A. Kacy Spade, owner, invested $15,500 cash in the company in exchange for common stock.
B. The company purchased office supplies for $450 cash.
C. The company purchased $8,572 of office equipment on credit.
D. The company received $1,829 cash as fees for services provided to a customer.
E. The company paid $8,572 cash to settle the payable for the office equipment purchased in transaction c.
F. The company billed a customer $3,286 as fees for services provided.
G. The company paid $520 cash for the monthly rent.
H. The company collected $1,380 cash as partial payment for the account receivable created in transaction f.
I. The company paid a $900 cash dividend to the owner (sole shareholder).
Required:
Prepare a trial balance.
Which of the following scenarios illustrates the law of demand?
A. A research company finds that the more expensive a particular brand of a designer handbag, the more that consumers are willing to purchase the brand.
B. Kathleen eats more steak when the price is low, and less when the price is high.
C. Francis does not care about the price of coffee at the coffee shop – he must buy two cappuccinos every day, regardless of the price.
D. John likes to drink spring water. At $2 he buys four bottles of water, and at $1.50 he still buys four bottles of water.
Answer:
Option B is correct.
Explanation:
In order to answer this question correctly, we first need to understand the law of demands.
Law of demands: It says that the relationship of price and quantity demanded is inversely proportional. It means if the price of a particular product goes high, then the quantity of demand will be reduced. Similarly, if the price of the product is low then the quantity of demanded will be higher.
Here,
Option B is the most relevant to the Law of Demand which says that Kathleen eats more steak when the price is low. It means when the price is low, the quantity of steak demanded is higher in Kathleen's case. Furthermore, Kathleen eats less when the price is high. It means, when the price of steak is higher then the quantity of steak demanded from Kathleen is low.
Hence, Option B is the correct option which fulfills the law of demand.
Royal Technology Company uses a job order cost system. The following data summarize the operations related to production for March:
Mar.
1 Materials purchased on account, $770,000.
2 Materials requisitioned, $680,000, of which $75,800 was for general factory use.
31 Factory labor used, $756,000, of which $182,000 was indirect.
31 Other costs incurred on account for factory overhead, $245,000; selling expenses, $171,500; and administrative expenses, $110,600.
31 Prepaid expenses expired for factory overhead were $24,500; for selling expenses, $28,420; and for administrative expenses, $16,660.
31 Depreciation of factory equipment was $49,500; of office equipment, $61,800; and of office building, $14,900.
31 Factory overhead costs applied to jobs, $568,500.
31 Jobs completed, $1,500,000.
31 Cost of goods sold, $1,375,000.
Required:
Journalize the entries to record the summarized operations.
Answer:
See the journal entries below.
Explanation:
The journal entries will look as follows:
Date Account Title Debit ($) Credit ($)
Mar. 1 Materials 770,000
Accounts payable 770,000
(To record materials purchased on account.)
Mar. 2 Factory Overhead 75,800
Work in process 604,200
Materials 680,000
(To record materials requisition.)
Mar. 31 Factory Overhead 182,000
Work in process 574,000
Wages payable 756,000
(To record materials wages payable.)
Mar. 31 Factory Overhead 245,000
Selling expenses 171,500
Administrative expenses 110,600
Accounts payable 527,500
(To record other costs incurred on account.)
Mar. 31 Factory Overhead 24,500
Selling expenses 28,420
Administrative expenses 16,660
Accounts payable 69,580
(To record prepaid expenses expired.)
Mar. 31 Depreciation expenses 126,200
Accumulated dep. - Equp. & Buil. 126,200
(To record depreciation expenses for equipment and building.)
Mar. 31 Work in process 568,500
Factory Overhead 568,500
(To record factory overhead costs applied.)
Mar. 31 Finished goods 1,500,000
Work in process 1,500,000
(To record jobs completed.)
Mar. 31 Cost of goods sold 1,375,000
Finished goods 1,375,000
(To record cost of goods sold.)
On December 31, 2021, Fighting Okra Cooking Services reports the following revenues and expenses.
