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College Accounting 1st Edition Jerry J. Weygandt, Paul D. Kimmel, Deanna C. Martin, Jill E. Mitchell - Solutions
Bao Company lost all of its inventory in a fire on December 26, 2022. The accounting records showed the following gross profit data for November and December. Bao is fully insured for fire losses but must prepare a report for the insurance company. Instructions a. Compute the gross profit rate
Larkin Company reports net income of $90,000 in 2022. However, ending inventory was understated $7,000. What is the correct net income for 2022? What effect, if any, will this error have on total assets as reported in the balance sheet at December 31, 2022?
The management of Danica Co. asks your help in determining the comparative effects of the FIFO and LIFO inventory cost fl ow methods. For 2022, the accounting records provide the following data.Inventory, January 1 (10,000 units) ...................... $ 47,000Cost of 100,000 units purchased
Sports Locker, a sporting goods store, accumulates the following cost and net realizable value data at December 31. Compute the lower-of-cost-or-net realizable value for the company?s total inventory. Inventory Categories Clothing Shoes Equipment Net Realizable Value Data Cost Data $12,000 9,500
What are the inventory classification for merchandising companies? What are the inventory categories typically used by manufacturing companies?
You are provided with the following information for Koetteritz Inc. for the month ended June 30, 2022. Koetteritz uses the periodic method for inventory. Instructions a. Calculate (i) ending inventory, (ii) cost of goods sold, (iii) gross profit, and (iv) gross profit rate under each of the
The following information was developed for Richt Department Store: (a) If Richt Department Store estimates inventory by using the retail inventory method, what is the estimated cost of ending inventory? (b) If Richt Department Store uses the gross profi t method and net sales are $500,000, the
You are the accountant of Small Toys Company. Pamela Bames, the president, recently mentioned to you that she found an error in the 2022 financial statements which she believes has corrected itself. She determined, in discussions with the Purchasing Department, that 2022 ending inventory was
On April 10, 2022, fire damaged the office and warehouse of Corvet Company. Most of the accounting records were destroyed, but the following account balances were determined as of March 31, 2022: Inventory (January 1, 2022), $80,000; Sales Revenue (January 1?March 31, 2022), $180,000; Purchases
What is the basic difference between a manufacturer and a merchandiser with regards to inventory?
On December 1, 2022, Annalise Company had the following account balances. The following transactions occurred during December. Dec. 3 Purchased 4,000 units of inventory on account at a cost of $0.74 per unit. 5 Sold 4,400 units of inventory on account for $0.90 per unit. (It sold 3,000 of the
Houghton Limited is trying to determine the value of its ending inventory as of February 28, 2022, the company’s year-end. The following transactions occurred, and the accountant asked your help in determining whether they should be recorded or not.a. On February 26, Houghton shipped goods
The general ledger of Hensley Company contained the following Accounts Payable control account for the month of February. Also shown are the related subsidiary ledger balances at the end of February. Instructions a. Indicate the missing posting reference and amount in the control account, and
Presented below is the subsidiary accounts receivable account of Jill Longley. InstructionsWrite a memo to Sara Fogelman, chief financial officer, that explains each transaction. Accounts Receivable Subsidiary Ledger Longley Date Ref. Debit Credit Balance 2022 Sept. 2 S31 61,000 61,000 14,000 G4
Indicate whether the following statements are true or false. If false, indicate how to correct the statement.1. A computerized accounting system must be customized to meet a company’s needs.2. Small companies generally use entry-level programs rather than ERP systems.3. A manual accounting system
Presented below is information related to Harrison Co. InstructionsPrepare the necessary closing entries. Insurance Expense Rent Expense Ending inventory actually on hand Cost of Goods Sold Freight-Out Salaries and Wages Expense Sales Discounts Sales Returns and Allowances Sales Revenue $ 13,000
Tim Jarosz Company had the following account balances at year-end: Cost of Goods Sold $40,000, Inventory $20,000, Operating Expenses $22,000, Sales Revenue $110,000, Sales Discounts $1,500, and Sales Returns and Allowances $1,900.InstructionsPrepare closing entries.
What merchandising account(s) will have a balance after closing entries have been posted?
