Pete Robinson wants to have a one-third interest in a law practice that has two partners with capital balances as follows: Ricky Slade, Capital …………………………………….. $5,300 Alan Pool, Capital ………………………………………….. 2,700 How much must Pete invest into the partnership?
> What is meant by check truncation or safekeeping?
> What are the major advantages and disadvantages of online banking?
> What is EFT?
> Why do adjustments to the checkbook balance in the reconciliation process need to be journalized?
> Discuss how smartphone apps are making banking more mobile.
> What accounts are usually listed on a post-closing trial balance?
> How can a worksheet aid the closing process?
> What is the purpose of Income Summary and where is it located?
> List the four steps of closing.
> How has computer software affected use of closing entries?
> Explain the steps of closing for a merchandise company.
> What is the difference between temporary and permanent accounts?
> “Closing slows down the recording of next year’s transactions.” Defend or reject this statement with supporting evidence.
> Why must adjusting entries be journalized even though the formal statements have already been prepared?
> Closing entries are always prepared once a month. Agree or disagree? Why?
> When a worksheet is completed, what balances are found in the general ledger?
> Why don’t the formal financial statements contain debit or credit columns?
> Define the term accrued salaries.
> Each month Accumulated Depreciation grows while Equipment goes up. Agree or disagree? Defend your position.
> Depreciation expense goes on the balance sheet. True or false. Why?
> Why do we need the Accumulated Depreciation account?
> Explain why figures for beginning and ending inventory are not combined on the Income Summary line of the worksheet.
> Explain how an adjustment can affect both the income statement and balance sheet. Please give an example.
> What is the relationship of internal transactions to the adjusting process?
> What is the purpose of adjusting accounts?
> Alice Hawkins, president of Realon Co., went to a conference on tax planning. One of the speakers at the seminar advised the audience to put off showing expenses until next year because doing so would allow them to take advantage of a new tax law. When A
> Explain how the financial statements are prepared from the worksheet.
> With computer software, the need for worksheets has been completely eliminated. Agree or disagree and explain your answer.
> Posting means updating the journal. Agree or disagree? Please comment.
> What is a compound journal entry?
> What is the relationship of the chart of accounts to the general journal?
> How do transactions get “linked” in a general journal?
> Jim Heary is the custodian of petty cash. Jim, who is short of personal cash, decided to pay his home electrical and phone bills from petty cash. He plans to pay it back next month. Do you feel Jim should do so? You make the call. Write down your specifi
> With computers today, ledgers are not needed in today’s accounting system. Agree or disagree and defend your position.
> What are interim statements?
> Compare and contrast a calendar year versus a fiscal year.
> An accounting period is based on the balance sheet. Agree or disagree and defend your position.
> What is the difference between a transposition and a slide?
> Discuss the concept of cross-referencing.
> The PR column of a general journal is the last item to be filled in during the manual posting process. Agree or disagree?
> The side that decreases an account is the normal balance. True or false?
> Not all businesses have or need an accounting cycle. Agree or disagree and defend your position.
> Why are there no debit or credit columns on financial statements?
> How are Form 941 taxes paid to the Treasury Department?
> Tropp Corporation was just issued a charter by the state of New York. This charter gives Tropp the authority to issue 150,000 shares of $10 par-value common stock. Consider the following transactions: 1. Prepare journal entries to record the transactions
> A trial balance is a formal statement. True or false? Please explain.
> Computers cannot do debits and credits—agree or disagree and explain why.
> What are the five steps of the transaction analysis chart?
> What do we mean when we say that a transaction analysis chart is a teaching device?
> Explain under which method the balance in the Allowance account is ignored. Give an example.
> Calculate Net Purchases from the following: Purchases, $27; Purchases Returns and Allowances, $9; Purchases Discounts, $5.
> Identify which of the following taxes are paid by the employee (EE) and which are paid by the employer (ER): а. FICA Medicare b. FIT с. FUTA d. SUTA
> Match the following: 1. Total gross pay 2. A deduction 3. Net pay Office Salary Expense a. b. FICA OASDI с. FICA Medicare d. Federal Income Tax е. Medical Insurance f. Wages and Salaries Payable
> In Exercise 5, if the custodian decided to raise the level of petty cash to $30.75, what would be the journal entry to replenish? (Use a general journal entry.)
> Explain why stock dividends will not reduce total stockholders’ equity.