Service revenue $75,500 Rent expense 18,800
Postage expense 1,550 Salaries expense 23,000
Legal fees expense 2,500 Supplies expense 18,000
In addition, the balance of common stock at the beginning of the year was $170,000, and the balance of retained earnings was $34,000. During the year, the company issued additional shares of common stock for $28,000 and paid dividends of $18,000.
Required:
a. Prepare an income statement.
b. Prepare a statement of stockholders' equity.
Answer and Explanation:
The preparation is presented below:
a. Income statement
Service revenue $75,500
Less expenses
Rent expense $18,800
Postage expense $1,550
Salaries expense $23,000
Legal fees expense $2,500
Supplies expense $18,000
Net income $11,650
b. statement of stockholders' equity
Common stock ($170,000 + $28,000) $198,000
Add: retained earnings ($34,000 + $11,650 - $18,000) $27,650
Stockholder equity $225,650
Which of the following is true of import tariffs and quotas? a. Because they increase the output levels of domestic firms, they tend to lower domestic prices. b. They benefit domestic producers. c. Specialization and comparative advantage are advanced by tariffs and quotas. d. Domestic consumers gain because they purchase the output of domestic firms. e. They tend to expand the volume of world trade.
Answer:
b. They benefit domestic producers.
Explanation:
The tariff and quotas would rise the goods value in the market price that permits the domestic consumer who was fire out also the production would be increased but at a higher cost so at the time it would harm the local consumer but it benefit the producer
Therefore the option b is correct
Manufacturing overhead was estimated to be $249,600 for the year along with 20,800 direct labor hours. Actual manufacturing overhead was $219,000, and actual labor hours were 21,900. The amount debited to the Manufacturing Overhead account would be: Multiple Choice $219,000. $249,600. $233,000. $262,800.
Answer:
Debit to manufacturing overhead= $262,800
Explanation:
First, we need to calculate the predetermined overhead rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 249,600/20,800
Predetermined manufacturing overhead rate= $12 per direct labor hour
Now, we can allocate overhead:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 12*21,900
Allocated MOH= $262,800
Debit to manufacturing overhead= $262,800
For each of the following, compute the future value: (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Present Value Years Interest Rate Future Value $ 1,800 10 14 % $ 7,852 8 8 67,355 15 13 174,796 6 5
Answer:
$6673
$14,533.50
$421,256.38
$234,243.36
Explanation:
The formula for determining future value is :
The formula for calculating future value:
FV = P (1 + r)^n
FV = Future value
P = Present value
R = interest rate
N = number of years
$1,800 x (1.14)^10 = $6673
$7,852 x (1.08)^8 = $14,533.50
$67,355 x (1.13)^15 = $421,256.38
$174,796 x (1.05)^6 = $234,243.36
Karen, Inc. manufactures a product that uses $15 in direct materials and $5 in direct labor per unit. Under the traditional costing system Karen uses, manufacturing overhead applied to each unit is $12. However, Karen is considering switching to an ABC system. Under the ABC system, the total activity cost would be $25. What is the total manufacturing cost per unit for Karen under the ABC system
Answer:
oie no sepo ingles:"(
Explanation:
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Prepare the journal entries to record the assignment of direct materials and direct labor and the allocation of manufacturing overhead to the Fermenting Department. Assume labor costs are accrued and not yet paid. Also prepare the journal entry to record the cost of the gallons completed and transferred out to the Packaging Department. Begin with the summary journal entry to record the assignment of direct materials and direct labor and the allocation of manufacturing overhead to the Fermenting Department.
Answer:
Note: The full question is attached below
Date Accounts Title and Explanation Debit Credit
Mar-31 WIP-Fermenting Department $15,971
Raw Material Inventory $9,288
Wages payable $3,305
Manufacturing Overhead $3,378
(Being cost assigned to WIP-Fermenting department)
You've decided to buy a house that is valued at $1 million. You have $350,000 to use as a down payment on the house, and want to take out a mortgage for the remainder of the purchase price. Your bank has approved your nterest rate (called the $650,000 mortgage, and is offering a standard 30-year mortgage at a 10% fixed nomina loan's annual percentage rate or APR). Under this loan proposal, your mortgage payment will be ___________per month.