The adjusted trial balance of Sang Company shows the following data pertaining to sales at the end of its fiscal year October 31, 2022: Sales Revenue $820,000, Freight-Out $16,000, Sales Returns and Allowances $25,000, and Sales Discounts $13,000.InstructionsPrepare separate closing entries for (a)
Financial information is presented below for three different companies. InstructionsDetermine the missing amounts. Hardy Yee Wang Cosmetics Wholesalers Grocery $ (e) 5,000 95,000 (f) 38,000 (g) $122,000 Sales revenue $90,000 (a) 86,000 56,000 Sales returns and allowances 12,000 Net sales (i) Cost
Presented below is financial information for two different companies. Instructionsa. Determine the missing amounts.b. Determine the gross profit rates. (Round to one decimal place.) Winter Company Summer Company (d) $ 5,000 102,000 (e) 41,500 (f) 18,000 Sales revenue Sales returns Net sales Cost
Identify the distinguishing features of a multiple-step income statement for a merchandising company.
In 2022, Laquen Company had net sales of $900,000 and cost of goods sold of $522,000. Operating expenses were $225,000, and interest expense was $11,000. Laquen prepares a multiple-step income statement.Instructionsa. Compute Laquen’s gross profit.b. Compute the gross profit rate. Why is this
The adjusted trial balance of Sang Company shows the following data pertaining to sales at the end of its fiscal year October 31, 2022: Sales Revenue $820,000, Freight-Out $16,000, Sales Returns and Allowances $25,000, and Sales Discounts $13,000.InstructionsPrepare the sales section of the income
The adjusted trial balance of Sang Company shows the following data pertaining to sales at the end of its fiscal year October 31, 2022: Sales Revenue $820,000, Freight-Out $16,000, Sales Returns and Allowances $25,000, and Sales Discounts $13,000.InstructionsPrepare the sales section of the income
The trial balance columns of the worksheet for Dixon Company at June 30, 2022, are as follows. Other data:1. A physical count reveals $500 of inventory on hand.2. $100 of the unearned sales revenue is still unearned at month-end. InstructionsEnter the trial balance on a worksheet and complete
Andres Hermano owns College Depot. Students from the nearby college like to shop there for items they can use on campus such as backpacks and school supplies. College Depot has a December 31 year-end. Many students purchase gift cards as holiday gifts to give to their friends. Because college is
The trial balance of Gaolee Fashion Center contained the following accounts at November 30, 2022, the end of the company?s fiscal year. Adjustment data:1. Customers used gift cards to purchase merchandise totaling $9,000.2. Inventory actually on hand is $88,400. Instructionsa. Enter the trial
Presented below is information related to Hoerl Co. for the month of January 2022.Ending inventory per perpetual records .................................. $ 21,600Ending inventory actually on hand ............................................ 21,000Cost of goods sold
Presented below is information for Device Depot for 2022. Prepare a single-step income statement, a multiple-step income statement, and compute the gross profit rate. (Round to two decimal places.) $20,000 30,000 Operating ex penses Interest expense Interest revenue Net sales $203,000 570,000 Cost
Ball Mart sells gift cards to customers. At the beginning of the year, the balance in the Unearned Sales Revenue account was $9,000. During the year, customers purchased $5,000 in gift cards and used $2,000 in gift cards to pay for merchandise. Determine the balance in the Unearned Sales Revenue
Three years ago, Amy Hessler and her brother-in-law Jacob Seeling opened Family Department Store. For the first two years, business was good, but the following condensed income statement results for 2022 were disappointing. Amy believes the problem lies in the relatively low gross profit rate
Tim Jarosz Company had the following account balances at year-end: Cost of Goods Sold $60,000 and Inventory $15,000. A physical count of inventory determines that merchandise inventory on hand is $13,600.InstructionsPrepare the adjusting entry necessary as a result of the physical count.
Colorful Clothing is a retailer in Atlanta, Georgia. The company sells gift cards and records the cash received in the Unearned Sales Revenue account. Presented below is the unadjusted trial balance for Colorful Clothing as of December 31, 2022.Adjustment data:1. Customers used gift cards to
Presented below are transactions related to Lofl in Company.1. On December 3, Lofl in Company sold $600,000 of merchandise to Honor Co., terms 2/10, n/30, FOB destination. Lofl in paid $500 for freight charges. The cost of the merchandise sold was $200,000.2. On December 8, Honor Co. was granted an
On June 10, Taylor Company sold $8,000 of merchandise to Diaz Company, FOB shipping point, terms 2/10, n/30. The merchandise purchased by Diaz on June 10 cost Taylor $4,800. Diaz pays the freight costs of $400 on June 11. Damaged goods totaling $300 are returned to Taylor for credit on June 12.The
Nixa Office Supply uses a perpetual inventory system. On September 12, Nixa sold 26 calculators costing $23 for $31 each to Sura Bookstore, terms n/30. During the remainder of September, the following transactions occurred.Sept. 14 Granted credit of $31 to Sura Bookstore for the return of one
Why do retailers permit returns from their customers?
