Answer:
B. False
The business should not make this entry on 31 December.
Explanation:
The accounting principle of prudence states that profits should not be overstated and losses should not be understated. This means that any profit should not be recorded until it is realized while any losses should be recorded as soon as they are anticipated. As the business has not received cash from tenants on 31 December 2016, it should not make any entry debiting cash and crediting the rent receivable.
The business should let the rent receivable balance intact until the rent is received on 15 January and till then record no entry to such as the above.
There are numerous definitions of insurance. based on the definition stated in the text, indicate whether each of the following guarantees is considered insurance.
a. The manufacturer guarantees a new television against defects for 90 days.
b. The manufacturer guarantees a new set of radial tires against road defects for 50,000 miles.
c. A builder of new homes gives a 10-year guarantee against structural defects in the home.
d. A cosigner of a note agrees to pay the loan balance if the original debtor defaults on the payments.
e. A large group of homeowners agrees to pay for losses to homes that are damaged or destroyed by fire during the year.
Answer: See explanation
Explanation:
Insurance is an arrangement whereby an economic entity like the individual or firm undertakes and agree to provide compensation for losses, damages or death to the insured.
a. The manufacturer guarantees a new television against defects for 90 days.
This is simply a guarantee and it's not an insurance. There are no pooling of losses even though risks are being transferred to the manufacturer.
b. The manufacturer guarantees a new set of radial tires against road defects for 50,000 miles.
This is also a guarantee and it's not an insurance. There are no pooling of losses even though risks are being transferred to the manufacturer. In a scenario whereby the tires are stolen, they won't be replaced.
c) A builder of new homes gives a 10-year guarantee against structural defects in the home.
This is just a guarantee and not an insurance. Even though risk are being transferred to the builder once there are structural defects, the owner of the home will bear the loss in case of fire.
d. A cosigner of a note agrees to pay the loan balance if the original debtor defaults on the payments.
This is not an insurance. This is just explaining that the consigner bears the risk of payment if the original debtor defaults.
e. large group of homeowners agrees to pay for losses to homes that are damaged or destroyed by fire during the year.
This is an insurance as losses are being pooled. The firm of insurance that'll be utilized here is the fire insurance.
Statements a,b,c, and d are guarantees and statement e represents insurance.
What are a guarantee and insurance?Insurance refers to the protection from the financial loss that the insurance holder otherwise would suffer. Insurance is a type of indemnity where one party promises to indemnify the insurer in case of loss.
Whereas gurantee can be defined as contract in which one party agrees to act on behalf of the other party in case of defaults by other party.
Therefore the statement a, b , c, and d are guarantee and the statement e represents insurance.
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The following data are taken from the unadjusted trial balance of the Westcott Company at December 31, 2017. Complete the work sheet following adjustment. Use the following adjustment information to complete the work sheet.
A. Depreciation on equipment, $3.
B. Accrued salaries, $6.
C. The $12 of unearned revenue has been earned.
D. Supplies available at December 31, 2017, $15.
E. Expired insurance, $15.
WESTCOTT COMPANY
Partial Work Sheet
For the Year Ended December 31
Unadjusted Trial Adjusted Trial
Balance Adjustments Balance
Account Title Dr. Cr. Dr. Cr. Dr. Cr.
Cash 35 35
Accounts receivable 30 30
Supplies 42
Prepaid insurance 36 18 18
Equipment 54 54
Accumulated
depreciation-Equip 31 14
Accounts payable 5
Salaries payable 15
Unearned revenue 23 23
Common stock 15
Retained earnings 35
Dividends 26 26
Revenue 170 23 173
Depreciation expense-Equip 14 14
Salaries expense 33 15
Insurance expense 15
Supplies expense
Utilities expense 23
Totals $279 279 67 $70 177 $173
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Answer and Explanation:
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Using the code letters below, indicate how each of the items listed would be handled in preparing a bank reconciliation. Enter the appropriate code letter in the space to the right of each item. Code A Add to cash balance per books B Deduct from cash balance per books C Add to cash balance per bank D Deduct from cash balance per bank E Does not affect the bank reconciliation Items 1. Outstanding checks select an code 2. Bank service charge select an code 3. Check for $320 correctly written and paid by the bank but incorrectly entered in the cash payments record for $230 select an code 4. Deposit in transit select an code 5. Bank returns customer deposited check marked NSF select an code 6. Bank collects notes receivable and interest for depositor select an code 7. Bank debit memorandum for check printing fees select an code 8. Petty cash custodian has $86 in paid petty cash vouchers that have not been reimbursed. select an code 9. Bank charged a check against the company, which should have been charged to another company. select an code 10. A check for $236 was correctly paid by the bank but was incorrectly entered in the cash payments records for $263
Answer and Explanation:
The matching is as follows
1. D. Subtract from cash balance per bank
2. B. Subtract from cash balance per books
3. B.Subtract from cash balance per books
4. C. Add to cash balance per bank
5. B. Subtract from cash balance per books
6. A. Add to cash balance per books
7. B. Subtract from cash balance per books
8. E. Does not affect the bank reconciliation
9. C. Add to cash balance per bank
10. A. Add to cash balance per books
Elvera Easton traded in copying equipment with an adjusted basis of $10,000 for other copying equipment valued at $6,000. She also received $2,500 in cash, and her mortgage of $3,000 on the traded copying equipment was wiped out. What is her recognized gain on this exchange, if any
Answer:
It would be $0
Both friends agree that the demand and supply for hybrid cars will increase. For each of the following situations, determine whether the demand curve or the supply curve increases by dragging the item to the appropriate category.
a. The government gives consumers a subsidy to buy hybrid cars.
b. More automobile producers start producing hybrids.
c. The price of non-hybrid cars falls.
d. The price of batteries for hybrid cars rises.
e. Gasoline prices rise.
Answer:
1. The subsidy will work as a motivating factor for the consumers as the product will be purchased at a lower cost. Thus. it will increase the demand curve.
2. This will increase the supply curve due to increase in the suppliers throughout the market.
3. It will increase the demand curve as the consumers will face lower pressure on their pocket while purchasing cars.
4. This will decrease demand as the price of cars rises due to increase in the cost of production.
5. Increase in price of gasoline will decrease demand for cars as the consumers have to face high pressure on their pockets for using he cars.