a. $7,700.43
b. 7130.03
c. 8841.23
d. 5704.02
Answer:
d. 5704.02
Explanation:
Nper = 30*12 = 360
Rate = 10%/12 = 0.008333
PV = 650,000
Using the MS Excel function:
Monthly payment = PMT(RATE, NPER, -PV)
Monthly payment = PMT(10%/12, 360, -650000)
Monthly payment = $5,704.02
Santa Fe Corporation manufactured inventory in the United States and sold the inventory to customers in Mexico. Gross profit from the sale of the inventory was $247,000. Title to the inventory passed FOB: shipping point. How much of the gross profit is treated as foreign source income for purposes of computing the corporation's foreign tax credit in the current year
Answer: $0
Explanation:
FOB Shipping point means that the title passes to the buyers at the shipping point which in this case is the United States, the sale can be said to have occurred in the United States.
There will therefore be no foreign trade tax credit because the income from this transaction will be treated as having been earned in the United States (U.S. source income).
The 2018 balance sheet of Speith’s Golf Shop, Inc., showed long-term debt of $5 million, and the 2019 balance sheet showed long-term debt of $5.25 million. The 2019 income statement showed an interest expense of $165,000. The 2018 balance sheet showed $510,000 in the common stock account and $4.6 million in the additional paid-in surplus account. The 2019 balance sheet showed $550,000 and $4.8 million in the same two accounts, respectively. The company paid out $410,000 in cash dividends during 2019. Suppose you also know that the firm’s net capital spending for 2019 was $1,370,000, and that the firm reduced its net working capital investment by $69,000. What was the firm's 2019 operating cash flow, or OCF?
Answer:
$1,386,000
Explanation:
The computation of the operating cash flow is shown below:
But before that following calculations must be done
Cash Flow to Creditors
Cash Flow to Creditors = Interest Expenses Paid - Net Increase in Long term debt
= Interest Expenses Paid - [Ending Long term debt - BEginning Long term Debt]
= $165,000 - [$5,250,000 - $5,000,000]
= $165,000 - $250,000
= -$85,000
Cash Flow to Stockholders
Cash Flow to Stockholders = Dividend Paid - Net New Equity
= Dividend Paid - [(Ending Common stock + Ending Additional paid-in surplus account ) - (Opening Common stock + OPening Additional paid-in surplus account )
= $410,000 - [($550,000 + $4,800,000) - ($510,000 + $4,6000,000)]
= $410,000 - [$5,350,000 - $5,110,000]
= $410,000 - $240,000
= $170,000
Cash Flow from assets
Cash Flow from assets = Cash Flow to Creditors + Cash Flow to Stockholders
= -$85,000 + $170,000
= $85,000
Operating Cash Flow
= Operating Cash flows - Change in Net Working capital - Net Capital Spending
$85,000 = Operating cash flow - (-$69,000) - $1,370,000
= $85,000 - $69,000 + $13,70,000
= $1,386,000
A company purchased $2,000 of merchandise on July 5 with terms 1/10, n/30. On July 7, it returned $220 worth of merchandise. On July 8, it paid the full amount due. The amount of the cash paid on July 8 equals:
Answer:
$1,762.2
Explanation:
Calculation for what The amount of the cash paid on July 8 equals:
Cash Paid = ($2,000 - $220) * (199%-1%)
Cash Paid = ($2,000 - $220) * 0.99
Cash Paid = ($1,780*0.99)
Cash Paid = $1,762.2
Therefore The amount of the cash paid on July 8 equals:$1,762.2
Discuss some of the program’s challenges.