> Petty cash was originally established for $23. During the month, $5.20 was paid out for thumbtacks and $5.90 for paper cups. During replenishment, the custodian discovered that the balance in petty cash was $7.80. Record, using a general journal entry, t
> Indicate what effects (#1–4) each situation (#a–f) will have. (Note: There might be more than one effect applicable for a situation.) 1. New check written. 2. Recorded in general journal. 3. Petty cash voucher prepared
> Which of the transactions in Exercise 1 would require a journal entry?
> Indicate what effect (#1–4) each situation (#a–f) will have on the bank reconciliation process. 1. Add to bank balance. 2. Deduct from bank balance. 3. Add to checkbook balance. 4. Deduct from checkbook balance.
> Indicate next to each statement whether it refers to the income statement (IS), statement of owner’s equity (OE), or balance sheet (BS). а. Withdrawals found on it b. List total of all assets Statement that is prepared last с. d. S
> 8. Indicate whether the following items would appear on the income statement (IS), statement of owner’s equity (OE), or balance sheet (BS). Tutoring Fees Earned a. b. Office Equipment Accounts Receivable с. d. Office Supplies Legal
> Which of the following statements are false? Revenue provides only outward flows of cash. a. Revenue is a subdivision of Assets. b. Revenue provides an inward flow of cash or accounts receivable. C. d. Expenses are part of Total Assets.
> Identify which of the following are not assets. a. Sony DVD Player b. Accounts Receivable c. Accounts Payable d. Grooming Fees Earned
> From the following, which are subdivisions of owner’s equity? a. Smartphone b. J. Penny, Capital c. Accounts Payable d. J. Penny, Withdrawals e. Accounts Receivable f. Advertising Expense g. Taxi Fees Earned h. Microsoft Tablet
> From the following, calculate what would be the total of assets on the balance sheet. B. Devin, Capital …………………………………………………….. $43,000 Warehouse Equipment ………………………………………………. 3,000 Accounts Payable ……………………………………………………….. 6,500 Cash ……………………………………………….…
> What is the difference between a discount period and a credit period?
> Identify which transaction results in a shift in assets (S) and which transaction causes an increase in assets (I). a. Target bought computer equipment on account. b. Macy’s bought office equipment for cash.
> Complete the following statements. : rights of the creditors a. b. are total value of items owned by a business. is an unwritten promise to pay the creditor. с.
> Classify each of the following items as an Asset (A), Liability (L), or part of Owner’s Equity (OE). а. iPad b. Accounts Receivable c. Accounts Payable d. Smartphone e. B. Long, Capital е. f. Cash
> a. In which columns of the worksheet would the following additional data be placed? b. In which columns would the beginning-of-year figures be placed? Inventories Year-End Figures Column Raw materials $40,000 Work-in-process 21,000 Finished goods 3
> From the following transactions, prepare the appropriate general journal entries for the month of May: a. Raw materials costing $75,000 were issued from the storeroom. b. Direct labor of $50,000 was charged to production. c. Supplies costing $7,400 were
> Calculate the contribution margin for each department and income before taxes, based on the following: Dept. A 13,000 square feet Dept. B 21,000 square feet Net Sales $57,000 $93,000 Cost of Goods Sold 25,000 38,000 Sales Salaries 9,500 (38% directl
> From the following, calculate departmental income before tax. Assume a tax rate of 30%. Dept. A Dept. B Net Sales $230,000 $340,000 Cost of Goods Sold 100,000 126,000 Delivery Expense 24,900 28,300 Advertising Expense 23,150 22,250 Depreciation Expe
> Grant Company records invoices at gross in its voucher system. From the following transactions, (a) record in general journal form the appropriate entries at gross and (b) record the entries as if Grant Company recorded invoices at net. 201X Bought
> Dona Company uses a voucher system along with a petty cash fund. Record each of the following entries in journal entry form. Assume that Dona Company records all vouchers at gross. 201X Feb. Purchased $550 of merchandise on account from Glow Company
> Acorn Company, which is a medium-sized firm, uses a voucher system. Record each of the following entries in general journal form. Assume that Acorn Company records all vouchers at gross. 201X 6 Voucher no. 50 was prepared for the purchase of $7,100
> What is the difference between market value and book value?