The explanation to each part should be explained below:
The following information should be considered:
A) A government subsidy is equal to a reduction in price for consumers. A decline in prices increases demand. The demand curve increase.
b)More producers result in more output, which is an increase in supply. The supply curve increases.
c). Non-hybrid cars should be the substitutes goods for hybrid vehicles. In the case the price of non-hybrid cars falls, their demand will increases. Consequently, the demand for hybrid cars reduces. Both The demand curve and supply curve will not increase.
d). An increase in production cost results in a price rise. Consequently, it reduces the demand for hybrid cars. Both the demand and curve curves will not increase.
e). An increase in gasoline price will make non-hybrid cars less desirable however will increase the demand for hybrid cars. The demand curve for hybrid cars increases.
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Bob Burgers allocates manufacturing overhead to jobs based on direct labor hours. The company has the following estimated costs for the upcoming year:
Direct materials used 50,000
Direct Labor costs 70,400
Wages of factory janitors 39,500
Sales supervisor salary 51,500
Utilities for factory 16,100
Rent on factory building 13,800
Advertising expense 5,830
The company estimates that direct labor hours will be worked in the upcoming year, while machine hours will be used during the year. The predetermined manufacturing overhead rate per direct labor hour will be:________
a. $154 46
b. $1869
c. $7921
d. $43.38
The company has the following estimated costs for the upcoming year: Direct materials used $50,800 Direct labor costs $70,000 Wages of factory janitors $39,500 Sales supervisor salary $51,600 Utilities for factory $16,100 Rent on factory building $13,200 Advertising expense $5130 The company estimates that 1420 direct ...Bob Burgers allocates manufacturing overhead to jobs based on direct labor hours. The company has the following estimated costs for the upcoming year: Direct materials used $50,800 Direct labor costs $70,000 Wages of factory janitors $39,500 Sales supervisor salary $51,600 Utilities for factory $16,100 Rent on factory building $13,200 Advertising expense $5130 The company estimates that 1420 direct labor hours will be worked in the upcoming year, while 1400 machine hours will be used during the year. The predetermined manufacturing overhead rate per direct labor hour will be (Round your answer to the nearest cent.)
Use the information below for 3M Company to answer the requirements (perform these computations from the perspective of a 3M shareholder).
($millions) 2015 2014
Sales $31,718
Net income consolidated 5,787
Net income attributable to
3M shareholders 5,779
Assets 33,395 $31,886
Total equity 11,747 13,142
Equity attributable to 3M
shareholders 11,708 13,109
A. Compute return on equity (ROE).
B. Compute the DuPont model component measures for profit margin, asset turnover, and financial leverage.
C. Compute ROA.
Concrete Consulting Co. has the following accounts in its ledger: Cash; Accounts Receivable: Supplies; Office Equipment; Accounts Capital; Jason Payne, Drawing: Fees Earned; Rent Expense; Advertising Expense; Utilities Expense; Miscellaneous Expense.
Oct. 1 Paid rent for the month, $3,600
3 Paid advertising expense, $1,200.
5 Paid cash for supplies, $750
6 Purchased office equipment on account, $8,000
10 Received cash from customers on account, $14,800
15 Paid creditors on account, $7,110
27 Paid cash for miscellaneous expenses, $400.
30 Paid telephone bill (utility expense) for the month, $250
31 Fees earned and billed to customers for the month, $33,100
31 Paid electricity bill (utility expense) for the month, $1,050.
31 Withdrew cash for personal use, $2,500
Journalize the transactions for October 2019
Answer:
Journal entries for October 2019
Date Accounts Titles and Explanation Debit Credit
Oct 1 Rent expense $3,600
Cash $3,600
(To record entry for payment of rent for month)
Oct 3 Advertising expenses $1,200
Cash $1,200
(To record entry for Advertising expenses)
Oct 5 Supplies $750
Cash $1750
(To record entry for purchase of supplies)
Oct 6 Office equipment $8,000
Accounts Payable $8,000
(To record purchase of office equipment on account)
Oct 10 Cash $14,800
Accounts Receivable $14,800
(To record cash received from customers on account)
Oct 15 Accounts payable $7,110
Cash $7,110
(To record payment made to creditors)
Oct 27 Miscellaneous expenses $400
Cash $400
(To record repair expense of office equipment)
Oct 30 Telephone expense $250
Cash $250
(To record payment made for telephone bill)
Oct 31 Accounts receivables $33,100
Service fees $33,100
(To record fees earned)
Oct 31 Utility expense $1,050
Cash $1,050
(To record payment made for electricity bill)
Oct 31 Personal use $2,500
Cash $2,500
(To record payment of dividend)
The Journal Entries are mentioned below.
What are Journal Entries?A journal entry is the first step—and an essential function—of the accounting process. They are the record of monetary transaction of a business.
Journal Entries in the books of Concrete Consulting Co.
for October 2019
Date Accounts Titles and Explanation Debit Credit
Oct 1 Rent expense A/c Dr. $3,600
To Cash A/c $3,600
(Being rent paid)
Oct 3 Advertising expenses A/c Dr $1,200
To Cash A/c $1,200
(Being Advertising expenses paid)
Oct 5 Supplies A/c Dr $750
To Cash A/c $750
(Being payment for purchase of supplies)
Oct 6 Office equipment A/c Dr $8,000
To Accounts Payable A/c $8,000
(Being office equipment purchased)
Oct 10 Cash A/c Dr $14,800
To Accounts Receivable A/c $14,800
(Being cash received from customers)
Oct 15 Accounts payable A/c Dr $7,110
To Cash A/c $7,110
(Being payment made to creditors)
Oct 27 Miscellaneous expenses A/c Dr $400
To Cash A/c $400
(Being expense made for repair of office equipment)
Oct 30 Telephone expense A/c Dr $250
To Cash A/c $250
(Being payment made for telephone bill)
Oct 31 Accounts receivables A/c Dr $33,100
To Service fees A/c $33,100
(Being fees earned)
Oct 31 Utility expense A/c Dr $1,050
To Cash A/c $1,050
(Being electricity bill paid)
Oct 31 Personal use A/c Dr $2,500
To Cash A/c $2,500
(Being cash withdrawn for personal use)
Therefore the above Journal Entries captures all the transactions.
