Navigating Income Statements: Essential Guide For Students

Published: 11 months ago

Navigating Income Statements: Essential Guide For Students

23. On December 1, 2017, Prosen Distributing Company had the following account balances. I need help wit

On December 1, 2017, Prosen Distributing Company had the following account balances. I need help with the income statement in the last picture. I included previous pictures in case you need to reference them. Thank youComprehensive Problem 5 (Part Level Submission) On December 1, 2017, Prosen Distributing Company had the following account balances. Cash Accounts Receivable Inventory Supplies Equipment Debit $7,000 4,800 11,600 1,500 23,100 $48,000 Accumulated Depreciation Equipment Accounts Payable Salaries and Wages Payable Common Stock Retained Earnings Credit $2,310 4,900 1,100 30,000 9,690 $48,000 During December, the company completed the following summary transactions Dec. 6 8 10 13 15 18 20 23 27 Paid $1,750 for salaries and wages due employees, of which $650 is for December and $1,100 is for November salaries and wages payable. Received $2,000 cash from customers in payment of account (no discount allowed). Sold merchandise for cash $6,800. The cost of the merchandise sold was $4,200. Purchased merchandise on account from Maglio Co. $9,000, terms 2/10, n/30. Purchased supplies for cash $1,800. Sold merchandise on account $12,900, terms 3/10, n/30. The cost of the merchandise sold was $8,200. Paid salaries and wages $1,900. Paid Maglio Co. in full, less discount. Received collections in full, less discounts, from customers billed on December 18. We were unable to transcribe this imageDec. 20 Salaries and Wages Expen Cash 1,900 Dec. 23 Accounts Payable Inventory 180 Cash 8,820 Dec. 27 TCash TSales Discounts | Accounts Receivable 12,900 SHOW LIST OF ACCOUNTS (b) Your answer is correct. Enter the December 1 balances in the ledger T-accounts and post the December transactions. (Post entries in the order of jour Cash 12/6 1,750 1,800 A0A0 12/20 SOKOLO 1,900 12,513 || 8,820 T 12/ Bal. Accounts Receivable T 12/1 Bal. IT 4,800 IT 2/8 2,000 12,900 IT 12,900 T 12/31 Bal. = 1 2,800 Inventory T 12/1 al. IT 11,600 T IT 4,200 9,000 AT 8,200 180 T 12/31 Bal. 8,0201 Supplies T 12/1 Bal. It 1,500 ||| 1,800 II Equipment 11 al. 11 23,100 † 12/31 Bal. A 23,100 | Accumulated Depreciation Equipment 2,310 /1 Bal. Accounts Payable 1 /1 Bal. IT 4,900 9,000 4,900 T 12/31 Bal. TT Salaries and Wages Payable 1,100 T 12/1 Bal. I 1,100 -UUIII +-UU Common Stock Bal. I 30,000 30,000 1 Bal. Retained Earnings 9,690 TT 9,690 Bal. Sales Revenue 10 AT 6,800 T 12/18 IT 12,900 AIAN ELEITET BIET DILLI LILI LILIE 19,700 || 12/31 Bal. HIT Sales Discount 387 III 12/31 387 Cost of Goods Sold 4,200 T 8,200 T 12,4001 Salaries and Wages Expense 650 T 12/2 1,900 Adjustment data: 1. 