Consider the unadjusted trial balance of London, Inc., at December 31, 2007, and the related month-end adjustment data. London, Inc., December 31, 2007 Unadjusted trial balance Accounts Dr. Cr. Cash 19,200 Account receivable 11,600 Supplies 2,200 Prepaid rent 2,400 Equipment 81,000 Accumulated depreciation- equipment 4,000 Accounts payable 3,700 Unearned service revenue 1,500 Tax payable 2,000 Salary payable 5,300 Share capital 60,000 Retained earning 28,500 Dividend 5,000 Service revenue 34,000 Salary expenses 2,700 Depreciation expenses 1,800 Supplies expenses 9,600 Rent expenses 3,500 Total 139,000 139,000 Adjustment data on December 31, 20X7: 1. Unearned service revenue that has been earned is 70%. 2. The company pays employees each Friday. The amount of the weekly payroll is $10,000 for a five-day work week. The current accounting period ends on Tuesday. 3. Supplies on hand, $1,300 4. Payment for rent during the year, $2,000. Prepaid rent ending $3,000. 5. Service revenue of $6,000 has been earned but not yet received. 6. The equipment was purchased on July 1, 20X7. The equipment’s useful life is five years. There is a residual value of $3,000. Record the depreciation. Required: 1- Prepare adjusting entries for these transactions at December 31, 20X7, for each situation. Consider each fact separately. Omit the explanation. 2- Prepare an income statement for the year ended Dec. 31, 20X7 (after updating the accounts)
In: Accounting
The trial balance follows of the Larkspur, Inc. as at December 31. The books are closed annually on December 31.
| Larkspur, Inc. Trial Balance December 31 |
||||
| Debit | Credit | |||
| Cash | $112,500 | |||
| Accounts receivable | 63,000 | |||
| Allowance for doubtful accounts | $8,850 | |||
| Land | 347,000 | |||
| Buildings | 582,000 | |||
| Accumulated depreciation—buildings | 38,000 | |||
| Equipment | 315,000 | |||
| Accumulated depreciation—equipment | 123,500 | |||
| Prepaid insurance | 10,000 | |||
| Common shares | 867,670 | |||
| Retained earnings | 151,000 | |||
| Sales revenue | 412,500 | |||
| Rent revenue | 44,880 | |||
| Utilities expense | 74,600 | |||
| Salaries and wages expense | 89,300 | |||
| Repairs and maintenance expense | 53,000 | |||
| $1,646,400 | $1,646,400 | |||
Instructions: A)Enter the balances in ledger accounts.
B) From the trial balance and the information that follows, prepare annual adjusting entries.
| 1. | The buildings have an estimated life of 30 years with no residual value. (The company uses the straight-line method.) | |
| 2. | The equipment is depreciated at 10% of its year-end carrying value per year. | |
| 3. | Insurance expired during the year was $5,300. | |
| 4. | The rental revenue is the amount received for 11 months for dining facilities. The December rent of $4,080 has not yet been received. A Rent Receivable account is used. | |
| 5. | It is estimated that 20% of the accounts receivable will be uncollectible. | |
| 6. | Salaries and wages earned but not paid by December 31 amounted to $3,730. | |
| 7. | Sales revenue included dues paid in advance by members and totalled $9,550. |
C) Post annual adjusting entries to the ledger accounts: (Post entries in the order of journal entries presented in the previous part.)
In: Accounting
The trial balance of Winter Co. does not balance:
|
WINTER CO. |
|||
|
Debit |
Credit |
||
|
Cash |
$2,833 |
||
|
Accounts receivable |
1,990 |
||
|
Supplies |
532 |
||
|
Equipment |
$7,875 |
||
|
Accounts payable |
2,573 |
||
|
Unearned revenue |
1,847 |
||
|
F. Winter, capital |
11,221 |
||
|
F. Winter, drawings |
801 |
||
|
Service revenue |
3,475 |
||
|
Office expense |
978 |
||
|
Salaries expense |
2,977 |
||
|
$11,958 |
$25,144 |
||
Your review of the ledger reveals that each account has a normal
balance. You also discover the following errors:
| 1. | Cash received from a customer on account was debited to Cash for $860 and Accounts Receivable was credited for the same amount. The actual collection was $680. | |
| 2. | The purchase of supplies on account for $350 was recorded as a debit to Equipment for $350 and a credit to Accounts Payable for $350. | |
| 3. | Services of $860 were performed on account for a client. Accounts Receivable was debited for $86 and Service Revenue was credited for $860. | |
| 4. | A debit posting to Office Expense of $510 was not done. | |
| 5. | A payment on account for $605 was credited to Cash for $605 and debited to Accounts Payable for $506. | |
| 6. | The withdrawal of $390 cash for Winter’s personal use was debited to Salaries Expense for $390 and credited to Cash for $390. | |
| 7. | A transposition error (reversal of digits) was made when copying the balance in Service Revenue to the trial balance. The correct balance recorded in the account was $4,375. | |
| 8. | The general ledger contained a Prepaid Insurance account with a debit balance of $647. |
Prepare a correct trial balance.
