Questions and Answers of Accounting Tools Business

What are the steps in preparing an owner’s equity statement?
In February 2022, Ken Moran invested an additional $10,000 in his business, Moran’s Pharmacy, which is organized as a proprietorship.Moran’s accountant, Terry Baden, recorded this receipt as an
The adjusted trial balance columns of the worksheet for Rick Pool Company, owned by Rick Pool, are as follows. Instructionsa. Prepare an income statement, owner?s equity statement, and a classified
The adjusted trial balance of Lorenz Company at the end of its fiscal year is: Instructionsa. Prepare an income statement and an owner?s equity statement for the year. Lorenz did not make any
What items affect owner’s equity, and in what direction?
What are the differences in the equity accounts of a sole proprietorship versus those of a corporation?
The adjusted trial balance columns of the worksheet for Whitmore Company are as follows. Instructionsa. Prepare an income statement, owner?s equity statement, and a classified balance sheet. $10,000
Presented below is information related to the sole proprietorship of Kurt Cooper,attorney.Legal service revenue—2022 ...........$360,000Total expenses—2022
What is the basic accounting equation for a sole proprietorship?
On May 1, Steven Rumford started Skyline Flying School, a company that provides flying lessons, by investing $45,000 cash in the business. Following are the assets and liabilities of the company on
Why is Apple not a partnership?
For National Co., beginning capital balances on January 1, 2022, are Nancy Payne $20,000 and Ann Dody $18,000. During the year, drawings were Payne $8,000 and Dody $5,000. Net income was $40,000, and
Coburn (beginning capital, $60,000) and Webb (beginning capital $90,000) are partners. During 2022, the partnership earned net income of $80,000, and Coburn made drawings of $18,000 while Webb made
AP At the end of its first year of operations on December 31, 2022, NBS Company?s accounts show the following. The capital balance represents each partner?s initial capital investment. Therefore, net
The post-closing trial balances of two proprietorships on January 1, 2022, are presented below. All cash will be transferred to the partnership, and the partnership will assume all the liabilities of
Selected account balances for Ramano Company at January 1, 2022, are presented below.Accounts Payable $19,000Accounts Receivable 22,000Cash 17,000Inventory 13,500Ramano’s sales
Milner Co. uses special journals and a general journal. The following transactions occurred during May 2022.May 1 M. Milner invested $48,000 cash in the business in exchange for common stock.2 Sold
Merando Computer Components Inc. uses a multi-column cash receipts journal. Indicate which column(s) is/are posted only in total, only daily, or both in total and daily.a. Accounts
Norren Company uses special journals and a general journal. The following transactions occurred during September 2022.Sept. 2 Sold merchandise on account to J. Yancey, invoice no. 101, $780, terms
Gonzalez Company has a balance in its Accounts Payable control account of $8,250 on January 1, 2022. The subsidiary ledger contains three accounts: Rye Company, balance $3,000; Keyes Company,
Bill Porter Company has a balance in its Accounts Receivable control account of $10,200 on January 1, 2022. The subsidiary ledger contains three accounts: Connor Company, balance $4,000; Uhlig
On September 1, the balance of the Accounts Receivable control account in the general ledger of Stark Company was $10,960. The customers’ subsidiary ledger contained account balances as follows:
For the year ended December 31, 2022, Denkinger Electrical Repair Company reports the following summary payroll data.Gross earnings:Administrative salaries ..................$200,000Electricians?
In January, gross earnings in Lugo Company totaled $80,000. All earnings are subject to 7.65% FICA taxes, 5.4% state unemployment taxes, and 0.6% federal unemployment taxes. Prepare the entry to
The following payroll liability accounts are included in the ledger of Harmon Company on January 1, 2022.FICA Taxes Payable .......................................$ 760.00Federal Income Taxes Payable
Mann Hardware has four employees who are paid on an hourly basis plus time-and a-half for all hours worked in excess of 40 a week. Payroll data for the week ended March 15, 2022, are presented as
In November 2022, after having incorporated Cookie Creations Inc., Natalie begins operations. She has decided not to pursue the off er to supply cookies to Biscuits. Instead, the company will focus
Data for Croix Company are given in BE23.1. In the second quarter, budgeted sales were $380,000, and actual sales were $384,000. Prepare a static budget report for the second quarter and for the
For the quarter ended March 31, 2022, Croix Company accumulates the following sales data for its newest guitar, The Edge: $315,000 budget; $305,000 actual. Prepare a static budget report for the
In Rooney Company, direct labor is $20 per hour. The company expects to operate at 10,000 direct labor hours each month. In January 2022, direct labor totaling $206,000 is incurred in working 10,400
Clarke Inc. operates the Patio Furniture Division as a profit center. Operating data for this division for the year ended December 31, 2022, are as shown below. In addition, Clarke incurs $180,000 of
Fallon Company uses fl exible budgets to control its selling expenses. Monthly sales are expected to range from $170,000 to $200,000. Variable costs and their percentage relationship to sales are