https://www.pbs.org/video/need-know-financial-literacy/
Answer:
okay aph development continues with an expression of the rationale or the explanation that the writer gives for how the reader should interpret the information presented in the idea statement or topic sentence of the paragraph. The writer explains his/her thinking about the main topic, idea, or focus of the paragrap
Explanation:
In January, Dieker Company requisitions raw materials for production as follows: Job 1 $900, Job 2 $1,200, Job 3 $700, and general factory use $600. Prepare a summary journal entry to record raw materials used. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 31 enter an account title for the journal entry on January 31
Answer:
Dr Work in process inventory 2,800
Dr Factory overhead 600
Cr Raw material inventory 3,400
Explanation:
Work in process = $900 + $1,200 + $700 = $2,800
Factory overhead (supplies) is the same, $600
inventory decrease = WIP + supplies = $2,800 + $600 = $3,400
The Dieker Company will keep track of the production's raw materials on January 31. The final journal entry will read like this:
Dr Work in process inventory 2,800
Dr Factory overhead 600
Cr Raw material inventory 3,400
Work in process = $900 + $1,200 + $700
Work in process = $2,800
Factory overhead (supplies) is the same, $600
Inventory decrease = WIP + supplies
Inventory decrease = $2,800 + $600
Inventory decrease = $3,400
The same amount will be credited to the account for raw materials inventory, reducing the balance of the account to represent the raw materials utilized in production.
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What Characteristics of the Confederate States of American made it a confederal government when compared to the government of the United States?
Answer:
Explanation:
The Confederate States of America can also be regarded as Confederate States was regarded as unrecognized breakaway state which exist between
year 1861 and 1865 which rose against
United States of America when she was experiencing American Civil War.
Characteristics of the Confederate States of American made it a confederal government when compared to the government of the United States are;
✓The central government of
The Confederate States of America is weaker compare to United States.
✓The sovereignty and power of individual states is more than US States
✓Issues such as national economic as well as foreign issues only are been handled by central government of the Confederate States
In 1880 five aboriginal trackers were each promised the equivalent of 100 Australian dollars for helping to capture the notorious outlaw Ned Kelley. In 2002 the granddaughters of two of the trackers claimed that this reward had not been paid. The Victorian prime minister stated that if this was true, the government would be happy to pay the $100. However, the granddaughters also claimed that they were entitled to compound interest.
Required:
a. How much was each granddaughter entitled to if the interest rate was 4%?
b. How much was each entitled to if the interest rate was 8%?
Answer:
A. $11,969.3
B. $1,195,909.1
Explanation:
a. Calculation for How much was each granddaughter entitled to if the interest rate was 4%
First step is to calculate the Time period
Time period=2002-1880
Time period=122 years
Now let calculate the Future value using this formula
Future value=PV(1+r)^122 years
Let plug in the formula
Future value=$100(1+0.04)^122 years
Future value=$100(1.04)^122 years
Future value=$11,969.3
Therefore How much was each granddaughter entitled to if the interest rate was 4% will be $11,969.3
b. Calculation for How much was each entitled to if the interest rate was 8%
First step is to calculate the Time period
Time period=2002-1880
Time period=122 years
Now let calculate the Future value using this formula
Future value=PV(1+r)^122 years
Let plug in the formula
Future value=$100(1+0.08)^122 years
Future value=$100(1.08)^122 years
Future value=$1,195,909.1
Therefore How much was each entitled to if the interest rate was 8% will be $1,195,909.1
Amazon Company uses predetermined departmental overhead rates based on direct labor cost to apply manufacturing overhead to jobs. The predetermined overhead rate for Department A this year was 200% of direct labor cost. The predetermined overhead rate for Department B this year was 50% of direct labor cost. Job Delta, which used labor time in both departments, was charged with the following costs.
Dept A Dept B
Direct materials $50,000 $10.000
Direct labor ? $60.000
Manufacturing overhead $80.000 ?
What was the total manufacturing cost assigned to Job Delta?
a. $270,000
b. $360,000
c. $390.000
d. $480.000
Answer:
a. $270,000
Explanation:
Department A:
Manufacturing overhead=200% of direct labor
80000 = 200% of direct labor
So, direct labor = 80000/200%=$40,000
Department B:
Manufacturing overhead=50% of direct labor
So, Manufacturing overhead = 50%*60000=$30,000
Total manufacturing cost = Material cost + Labor cost + Manufacturing overhead
- Material cost = 50000+10000=$60,000
- Direct labor cost = 40000+60000=$100,000
- Manufacturing overhead = 80000+30000=$110,000
Total manufacturing cost = $60,000 + $100,000 + $110,000
Total manufacturing cost = $270,000
if china has china business is china china or just china
who will wim trump or bid en³³³³³³³³³³³³³³³³³³³³³³³³∉∉∉∉∉∉∉∉∉∉∉
Answer:bid
Explanation:
Answer:
biden is a china puppet aka he is being controlled by china
Explanation:
Match each of the follwoing terms with their descriptions Total Liabilities.
