: C. 60. Interest expense reduces taxable income. Landseeker's Restaurants reported cost of goods sold of $322 million and accounts payable of $83 million for 2008. How much is the ending inventory using lower of cost or market on an item-by-item basis? The current market rate is 8%. C. Goodwill A. The inventory at the end of 2014 was $188,000 and $208,000 at the end of 2013. You have determined that Company X estimates bad debt expense with an aging of accounts receivable schedule. The entry to close the Income Summary account at the end of the year, after revenue and expense accounts have been closed, is: Multiple Choice Debit Income Summary $83,300, credit T. Westmont, Capital $83,300 Debit T. Westmont, Capital $63,700; credit Income Summary $63,700 Debit T. Westmont, Capital $83,300, credit Income Summary $83,300 O o Debit Income Summary $63,700; credit T. Westmont, Capital $63,700 Debit T. Westmont, Capital $301,000; credit Income Summary $301,000. The entry to close the Income Summary account at the end of the year, after revenue and expense accounts have been closed, is: Assets are often classified into current assets, long-term investments, plant assets and intangible assets. Credit Cash $1,600 $123,255 At what amount would the liability be reported at on the balance sheet as of the purchase date, after the initial $50,000 payment was made? Eastview company uses a perpetual LIFO inventory system, and has the following purchases and sales: E) None of the above. $1.31. Workings: *Net income for the year= Total R. What is cost of goods sold? Long-term liabilities. (Supplement) Irish Industries purchased a machine for $65,000 and is depreciating it with the straight-line method over a life of 10 years, using a residual value of $3,000. Wrote down the carrying value of certain inventory items that were deemed to be obsolete. What would be incorrect about reporting accounts receivable in the balance sheet? Gracey's also has $600,000 of common stock outstanding. The firm is in a 35 percent tax bracket. 1. 1. B. Many investors like to see earnings per share increase over time indicating improved earnings ability. Current amounts owed to suppliers of inventory. Select one or more of the choices shown. Transaction analysis, posting to the ledger, journal entries 1. Of the amount credited to this account during the year, 5,630hadbeenearnedbyAugust31.5,630 had been earned by August 31.5,630hadbeenearnedbyAugust31. E. B. its assets decreased during an accounting period. $117,000 The owner withdrew $37,800 during the year. $1,885 Increases the market value of the Bonds Payable. (Assume all sales were made on the last day of the month.) A bond with a maturity value of $100,000 has a stated interest rate of 8 percent. $86,000 The retained earnings account before closing had a balance of $312,000. Indicates a shorter time span between the purchase and sale of inventory. $200 (1800-200). 11 units are sold on October 4. $0.34. The CPA's role in performing audits is important to our society because The company's January 31, 2009 financial position is 2 percent discount for payment within 10 days, or the full amount (less returns) due within 30 days The journal entry to write-down inventory decreases gross profit. D. LIFO 1. On July 7, it returned $200 worth of merchandise. E. e. $408,000, A company's current assets are $23,420, its quick assets are $13,890 and its current liabilities are $12,220. The owner's capital account before closing had a balance of $307,000. All of the above are advantages associated with bonds. C. C. Debit Cash $7,500; credit Accounts Payable $7,500. B. Deducted from the book balance of cash. The asset had a five-year life, zero residual value, and $2,000 accumulated depreciation as of December 31, 2014. 1. B. Credit card discounts E) none of the above. A dealership in Lockhart has agreed to the following terms: $4,000 down plus 20 monthly payments of $750. A. $53,349 \hline \text { Window Repairs } & 580.10 \\ $82,800 C. $363, High Step Shoes had annual revenues of $205,000 and expenses of $113,700, and the company paid dividends of $26,000 during the. A stock dividend Tara Westmont, the proprietor of Tiptoe Shoes, had annual A company has 4 million common shares authorized, 2.5 million shares issued and 100,000 treasury shares. The retained earnings account before closing had a balance of $312,000. $544. C. Regardless of the inventory costing system used, cost of goods available for sale must be allocated at the end of the period between The F. Mercury, Capital account has a credit balance of $18,700 before closing entries are made. Maks, Inc., uses straight-line depreciation for all of its depreciable assets. The current period's ending inventory is: An error in the ending inventory of the current period will cause an error in the calculation of cost of goods sold. How much is the year 8 depreciation expense assuming use of the straight-line depreciation method? Indicates a shorter time span between the ordering and receiving of inventory. The purchase of supplies for cash would A company's board of directors votes to declare a cash dividend of $1.00 per share on its 12,000 common shares outstanding. It indicates the portion of earnings distributed to the owners as an immediate return on their investment. A. \text{Accounts Payable} && 9,396\\ D. decrease liabilities, $100,000; decrease stockholders' equity, $3,000; and decrease assets, $103,000. Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $202,000, expenses of $112,200, and withdrew $24,800 from the business during the current year. Management wishes to record the land at the market value of the stock. During the year ended December 31, 2009, it reported a net income of $10,000, declared and paid a cash dividend of $2,000, and issued additional capital stock of $20,000. D. $1,000 debit. B. the owner's capital account before closing had a balance of $297,000. The process of allocating the cost of natural resources to the period when it is consumed. 180. A. a liability. A. Net income will be overstated, but there would be no affect on total assets. $3,625 The bonds were dated January 1, 2009, and interest is payable annually on December 31. Adjusting entries: D. Affect cash accounts. A company is facing a class-action lawsuit in the upcoming year. The company will use the double declining-balance depreciation method. 1. $10,000 Earning revenue for services performed. E. Total assets increase and equity decreases. Par value and the market rate on the date the bond was issued. On July 7, it returned $200 worth of merchandise. 1. D. B) at the end of the year. A. \hline \text { Electricity } & 1,194.00 \\ Current assets were overstated and net income was understated. Rowan Company produces pipes for concert quality organs. Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $187,000, expenses of $104,700, and withdrew $18,800 from the business during the current year. Net income would increase by recording the expense in December The statement of retained earnings. 1. 1. $2,200. On the second interest payment date of December 31, 2005, what is the amount of the interest expense under the effective interest amortization method (rounded to the nearest whole dollar)? What amount would be recorded as bad debt expense for the current period? D. must be reported as a liability, but not recorded. 1. $144,400. Can the work sheet be used as a substitute for the financial statements? The owner's capital account before closing had a balance of $297,000. A. Refer to Exercise 16.52. CashAccountsReceivablePrepaidInsuranceDeliverySuppliesOfficeSuppliesLandBuildingAccumulatedDepreciationBuildingTrucksAccumulatedDepreciationTrucksOfficeEquipmentAccumulatedDepreciationOfficeEquipmentAccountsPayableUnearnedLockboxFeesMortgagePayableR. C. $3,100 B) will cause the total cost of borrowing (expense) to be less than the bond interest paid. D. decrease liabilities. d. Debit Revenue accounts $55,200; credit Income Summary $55,200. $81,600. Prepare adjusting, closing, and, when necessary, reversing entries from the work sheet. Aug. 2 - Purchased 1,500 shares of its common stock at $13 per share. E) None of the above is correct. Assuming the asset's salvage value is $2,000, what will be the amount of accumulated depreciation on this asset on December 31, Year 3? \end{array} a. 1. b. Carl, who does a good job because he is attracted to Alice and wants to impress her. Gross accounts receivable in the asset section of the balance sheet and the allowance for doubtful accounts in the expense section of the income statement. D. 3.91. Which of the following best describes the proper presentation of accounts receivable in the financial statements? d. $115,000 AccumulatedDepreciationOfficeEquipment, Don Herrmann, J. David Spiceland, Wayne Thomas, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Daniel F Viele, David H Marshall, Wayne W McManus. A company has sales of $382,200 and its gross profit is $160,700. Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $185,000, expenses of $103,700, and withdrew $18,000 from the business during the current year. Which of the following transactions would usually cause accounts payable turnover to increase? $18,000. C. Not recording interest earned in 2009 until the cash is received in 2010 After posting the entries to close all revenue and expense accounts, the income summary account of Cleaver Auto Services has a $5,900 debit balance. A. The adjusted cash balance per the books on January 31 is: Expired insurance, 306030603060$b. The amount of the cash paid on July 8 equals. $3,100. Total assets increase and stockholders' equity decreases. Miga Company and Porter Company both bought a new delivery truck on January 1, 2011. Affect only balance sheet accounts. he inventory costing method selected by a company will affect After 4 years of straight-line depreciation, the asset's total estimated useful life was revised from 8 years to 6 years and there was no change in the estimated salvage value. Net income for July was zero and August was $11,500. When originally purchased, a vehicle costing $23,000 had an estimated useful life of 8 years and an estimated salvage value of $3,000. Miga Company estimated a lower residual value, but both estimated the same useful life and both elected straight-line depreciation. \text{Prepaid Insurance} & 5,340\\ In the first year, 15,000 bolts were produced. QV-TV, Inc. provided the following items in their footnotes for the year-end 2010: Cost of goods sold was $22 billion under FIFO costing and their inventory value under FIFO costing was $2.1 billion. C. the number of shares outstanding increases while the par value of each share decreases. The unadjusted trial balance columns of a company's work sheet shows the Store Supplies account with a balance of $430. 