On December 3, Humphrey Company sold $570,000 of merchandise to Frazier Co., terms 1/10, n/30, FOB destination. The cost of the merchandise sold was $350,000. Humphrey paid $900 for freight charges.Instructions Prepare the journal entries to record these transactions on the books of Humphrey
Describe the advantages to the retailer for permitting customers to pay using credit cards.
Renner Hardware Store completed the following merchandising transactions in the month of May. At the beginning of May, the ledger of Renner showed Cash of $5,000, Inventory of $6,900, and Owner’s Capital of $11,900.May 2 Sold merchandise on account $2,100, terms 1/10, n/30. The cost of the
Skyler’s friend Justice works at a Sam’s Sporting Goods. Justice is a manager and has the authority to approve returns and allowances. Justice tells Skyler to purchase a pair of his favorite sneakers and then come back the next day and show that the shoes were damaged. Justice states that he
On June 10, Taylor Company sold $8,000 of merchandise to Diaz Company, FOB destination, terms 2/10, n/30. The merchandise purchased by Diaz on June 10 cost Taylor $4,800. Taylor pays the freight costs of $400 on June 11. Both companies use a perpetual inventory system. InstructionsPrepare
On October 5, Wang Company sells merchandise to Davis Company for $4,800, terms 2/10, n/30. The cost of the merchandise sold is $3,100. On October 7, Davis Company returns defective goods with a selling price of $650 and a fair value of $100. On October 11, Wang Company receives the balance due
On July 4, Spangler’s Restaurant accepts a Visa card for a $150 dinner bill. Visa charges a 4% service fee. Prepare the entry on Spangler’s books related to this transaction. Omit explanations.
Kern’s Book Warehouse distributes hardcover books to retail stores and extends credit terms of 2/10, n/30 to all of its customers. At the end of May, Kern’s inventory consisted of books purchased for $1,800. During June, the following merchandising transactions occurred.June 3 Sold books on
Nixa Office Supply uses a perpetual inventory system. On September 12, Nixa Office Supply sold 26 calculators costing $23 for $31 each to Sura Book Store, terms n/30. InstructionsJournalize the transaction required on September 12. Omit explanations.
On October 5, Wang Company sells merchandise to Davis Company for $4,800, terms 1/10, n/30. The cost of the merchandise sold is $3,100. Wang paid the freight charges of $200. Record the transactions on the books of Wang Company. Omit explanations.
On May 3, Dinh Company sold $500,000 of merchandise to Thao Company, terms 2/10, n/30. The cost of the merchandise sold was $325,000. Prepare the journal entry to record this transaction on Dinh Company’s books using a perpetual inventory system. Omit explanations.
On June 10, Diaz Company purchased $8,000 of merchandise from Taylor Company, FOB shipping point, terms 2/10, n/30. Diaz pays the freight costs of $400 on June 11. Damaged goods totaling $300 are returned to Taylor for credit on June 12. On June 19, Diaz pays Taylor Company in full, less the
Information related to Kerberos Co. is presented below 1. On April 8, returned damaged merchandise to Wilkes Company and was granted a $3,000 credit for returned merchandise. 2. On April 15, paid the amount due to Wilkes Company in full. (Note: On April 5, purchased merchandise from
Record journal entries for the following transactions for Captain Harry Outfitters. 1. Captain Harry Outfitters returned 3 damaged tents for $300 to Camp Supplies, Inc. The purchase was on account. 2. Captain Harry Outfitters received an allowance from Handsome Hats Company of $100 for 5
Information related to Kerberos Co. is presented below 1. On April 5, purchased merchandise from Wilkes Company for $23,000, terms 2/10, net/30, FOB shipping point. 2. On April 6, paid freight costs of $900 on merchandise purchased from Wilkes. 3. On April 7, purchased equipment on
Record journal entries for the following transactions for Captain Harry Outfitters. 1. Captain Harry Outfitters purchased 100 tents for $10,000 on account. 2. Captain Harry Outfitters purchased 10 display cases for $2,500 on account. 3. Captain Harry Outfitters purchased 50 rain
Mr. Etihad has prepared the following list of statements about service companies and merchandisers. 1. Measuring net income for a merchandiser is conceptually the same as for a service company. 2. For a merchandising company, sales less operating expenses is called gross profit. 3.
