[URGENT PLEASE] Basic Financial accounting question 1.1) Bramkin Inc. is a Danish firm located in Copenhagen. You
Question:
[URGENT PLEASE] Basic Financial accounting question
1.1) Bramkin Inc. is a Danish firm located in Copenhagen. You were hired as the firm's accounting manager. There were following events of Bramkin Inc. during 2019:
Jan 8 The investors invested $ 10,000 cash in exchange for common stock.
Jan 25 The firm purchased assets costing $ 6,000
Dec 30 The firm recorded 2019 revenues for $ 4,000
Dec 30 The firm recorded 2019 expenses for $ 3,250
On December 31, 2019, the firm reported $ 4,750 net income.
1.1.a) Evaluate the accounting errors that the firm committed in 2019.
1.1.b) Prepare the firm’s corrected journal entries.
1.1.c) Prepare the firm’s corrected income statement.
1.2)
John Furthon is the sales manager of Bramkin Inc. He wants the firm's credit department to be less restrictive in granting credit. He argues that it would be difficult to improve the firm's sales if the credit department tends to reject the credit application. Discuss the pros and cons of easy credit. What are the accounting implications? Explain.
1.3)
Laura Cooper is an accounting manager of Bramkin Inc. Her boss notes that an income statement is an important financial statement used by individuals interested in a business enterprise's operations. However, her boss needs further explanations on how the time period assumption and the revenue and expense recognition principles guide accountants in preparing an income statement. Explain.
Expert Answer:
11 a There are a few errors in the accounting for Bramkin Inc in 2019 1 The investment on January 8 should have been recorded as a capital contribution not as common stock 2 The purchase of assets on ... View the full answer