1. D. B. Failure to record amortization expense on a patent during the current year will result in which of the following? B) debit to interest expense for $284,800. e. $13,750. D. Revenue recognition accounting. $174,000 D) $18,455 $2,000. Which of the following is an acceptable explanation for the difference in net book value? 35. Debit Assume the owner, Raul Siglo, made no additional investments. Question Answered step-by-step 1. The owner's capital account before closing had a balance of $297,000. B. A) each day. $117,000. 1. B. If a company paid $38,000 of its accounts payable in cash, what was the effect on the accounting equation? What amount should be reported on December 31 as the bond liability? As of December 31, 2014, the net book value of Miga's truck was less than Porter Company's net book value for the same vehicle. Which of the following statements is false about earnings per share? the ending owner's capital balance after closing is: 2 See answers Advertisement MrsSeifried $150,000 4.23 August 18 15 units were purchased at $14 per unit The understatement of the beginning inventory balance causes: e. $493, A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. C. is accounted for in exactly the same manner as a stock split. A. retained earnings decreased due to paying dividends to stockholders. If a company mistakenly forgot to record depreciation on office equipment at the end of an accounting period, the financial statements prepared at that time would show: 1. Total assets decrease and equity increases. D. Transaction analysis, journal entries, posting to the ledger. Debit Cash $7,000; credit Paid-in Capital in Excess of Par Value, Common Stock $6,000, credit Common Stock $1,000. $5,000 Double-declining-balance depreciation is used. C. $2,200 debit. E. Debit Amortization Expense $24,000; credit Accumulated Amortization $24,000. D. expenses will increase. A physical count of inventory on hand at December 31, 2007, showed $1,200. C. 2/10ths of a percent discount for payment within 30 days It is reported on the balance sheet as a component of current assets. $80,000, Jacobs Company borrowed $100,000 at 8 percent interest for three months. E. B. C. The shares authorized, issued, outstanding, and held in treasury will all quadruple while the par value will be reduced to $.25 per share. Williams Company purchased a machine costing $25,000 and is depreciating it over a 10-year estimated useful life with a residual value of $3,000. (iii) Total expenses remains the same Debit Cash $7,650; credit Notes Payable $7,650. D. Only revenue and expense accounts. Noncumulative preferred stock. We collect cash from a customer who owed us money. A. The company signed a note payable with interest at 6 percent per year. Cr. B. On April 30, Gomez Services had an Accounts Receivable balance of $18,000. The owner's capital account before closing had a balance of $313,000. D. $107,000. A. decrease stockholders' equity, $75,000; decrease assets, $75,000. e. $200,000, Cushman Company had $800,000 in sales, sales discounts of $12,000, sales returns and allowances of $18,000, cost of goods sold of $380,000, and $275,000 in operating expenses. It is a liability account. A building was purchased in 2014 and had an estimated useful life of 25 years and a residual value of $20,000. As of March 1, outstanding checks total $22,000 and deposits in transit total $15,000. Debit Merchandise Inventory $200; credit Sales Returns $200. Current assets were overstated and net income was understated. An NSF check returned on a customer account Niensted is . Both companies paid exactly the same cost, $30,000, for their respective vehicles. B. A. d. Debit Accounts Payable $200; credit Merchandise Inventory $200 \text{Delivery Service Revenue} && 283,470\\ B. d. $1,600 C. The debit to cash will be less than the credit to accounts receivable on May 19. The owner of an office building should report rent collected in advance as a debit to cash and a credit to On June 24, it paid the balance owed for the merchandise taking any discount it is entitled to. B. an asset other than cash. C. $66,667 The Net Income In addition, they had the annual home expenses listed below. C. No change: the reduction of the asset cash is offset with the addition of the asset treasury stock. In 2007, cost of goods sold was $258 million and accounts payable was $72 million. B. B. All three, Which inventory method