Question

In: Accounting

The balance of Barkley Co’s supplies account was $800 at the start of the accounting period....

The balance of Barkley Co’s supplies account was $800 at the start of the accounting period. During the year Barkley made two purchases of supplies for $2,800 and $1,200. A physical count of the supplies on hand at the end of the accounting period showed that Barkley had $600 worth of supplies still on hand. For supplies, Barkley’s financial statements for this period should include

Supplies of $4,800 on the Balance Sheet

Supplies Expense of $4,200 on the Income Statement

Supplies of $4,200 on the Balance Sheet

Supplies Expense of $600 on the Income Statement

Nittany Company borrowed $75,000 from Lion Corporation on May 1, 2018 signing a 9-month payable with an interest rate of 4%.  Nittany Co operates on a calendar year basis and is preparing its year-end financial statements.  What amount of Interest Payable should Nittany Co. report from this note payable on its December 31, 2018 Balance Sheet?

$ 0

$1,750

$2,000

$3,000

Solutions

Expert Solution

Answer to Question 1:
Supplies account, Beginning Balance = $800
Supplies purchased = $2,800 + $1,200
Supplies purchased = $4,000

Supplies account, Ending Balance = $600

Supplies used = Beginning balance + Supplies used – Ending balance
Supplies used = $800 + $4,000 - $600
Supplies used = $4,200

The Barkley’s financial statement for this period would report:
Supplies expense of $4,200 on the Income Statement
Supplies of $600 on the Balance Sheet.

Option 2 is Correct.

Answer to Question 2:
Amount borrowed = $75,000
Date of Borrowing = May 1, 2018
Interest Rate = 4%
Interest accrued on December 31, 2018 = $75,000 * 4% * 8/12
Interest accrued on December 31, 2018 = $2,000

The Interest payable from the Note Payable for the Year ended December 31, 2018 balance sheet should record the interest expenses which has been accrued i.e. for the period of May 1, 2018 to December 31, 2018 which amount to $2,000.

Option 3 is Correct.



ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

The Book Binders Company’s Supplies account balance at the end of the period is $44,000. Supplies...
The Book Binders Company’s Supplies account balance at the end of the period is $44,000. Supplies totaling $37,600 have been purchased during the period and debited to Supplies. A physical count shows $10,000 worth of supplies on hand at the end of the period.
During the accounting period, it is noted that the Cash account has a credit balance. Which...
During the accounting period, it is noted that the Cash account has a credit balance. Which statement is true? a. This is the normal balance for cash. b. Although cash has a debit balance, it will often have a credit balance during the accounting period due to payments on account. c. The account needs to be analyzed to determine the reason for the credit balance. d. Debit postings exceed the credit postings for the accounting period. Which statement is incorrect?...
9) For Office Supplies, the category of account and its normal balance is
 9) For Office Supplies, the category of account and its normal balance is A) assets and a credit balance B) liabilities and a credit balance C) assets and a debit balance D) liabilities and a debit balance 10) For Expenses, the category of account and its normal balance is A) assets and a credit balance B) equity and a debit balance C) equity and a credit balance D) assets and a debit balance 11) For Retained Earnings, the category of account and its normal balance is A) assets and a debit...
a. The supplies account had a beginning balance of 1815 and was debited for 3790 for...
a. The supplies account had a beginning balance of 1815 and was debited for 3790 for supplies purchased during the year. Journalize the adjusting entry required at the end of the year assuming the amount of supplies on hand id 1675. b. The balance in 5he unearned fees account, before adjustment at the end of the year is $31,850. Journalize the adjusting entry required assuming the amount of unearned fees at the end of the yea is 6,195. c. At...
December 31, 20XX, according to the Trial Balance, the Office Supplies account has a balance of...
December 31, 20XX, according to the Trial Balance, the Office Supplies account has a balance of 2,100.00. Adjustment data reveals that 960.00 of office supplies are on hand at the end of the period. Journalize the adjusting entry. December 31, 20XX, according to the Trial Balance, the Store Supplies account has a balance of 3,000.00. Adjustment data reveals that 2,000.00 of store supplies have been used at the end of the period. Journalize the adjusting entry. December 31, 20XX, according...
If the Manufacturing Overhead account has a debit balance at the end of a period, it...
If the Manufacturing Overhead account has a debit balance at the end of a period, it means that actual overhead costs were a.greater than overhead costs applied to jobs. b.actual overhead costs were less than overhead costs applied to jobs. c.actual overhead costs were equal to overhead costs applied to jobs.d. no jobs have been completed.
If a count of office supplies on hand reveal $1,000 of supplies unused at year-end and the Office Supplies on Hand account has a balance of $2,500
If a count of office supplies on hand reveal $1,000 of supplies unused at year-end and the Office Supplies on Hand account has a balance of $2,500, the adjusting entry to bring the Office Supplies on Hand up to date at year-end should include:A.Debit Office Supplies on Hand $1,000, Credit Office Supplies Expense $1,000B.Debit Office Supplies on Hand $1,500, Credit Office Supplies Expense $1,500C.Debit Office Supplies Expense $1,500, Credit Office Supplies on Hand $1,500D.none of the above
(a) If operations for an accounting period resulted in cash sales of $25,000, sales on account...
(a) If operations for an accounting period resulted in cash sales of $25,000, sales on account of $30,000, and expenses paid in cash of $50,000, did the business incur a net income or a net loss for the period? (b) What is the amount of net income or net loss? (c) If liabilities are $65,000 and owner’s equity is $35,000, the amount of the assets is: (d) If assets are $205,000 and owner’s equity is $75,000, the amount of the...
Scrappers Supplies tracks the number of units purchased and sold throughout each accounting period but applies...
Scrappers Supplies tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31. Transactions Units Unit Cost Beginning inventory, January 1 210 $ 34 Transactions during the year: a. Purchase on account, March 2 305 36 b. Cash sale, April 1...
Scrappers Supplies tracks the number of units purchased and sold throughout each accounting period but applies...
Scrappers Supplies tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31. Transactions Units Unit Cost Beginning inventory, January 1 220 $ 26 Transactions during the year: a. Purchase on account, March 2 310 28 b. Cash sale, April 1...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT