Navigate Accounting Modules: Assignment Assistance Unveiled
26. Exercise 3-11 Selected transactions for Sophie's Dog Care are as follows during the month of Marc...
Exercise 3-11 Selected transactions for Sophie's Dog Care are as follows during the month of March March 1 Paid monthly rent of $1,370 3 Performed services for $160 on account. 5 Performed services for cash of $85. 8 Purchased equipment for $685. The company paid cash of $90 and the balance was on account. 12 Received cash from customers billed on March 3 14 Paid wages to employees of $600. 22 Paid utilities of $82. 24 Borrowed $1,710 from Grafton State Bank by signing a note. 27 Paid $250 to repair service for plumbing repairs. 28 Paid balance amount owed from equipment purchase on March 8 30 Paid $2,050 for six months of insurance Journalize the transactions (Tf no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automa presented in the problem.)
27. Are the following events recorded in the accounting records? Explain your answer in each case.
Are the following events recorded in the accounting records? Explain your answer in each case.
(a) A major stockholder of the company dies.
(b) Supplies are purchased on account.
(c) An employee is fired.
(d) The company pays a cash dividend to its stockholders.
28. Prepare journal entries to record the following merchandising transactions of Wave Company, which...
Prepare journal entries to record the following merchandising transactions of Wave Company, which applies the perpetual inventory system.
July 3 Purchased merchandise from CAP Corp. for $15,000 under credit terms of 1/10, n/30, FOB destination, invoice dated July 3.
4 At CAP’s request, Wave paid $250 cash for freight charges on the July 3 purchase, reducing the amount owed to CAP.
7 Sold merchandise to Morris Co. for $10,500 under credit terms of 2/10, n/60, FOB destination, invoice dated July 7. The merchandise had cost $7,500.
10 Purchased merchandise from Murdock Corporation for $14,200 under credit terms of 1/10, n/45, FOB shipping point, invoice dated July 10. The invoice showed that at Wave’s request, Murdock paid the $600 shipping charges and added that amount to the bill. (Hint: Discounts are not applied to freight and shipping charges.)
11 Paid $300 cash for shipping charges related to the July 7 sale to Morris Co.
12 Morris returned merchandise from the July 7 sale that had cost Wave $1,250 and been sold for $1,750. The merchandise was restored to inventory.
14 After negotiations with Murdock Corporation concerning problems with the merchandise purchased on July 10, Wave received a credit memorandum from Murdock granting a price reduction of $2,000.
17 Received balance due from Morris Co. for the July 7 sale less the return on July 12.
20 Paid the amount due Murdock Corporation for the July 10 purchase less the price reduction granted.
21 Sold merchandise to Ulsh for $9,000 under credit terms of 1/10, n/30, FOB shipping point, invoice dated July 21. The merchandise had cost $6,250.
24 Ulsh requested a price reduction on the July 21 sale because the merchandise did not meet specifications. Wave sent Ulsh a credit memorandum for $1,500 to resolve the issue.