Match the following words to their definitions: a. Perpetual inventory system. b. Periodic inventory system. c. Gross profit. d. Sales revenue.1. The primary source of revenue in a merchandising company. 2. An inventory system under which the company keeps detailed records
Jackie wants to start a business selling skateboards. She doesn’t have a lot of money to purchase much other than the skateboards themselves. She doesn’t plan to rent a building or even an offi ce. She plans to set up a booth at skateboarding competitions, and she will sell her skateboards
Renner Hardware Store completed the following merchandising transactions in the month of May. May 1 Purchased merchandise on account from Braun’s Wholesale Supply $4,200, terms 2/10, n/30. 5 Received credit from Braun’s Wholesale Supply for merchandise returned $300. 10 Paid
Identify, in the sequence in which they are prepared, the three trial balances that are often used to prove the equality of the account balances.
What is shown on an adjusted trial balance?
One part of the adjusting entry is given below. Indicate the account title for the other part of the entry.a. Salaries and Wages Expense is debited.b. Depreciation Expense is debited.c. Supplies is credited.
On December 31, employees have earned $5,000 but payday is not until January 9. Record the adjusting entry at December 31.
The adjusted trial balance for Turnquist Company is provided. InstructionsPrepare the income and owner?s equity statements for the year and the balance sheet at August 31. Turnquist Company Adjusted Trial Balance August 31, 2022 Debit Credit Cash $10,400 Accounts Receivable 11,000 Supplies 900
A partial adjusted trial balance of Frangesch Company at January 31, 2022, shows the following. InstructionsAnswer the following questions, assuming the year begins January 1.a. If the amount in Supplies Expense is the January 31 adjusting entry, and $1,000 of supplies was purchased in January,
The adjusted trial balance of Wilder Company at December 31, 2022, includes the following accounts: Owner’s Capital $15,600, Owner’s Drawings $7,000, Service Revenue $39,000, Salaries and Wages Expense $16,000, Insurance Expense $2,000, Supplies Expense $1,500, and Depreciation Expense $1,300.
The adjusted trial balance of Wilder Company at December 31, 2022, includes the following accounts: Owner’s Capital $15,600, Owner’s Drawings $7,000, Service Revenue $39,000, Salaries and Wages Expense $16,000, Insurance Expense $2,000, Supplies Expense $1,500, and Depreciation Expense $1,300.
Meghan Lindh, D.D.S., opened a dental practice on January 1. During the first month of operations, the following transactions occurred.1. Purchased dental equipment on January 1 for $80,000. The equipment depreciates $400 per month.2. Purchased a one-year malpractice insurance policy on January 1
The ledger of Passehl Rental Agency on March 31 of the current year includes thefollowing selected accounts before adjusting entries have been prepared. An analysis of the accounts shows the following.1. The equipment depreciates $400 per month.2. Supplies on hand total $750.3. Insurance expires
Have you ever babysat children? When did you get paid? You probably went to the family’s house, watched the children, and were paid when the parents returned home. Businesses, however, do not pay their employees every day.InstructionsThink about a job that you may have had. Let’s say you were
On November 1, 2022, the account balances of Hamm Equipment Repair were asfollows. During November, the following summary transactions were completed.Nov. 2 Paid $700 for salaries due employees.10 Received $3,620 cash from customers on account.12 Received $3,100 cash for services performed in
On July 1, Major Co. pays $15,120 to Cruz Insurance Co. for a 4-year insurance contract. Both companies have fiscal years ending December 31. For Major Co., journalize and post the entry on July 1 and the adjusting entry made on an annual basis on December 31.
Russell Company is a pesticide manufacturer. Its sales declined greatly this year due to the passage of legislation outlawing the sale of several of Russell’s chemical pesticides. In the coming year, Russell will have environmentally safe and competitive chemicals to replace these discontinued
Macy?s Motel opened for business on May 1, 2022. Its trial balance before adjustment on May 31 is as follows. In addition to those accounts listed on the trial balance, the chart of accounts for Macy?s Motel also contains the following accounts and account numbers: No. 158 Accumulated
In reviewing the accounts of Kelli Taylor Co. at the end of the year, you discover that adjusting entries have not been made.InstructionsWrite a memo to Kelli Taylor, the owner of Kelli Taylor Co., that explains the following: the nature and purpose of adjusting entries, why adjusting entries are
Yang Co. was organized on April 1. The company prepares quarterly financial statements. The adjusted trial balance amounts at June 30 are shown below. a. Determine the net income for the quarter April 1 to June 30.b. Determine the total assets and total liabilities at June 30 for Yang Company.c.