Torres Company accumulates the following summary data for the year ending December 31, 2022, for its Water Division, which it operates as a profit center: sales—$2,000,000 budget, $2,080,000
Sentinel Industries has manufactured prefabricated houses for over 20 years. The houses are constructed in sections to be assembled on customers? lots. Sentinel expanded into the precut housing
For the year ending December 31, 2022, Cobb Company accumulates the following data for the Plastics Division which it operates as an investment center: contribution margin—$700,000 budget, $710,000
On July 17, 2021, Keith Urban borrowed $42,000 from his grandfather to open a clothing store. Starting July 17, 2022, Keith has to make 10 equal annual payments of $6,500 each to repay the loan. Use
Parsons Company is planning to produce 2,000 units of product in 2022. Each unit requires 3 pounds of materials at $5 per pound and a half-hour of labor at $16 per hour. The overhead rate is 70% of
During March 2022, Toby Tool & Die Company worked on four jobs. A review of direct labor costs reveals the following summary data. Analysis reveals that Job A257 was a repeat job. Job A258 was a
Urban Corporation prepared the following variance report. InstructionsFill in the appropriate amounts or letters for the question marks in the report. Urban Corporation Variance Report–Purchasing
Hugh Curtin borrowed $35,000 on July 1, 2022. This amount plus accrued interest at 8% compounded annually is to be repaid on July 1, 2027. How much will Hugh have to repay on July 1, 2027?
Gleason Enterprises issued 6%, 8-year, $2,500,000 par value bonds that pay interest annually on April 1. The bonds are dated April 1, 2022, and are issued on that date. The discount rate of
Frazier Company issues a 10%, 5-year mortgage note on January 1, 2022, to obtain financing for new equipment. Land is used as collateral for the note. The terms provide for semiannual installment
Carly Simon wishes to invest $18,000 on July 1, 2022, and have it accumulate to $50,000 by July 1, 2032. Use a financial calculator to determine at what exact annual rate of interest Carly must
Using a financial calculator, solve for the unknowns in each of the following situations.a. On June 1, 2021, Jennifer Lawrence purchases lakefront property from her neighbor, Josh Hutcherson, and
Craig Corporation purchased debt investments for $40,800 on January 1, 2022. On July 1, 2022, Craig received cash interest of $1,660. Journalize the purchase and the receipt of interest. Assume no
On December 31, 2021, the end of its first year of operations, Botani Associates owned the following securities that are held as long-term investments. On this date, the total fair value of the
In January 2022, the management of Northern Company concludes that it has sufficient cash to purchase some short-term investments in debt and stock securities. During the year, the following
Cost and fair value data for the trading debt securities of Lecler Company at December 31, 2022, are $62,000 and $59,600, respectively. Prepare the adjusting entry to record the securities at fair
Wellman Company acquired 30% of the outstanding common stock of Grinwold Inc. on January 1, 2022, by paying $1,800,000 for 60,000 shares. Grinwold declared and paid a $0.50 per share cash dividend
Penn Farms is a grower of hybrid seed corn for Bend Genetics Corporation. It has had two exceptionally good years and has elected to invest its excess funds in bonds. The following selected
For the data presented in BEH.4, show the financial statement presentation of the trading securities and related accounts.Cost and fair value data for the trading debt securities of Lecler Company at
These are two independent situations:1. Sosey Cosmetics acquired 12% of the 300,000 shares of common stock of Elite Fashion at a total cost of $14 per share on March 18, 2022. On June 30, Elite
Here is Kalvin Company’s portfolio of long-term stock investments at December 31, 2021, the end of its first year of operations.Cost1,400 shares of Batone Inc. common stock $73,5001,200 shares of
In its first year of operations, Machin Corporation purchased available-for-sale debt securities costing $72,000 as a long-term investment. At December 31, 2022, the fair value of the securities is
At December 31, 2022, the trading debt securities for Gwynn, Inc. are as follows. Instructionsa.?Prepare the adjusting entry at December 31, 2022, to report the securities at fair value.b. Show the
The following data, presented in alphabetical order, are taken from the records of Manfreid Corporation. InstructionsPrepare a balance sheet at December 31, 2022. Accounts payable $ 150,000
For the data presented in BEH.6, show the financial statement presentation of the securities and related accounts. Assume the securities are noncurrent.In its first year of operations, Machin
Data for debt investments are presented in EH.6. Assume instead that the investments are classified as available-for-sale debt securities with the same cost and fair value data as indicated in EH.6.
Stetson Corporation uses the equity method to account for its ownership of 30% of the common stock of Pike Packing. During 2022, Pike reported a net income of $80,000 and declares and pays cash
Weston Company has these data at December 31, 2022, the end of its first year of operations. The available-for-sale securities are held as a long-term investment. Instructionsa.?Prepare the