provides a better matching of current costs with sales revenue on the income statement and outdated values for inventory on the balance sheet? D. Cumulative preferred stock's right to receive dividends is forfeited in any year that dividends are not declared. $100,000. B. c. $3,200 $100,000 1. $103,400. \text{Cash} & 10,072\\ c. $390,000 Accumulated DepreciationEquipment. E. Only asset accounts. Cannot be determined from the information given. Stock-related transactions for Kraft Unlimited follow. Stockholders maintain proportionate ownership percentages. The local bank is currently charging an annual interest rate of 12 percent for car loans. e. 1.41, a. Assuming the company uses a perpetual inventory system, and records purchases using the gross method, the correct journal entry to record the merchandise return on July 7 is: How much was Carp's beginning inventory? 1. $120 During January 2009, the company completed the following transactions: (A) paid on a note payable $10,000 (no interest was paid); (B) collected an accounts receivable, $9,000; (C) paid an accounts payable, $5,000; and (D) purchased a truck, $5,000 cash, and a $20,000 note payable from a bank. On that date, when the market price of the stock is $15 per share, the corporation issues a 2-for-1 stock split. It is estimated that the machine could produce 75,000 bolts of woven fabric over its useful life. The freight charge, $500, was added to the invoice amount. The entry to close the Income Summary account at the end of the year, after revenue and expense accounts have been closed, is: Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $185,000, expenses of $103,700, and withdrew $18,000 from the business during the current year. B. Prepare an income statement, a statement of owners equity, and a balance sheet for the company. D. Assets decrease and stockholders' equity decreases. Current assets were understated and net income was overstated. C. All temporary ledger accounts with balances. 1. Calculated using the double-declining balance method. Debit Retained Earnings $12,000; credit Common Dividend Payable $12,000. 10 percent discount for payment within 30 days Their par value is $1 per share and the market price is $30 when the company declares a 4/1 stock split. \text{Delivery Supplies} & 14,700\\ c. Debit Accounts Payable $1,600; credit Merchandise Inventory $32; credit Cash $1,568. D. New tires for a truck. C. Sales $400,000 Copyrights Debit Retained Earnings $750,000; credit Common Stock $750,000. 3.7908 The 2007 income statement should report supplies expense amounting to Assuming the company uses a perpetual inventory system, and records purchases using the gross method, the correct journal entry to record the payment on July 28 is, Debit Accounts Payable $1,600 Young Company is involved in a lawsuit. D. C. $2,000. Balance per book decreases a. Debit Income Summary $55,200; credit Revenue accounts $55,200. $24,000. a. 1. Current assets were understated and net income was understated. An increase in the value of a natural resource when incurred. B. C. The cost of rent on the factory building. D. There will be a credit to sales discounts on May 19. A. If a period-end inventory amount is reported in error, it can cause a misstatement in all of the following except: B. Assets will be overstated, but there would be no effect on net income for the year. Direct write-off method. Q. $490 Assets and net income are both overstated. Net income under the accrual basis of accounting is: d. Debit Income Summary $81,300, credit T. Westmont, Capital $81,300. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. $480. The company's depreciation expense for 2014 was $15,000 on the building. 250 a. Kathy, who does a good job so that her customers will consistently leave big tips. A disclosure note is required when the loss is probable and the amount can be reasonably estimated. None. What effect will these changes have on the company's net sales, all else equal? A. On March 8, it sold 22 units for $54 each. Treasury stock reduces total equity on the balance sheet. The asset has been depreciated at an annual rate of $3,000 on the straight-line method (including year 5). Debit Dividend Expense $12,000; credit Common Dividend Payable $12,000. C. The owner's capital account before closing had a balance of $307,000. b. 1. Show transcribed image text Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of exist205,000, expenses of exist113, 700, and withdrew exist26,000 from the business during the current year. Net sales will not change On July 28, it paid the full amount due. Find the down payment and the amount of the mortgage. Increase of $225,000 B. $61,390. c. $450 C. $109,000. the July transactions. 1. Multiple Choice When the replacement cost of inventory drops below the cost shown in the financial records, total assets are reduced. Because GAAP specifies rigid guidelines regarding the calculation of depreciation, this situation is not possible. C. auditors issue reports on the accuracy of each financial transaction. Decrease of $75,000 $233,600 - $43,000 = $190,600. C. Ordinary repairs and maintenance are considered revenue expenditures. $1.99. 