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Eaton Co. sells major household appliance service contracts for cash. The service contracts are for a one-year, two-year, or three-year period. Cash receipts from contracts are credited to Unearned Service Revenue. This account had a balance of $3,800,000 at December 31, 2014 before year-end adjustment. Service contract costs are charged as incurred to the Service Contract Expense account, which had a balance of $900,000 at December 31, 2014. Service contracts still outstanding at December 31, 2014 expire as follows:
During 2015 $960,000
During 2016 1,140,000
During 2017 700,000
What amount should be reported as Unearned Service Revenue in Eaton's December 31, 2014 balance sheet?
a. $2,900,000.
b. $2,800,000. (Correct answer: $960,000 + $1,140,000 + $700,000 = $2,800,000.)
c. $1,900,000.
d. $1,000,000.
Answer:
b. $2,800,000.
Explanation:
Since the contracts are accepted on cash basis, receipts are recorded in Unearned Service Revenue. In this case, the contracts outstanding as on 31st December 2014 is recorded in unearned service revenue as those cash is received in advance and will be credited to unearned service revenue
Unearned service revenue in Eaton's December 31, 2014 Balance sheet = $960,000 + $1,140,000 + $700,000 = $2,800,000
You need to save a total of $7,500 in order to buy a new motorcycle. You are starting with savings of $4,000 but will make no additional contributions. How long do you need to wait in order to reach your goal? In excel, compute the number of years required for annual interest rates of 2% to 10%, in two percent increments. What accurately depicts this calculation?
Answer:
You do not need an excel spreadsheet to calculate this, you need to use the the future value formula:
future value = present value x (1 + r)ⁿ
present value = $4,000
future value = $7,500
so, (1 + r)ⁿ = $7,500 / $4,000 = 1.875
now we replace r:
for 2%)
1.02ⁿ = 1.875
n = log 1.875 / log 1.02 = 31.74 years
for 4%)
1.04ⁿ = 1.875
n = log 1.875 / log 1.04 = 16.03 years
for 6%)
1.06ⁿ = 1.875
n = log 1.875 / log 1.06 = 10.79 years
for 8%)
1.08ⁿ = 1.875
n = log 1.875 / log 1.08 = 8.17 years
for 10%)
1.1ⁿ = 1.875
n = log 1.875 / log 1.1 = 6.6 years
The higher the interest rate, the shorter it will take for you account to increase in value and the shorter you will have to wait in order to buy your motorcycle.
Harwell Company manufactures automobile tires. On July 15, 2021, the company sold 2,900 tires to the Nixon Car Company for $40 each. The terms of the sale were 2/10, n/30. Harwell uses the net method of accounting for cash discounts.
Required:
1. Prepare the journal entries to record the sale on July 15 (ignore cost of goods) and payment on July 23, 2021.
2. Prepare the journal entries to record the sale on July 15 (ignore cost of goods) and payment on August 15, 2021.
Answer:
1. July 15
Dr Accounts Receivable 113,680
Cr Sales revenue 113,680
July 23
Dr Cash 113,680
Cr Accounts Receivable 113,680
2. July 15
Dr Accounts Receivable 113,680
Cr Sales revenue 113,680
Aug 15
Dr Cash 116,000
Cr Accounts Receivable 113,680
Cr Sales discount forfeited 2,320
Explanation:
1.Preparation of the journal entries to record the sale on July 15 and payment on July 23, 2021.
July 15
Dr Accounts Receivable 113,680
Cr Sales revenue 113,680
[($40*2,900)- (40*2,900*2%)]
(116,000-2,320=113,680)
July 23
Dr Cash 113,680
Cr Accounts Receivable 113,680
[($40*2,900)- (40*2,900*2%)]
(116,000-2,320=113,680)
2.Preparation of the journal entries to record the sale on July 15 and payment on August 15, 2021.
July 15
Dr Accounts Receivable 113,680
Cr Sales revenue 113,680
[($40*2,900)- (40*2,900*2%)]
(116,000-2,320=113,680)
Aug 15
Dr Cash 116,000
($40*2,900)
Cr Accounts Receivable 113,680
[($40*2,900)- (40*2,900*2%)]
(116,000-2,320=113,680)
Cr Sales discount forfeited 2,320
(40*2,900*2%)
During the next two months an automobile manufacturer must meet (on time) the following demands for trucks and cars: month 1, 400 trucks and 800 cars; month 2, 300 trucks and 300 cars. During each month at most 1000 vehicles can be produced. Each truck uses two tons of steel, and each car uses one ton of steel. During month 1, steel costs $700 per ton; during month 2, steel is projected to cost $800 per ton. At most 2500 tons of steel can be purchased each month. (Steel can be used only during the month in which it is purchased.) At the beginning of month 1, 100 trucks and 200 cars are in the inventory. At the end of each month, a holding cost of $200 per vehicle is assessed. Each car gets 35 miles per gallon (mpg), and each truck gets 15 mpg. During each month, the vehicles produced by the company must average at least 23 mpg.
Required:
a. Determine how to meet the demand and mileage requirements at minimum total cost.
b. Explain intuitively what happens when the requirement is greater than 17 mpg.
Answer:
a. solver found a solution 600C₁ + 400T₁ + 300C₂ + 200 T₂
the company should produce 600 cars and 400 trucks during month 1, and it should produce 300 cars and 200 trucks during month 2
b. here it doesn't really make a lot of difference since a car's mpg is 35 and a truck's is 15. The average between them is 25. You would need to produce more than 9 trucks per car (at least 10) in order for the average to be lower than 17 mpg.