> From the given income statement and additional information of Carbone Co., compute the following: a. Asset turnover for 2016 b. Inventory turnover for 2016 c. Accounts receivable turnover for 2016 2016 2015 Net Sales $840,000 $780,000 Cost of Goods
> From the following comparative balance sheet of Holland Co., prepare a common-size comparative balance sheet. (Round all percentages to the nearest tenth of a percent.) 2016 2015 $ 91,000 $ 46,000 Current Assets Plant and Equipment 455,000 318,000 $
> From the following, prepare a common-size income statement for Todd Co. by converting the dollar amounts into percentages. (Round to the nearest hundredth of a percent.) Use net sales as 100%. 2016 2015 Net Sales $500,000 $500,000 Cost of Goods Sold
> Prepare a horizontal analysis of the comparative income statement for Alton Co. for the years ending December 31, 2015, and December 31, 2016. (Round to the nearest hundredth of a percent as needed.) 2016 2015 Net Sales $70,000 $60,000 Cost of Goods
> From the following, calculate the net cash flows from operating activities (use the indirect method): 2013 2014 Accounts Receivable $ 5,500 $7,900 Prepaid Insurance 908 842 Accounts Payable 3,999 4,599 Salaries Payable 900 2,150 For the year ended 2
> On January 1 Russo Corporation sold $370,000 of 10-year sinking fund bonds. The corporation expects to earn 10% on the sinking fund balance and is required to deposit $23,615 at the end of each year with the trustee. Record the following entries: a. The
> On July 1 April Corporation issued 10%, 10-year bonds with a face value of $107,000 for $94,749 because the current market rate is 12%. Record the following entries, assuming the interest method is used to amortize the discount on bonds. Round discount t
> Redo the journal entries for Exercise 20B-3, assuming that bonds sold at 107. Exercise 20B-3: Smith Corporation issued $320,000 of 4%, 25-year bonds at 91 on November 1, 201X, with semiannual interest payable on November 1 and May 1. Amortization of di
> Smith Corporation issued $320,000 of 4%, 25-year bonds at 91 on November 1, 201X, with semiannual interest payable on November 1 and May 1. Amortization of discount is by the straight-line method. Record the journal entries for the following: a. Issuanc
> On January 1, 201X, Parino Corporation issued $800,000 of 8%, 10-year bonds to lenders at par (100). Interest is to be paid semiannually on July 1 and January 1. Journalize the following entries: a. Issued the bonds. b. Paid semiannual interest payment.
> What is the difference between the articles of incorporation and a charter?
> From the following, prepare in proper form a statement of retained earnings for Yvette Company for the year ended December 31, 2015. Prior period adjustment: increase in recording expense for Land in Retained Earnings, January 2015 $36,000 2013 (dis
> Given the following stockholders’ equity: Common Stock, $4 par value, authorized 98,000 shares, 77,000 shares issued and outstanding …………â€&brvb
> From the following information, determine the book value per share for preferred and common stock assuming $14,400 of dividends are in arrears on the preferred stock. Stockholders’ Equity Preferred 12% Stock cumulative and nonparticipating, $21 par valu
> Market Corporation began its business on January 1, 201X. It sold at $33 per share 5,700 shares of no-par common stock with a stated value of $23 per share. The charter of Market indicated 35,000 shares were authorized. Retained earnings were $56,000 on
> On January 1, 201X, Friendly Corporation issued on a subscription basis 1,030 shares of $52 par-value common stock at $92 per share. Two equal installments were to be made on July 1 and December 31. Prepare the appropriate journal entries on January 1, J
> Nicole Corporation was authorized to issue 32,000 shares of common stock. Record the journal entry for each of the following independent situations, assuming Nicole issues 6,000 shares at $17 on July 20, 201X: a. Common stock has a $12 par value. b. Comm
> Lincoln Co., whose accounting period ends on December 31, purchased a machine for $6,800 on January 1 with an estimated residual value of $840 and an estimated useful life of 4 years. Prepare depreciation schedules for the current as well as the followin
> From the following, prepare depreciation schedules for the first 2 years for (a) straight-line, (b) units of-production, and (c) double declining-balance at twice the straight-line rate methods. • Machine purchased on January 1, $1,460. • Residual value,
> Madden Sales uses the FIFO method with the perpetual inventory system. Enter the following information into the inventory record form for product 44BX. Be sure to keep the balance on hand up-to-date. 201X Jan. 1 Balance on hand: 6 units at a cost of
> Journalize and post the preceding transactions (Exercise 15B-2) using a two-column journal and T accounts. Exercise 15B-2: The ABC Company uses the perpetual inventory system with a subsidiary ledger for inventory. Enter the following information into
> Hernando Favor had been working in the bakery department of Long Company for 4 years when he was promoted to the accounting department. Since his promotion, sales in the bakery department have slipped, and management is considering cutting the department
> The Carney Electric Company uses the perpetual inventory system. Record these transactions in a two-column journal. 201X 3 Purchased 25 Model 77DX light fixture(s) on account from Flashing Electric at total cost of $1,000; terms n/30. 5 Sold 6 model