In: Accounting
On May 31, 2019, Teri Corporation sold spring floral arrangements for $27,000 (on account). Teri paid $12,000 to acquire the flowers from a wholesaler. Which of the entries will be made on May 31, 2019?
A. Debit Cost of Goods Sold $12,000; Credit Inventory $12,000
B. Debit Cash $27,000; Credit Sales Revenue $27,000
C. Debit Accounts Receivable $27,000; Credit Unearned Revenue $27,000
D. Debit Cost of Goods Sold $12,000; Credit Revenue $27,000
___________________________________________________________________________
Manny Corporation (“Manny”) has the following information from its financial statements and is trying to assess its business. What are the Days Sales in Inventory (“DSI”), Accounts Receivable Turnover (“ART”) and Accounts Payable Turnover (“APT”) ratios?
|
Revenue |
$450,000 |
|
Cost of Goods Sold |
$300,000 |
|
Operating Expenses |
$20,000 |
|
Cash |
$40,000 |
|
Accounts Receivable |
$90,000 |
|
Inventory |
$50,000 |
|
Accounts Payable |
$50,000 |
A. DSI = 0.17; ART = 6.0; APT = 5.0
B. DSI = 60.83; ART = 9.0; APT 3.33
C. DSI = 60.83; ART = 5.0; APT = 6.0
D. DSI = 6.083; ART = 9.0; APT = 6.0
___________________________________________________________________________
The following are selected data from Braun Corporation’s year-end financial statements. What is the gross profit margin for Braun Corp.?
Net Income $300,000
Sales $900,000
Cost of Goods Sold $400,000
Operating Income $325,000
Total Liabilities $200,000
A. 33.33%
B. 28.33%
C. 36.11%
D. 55.56%
In: Accounting
I need this question answered assuming that Westgate Construction's contract with Santa Clara County does NOT qualify for revenue recongnition over time... In 2016, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2018. Information related to the contract is as follows:
| 2016 | 2017 | 2018 | ||||||
| Cost incurred during the year | $ | 2,400,000 | $ | 3,600,000 | $ | 2,200,000 | ||
| Estimated costs to complete as of year-end | 5,600,000 | 2,000,000 | 0 | |||||
| Billings during the year | 2,000,000 | 4,000,000 | 4,000,000 | |||||
| Cash collections during the year | 1,800,000 | 3,600,000 | 4,600,000 | |||||
| ****IMPORTANT - Complete the requirements assuming that Westgate Construction's contract with Santa Clara County does NOT qualify for revenue recongnition over time.**** |
| 1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years. |
| 2-a. In the journal below, complete the necessary journal entries for the year 2016 (credit "Various accounts" for construction costs incurred). |
| 2-b. In the journal below, complete the necessary journal entries for the year 2017 (credit "Various accounts" for construction costs incurred). |
| 2-c. In the journal below, complete the necessary journal entries for the year 2018 (credit "Various accounts" for construction costs incurred). |
| 3. Complete the information required below to prepare a partial balance sheet for 2016 and 2017 showing any items related to the contract. |
| 4. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the following costs incurred and costs to complete information. |
In: Accounting
Trial Balance
|
Debit |
Credit |
||
|
1. |
Cash |
70,000 |
|
|
2. |
Account Receivable |
16,500 |
|
|
3. |
Prepaid Insurance |
2,500 |
|
|
4. |
Supplies |
13,000 |
|
|
5. |
Equipment |
16,000 |
|
|
6. |
Accounts Payable |
15,000 |
|
|
7. |
Unearned Revenue |
11,400 |
|
|
8. |
Notes Payable |
22,300 |
|
|
9. |
Capital |
49,000 |
|
|
10. |
Drawings |
1,500 |
|
|
11. |
Service Revenue |
55,000 |
|
|
12. |
Salaries Expense |
15,000 |
|
|
13. |
Utilities Expense |
4,000 |
|
|
14. |
Rent Expense |
11,900 |
|
|
15. |
Supplies Expense |
2,300 |
|
|
152,700 |
152,700 |
Income Statement
|
Revenues |
||
|
55,000 |
|
|
Total Revenues |
55,000 |
|
|
Expanses |
||
|
15,000 |
|
|
4,000 |
|
|
11,900 |
|
|
2,300 |
|
|
Total Expenses |
33,200 |
|
|
Net Income |
21,800 |
Owner’s Equity Statement
|
Opening Capital |
49,000 |
|
Net Income |
21,800 |
|
Subtotal |
70,800 |
|
Drawing |
1,500 |
|
Ending Capital |
69,300 |
Balance Sheet
|
Assets |
|
|
Cash |
70,000 |
|
Account Receivable |
16,500 |
|
Prepaid Insurance |
2,500 |
|
Supplies |
10,000 |
|
Equipment |
28,000 |
|
Total Assets |
127,000 |
|
Liabilities |
|
|
Accounts Payable |
15,000 |
|
Unearned Revenue |
11,400 |
|
Notes Payable |
22,300 |
|
Capital |
69,300 |
|
Total Liabilities |
118,000 |
Trying to prepare a financial statement for the trial balance transactions, can someone point to me where is my mistake or what I did wrong in my answer.. the balance sheet is not even. thanks.