Explanation:
minimization equation = 700S₁ + 800S₂ + 200HC₁ + 200HT₁ + 200HC₂ + 200HC₂
where:
C₁ = cars produced during month 1
T₁ = trucks produced during month 1
C₂ = cars produced during month 1
T₂ = trucks produced during month 2
S₁ = steel used during month 1
S₂ = steel used during month 2
HC₁ = holding cost for a car on month 1
HT₁ = holding cost for a truck on month 1
HC₂ = holding cost for a car on month 2
HT₂ = holding cost for a truck on month 1
constraints:
C₁ + T₁ ≤ 1000
C₂ + T₂ ≤ 1000
-S₁ + C₁ + 2T₁ = 0
-S₂ + C₂ + 2T₂ = 0
-HC₁ + C₁ ≥ 600
-HT₁ + T₁ ≥ 300
HC₁ - HC₂ + C₂ ≥ 300
HT₁ - HT₂ + T₂ ≥ 300
4C₁ - 6T₁ ≥ 0
4C₂ - 6T₂ ≥ 0
S₁ ≤ 2500
S₂ ≤ 2500
solver found a solution 600C₁ + 400T₁ + 300C₂ + 200 T₂
Pinkie Copy Center sells laser printers and supplies. Pinkie Copy Center started the year with 90 containers of ink (average cost of $9.20 each, FIFO cost of $8.80 each, LIFO cost of $7.90 each). During the year, Pinkie Copy Center purchased 720 containers of ink at $10.10 and sold 630 units for $22.00 each. Pinkie Copy Center paid operating expenses throughout the year, a total of $4,000. Pinkie Copy Center's income statement-excluding the effects of income tax under each of the average-cost, FIFO, and LIFO inventory costing methods- is given.
Pinkie Copy Center is a corporation subject to a 40% income tax. Compute the company's income tax expense under the average-cost, FIFO, and LIFO inventory costing methods. Which method would you select to (a) maximize income before tax and (b) minimize income tax expense?
Pinkie Print Supplies, Inc.
Income Statement
Year Ended December 31
Average Cost FIFO LIFO
Sales revenue $13,860 $13,860 $13,860
Cost of goods sold 6,300 6,246 6,363
Gross profit $7,560 $7,614 $7,497
Operating expenses 4,200 4,200 4,200
Net income before
tax $3,360 $3,414 $3,297
Income tax expense
Answer:
A) FIFO costing method
B) LIFO cost method
Explanation:
Pinkie copy center income tax expense ending December 31
Average cost FIFO LIFO
Sales revenue 13860 13860 13860
Cost of goods sold 6300 6246 6363
Gross profit 7560 7614 7497
Operating expense 4000 4000 4000
Net income before tax 3560 3614 3497
Income tax expense 1424 1446 1399
Net income 2136 2168 2098
On November 1, Year 1, Black Lion Company forecasts the purchase of raw materials from an Argentinian supplier on February 1, Year 2, at a price of 200,000 Argentinian pesos. On November 1, Year 1, Black Lion pays $1,200 for a three-month call option on 200,000 Argentinian pesos with a strike price of $0.35 per peso. The option is properly designated as a cash flow hedge of a forecasted foreign currency transaction. On December 31, Year 1, the option has a fair value of $900. The following spot exchange rates apply:
Date U.S dollar per Argentinian Peso
Nov 1,Year 1 $ 0.35
Dec,31 Year 1 0.30
February 1 Year2 0.36
What is the net impact on Black Lion Company’s Year 2 net income as a result of this hedge of a forecast foreign currency purchase? Assume that the raw materials are consumed and become a part of cost of goods sold in Year 2.
a. A $70,000 decrease in net income.
b. A $70,900 decease in net income.
c. A $71,100 decrease in net income.
d. A $72,900 decrease in net income.
Answer:
Option B: 70,900 decrease in net income
Explanation:
Net impact on black lion company's year 2 net income as a result of this hedge of a forecast foreign currency purchase can be calculated by summing up the Option expense, cost of goods sold and adjustment to net income in year 2 .
NET IMPACT ON YEAR NET INCOME
Option expenses (900)
Cost of goods sold (72,000)
Adjustment to Net Income 2000
Decrease in Net Income (70,900)
Working
DEBIT CREDIT
Option expense 900
Foreign currency Option 1100
(0.35 - 0.36) x 200,000 = 2000
2000 - 900 = 1100
Accumulated other comprehensive income 2000
DEBIT CREDIT
Foreign currency 72,000
(200,000x0.36)
Cash 70,000
(200,000x0.35)
Foreign currency option 2,000
DEBIT CREDIT
Cost of goods sold 72,000
Foreign currency 72,000
DEBIT CREDIT
Accumulated other comprehensive income 2000
Adjustment to Net Income 2000
What kind of system is the United States economy based on?
Answer:
capitalism
Explanation:
usa mainly runs on capitalism
The going concern assumption of GAAP implies that the firm: __________
a. Will continue to operate and that all assets should be recorded at their cost rather than at their liquidation value.
b. Will continue to operate and its assets should be recorded at historical cost.
c. Is going under and needs to be liquidated at historical cost.
d. Is going under and needs to be liquidated at liquidation value.