2. 3. Accrued salaries and wages payable $500. Depreciation $210 per month. Supplies on hand $1,500. Journalize adjusting entries. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Date Account Titles and Explanation Debit Credit TSalaries and Wages Expen Salaries and Wages Pay 500 2. 2. Dec. 31 8 TDepreciation Expense Depreciation Expense Accumulated Depreciati 210 3. Dec. 31 8 TSupplies Supplies 1,800 Post adjusting entries. (Post entries in the order of journal entries presented above.) 12/1 Bal. 12/8 12/10 12/27 12/31 Bal. 1,750 1,800 1,900 8,820 Cash 7,000 12/6 2,000 12/15 6,800|12/20 12,513 12/23 14,043 Accounts Receivable 4,800 12/8 12,900 12/27 2,800 Inventory 11,600 12/10 9,000 12/18 12/1 Bal. 12/18 12/31 Bal. 2,000 12,900 12/1 Bal. 12/13 4,200 8,200 180 12/31 Bal. 12/23 8,020 Supplies 12/1 Bal. 1,500T 12/31 1,800 12/15 1,800T T 12/31 Bal. 12/1 Bal. 12/31 Bal. 1,500 M Equipment 23,100 23,100 Accumulated Depreciation Equipment 12/1 Bal. 2,310 | 12/31 210 2,520 12/23 T 12/31 Bal. Accounts Payable 9,000 12/1 Bal. 12/13 12/31 Bal. Salaries and Wages Payable 1,100 12/1 Bal. 4,900 9,000 4,900 12/6 1,100 | 12/31 27 500 500 30,000 30,000 N 12/31 Bal. Common Stock 12/1 Bal. 12/31 Bal. Retained Earnings 12/1 Bal. 12/31 Bal. Sales Revenue 12/10 12/18 9,690 9,690 6,800 12,900 180 12/31 Bal. 12/23 8,020 Supplies 12/1 Bal. 1,500T 12/31 1,800 12/15 1,800T T 12/31 Bal. 12/1 Bal. 12/31 Bal. 1,500 M Equipment 23,100 23,100 Accumulated Depreciation Equipment 12/1 Bal. 2,310 | 12/31 210 2,520 12/23 T 12/31 Bal. Accounts Payable 9,000 12/1 Bal. 12/13 12/31 Bal. Salaries and Wages Payable 1,100 12/1 Bal. 4,900 9,000 4,900 12/6 1,100 | 12/31 27 500 500 30,000 30,000 N 12/31 Bal. Common Stock 12/1 Bal. 12/31 Bal. Retained Earnings 12/1 Bal. 12/31 Bal. Sales Revenue 12/10 12/18 9,690 9,690 6,800 12,900 19,700 12/27 12/31 Bal. 12/31 Bal. Sales Discount 387 387 Cost of Goods Sold 4,200 8,200 12,400 Depreciation Expense 12/10 12/18 12/31 Bal. T 12/31 AT T 12/31 Bal. Salaries and Wages Expense 12/6 1,900 12/20 12/312 112/31 Bal. A month.io 50 3,050 IT Supplies Expense T 12/31 A T 12/31 Bal. 1,800 J]. TIET III.. December 31, 2017 Debit Credit Cash 14043 TAccounts Receivable | 2800 Inventory 8020 TSupplies | 1500 TEquipment 23,100 TAccumulated Depreciation 2520 TAccounts Payable 4900 TSalaries and Wages Payab 500 ?VVVVVVVVVVVVV ?PPPP ELL PH PPPT VN515 TCommon Stock 30,000 TRetained Earnings 9690 Sales Revenue 19700 Sales Discounts 387 TCost of Goods Sold 12400 Depreciation Expense 210 TSalaries and Wages Expen 3050 Supplies Expense 1800 Totals 67310 67310 Prepare an income statement. PROSEN DISTRIBUTING COMPANY Income Statement