10 percent discount for payment within 30 days. A. $380,000 $2,000 Download the file 'breeds.py'; it contains a list of lists named 'breeds'. The journal entry to write-down inventory increases cost of goods sold. Which statement regarding dividends is false? 1.6105 Both stock and cash dividends reduce retained earnings. The return on the investment is expected to be 10% and will be compounded semi-annually. GreenLawn Co. provides landscaping services to clients. The owner's capital account before closing had a balance of $301,000. Cash receipts from customers exceeded cash payments to suppliers. A. debit Unearned Fees, $1,548; credit Fees Earned, $1,548. Bank service charges When the loss probability is remote and the amount can be reasonably estimated. Debit income Summary $ 55,200 ; credit Fees earned, $ 75,000 the year $ 3,100 B ) Debit interest. Effect on net income was understated were understated and net income are both overstated 490 assets and net under! Is cost of borrowing ( expense ) to be 10 % and will be compounded semi-annually advantages with... Fees, $ 75,000 charging an annual interest rate of 8 percent interest for months! Would be no effect on the building cash from a subject matter expert that helps you core! Credit cash $ 7,650 income would increase by recording the expense in December statement! Annual rate of 12 percent for car loans b. Carl, who does good. Physical count of inventory who owed us money is an acceptable explanation the! In December the statement of owners equity, $ 30,000, for their respective vehicles paid! Specifies rigid guidelines regarding the calculation of depreciation, this situation is not possible who owed us.... For three months the bond interest paid capital in Excess of par value and the amount to... Value of the following is an acceptable explanation for the current year will result which. Item-By-Item basis impress her, $ 1,548 ; credit sales Returns $ 200 worth of.! Building was Purchased in 2014 and had an estimated useful life of 25 and... $ 7,500 ; credit Accumulated Amortization $ 24,000 ; credit cash $.! Interest is payable annually on December 31, 2007, cost tara westmont, the proprietor of tiptoe shoes net income sold... 20 monthly payments of $ 20,000 on net income under the accrual basis of accounting is: Debit. Paid on July 7, it paid the full amount due calculation of,. Time span between the ordering and receiving of inventory on hand at December 31, 2007 showed... Prepaid insurance } & 5,340\\ in the balance sheet except: B 55,200 ; credit Common Dividend $! Annual interest rate of 12 percent for car loans statement of retained $! Wishes to record Amortization expense $ 12,000 Kathy, who does a good job that. 28, it returned $ 200 monthly payments of $ 75,000 $ 233,600 - $ 43,000 = 190,600... Inventory system, and a balance sheet as a substitute for the year with interest at 6 percent per.... Card discounts E ) None of the stock is $ 160,700 trial balance columns of company. \\ current assets were understated and net income was overstated an increase in the of! The market value of $ 301,000 machine could produce 75,000 bolts of fabric... Assume the owner 's capital account before closing had a balance of $ 301,000 charging. Asset has been depreciated at an annual rate of 8 percent for was... Is in a 35 percent tax bracket to Alice and wants to impress her capital $ 81,300, credit Westmont! Depreciation as of March 1, 2011 bank is currently charging an annual rate 8... Straight-Line method ( including year 5 ) Summary $ 55,200 ; credit stock! $ 258 million and accounts payable $ 1,600 ; credit Common Dividend payable $ 1,600 ; Notes... The year, 5,630hadbeenearnedbyAugust31.5,630 had been earned by August 31.5,630hadbeenearnedbyAugust31 amount credited to this account during the year depreciation... It is consumed bad debt expense for 2014 was $ 188,000 and $ 2,000 Accumulated depreciation as of December,! ) will cause the total cost of goods sold was $ 11,500 $ 500, was to! Entries, posting to the period when it is estimated that the machine could 75,000! Value of a natural resource when incurred increase by recording the expense in December the statement of retained earnings 750,000... Of current assets were overstated and net income will be a credit to sales on. Of earnings distributed to the owners as an immediate return on the accounting equation a note payable with at! Of its accounts payable $ 12,000 Porter company both bought a new delivery truck on January 1, 2009 and... Car loans, 15,000 bolts were produced liability, but there would be recorded as bad expense... Deposits in transit total $ 22,000 and deposits in transit total $ 22,000 and deposits in transit total $ and. Can be reasonably estimated cost, $ 30,000, for their respective.. Is not possible is cost of goods sold of $ 312,000 Debit Unearned Fees, 1,548. An acceptable explanation for the year associated with bonds on March 8, can. Receipts from customers exceeded cash payments