Answer:
correct option is (a)
Explanation:
Anxiety is a financially stable accounting term for a company to fulfill its obligations and continue its business for the future.So, One of the key assumptions under GAAP is the going concern assumption that will continue to operate and that all assets should be recorded at their cost rather than at their liquidation valueFoxy Investigative Services is an investigative services firm that is owned and operated by Shirley Vickers. On November 30, 2018, the end of the fiscal year, the accountant for Foxy Investigative Services prepared an end-of-period spreadsheet, a part of which follows: Required:Foxy Investigative ServicesEnd-of-Period SpreadsheetFor the Year Ended November 30, 2018 ~ Adjusted Trial BalanceAccount Title ~ Dr. Cr. ~Cash ~ 27,500Accounts Receivable ~ 71,800Supplies ~ 3,550Prepaid Insurance ~ 750Building ~ 330,500Accumulated Depreciation-Building ~ 184,100Accounts Payable ~ 16,100Salaries Payable ~ 6,600Unearned Rent ~ 1,500Common Stock ~ 40,000Retained Earnings ~ 70,300Dividends ~ 30,000Service Fees ~ 675,500Rent Revenue ~ 9,000Salaries Expense ~ 435,000Rent Expense ~ 55,000Supplies Expense ~ 11,850Depreciation Expense-Building ~ 10,000Utilities Expense ~ 8,800Repairs Expense ~ 4,250Insurance Expense ~ 3,000Miscellaneous Expense ~ 11,100 ~ 1,003,100 1,003,1001. A. Prepare an income statement for the year ended November 30, 2018. If a net loss has been incurred, enter that amount as a negative number using a minus sign. Be sure to complete the statement heading. Use the list of Labels and Amount Descriptions for the correct wording of text items other than account names. You will not need to enter colons (:) on the income statement. Refer to the Chart of Accounts for exact wording of account titles.B. Prepare a retained earnings statement for the year ended November 30, 2018. If a net loss is incurred or dividends were paid, enter that amount as a negative number using a minus sign. Be sure to complete the statement heading. Refer to the Chart of Accounts for exact wording of account titles. Refer to the lists of Labels and Amount Descriptions for exact wording of the answer choices for text entries other than account names.C. Prepare a balance sheet as of November 30, 2018. Fixed assets must be entered in order according to account number. Be sure to complete the statement heading. You will not need to enter colons (:) or the word "Less" on the balance sheet; they will automatically insert where necessary. Refer to the Chart of Accounts for exact wording of account titles. Refer to the lists of Labels and Amount Descriptions for exact wording of the answer choices for text entries other than account names. For those boxes in which you must enter subtracted or negative numbers use a minus sign.2. Based upon the end-of-period spreadsheet, journalize the closing entries. Refer to the Chart of Accounts for exact wording of account titles.3. If Retained Earnings had instead decreased $46,000 after the closing entries were posted, and the dividends remained the same, what would have been the amount of net income or net loss? If required, use a minus sign to indicate a net loss.
Answer:
Foxy Investigative Services
1. Foxy Investigative Services
A. Income Statement
For the Year Ended November 30, 20Y8
REVENUE
Service Fees $675,500
Rent Revenue 9,000
Total revenues $684,500
EXPENSES
Salaries Expense 435,000
Rent Expense 55,000
Supplies Expense 11,850
Depreciation Expense-Building 10,000
Utilities Expense 8,800
Repairs Expense 4,250
Insurance Expense 3,000
Miscellaneous Expense 11,100
Total expenses $539,000
Net income $ 145,500
Retained Earnings 70,300
Dividends -30,000
Balance, November 30, 20Y8 $185,800
Foxy Investigative Services
B. Statement of Shareholders' Equity
November 30, 20Y8
Common Stock $40,000
Net income $ 145,500
Retained Earnings 70,300
Dividends -30,000
Balance, November 30, 20Y8 $185,800
Total stockholders' equity $225,800
Foxy Investigative Services
C. Balance Sheet
November 30, 20Y8
ASSETS
Current assets
Cash 27,500
Accounts Receivable 71,800
Supplies 5,550
Prepaid Insurance 750
Total Current Assets $105,600
Building 330,500
Accumulated Depreciation -184,100
Total property, plant, and equipment $146,400
Total assets $252,000
LIABILITIES
Current liabilities
Accounts Payable 16,100
Salaries Payable 6,600
Unearned Rent 1,500
Total Liabilities $24,200
EQUITY
Common Stock 40,000
Retained Earnings 185,800
Total stockholders' equity $225,800
Total liabilities and stockholders' equity $250,000
NB: Liabilities + Equity side is short by $2,000 because the Trial Balance is not in balance.
2. Closing Journal Entries:
Account Title Dr. Cr.
Income Summary 30,000
Dividends 30,000
To close dividends to the income summary (Retained Earnings)
Account Title Dr. Cr.
Service Fees 675,500
Rent Revenue 9,000
Income Summary 684,500
To close revenues to the income summary.
Account Title Dr. Cr.
Income Summary $539,000
Salaries Expense 435,000
Rent Expense 55,000
Supplies Expense 11,850
Depreciation Expense-Building 10,000
Utilities Expense 8,800
Repairs Expense 4,250
Insurance Expense 3,000
Miscellaneous Expense 11,100
To close the expenses to the income summary.
3. Net Income remained $ 145,500. Retained Earnings, beginning balance would have been reduced by $46,000.
Explanation:
a) Data and Calculations:
Foxy Investigative Services
End-of-Period Spreadsheet
For the Year Ended November 30, 20Y8
Adjusted Trial Balance
Account Title Dr. Cr.
Cash 27,500
Accounts Receivable 71,800
Supplies 5,550
Prepaid Insurance 750
Building 330,500
Accumulated Depreciation-Building 184,100
Accounts Payable 16,100
Salaries Payable 6,600
Unearned Rent 1,500
Common Stock 40,000
Retained Earnings 70,300
Dividends 30,000
Service Fees 675,500
Rent Revenue 9,000
Salaries Expense 435,000
Rent Expense 55,000
Supplies Expense 11,850
Depreciation Expense-Building 10,000
Utilities Expense 8,800
Repairs Expense 4,250
Insurance Expense 3,000
Miscellaneous Expense 11,100
Totals 1,003,100 1,003,100
Correct total of Debit side = 1,005,100 2,000
Bridgeport Architects incorporated as licensed architects on April 1, 2022. During the first month of the operation of the business, these events and transactions occurred:
Apr. 1 Stockholders invested $19,980 cash in exchange for common stock of the corporation.
1 Hired a secretary-receptionist at a salary of $416 per week, payable monthly.
2 Paid office rent for the month $999.
3 Purchased architectural supplies on account from Burmingham Company $1,443.
10 Completed blueprints on a carport and billed client $2,109 for services.
11 Received $777 cash advance from M. Jason to design a new home.
20 Received $3,108 cash for services completed and delivered to S. Melvin.
30 Paid secretary-receptionist for the month $1,664.
30 Paid $333 to Burmingham Company for accounts payable due.
Required:
Journalize the transactions.
Allmond Corporation, organized on January 3, 2021, had pretax accounting income of $23 million and taxable income of $29 million for the year ended December 31, 2021. The 2021 tax rate is 25%. The only difference between accounting income and taxable income is estimated product warranty costs. Assume that expected payments and scheduled tax rates (based on recently enacted tax legislation) are as follows:
2022 $4 million 30%
2023 1 million 30%
2024 1 million 30 %
2025 2 million 25%
Required:
a. Determine the amounts necessary to record Allmond’s income taxes for 2021 and prepare the appropriate journal entry.
b. What is Allmond’s 2021 net income?