a. refers to the difference in the value of the firm's assets and liabilities (what the firm owns)
b. Short and long term interest bearing accounts (Notes Payable + Long term debt in this class)
c. represent resources used by the firm and the sum of shareholders' equity and total liabilities (what the firm has)
d. represent the total amount owed to creditors (what the firm owes)
1. Total Liabilities
2. Total Shareholders' Equity
3. Total Assets
4. Total Debt
Answer and Explanation:
The matching is as follows:
a. 2. Shareholder equity as it shows the difference between the assets and liabilities of the firm
b. 4. Total debt it represent the short and long term interest i.e. note payable + long term debt etc
c. 3. Total assets it is a sum of shareholder equity and the total liabilities
d.1. Total liabilities it shows the obligations or the amount owed to creditors
19. In its accrual basis income statement for the year ended December 31, 2012, Nelson Company reported revenue of $3,500,000. Additional information is as follows: Accounts receivable-- Beg.
December 31, 2011 ............... $ 750,000
Net income for 2012 .................................. 140,000
Accounts receivable--End. December 31, 2012 ............... 1,010,000
Nelson should report cash collected from customers in its 2012 statement of cash flows (direct method) in the amount of
a. $3,240,000.
b. $3,100,000.
c. $3,380,000.
d. $3,760,000.
____ 20. Stiggins Corporation had the following account balances for 2012: December 31 January 1
Accounts Payable ...................... $67,200 $58,200
Prepaid Rent Expense .................. 24,600 37,200
Accounts Receivable (net) ............. 84,000 66,600
Stiggins' 2012 net income is $450,000. What amount should Stiggins include as net cash provided by operating activities in its 2012 statement of cash flows?
a. $436,200
b. $445,200
c. $453,600
d. $454,200
Answer:
a. $3,240,000.
b. $445,200
Explanation:
1. Particulars Amount
Beginning account receivable $750,000
Add: Revenue $3,500,000
Less: Ending account receivable $1,010,000
Cash collected from customer $3,240,000
2. Particulars Amount
Net income $450,000
Adjustment to reconcile net income
Increase account payable $9,000
Decrease prepaid rent expenses $12,600
Increase account receivable $17,400 $4,200
Net cash provided by operating activities $454,200
Why might Robert choose to attend a technical school rather than a four-year university?
Select one:
a. There are more options and greater earning potential at technical schools.
b. There are more opportunities for advancement in technical schools.
c. Some trades are in higher demand than certain university degrees.
d. The social aspect of technical schools is more appealing.
Answer:
b. There are more opportunities for advancement in technical schools.
Explanation:
Technical schools teach more specific courses and generally last one or two years. If a student needs to get some type of specific education that allows to work fast, e.g. becoming an electrician, a technical school is a better option. While college careers yield higher benefits in the long run, in the short run some people might need to get technical degrees.
Answer:
The answer is C. Some trades are higher in demand then certain university degrees.
Explanation:
I took the test :)
Cogswell Printers purchased a four year insurance policy on May 1, Year 2 for $12,000,effective immediately. The company expensed the full cost of the policy in Year 2. Theadjusting journal entry required at December 31, Year 2 will include a:________
a. Credit to prepaid insurance of $9,000
b. Debit to insurance expense of $3,000
c. Credit to insurance expense of $2,000
d. Debit to prepaid insurance of $10,000
e. None of the above
Answer:
d. Debit to prepaid insurance of $10,000
Explanation:
The company has paid for insurance that covers a period of 4-year, hence, based on the matching concept it is expected that the insurance cost would be expensed over 4 years as well.
However, the company has debited the whole $12,000 to insurance expense in year 1, hence, we need to adjust for the remaining cost of insurance for the future period.
