In: Accounting
Is the $3,000 in interest a liability of the firm on the day the money is borrowed? YES _____ NO _____
Balance per Bank Statement $4,862.77
Balance per Books 2,479.48
Deposits in Transit, not on bank statement 654.24
Outstanding checks, not on bank statement 3,028.89
Interest earned, not in books yet 8.64
Ending balance of cash in this account _________
I. Berful wants to increase its reported net income. Will the following result in an increase in net income for the firm?
Ans a yes, the loan when taken becomes a liability | ||||
No, $3000 interest is not a liability on the day loan is borrowed as it is not accured | ||||
1) Yes | ||||
2) No | ||||
ans b | ||||
It ia part of the truck as the truck is not put to use before its put to use all the | ||||
expense related to bring it in the condition of put to use becomes its part | ||||
Cost of truck | ||||
ans c | ||||
No, as she is only hired and would be working form the first day of next year hence | ||||
no liability will occur | ||||
ans d | ||||
It is an expense Reserch & development expense | ||||
ans e | ||||
No, as direct method when used it takes bade debt into account when it actually occurs | ||||
ans f | ||||
Yes, as allowance method is used hence bad debt expnese will be recorded | ||||
ans h | ||||
It is an asset-Goodwill intagible asset | ||||
ans i | ||||
Straight linr (40000-4000)/8 | 4500 | |||
DDB method (40000*25%) | 10000 | |||
DDB rate 1/8*200% | 0.25 | |||
ans j | ||||
a) FIFO | ||||
Cost of good sold | $1,000,000 | |||
Ending Inventory (1100000+1200000) | 2300000 | |||
b) | ||||
LIFO | ||||
Cost of good sold | $1,200,000 | |||
Ending Inventory (1100000+1000000) | 2100000 | |||
c) Avg method | ||||
(1200000+1100000+1000000)/3 | 1100000 | |||
Cost of good sold | $1,100,000 | |||
Ending Inventory | 2200000 | |||
ans k | ||||
Bank reconsialiation statement | ||||
Balance per Bank | 4862.77 | |||
Add: Deposit in transit | 654.24 | |||
Less: Outstanding checks | -3028.89 | |||
Adjusted balance | 2488.12 | |||
Unadjsuted balance as per bookks | 2479.48 | |||
Add: Interest earned | 8.64 | |||
Adjusted ending balance | 2488.12 | |||
ans l | ||||
No effect as its issue of shares | ||||
No effect as paid in capital would increase | ||||
If any doubt please comment |