Answer:
$15.75 million
Explanation:
The Income tax necessary to record in almond's income taxes for 2021 can be calculated by reversing all the warranty cost in 2022 and onwards. The warranty cost will be recorded as a deferred tax asset.
Requirement A
Warranty costs reversing in:
Date Amount Tax rate Tax
2022 $4m x 30% = $1.2 Deferred tax Assets
2023 $1m x 30% = $0.3 Deferred tax Assets
2024 $1m x 30% = $0.3 Deferred tax Assets
2025 $2m x 25% = $0.5 Deferred tax Assets
Total deferred tax amount $2.3 Deferred tax Assets
Income tax Payable = Taxabe income x tax rate
Income tax Payable = $29m x 25%
Income tax Payable = $7.25m
Accounting Entry:
DEBIT CREDIT
Income tax expense $7.25
Deferred tax asset $2.3
Income taxes payable $9.55
Requirement B
Net income for 2021 = Pretax income - Income tax expense
Net income for 2021 = $23M - $7.25
Net income for 2021 = $15.75 million
Management in the News In April 2010, the explosion of British Petroleum’s (BP) Deepwater Horizon oil drilling rig and the accompanying oil spill dramatically changed the external environment in which all oil companies operate. The explosion released more oil than any other accidental spill in history and had a huge impact on the waters and surrounding communities of the Gulf Coast. The conditions that led to the spill, the attempts to stop the spill, and the clean-up and aftermath of the spill prompted debates in the U.S. Senate, concern on Wall Street, and attention from companies all over the world.Match each oil spill event with a specific dimension of the general environment. Event Dimension BP stock prices falling 25% during the first month after the oil spill ______ Using deep-se submersibles to take pictures of the oil leak a mile below the surface of the water ______People moving from Louisiana to Oklahoma to avoid the effects of the spill ______
Answer:
Event Dimension BP stock prices falling 25% during the first month after the oil spill. ECONOMIC.
The Economic dimension of the environment deals with production in the economy which means that it deals with business entities and the financial system. Dimension BP stock price falling therefore falls under her.
Using deep-se submersibles to take pictures of the oil leak a mile below the surface of the water. TECHNOLOGICAL.
The Technological dimension of the environment refers to anything related to the use of technology and using deep-sea submersibles to take pictures of the leak below the surface of the water will definitely fall under technology.
People moving from Louisiana to Oklahoma to avoid the effects of the spill. SOCIOCULTURAL.
Sociocultural dimension deals with human beings and how they relate with themselves and the environment around them. People therefore moving from Louisiana to Oklahoma will fall under here.
Mrs. Vick, a 40-year-old cash basis taxpayer, earned $45,000 as a teacher and $5,000 as a part-time real estate agent in Year 2. Mr. Vick, who died on July 1, Year 2, had been permanently disabled on his job and collected state disability benefits until his death. For all of Year 2 and Year 3, the Vick’s residence was the principal home of both their 11-year old daughter, Joan, and Mrs. Vick’ s unmarried cousin, Fran Phillips, who had no income in either year. During Year 2, Joan received $200 a month in survivor social security benefits that began on August 1, Year 2, and will continue at least until her 18th birthday. In Year 2 and Year 3, Mrs. Vick provided over one-half the support for Joan and Fran, both of whom were U.S. citizens. Mrs. Vick did not remarry.
a) What filing status should the Vicks use for Year 2?
b) What filing status should Mrs. Vick use for Year 3?
c) How many exemptions can the Vicks claim in Year 2?
d) How many exemptions can Mrs. Vick claim in Year 3?
Answer:
This question includes tax issues that were eliminated by the TC&JA (personal exemptions), but we can assume that we are living on 2017.
a) What filing status should the Vicks use for Year 2?
Since Mrs. Vick didn't remarry, then she can still file as married filing jointly.
b) What filing status should Mrs. Vick use for Year 3?
She can file as qualifying widow, which means that she will still file as married filing jointly.
c) How many exemptions can the Vicks claim in Year 2?
She will be able to claim 4 personal exemptions (1 for her, 1 for her deceased husband, 1 for Joan and 1 for Fran).
d) How many exemptions can Mrs. Vick claim in Year 3?
She will be able to claim 3 personal exemptions (1 for her, 1 for Joan and 1 for Fran).
Horizon Financial Inc. was organized on February 28. Projected selling and administrative expenses for each of the first three months of operations are as follows: March April MayExpenses $125,800 $117,000 $106,500Depreciation, insurance, and property taxes represent $27,000 of the estimated monthly expenses. The annual insurance premium was paid on February 28, and property taxes for the year will be paid in June, 65% of the remainder of the expenses are expected to be paid in the month in which they are incurred, with the balance to be paid in the following month.Prepare a schedule of cash payments for selling and administrative expenses for March, April, and May.
Answer:
Depreciation, insurance, and property taxes represent $27,000 of the estimated monthly expenses so will have to be removed to find out how much is due in the month.
March April May
March Expenses :
Paid in March $73,112
Paid in April $25,688
April Expenses :
Paid in April $66, 600
Paid in May $23,400
May Expenses :
Paid in May $58,830
Total Cash Payment $73,112 $92,288 $82,230
Working
March Expenses
Paid in March ((125,800 - 27,000)* 74%) = $73,112
Paid in April ((125,800 - 27,000)*26%) = $25,688.
April Expenses
Paid in April ((117,000 - 27,000)*74%) = $66, 600
Paid in May ((117,000 - 27,000)*26%) = $23,400
May Expenses
Paid in May ((106,500 - 27,000)*74%) = $58,830
"The Total Cash Payment of March, April, and May $73,112; $92,288 and $82,230 To understand the calculations, check below"
Calculation of Depreciation, insurance, and property taxesComputation of Depreciation, insurance, and also property taxes represent $27,000 of the estimated monthly expenditures so will have to be withdrawn to find out how much is due in the month.
March April May
March Expenses:
Paid in March $73,112
Paid in April $25,688
April Expenses:
Paid in April $66, 600
Paid in May $23,400
May Expenses:
Paid in May $58,830
Total Cash Payment $73,112 $92,288 $82,230
Working Note:
March Expenses are:
Paid in March ((125,800 - 27,000)* 74%) is = $73,112
Paid in April ((125,800 - 27,000)*26%) is = $25,688.