Insurance expense for the 8-month period(May-Dec)=$12,000*8/48=$2000
Note there are 48 months in 4 years
balance of insurance paid=$12,000-$2,000=$10,000
The $10,000 would be credited to insurance in order to reduce the insurance recognized earlier as $12,000 to only $2,000 while prepaid insurance is debited with $10,000
- Adele Corp., a wholesaler of music equipment, issued $22,000,000 of 20-year, 7% callable
bonds on March 1, 20Y1, at their face amount, with interest payable on March 1 and
erat September 1. The fiscal year of the company is the calendar year. Journalize the entries
to record the following selected transactions:
20Y1
Mar. 1. Issued the bonds for cash at their face amount.
Sept. 1. Paid the interest on the bonds.
2045
Sept. 1. Called the bond issue at 102, the rate provided in the bond indenture.
(Omit entry for payment of interest.)
Answer:Please see answer in explanation column
Explanation:
The Journal entry is shown below:-
1. To record the issue of bonds payable
Date Account titles and explanation Debit Credit
March 1 20Y1 Cash $22,000,000
To Bonds payable $22,000,000
2.To record Interest on the bonds paid
Date Account titles and explanation Debit Credit
Sept 1 20Y1 Interest expense $770,000
Cash $770,000
Calculation:
Interest = face value of bonds x interest rate x time
=$22,000,000 x 7% x 6/12
=$770,000
3. To record bonds on retirement is recorded
Date Account titles and explanation Debit Credit
Sept 1 2045 Bonds payable $22,000,000
Loss on retirement of bonds $440,000
To Cash $22,440,000
Calculation:
Cash = $22,000,000 × 102/ 100) = 22,440,000
Loss on retirement of bonds = $22,440,000 - $22,000,000 = $440,000
Suppose that the total revenue received by a company selling basketballs is $600 when the price is set at $60 per basketball and $600 when the price is set at $40 per basketball. Without using the midpoint formula, identify whether demand is elastic, inelastic, or unit-elastic over this price range.
Answer:
Unit elastic
Explanation:
Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.
Price elasticity of demand = percentage change in quantity demanded / percentage change in price
If the absolute value of price elasticity is greater than one, it means demand is elastic. Elastic demand means that quantity demanded is sensitive to price changes.
Demand is inelastic if a small change in price has little or no effect on quantity demanded. The absolute value of elasticity would be less than one
Demand is unit elastic if a small change in price has an equal and proportionate effect on quantity demanded. Demand is unit elastic if total revenue remains the same over different prices
2. How is CrudeOil violating its core value of treating oth-
ers with respect? What are some ways it could reincor-m
porate this core value into its organizational culture??
Answer:
1. Describe the organizational culture at CrudeOil. How does it contribute to the current situation?
Jim treated all of the employees with intimidating behavior based on productivity levels and not moral or ethical concepts. His leadership style is coercive and demands immediate compliance. If this style were summed up in one phrase, it would be "Do what I tell you." In my opinion, it should be avoided because it can alienate employees and create a hostile work environment.
2. How is CrudeOil violating its core value of treating others with respect?
What are some ways it could reincorporate this core value into its organizational culture? “The company’s core value is to treat everyone with respect”. Employees and supervisors, in my experiences, often treat colleagues in harsh and unethical manners only as far as the victim allows it to happen. Financial and reputational harm are questionable and unethical behaviors and organizational policies must be clearly established to reincorporate this value into its culture.
3. If Madison cannot report her problems to her immediate supervisor, what are some other ways she can handle the situation?
I would suggest for Madison to seek advice from a trusted professional, such as the HR compliance officer to verify the actions are inappropriate, if so, Madison needs to learn what process is available for voicing her concern to a higher level. Jim’s behavior is clearly unethical, but many of these behaviors are less clear and occur in complex situations. The most complicated situations often involve employees who witness what is, or appears to be, unethical behavior and are unsure how to respond, especially if job security is on the line...
This is some of it
Jim's leadership abilities breached CrudeOil's fundamental value of treating others with respect because he frequently treats coworkers harshly and unethically.
What are the three main uses of crude oil?Petroleum-based products are used to power vehicles, heat buildings, and generate energy. Plastics, polyurethane, solvents, and countless more intermediate and finished commodities are produced by the petrochemical industry, which is a part of the industrial sector.