The ledger of Jahnke Inc. on March 31 includes the following selected accounts before adjusting entries. An analysis of the accounts shows the following.1. Insurance expires at the rate of $300 per month.2. Supplies on hand total $1,100.3. The equipment depreciates $480 per month.4. During March,
?Happy Camper Park was organized on April 1, 2021, by Erica Hatt. Erica is a good manager but a poor accountant. From the trial balance prepared by a part-time bookkeeper, Erica prepared the following income statement for the quarter that ended March 31, 2022. Erica thought that something was
A review of the ledger of Remina Company at December 31, 2022, produces the following data pertaining to the preparation of annual adjusting entries.1. Prepaid Insurance $10,340. The company has separate insurance policies on its buildings and its motor vehicles. Policy B45 on the building was
Several timing concepts are discussed in this chapter. A list of concepts is provided below in the left column, with a description of the concept in the right column. Match each concept to the appropriate definition.1. Calendar year.2. Time period assumption.3. Adjusting entries.4. Interim
Logan Krause started her own consulting firm, Krause Consulting, on May 1, 2022.The trial balance at May 31 is as follows. In addition to those accounts listed on the trial balance, the chart of accounts for Krause Consulting also contains the following accounts and account numbers: No. 158
The ledger of Althukair Company includes the following accounts. Explain why each account may require adjustment.a. Supplies.b. Prepaid Insurance. c. Depreciation Expense.d. Salaries and Wages Expense.
Nelson Company provides the following information for the month ended October 31, 2022: sales on credit $280,000, cash sales $95,000, sales discounts $5,000, and sales returns and allowances $11,000. Prepare the sales section of the income statement based on this information.
Describe strong internal control policies related to cash receipts and cash payments.
Jessica Mahan is the new owner of Penny Parking. She has heard about internal control but is not clear about its importance for her business. Explain to Jessica the purposes of internal control over cash.
Listed below are three procedures followed by Gary’s Sporting Goods, owned by Gary Stanten. Indicate whether each procedure is an example of a strong internal control or a weak internal control. a. Cashiers accept cash from customers and use a cash register. b. At the end of the day,
On May 31, 2022, Reber Company had a cash balance per books of $6,781.50. The bank statement from New York State Bank on that date showed a balance of $6,404.60. A comparison of the statement with the Cash account revealed the following facts. 1. The statement included a debit memo of $40 for
On December 1, 2022, Fullerton Company had the following account balances. During December, the company completed the following transactions. Dec. 7 Received $3,600 cash from customers in payment of account (no discount allowed). 12 Purchased merchandise on account from Vance Co.
Indicate whether each of the following statements is true or false. If false, indicate how to correct the statement. a. Only deposits can be made at an ATM. b. The routing number is a 9-digit number at the bottom of each check. c. A special endorsement on a check allows the check to
The bank portion of the bank reconciliation for Langer Company at November 30, 2022, was as follows. The adjusted cash balance per bank agreed with the cash balance per books at November 30. The December bank statement showed the following checks and deposits. The cash records per books
Describe the various transactions that may be completed using an ATM.
Match the following banking terms with the correct definition 1. Automated teller machine (ATM). 2. Bank statement. 3. Canceled check. 4. Check. 5. Credit memorandum. 6. Debit memorandum. 7. Deposit slip. 8. Depositor. 9. Electronic funds transfer
On April 30, the bank reconciliation of Westbrook Company shows three outstanding checks: No. 254, $650; No. 255, $620; and No. 257, $410. The May bank statement and the May cash payments journal show the following. Instructions Using Step 3 in the reconciliation procedure, list the
Rodriguez Company maintains a checking account at Imura Bank. At July 31, selected data from the ledger balance and the bank statement are shown below. Analysis of the bank data reveals that the credits consist of $79,000 of July deposits and a credit memorandum of $4,470 for the collection of
As a new staff accountant for the CPA firm of Eaton, Quayle, and Hale, you have been assigned to review the internal controls over mail cash receipts of Pritchard Company. Your review reveals the following. Checks are promptly endorsed “For Deposit Only,” but no list of the checks is prepared
FUTA stands for Federal Unemployment Tax Act; and SUTA stands for State Unemployment Tax Act.
Which payroll tax is required to be paid by both employers and employees?
You are the bookkeeper in charge of general ledger accounting at Linbarger Bottling Company. Your company has a large loan from an insurance company. The loan agreement requires that the company’s cash account balance be maintained at $200,000 or more, as reported monthly. At June 30, the
Describe the three types of endorsements made on checks.
Chase Company, an auto repair shop, established a $200 change fund on March 1. On March 2, the cash on hand at the end of the day was $856.75. Prepare the necessary journal entries for March 1 and March 2.
Is using a debit card the same as using a check? Explain.
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