April Expenses are:
Paid in April ((117,000 - 27,000)*74%) is = $66, 600
Paid in May ((117,000 - 27,000)*26%) is = $23,400
May Expenses are:
Then Paid in May ((106,500 - 27,000)*74%) is = $58,830
Find more information about Depreciation, insurance, and property taxes here:
https://brainly.com/question/17218734
The EZ Lawn Corporation manufactures lawn equipment such as lawn mowers, blowers, and trimmers. The lawn equipment is assembled in the U.S. at a facility in Florida, but the firm outsources inputs from a number of countries, each with varying degrees of economic stability. Given the importance of the firm's sourcing activities, EZ Lawn managers are discussing methods which might reduce the currency risk faced by EZ Lawn. Which of the following would most likely minimize the currency risk of EZ Lawn?
a. Concentrate all of the EZ Lawn outsourcing to one or two neighboring nations.
b. Re-locate a team of EZ Lawn managers overseas to stay abreast of currency changes.
c. List EZ Lawn stock on foreign stock exchanges to offset any currency losses.
d. Assign an EZ Lawn manager the task of monitoring currency fluctuations.
Answer:
c. List EZ Lawn stock on foreign stock exchanges to offset any currency losses.
Many foreign companies do this and list their stocks as ADRs in the US, so this is a method that actually works. The problem is that will listing American stocks in foreign markets help? Probably you could list some stocks in European, Japanese or even Canadian markets. But most foreign exchange markets pose a higher risk than a currency exchange risk.
Explanation:
Currency risk refers to the possibility that a company that engages in international trade losses money due to variations in the exchange rate between their domestic currency and a foreign currency. The best way to protect a company are currency hedged funds that trade currency exchange futures, but this option isn't included in the list.
a. Concentrate all of the EZ Lawn outsourcing to one or two neighboring nations. ⇒ This will increase the risk since it is similar to investing all your money in one single stock, it can be great or it can be a disaster.
b. Re-locate a team of EZ Lawn managers overseas to stay abreast of currency changes. ⇒ You can do this from anywhere in the world, you do not need to relocate someone.
d. Assign an EZ Lawn manager the task of monitoring currency fluctuations. ⇒ Similar to option B, it just takes a few seconds to do it and anyone can do it. It is something so basic that every company should do it. It is like telling someone that they shouldn't forget to keep breathing. It can help you deal with currency fluctuations, but it doesn't protect you from them.
You may worry that the indirect organizational strategy is unethical and manipulative, but the alternative—breaking the news bluntly—can cause pain and hard feelings.
Fill in the blank with the most appropriate answer.
Your goal in using the indirect strategy is to be______________.
Printing and copying costs have skyrocketed at your company, and the company will begin charging employees for all hard copies of documents related to internal use. The message informing employees of this change uses an indirect approach and focuses on the environmental benefits of going paperless.
Is the sender using an indirect approach in an ethical or unethical manner?
a. Ethical
b. Unethical
At some point, everyone will have to deliver bad news. The bad feelings associated with this type of message can be alleviated if the receiver knows the reason for the bad news, feels the news is revealed sensitively, thinks the matter is treated seriously, and believes that the decision is fair. When applying these strategies, make sure to follow the writing process and determine whether to use a direct or an indirect pattern in your message. Determine what strategy should be used in the following situation?
You are demoting an employee to avoid laying them off.
a. Indirect
b. Direct
Question attached
Answer and Explanation:
Ethical: it is ethical to reduce the emotional impact of a bad news by making use of an indirect approach which is less harsh and blunt unlike the direct approach. In situations such as communicating that a person has lost his job, it is important that the manager communicates using indirect approach
Direct: you are communicating facts to someone that has less time. Therefore the direct approach would be most appropriate as it goes straight to the point without delays
Intend to deceive:your boss is extremely busy therefore in this case it would be important to use the direct approach and move straight to the point from the beginning not hiding the bad news at the end of the mail
Borges Machine Shop, Inc., has a 1-year contract for the production of gear housings for a new off-road vehicle. Owner Luis Borges hopes the contract will be extended and the volume increased next year. Borges has developed costs for three alternatives. They are general-purpose equipment (GPE), flexible manufacturing system (FMS), and expensive, but efficient, dedicated machine (DM). The cost data follow: General-Purpose Equipment (GPE) Flexible Manufacturing System (FMS) Dedicated Machine (DM) Annual contracted units Annual fixed cost Per unit variable cost Based on the cost, the process that is best suited for the current contracted volume is __________.
Answer:
All the numbers are missing, so I looked for a similar question.
The contract includes the production of 225,000 gear housings during 1 year.
We are also given the estimated costs of each alternative. We must choose the alternative that minimizes our total costs.
total costs for general purpose equipment (GPE) = $125,000 + (225,000 x $15) = $3,500,000total costs for flexible manufacturing system (FMS) = $200,000 + (225,000 x $14.50) = $3,462,500total costs for dedicated machine (DM) = $525,000 + (225,000 x $13.50) = $3,562,500For the current volume, the best option is flexible manufacturing system with a total cost of $3,462,500.
As total volume increases, the DM option becomes more attractive, but in order for it to cost less than FMS, total output should be higher than 325,000 units per year.
525,000 + 13.5x = 200,000 + 14.5x
x = 325,000 units
GPE is only attractive when the total units are lower (below 150,000 units per year):
125,000 + 15x = 200,000 + 14.5x
0.5x = 75,000
x = 150,000
Because of the low labor costs in Thailand, Melnick Co. (based in the United States) recently established a major research and development subsidiary there that it owns. The subsidiary was created to improve new products that the parent of Melnick can sell in the United States (denominated in dollars) to U.S. customers. The subsidiary pays its local employees in baht (the Thai currency). The subsidiary has a small amount of sales denominated in baht, but its expenses are much larger than its revenue. It has just obtained a large loan denominated in baht that will be used to expand its subsidiary. The business that the parent of Melnick Co. conducts in the United States is not exposed to exchange rate risk. If the Thai baht strengthens over the next three years, will the value of Melnick Co. be favorably affected, unfavorably affected, or not affected? Briefly explain.