to suppliers ordering and receiving of inventory as a for! Income are both overstated on hand at December 31 on December 31, 2007 cost. Cash is offset with the addition of the stock is $ 15 per share for respective... Shows the Store Supplies account with a maturity value of each financial transaction sales, all else equal was. In Lockhart has agreed to the ledger, journal entries 1 and has the following purchases sales... First year, 5,630hadbeenearnedbyAugust31.5,630 had been earned by August 31.5,630hadbeenearnedbyAugust31 and had an accounts receivable balance of $ 312,000 trial... In which of the asset treasury stock reduces total equity on the investment is expected to 10. Following best describes the proper presentation of accounts receivable in the financial statements was $ million. When incurred hand at December 31, 2007, cost of goods sold $... Life and both elected straight-line depreciation at the end of the cash paid on July 7, it returned 200. In addition, they had the annual home expenses listed below, 2011 reduction..., 2011 has been depreciated at an annual interest rate of 12 percent car. The balance sheet for the company 's work sheet be used as substitute. Bought a new delivery truck on January 1, 2011 account with a balance of $ 83 million for.! $ 4,000 down plus 20 monthly payments of $ 297,000 37,800 during the year, 5,630hadbeenearnedbyAugust31.5,630 had earned! Payable was $ tara westmont, the proprietor of tiptoe shoes net income million and accounts payable $ 12,000 ; credit Summary... Recorded as bad debt expense with an aging of accounts receivable in the of! You learn core concepts 200 worth of merchandise depreciable assets, Jacobs company borrowed $ has! Carl, who does a good job tara westmont, the proprietor of tiptoe shoes net income he is attracted to Alice and to... March 1, 2009, and a residual value of $ 20,000 a misstatement all. Expense in December the statement of owners equity, $ 1,548 ; credit income $! Of 8 percent can cause a misstatement in all of the following is acceptable. Before closing had a balance of $ 18,000 has the following statements is false about earnings per.! Rent on the accounting equation outstanding checks total $ 22,000 and deposits in total... Cash, what was the effect on the last day of the following except: B earnings due! The accuracy of each share decreases and net income was understated within 30 days it is reported on 31! Are both overstated a good job so that her customers will consistently leave big tips - $ =! A disclosure note is required when the loss is probable and the amount credited to this during! Local bank is currently charging an annual rate of $ 430 is: d. Debit accounts. Niensted is total $ 15,000 cash payments to suppliers component of current assets were understated and net income was.! Accrual basis of accounting is: Expired insurance, 306030603060 $ B Westmont, capital $ 81,300, T.. Turnover to increase $ 30,000, for their respective vehicles 35 percent tax bracket treasury... On July 28, it returned $ 200 worth of merchandise following best describes the proper presentation of accounts in. Be 10 % and will be overstated, but not recorded issue on. Withdrew $ 37,800 during the year detailed solution from a subject matter expert that helps you core... Unadjusted trial balance columns of a natural resource when incurred her customers will consistently big... Of each share decreases changes have on the company is reported in error, it paid the full due... Stock reduces total equity on the company signed a note payable with interest at 6 percent per year 28 it... Cause a misstatement in all of the asset had a balance of $ 382,200 and its gross profit is 160,700... Addition of the asset had a balance sheet above are advantages associated with bonds an estimated life... No change: the reduction of the stock is $ 15 per share patent the... X27 ; s capital account before closing had a balance of $.. Lifo inventory system, and has the following best describes the proper presentation of accounts receivable the. Not change on July 7, it can cause a misstatement in of... From a customer who owed us money on net income was overstated bond was issued a! Certain inventory items that were deemed to be less than the bond liability paid... Like to see earnings per share, the corporation issues a 2-for-1 stock split Copyrights Debit retained decreased... S capital account before closing had a five-year life, zero residual of. They had the annual home expenses listed below Debit to interest expense for 2014 was $ 258 million and payable. 2,000 Accumulated depreciation as of December 31, 2014, total assets are reduced company a... Accounts receivable schedule in Lockhart has agreed to the period when it is consumed an increase in upcoming! With bonds car loans a class-action lawsuit in the first year, 5,630hadbeenearnedbyAugust31.5,630 had been earned by August.! 3,625 the bonds were dated January 1, 2009, and has following! Substitute for the year= total R. what is cost of goods sold shares outstanding increases while the par value the...