30 Received Ulsh’s cash payment for the amount due from the July 21 sale.
31 Paid CAP Corp. the amount due from the July 3 purchase.
29. On January 1, 2021, the general ledger of 3D Family Fireworks includes the following account balance
Fireworks includes the following account balances: Debit 24,900 14,100 Accounts Credit Cash Accounts Receivable Allowance for Uncollectible Accounts 1,800 Supplies Notes Receivable (6, due in 2 years) 3,000 25,000 Land 7,500? Accounts Payable 8,800 101,000 32,900 Common Stock Retained Earnings $144,500 $144,500 Totals During January 2021, the following transactions occur: January 2 Provide services to customers for cash, $40,100 January 6 Provide services to customers on account, $77,400. January 15 Write off accounts receivable as uncollectible, $1,400. January 20 Pay cash for salaries, $31,900 January 22 Receive cash on accounts receivable, $75,000 January 25 Pay cash on accounts payable, $6,000. January 30 Pay cash for utilities during January, $14,200 The following information is available on January 31, 2021. a. The company estimates future uncollectible accounts. The company determines $5,500 of accounts receivable on January 31 are past due, and 20% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 5% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger) b. Supplies at the end of January total $950. c. Accrued interest revenue on notes receivable for January. Interest is expected to be received each December 31 d. Unpaid salaries at the end of January are $34,000. Credit Debit General Journal No Date 40,100 Jan 02, 2021 Cash 1 40,100 Service Revenue Accounts Receivable 77,400 2 Jan 06, 2021 77,400 Service Revenue Allowance for Uncollectible Accounts 1,400 3 Jan 15, 2021 1,400 Accounts Receivable Salaries Expense 31,900 Jan 20, 2021 4 31,900 Cash 75,000 Cash Jan 22, 2021 75,000 Accounts Receivable Accounts Payable 6,000 Jan 25, 2021 6 6,000 14,200 Utilities Expense Jan 30, 2021 7 14,200 Cash Bad Debt Expense 8 Jan 31, 2021 Allowance for Uncollectible Accounts 2,050 Supplies Expense Jan 31, 2021 2,050 Supplies 75,000 5 Jan 22, 2021 Cash 75,000 Accounts Receivable Accounts Payable 6,000 Jan 25, 2021 6 6,000 14,200 Utilities Expense Jan 30, 2021 7 14,200 Cash Bad Debt Expense Allowance for Unlectible Accounts Jan 31, 2021 8 Supplies Expense 2,050 9 Jan 31, 2021 2,050 Supplies Interest Receivable Interest Revenue Jan 31, 2021 10 Salaries Expense 34,000 Jan 31, 2021 34,000 Salaries Payable 11 un The company estimates future uncollectible accounts. The company determines $5,500 of accounts receivable on January 31 are past due, and 20% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 5% of these accounts estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in are Note: Enter debits before credits. Date General Journal Debit Credit Bad Debt Expense Allowance for Uncollectible Accounts Jan 31, 2021 Accrued interest revenue on notes receivable for January. Interest is expected to be received each December 31. Record the adjusting entry for interest. Note: Enter debits before credits. Date General Journal Debit Credit Jan 31, 2021 Interest Receivable Interest Revenue Record the closing entry for revenue Note: Enter debits before credits. Date General Journal Debit Credit Jan 31, 2021 Enter your Accounts Receivable turnover value in 1 decimal place and Ratio of Allowance for Uncollectible Accounts in Whole number. Analyze how well 3D Family Fireworks manages its receivables (a) Calculate the receivables turnover ratio for the month of January (Hint: For the numerator, use total services provided to customers on account). If the industry average of the receivables turnover ratios for the month of January is 4.4 times, is the company collecting cash from customers more or less efficiently than other companies in the same industry? Accounts Receivable turnover: times The company is collecting more efficiently. (true or false) (b) Calculate the ratio of Allowance for Uncollectible Accounts to Accounts Receivable at the end of January Based on a comparison of this ratio to the same ratio at the beginning of January, does the company expect an improvement or worsening in cash collections from customers on credit sales? Ratio of Allowance for Uncollectible Accounts to Accounts Receivable % Should the company expect improving or worsening conditions? 3D Family Fireworks Income Statement For Month Ended January 31, 2021 Revenue: Total Revenue $ Expenses: Total Expenses 0 $ 0 3D Family Fireworks Balance Sheet January 31, 2021 Liabilities Assets Current Liabilities: Current Assets: 0 C 0 0 Total Current Liabilities C 0 Total Liabilities Total Current Assets Stockholders' Equity Long-term assets: C Total Stockholders' Equity 0 $ 0 Total Liabilities & Stockholders' Equity Total Assets