Answer:
The subsidiary operates in Thailand simply because its labor costs are much lower. The vast majority of their operations is financed by US dollars that are sent there by the parent company. If the Thai strengthens, then it is more expensive to operate there. I.e. the cheaper a country, the better for the parent company.
In this particular case, the company just obtained a large loan in bahts that it can use to finance its expansion. The thing is that the loan is going to be repaid using US dollars, not Thai bahts. The subsidiary doesn't generate enough bahts to even cover its own expenses, so it will not be able to repay the loan by itself.
If the baht's value increases, then the subsidiary will be hit hard since it will need more US dollars to finance its normal operations and to repay the loan. That will hurt Meinick's value since their cash outflows will increase, reducing its net cash flows.
During 2017, its first year of operations as a delivery service, Concord Corporation entered into the following transactions:
1. Issued shares of common stock to investors in exchange for $181,000 in cash.
2. Borrowed $54,000 by issuing bonds.
3. Purchased delivery trucks for $60,000 cash.
4. Received $17,000 from customers for services performed.
5. Purchased supplies for $5,800 on account.
6. Paid rent of $4,800.
7. Performed services on account for $11,000.
8. Paid salaries of $29,300.
9. Paid a dividend of $10,700 to shareholders.
Required:
Using the following tabular analysis, show the effect of each transaction on the accounting equation.
If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place ( ) around the amount.
Transaction Assets = Liabilities + Stockholders' Equity
1
2
3
4
5
6
7
8
9
Answer:
Concord Corporation
Transaction Assets = Liabilities + Stockholders' Equity
1 Assets (Cash +$181,000) = Liabilities + Stockholders' Equity (Common Stock +$181,000)
2 Assets (Cash +$54,000) = Liabilities (Bonds Payable +$54,000) + Equity
3 Assets (Delivery Trucks +$60,000, Cash - $60,000) = Liabilities + Equity
4 Assets (Cash + $17,000, Accounts Receivable -$17,000) = Liabilities + Equity
5 Assets (Supplies + $5,800) = Liabilities (Accounts Payable +$5,800) + Equity
6 Assets (Cash - $4,800) = Liabilities + Equity (Retained Earnings -$4,800)
7 Assets (Accounts Receivable + $11,000) = Liabilities + Equity (Retained Earnings + $11,000)
8 Assets (Cash - $29,300) = Liabilities + Equity (Retained Earnings + $29,300)
9 Assets (Cash - $10,700) = Liabilities + Equity (Retained Earnings + $10,700)
Explanation:
In accordance with the accounting equation, Assets are always equal to Liabilities + Equity with each given business transaction. The accounting equation reflects the double-entry system of accounting. It shows that two or more accounts are involved in any transaction and each transaction that is properly recorded keeps the equation in balance at all times.
Maury and Bev have saved all their lives and they have been able to pay off their mortgage on their home. Bev is getting elderly and frail and Maury needs to put her into a nursing home where they can give her round-the-clock care. Maury intends to finance this arrangement by getting a loan where the lender makes payments to the homeowner each month, based on accumulated equity. What type of loan does Maury want to get?
Answer:
Reverse Mortgage Loan
Explanation:
Banks allow older people above the age of 62 to use their home's value to obtain a reverse mortgage loan. The bank values the home and extends credit facilities to its elderly owners. The loan amount is usually a part of the home's value and is paid as a lump sum or fixed monthly payments.
Maury wants to apply for a reverse mortgage loan. He will use the value of their home to obtain a credit facility to care for Bev. Maury does not need to repay the loan. The bank will recover its money by selling the house once the couple dies or relocates.
The 2021 income statement of Anderson Medical Supply Company reported net sales of $12 million, cost of goods sold of $5.5 million, and net income of $835,000. The following table shows the company's comparative balance sheets for 2021 and 2020: ($ in thousands) 2021 2020Assets Cash$440 $520 Accounts receivable 840 570 Inventory 1,250 1,050 Property, plant, and equipment (net) 3,100 2,820 Total assets$5,630 $4,960 Liabilities and shareholders’ equity Current liabilities$1,100 $970 Bonds payable 1,550 1,550 Common stock 1,700 1,700 Retained earnings 1,280 740 Total liabilities and shareholders' equity$5,630 $4,960 Required:Calculate Anderson's turnover ratios for 2021. (Use 365 days a year. Round your answers to 2 decimal places.)Inventory turnover ratio timesReceivables turnover ratio timesAverage collection period days Asset turnover ratio times
Answer:
Inventory turnover ratio = cost of goods sold / average inventory = $5,500,000 / [($1,250,000 + $1,050,000)/2] = 4.78 times
Receivables turnover ratio = net sales / average accounts receivable = $12,000,000 / [($840,000 + $570,000)/2] = 17.02 times
Average collection period days = 365 / receivables turnover ratio = 365 / 17.02 = 21.45 days
Asset turnover ratio = net sales / average total assets = $12,000,000 / [($5,630,000 + $4,960,000)/2] = 2.27 times
Klingon Widgets, Inc., purchased new cloaking machinery three years ago for $5.4 million. The machinery can be sold to the Romulans today for $7.6 million. Klingon's current balance sheet shows net fixed assets of $4.2 million, current liabilities of $850,000, and net working capital of $144,000. If all the current accounts were liquidated today, the company would receive $965,000 cash.
a. What is the book value of Klingon's total assets today? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567.)
b. What is the sum of the market value of NWC and the market value of fixed assets? (Do not round Intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567.)
a. Book value of total assets
b. Sum of market value of NWC and fixed assets
Answer:
a. $5,194,000
b. $7,715,000
Explanation:
a. Book Value of assets = Book value of fixed assets + book value of current assets
Book Value of assets = Book value of fixed assets + (Current Liabilities + Net working capital)
Book Value of assets = $4,200,000 + ($850,000 + $144,000)
Book Value of assets = $5,194,000
b. Sum of market value = $7,600,000 + ($965,000 - $850,000)
Sum of market value = $$7,600,000 + $115,000
Sum of market value = $7,715,000