Jim's activities should therefore be addressed by top management in order to reintegrate this key principle into the organizational culture. Additionally, they could offer a variety of training to their staff, particularly those in higher positions, to inform them on correct management and leadership skills as well as the significance of adhering to the company's code of ethics.
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The following unadjusted trial balance is prepared at fiscal year-end for Nelson Company.
NELSON COMPANY Unadjusted Trial Balance January 31, 2017
Debit Credit
Cash $8,150
Merchandise inventory 14,500
Store supplies 5,500
Prepaid insurance 2,600
Store equipment 42,800
Accumulated depreciation—Store equipment $17,850
Accounts payable 16,000
J. Nelson, Capital 18,000
J. Nelson, Withdrawals 2,100
Sales 114,550
Sales discounts 1,850
Sales returns and allowances 2,000
Cost of goods sold 38,000
Depreciation expense—Store equipment 0
Salaries expense 27,200
Insurance expense 0
Rent expense 12,000
Store supplies expense 0
Advertising expense 9,700
Totals $166,400 $166,400
Rent expense and salaries expense are equally divided between selling activities and general and administrative activities. Nelson Company uses a perpetual inventory system.
Additional Information:
Store supplies still available at fiscal year-end amount to $2,800.
Expired insurance, an administrative expense, is $1,650 for the fiscal year.
Depreciation expense on store equipment, a selling expense, is $1,625 for the fiscal year.
To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,800 of inventory is still available at fiscal year-end.
Required:
a. Using the above information prepare adjusting journal entries:
b. Prepare a multiple-step income statement for fiscal year 2017.
c. Prepare a single-step income statement for fiscal year 2017.
d. Compute the current ratio, acid-test ratio, and gross margin ratio as of January 31, 2017.
Answer:
Nelson Company
a. Adjusting Journal Entries:
Debit Supplies Expense $2,700
Credit Supplies $2,700
To record supplies expense.
Debit Insurance Expense $1,650
Credit Prepaid Insurance $1,650
To record insurance expense.
Debit Depreciation Expense $1,625
Credit Accumulated Depreciation $1,625
To record depreciation expense.
b. Multi-step Income Statement for the year ended January 31, 2017:
Sales $114,550
Sales returns and allowances 2,000
Net Sales 112,550
Cost of goods sold 38,000
Inventory Shrinkage 3,700 41,700
Gross profit $70,850
Depreciation expense- Store 1,625
Sales discounts 1,850
Salaries expense 13,600
Rent expense 6,000
Store supplies expense 2,700
Advertising expense 9,700
Total selling expenses $35,475
Administrative Expenses:
Salaries expense 13,600
Insurance expense 1,650
Rent expense 6,000
Total administrative expenses $21,250 $56,725
Net Income $14,125
c. Single-step Income Statement for the year ended January 31, 2017:
Sales $114,550
Sales discounts 1,850
Sales returns and allowances 2,000
Cost of goods sold 38,000
Inventory Shrinkage 3,700
Depreciation expense- Store 1,625
Salaries expense 27,200
Rent expense 12,000
Store supplies expense 2,700
Advertising expense 9,700
Insurance expense 1,650 $100,425
Net Income $14,125
d. Current Ratio = Current Assets/Current Liabilities
= $22,700/$16,000
= 1.42
Acid-test ratio = (Current assets - Inventory)/Current Liabilities
= ($22,700 -10,800)/$16,000
= 0.74
Gross margin ratio = Gross profit/Net Sales = $70,850/112,550 * 100
= 63%
Explanation:
a) Data and Calculations:
NELSON COMPANY Unadjusted Trial Balance January 31, 2017
Debit Credit
Cash $8,150
Merchandise inventory 14,500
Store supplies 5,500
Prepaid insurance 2,600
Store equipment 42,800
Accumulated depreciation -Store equipment $17,850
Accounts payable 16,000
J. Nelson, Capital 18,000
J. Nelson, Withdrawals 2,100
Sales 114,550
Sales discounts 1,850
Sales returns and allowances 2,000
Cost of goods sold 38,000
Depreciation expense- Store equipment 0
Salaries expense 27,200
Insurance expense 0
Rent expense 12,000