24. J. F. Outz, M.D., has been practicing as a cardiologist for three years. During April, 2007,

J. F. Outz, M.D., has been practicing as a cardiologist for three years. During April, 2007, Outz completed the following transactions in her practice of cardiology.

Apr. 1. Paid office rent for April, $800.

3. Purchased equipment on account, $2,100.

5. Received cash on account from patients, $3,150.

8. Purchased X-ray film and other supplies on account, $245.

9. One of the items of equipment purchased on April 3 was defective. It was returned with the permission of the supplier, who agreed to reduce the account for the amount charged for the item, $325.

12. Paid cash to creditors on account, $1,250.

17. Paid cash for renewal of a six-month property insurance policy, $370.

20. Discovered that the balances of the cash account and the accounts payable account as of April 1 were overstated by $200. A payment of that amount to a creditor in March had not been recorded. Journalize the $200 payment as of April 20.

24. Paid cash for laboratory analysis, $545.

27. Paid cash from business bank account for personal and family expenses, $1,250.

30. Recorded the cash received in payment of services (on a cash basis) to patients during April, $1,720.

30. Paid salaries of receptionist and nurses, $1,725.

30. Paid various utility expenses, $360.

30. Recorded fees charged to patients on account for services performed in April, $5,145.

30. Paid miscellaneous expenses, $132.

Outz’s account titles, numbers, and balances as of April 1 (all normal balances) are listed as follows: Cash, 11, $4,123; Accounts Receivable, 12, $6,725; Supplies, 13, $290; Prepaid Insurance, 14, $465; Equipment, 18, $19,745; Accounts Payable, 22, $765; J. F. Outz, Capital, 31, $30,583; J. F. Outz, Drawing, 32; Professional Fees, 41; Salary Expense, 51; Rent Expense, 53; Laboratory Expense, 55; Utilities Expense, 56; Miscellaneous Expense, 59.

Instructions

1. Open a ledger of standard four-column accounts for Dr. Outz as of April 1. Enter the balances in the appropriate balance columns and place a check mark (??) in the posting reference column. (Hint: Verify the equality of the debit and credit balances in the ledger before proceeding with the next instruction.)

2. Journalize each transaction in a two-column journal.

3. Post the journal to the ledger, extending the month-end balances to the appropriate balance columns after each posting.

4. Prepare an unadjusted trial balance as of April 30.

25 . Elizabeth, a public limited company, has granted 100 share appreciation rights to each of its 1,000...

Elizabeth, a public limited company, has granted 100 share appreciation rights to each of its 1,000 employees in January 20X4. The management feels that as of December 31, 20X4, 90% of the awards will vest on December 31, 20X6. The fair value of each share appreciation right on December 31, 20X4, is $10. What is the fair value of the liability to be recorded in the financial statements for the year ended December 31, 20X4?

(a) $300,000

(b) $10 million

(c) $100,000

(d) $90,000

26. (Adjusting Entries) Greco Resort opened for business on June 1 with eight air-conditioned units....

(Adjusting Entries) Greco Resort opened for business on June 1 with eight air-conditioned units. Its trial balance on August 31 is as follows.

Other data:

1. The balance in prepaid insurance is a one-year premium paid on June 1, 2014.

2. An inventory count on August 31 shows $450 of supplies on hand.

3. Annual depreciation rates are buildings (4%) and equipment (10%). Salvage value is estimated to be 10% of cost.

4. Unearned Rent Revenue of $3,800 was earned prior to August 31.

5. Salaries of $375 were unpaid at August 31.

6. Rentals of $800 were due from tenants at August 31.

7. The mortgage interest rate is 8% per year.

Instructions

(a) Journalize the adjusting entries on August 31 for the 3-month period June 1–August 31. (Omit explanations.)

(b) Prepare an adjusted trial balance on August 31.

27. For each separate case below, follow the 3-step process for adjusting the accumulated depreciatio...

Chrome File Edit View History Bookmarks People Window Help M Chapter 3 New Tab C ezto.mheducation.co m/hm.tpx ACCOUNTING Chapter 3 Question 3 (of3) For each separate case below, follow the 3-step process for adjusting the accumulated depreciation account at December 3 Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record the December 31, adjusting entry to get from step 1 to step 2. Assume no other adjusting entries are made during the year. The Krug Company's Accumulated Depreciation account has a $13,500 balance to start the year. A review of depreciation schedules reveals that $14,600 of depreciation expense must be recorded for the year Accumulated depreciation Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record the December 31 adjusting entry to get from step 1 to step 2. The company has only one fixed asset (truck) that it purchased at the start of this year. That asset had cost $44,000, had an estimated life of five years, and is expected to have zero value at the end of the five years 442 t FEB 4896 D Thu 4:21 PM a E instructions I help Ea Save & Exit Submit

28. Question Type: Multiple Choice 1) Which of the following statements is correct? a) Personal...

Question Type: Multiple Choice

1) Which of the following statements is correct?

a) Personal creditors have first claim on partnership assets.

b) Partnership creditors have first claim on partnership assets.

c) Partnership creditors have first claim on personal assets.

d) Partnership creditors have first claim on partnership assets; and partnership creditors have first claim on personal assets.