30. Identify the internal control weaknesses in the system. Model your response according to the six...
ABE Plumbing, Inc., opened its doors in 1979 as a wholesale supplier of plumbing equipment, tools, and parts to hardware stores, home-improvement centers, and professional plumbers in the Allentown-Bethlehem- Easton metropolitan area. Over the years they have expanded their operations to serve customer across the nation and now employ over 200 people as technical representatives, buyers, warehouse workers, and sales and office staff. Most recently ABE has experienced fierce competition from the large online discount stores such as Harbor Freight and Northern Supply. In addition the company is suffering from operational inefficiencies related to its archaic information system. ABE’s expenditure cycle procedures are described in the following paragraphs. Expenditure Cycle ABE uses a centralized accounting system for managing inventory purchases and recording transactions. The system is almost entirely paperless. Each department has a computer terminal that is networked to the ‘‘Purchases/ Accounts Payable System’’ that is run from a small data processing department. All accounting records are maintained on centralized computer files that are stored on a file server in the data processing department. Purchasing The process begins in the purchasing department. Each morning the purchasing agent reviews the inventory levels from his department terminal and searches for items that have fallen to their reorder points and need to be replenished. The purchasing agent then selects the vendors and creates digital purchase orders in the purchase order file. He then prints two hard copies of each purchase order and sends them to the respective vendors. Receiving When the items are received, the receiving department clerk reconciles the goods with the attached packing slip and the digital purchase order, which he accesses from his computer terminal. The clerk then creates a digital receiving report, stating the condition of the materials received. The system automatically closes the purchase order previously created by the purchasing agent. In addition, the receiving clerk prints a hard copy of the receiving report, which he sends with the inventory to the warehouse where the items are stored. Warehouse Upon receipt of the inventory, the warehouse clerk reconciles the items with the receiving report and updates the inventory subsidiary ledger. The accounting system automatically and immediately updates the inventory control account in the general ledger. Accounts Payable Once the accounts payable clerk receives the vendor’s invoice, she reconciles it with the purchase order and receiving report from her terminal. The clerk then creates a digital cash disbursement voucher record and sets a due date for payment. The system automatically updates the AP control account in the general ledger. Daily, the accounts payable clerk reviews the open cash disbursement voucher records from her terminal looking for items that need to be paid. The clerk then creates a record for the payment in the digital check register and closes the open cash disbursement voucher. Finally, the clerk prints a hard copy of the check and sends it to the vendor. The system automatically updates the accounts payable and cash general ledger accounts. Required
a. Create a data flow diagram of the current system.
b. Create a system flowchart of the existing system.
c. Identify the internal control weaknesses in the system. Model your response according to the six categories of physical control activities specified in SAS 78/COSO.
d. Prepare a system flowchart of a redesigned computer based system that resolves the control weaknesses you identified. Explain your solution.
31. 10) A major weakness of a partnership is ________. A) the difficulty in maintaining owners’ control.
10) A major weakness of a
partnership is ________.
A) the difficulty in maintaining
owners’ control
B) the difficulty in liquidating
or transferring ownership
C) the double taxation of income
D) its high organizational costs
11) Which of the following is a
strength of a corporation?
A) low taxes
B) limited liability
C) low organization costs
D) less government regulation
12) Which of the following legal
forms of organizations is characterized by unlimited liability?
A) sole proprietorship
B) limited partnership
C) corporation
D) C-corporation
13) Which of the following is the
purest and most basic form of corporate ownership?
A) bond
B) notes
C) common stock
D) preferred stock
14) Which of the following is
true of a partnership and a corporation?
A) In a corporation, income is
taxed at the corporate level; whereas, in a partnership, income is taxed twice.
B) In a partnership, income is
taxed at the corporate level; whereas, in a corporation, income is taxed twice.
C) Income from both forms of
organizations are double-taxed.
D) In a partnership, income is
exempted from tax up to $10 million; whereas, in a corporation, income is taxed
twice.
15) Which of the following is
true of sole proprietorships and corporations?
A) It is difficult to transfer
ownership of corporations compared to that of sole proprietorships.
B) Income from both forms of
organizations are taxed only at the corporate level.
C) Both sole proprietorships and
corporations are equally scrutinized and regulated by government bodies.
D) In sole proprietorships,
owners have unlimited liability; whereas, in corporations, owners have limited
liability.
1.3 Describe the goal of the firm, and explain
why maximizing the value of the firm is an appropriate goal for a business.
1) High net cash flow with fixed
risk is generally associated with a higher share price.
2) When considering a firm’s
financial decision alternative, financial managers should accept only those
actions that are expected to increase the firm’s profitability.