Store supplies expense 2,700
Advertising expense 9,700
Totals $166,400 $166,400
Adjustments:
Supplies Expense $2,700 Supplies $2,700
Insurance Expense $1,650 Prepaid Insurance $1,650
Depreciation Expense $1,625 Accumulated Depreciation $1,625
NELSON COMPANY
Adjusted Trial Balance January 31, 2017
Debit Credit
Cash $8,150
Merchandise inventory 10,800
Store supplies 2,800
Prepaid insurance 950
Store equipment 42,800
Accumulated depreciation -Store equipment $19,475
Accounts payable 16,000
J. Nelson, Capital 18,000
J. Nelson, Withdrawals 2,100
Sales 114,550
Sales discounts 1,850
Sales returns and allowances 2,000
Cost of goods sold 38,000
Inventory Shrinkage 3,700
Depreciation expense- Store 1,625
Salaries expense 27,200
Insurance expense 1,650
Rent expense 12,000
Store supplies expense 2,700
Advertising expense 9,700
Totals $168,025 $168,025
Current Assets:
Cash $8,150
Merchandise inventory 10,800
Store supplies 2,800
Prepaid insurance 950
Total current assets = $22,700
Current Liabilities:
Accounts payable 16,000
good lost by fire Rs 12000 and Assurance Company not admitted the claim journal entries
Answer:
Profit and Loss A/c DR 12,000
To Purchase A/c 12,000
Explanation:
Given:
Amount of goods lost = Rs. 12,000
Books of --- Ltd
Journal Entry
Date Particular Debit Credit
Profit and Loss A/c DR 12,000
To Purchase A/c 12,000
(Being goods lost in fire and insurance company accept no claim)
Jose purchased a delivery van for his business through an online auction. His winning bid for the van was $25,250. In addition, Jose incurred the following expenses before using the van: shipping costs of $1,270; paint to match the other fleet vehicles at a cost of $1,440; registration costs of $2,970, which included $2,750 of sales tax and an annual registration fee of $220; wash and detailing for $121; and an engine tune-up for $327.
Required:
What is Joseâs cost basis for the delivery van?
Answer:
$30,710
Explanation:
Calculation for Jose cost basis for the delivery van
Van Winning bid $25,250
Add Shipping costs of $1,270
Add Paint to match the other fleet vehicles $1,440
Add Sales tax $2,750
Basis for the delivery van $30,710
($25,250 + $1,270 + $1,440 + $2,750 )
Therefore Jose cost basis for the delivery van was $30,710
Splish Brothers, Inc. On December 31, 2017, Splish Brothers, Inc. has $1,760,000 of short-term debt in the form of notes payable to Michaels State Bank due February 5, 2018. On January 28, 2018, Splish Brothers issued 17,600 shares of common stock at $75 per share. Splish Brothers used the proceeds of $1,320,000 from the stock issuance, along with $572,000 in cash to retire the short-term debt and associated accrued interest on February 5, 2018. Splish Brothers will issue its December 31, 2017 financial statements on February 25, 2018.
Marigold Corp. On December 31, 2017, Marigold Corp. has $2.640,000 of short-term notes payable to Indiana Bank & Trust. The notes are due on January 31, 2018. Marigold retired the notes, along with $176,000 in accrued interest, in full on January 31, 2018. On February 11, 2018, Marigold obtained $3,960,000 in long-term financing from Terre Haute Bank & Trust. The new debt bears interest at 5 percent, with interest payments due annually. Marigold will issue its December 31, 2017 financial statements on February 28, 2018.
Prepare partial balance sheets for Splish Brothers, Inc. and Marigold Corp. at December 31, 2017, showing how both companies' short-term debt should be presented. (Enter account name only and do not provide descriptive information.)
Answer:
Splish Brothers, Inc
Note payable $1,760,000
Marigold Corp
Note payable $2,640,000
Explanation:
Prepare partial balance sheets for Splish Brothers, Inc. and Marigold Corp. at December 31, 2017,
Preparation of partial balance sheets for Splish Brothers, Inc at December 31, 2017,
Equity and Liabilities
Short term debt
Note payable $1,760,000
Preparation of partial balance sheets for Marigold Corp. at December 31, 2017,
Equity and Liabilities
Short term debt
Note payable $2,640,000