2) The first step in the liquidation process is to:

a) convert noncash assets into cash.

b) pay partnership creditors

c) compute any net income (loss) up to the date of dissolution.

d) allocate any gains or losses to the partners.

3) A schedule prepared each time cash is to be distributed is called a(n) :

a) advance cash distribution schedule.

b) marshaling of assets schedule.

c) loss absorption potential schedule.

d) safe payment schedule.

4) An advance cash distribution plan is prepared:

a) each time cash is distributed to partners in an installment liquidation.

b) each time a partnership asset is sold in an installment liquidation.

c) to determine the order and amount of cash each partner will receive as it becomes available for distribution.

d) none of these.

5) The first step in preparing an advance cash distribution plan is to:

a) determine the order in which partners are to participate in cash distributions.

b) compute the amount of cash each partner is to receive as it becomes available for distribution.

c) allocate any gains (losses) to the partners in their profit-sharing ratio.

d) determine the net capital interest of each partner.

6) Offsetting a partner's loan balance against his debit capital balance is referred to as the:

a) marshaling of assets.

b) right of offset.

c) allocation of assets.

d) liquidation of assets.

7) If a partner with a debit capital balance during liquidation is personally solvent, the:

a) partner must invest additional assets in the partnership.

b) partner's debit balance will be allocated to the other partners.

c) other partners will give the partner enough cash to absorb the debit balance.

d) partnership will loan the partner enough cash to absorb the debit balance.

8) Shrek, Donkey, and Fiona are partners in SDF and share profits and losses in the ratio of 5:3:2, respectively. The partnership has cash of $10,000 and noncash assets of $90,000 when they decide to liquidate. Liabilities at the time of liquidation are $40,000, including a note payable to Fiona of $5,000. The partner capital accounts are Shrek $40,000, Donkey $ 15,000 and Fiona $5,000. The non-cash assets of the partnership were sold for $26,000. The liabilities other than the note payable to Fiona are paid. Fiona is personally insolvent. Shrek and Donkey are not insolvent. Under the circumstances:

a) Shrek will receive a distribution in liquidation of $8,000.

b) Fiona will be required to contribute $2,800 to the partnership.

c) Shrek will receive a distribution in liquidation of $6,250.

d) Donkey will be required to contribute $4,200 to the partnership.

9) The partnership of Larry, Moe, and Curly shares profits and losses 60%, 30%, and 10%, respectively. On January 1, 2017, the partners voted to dissolve the partnership, at which time the assets, liabilities, and capital balances were as follows:

All of the partners are personally insolvent.

Assume that all noncash assets are sold for $840,000 and all available cash is distributed in final liquidation of the partnership. Cash should be distributed to the partners as follows:

a) Larry, $744,000; Moe, $372,000; Curly, $124,000.

b) Larry, $440,000; Moe, $380,000; Curly, $200,000.

c) Larry, $224,000; Moe, $272,000; Curly, $164,000.

d) Larry, $396,000; Moe, $198,000; Curly, $66,000.

10) The partnership of Peter, Paul, and Mary share profits and losses in the ratio of 4:4:2, respectively. The partners voted to dissolve the partnership when its assets, liabilities, and capital were as follows:

The partnership will be liquidated over a prolonged period of time. As cash is available, it will be distributed to the partners. The first sale of noncash assets having a book value of $600,000 realized $475,000. How much cash should be distributed to each partner after this sale?

a) Peter, $90,000; Paul, $140,000; Mary, $295,000

b) Peter, $210,000; Paul, $290,000; Mary, $145,000

c) Peter, $290,000; Paul, $210,000; Mary, $105,000

d) Peter, $150,000; Paul, $175,000; Mary, $200,000