Note: Feel free to modify or substitute any entry in the trial balance if needed.
In: Accounting
Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides data concerning the company’s costs:
| Fixed Cost per Month |
Cost per Car Washed |
||||||
| Cleaning supplies | $ | 0.80 | |||||
| Electricity | $ | 1,200 | $ | 0.09 | |||
| Maintenance | $ | 0.25 | |||||
| Wages and salaries | $ | 4,800 | $ | 0.30 | |||
| Depreciation | $ | 8,100 | |||||
| Rent | $ | 2,000 | |||||
| Administrative expenses | $ | 1,600 | $ | 0.03 | |||
For example, electricity costs are $1,200 per month plus $0.09 per car washed. The company expects to wash 8,200 cars in August and to collect an average of $5.90 per car washed.
The actual operating results for August appear below.
| Lavage Rapide | ||
| Income Statement | ||
| For the Month Ended August 31 | ||
| Actual cars washed | 8,300 | |
| Revenue | $ | 50,480 |
| Expenses: | ||
| Cleaning supplies | 7,060 | |
| Electricity | 1,908 | |
| Maintenance | 2,290 | |
| Wages and salaries | 7,620 | |
| Depreciation | 8,100 | |
| Rent | 2,200 | |
| Administrative expenses | 1,746 | |
| Total expense | 30,924 | |
| Net operating income | $ | 19,556 |
Required:
Calculate the company's revenue and spending variances for August. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
|
|||||||||||||||||||||||||||||||||||||||||||
In: Accounting
Anywhere Hospital’s CFO for the past 20 years, Jim Smith, just retired. He worked for the hospital for 40 years and was greatly respected by his staff. The hospital governing board has hired a new CFO, Todd White.
Jim Smith utilized the silo approach to revenue cycle management during his tenure. He relied on his key management personnel to contact upper management of other departments in the hospital to discuss issues and to resolve problems and vice versa.
Todd White, however, had implemented an integrated revenue cycle team at his former hospital three years ago and strongly believed in the power of teamwork. His previous team had gained numerous efficiencies and improved accounts receivable by millions. So when Todd started at Anywhere Hospital he planned on implementing a similar revenue cycle team.
As with any change, Todd was met with much resistance. But after speaking with many of his managers in patient accounts and finance he realized that the employees did not know how to effectively work in teams. And why should they—the previous CFO had not asked them to do so in several years.
1. What are some creative ways that Todd can help Anywhere Hospital understand the importance of an integrated revenue cycle team?
2. How can a manager improve teamwork amongst his or her employees?
3. Does Todd need assistance from a Changer Management Leader? Please explain your answer.
In: Nursing
2. The Sandcastle Motel adjusts and closes its accounts at the end of each year on 30 June. Most guests pay at the time they check out but a few guests pay in advance and these amounts are posted to Unearned Rental Revenue account at the time of receipt. The following transactions are being considered for adjustment:
(i) A one-year bank loan of $80,000 was obtained on 1 May. No interest has yet been paid. The interest accrued at 30 June is $1,000.
(ii) On 16 June, a suite of rooms was rented to a company for six months at a monthly rental of $3,200. The entire amount of $19,200 was collected in advance and posted to Unearned Rental Revenue account.
(iii) At 30 June, the motel has earned $18,090 rental revenue from current guests who will not be invoiced until they are ready to check out in July.
(iv) Salaries earned by employees at 30 June, but not yet paid, amount to $4,000.
v) On 30 June, the motel entered into an agreement to host the National Bodybuilders Convention in August. The motel expects to earn rental revenue of at least $90,000 from the convention.
(vi) On 1 June, a payment of $3,000 was made for six months cleaning services. The payment was entered into the Prepaid Cleaning account.
Question:
(a) Prepare the adjusting journal entries for the year ended 30 June. Ignore GST. (Explanations not required)
(b) The owner of the Sandcastle Motel is anxious to know the results for the year and wants to ignore the above adjustments in the interests of speedier reporting. Advise the owner why adjusting journal entries are important.
In: Accounting
Prepare a multiple-step income statement for Simon Corporation for 2019 using the data provided , including EPS disclosures assuming 500,000 shares of common stock were outstanding for 2019. The income tax rate is 25%.
Sales revenue : $30,000,000
General and administrative expenses : 5,400,000
Deferred revenue: 50,000
Interest expense: 18,000
Selling expenses : 800,000
Interest revenue: 16,000
Cost of goods sold: 9,000,000
Dividend revenue: 8,000
Additional Information:
The company's fiscal year end is December 31st. Income tax expense has not been determined. The following events also occurred during 2019. All transactions are material in amount unless otherwise noted.
1 -A chemical explosion caused $36,000 in uninsured damages to one of Simon's warehouses. The explosion was considered to be an unusual event.
2 -In October 2019, Simon sold its Paint division that qualified as a component of an entity for $1,600,000. The division generated "before tax income" of $360,000 from operations, from the beginning of the year through the date of disposal, and the book value of the division's assets was $700,000.
3 -$60,000 in restructuring costs were incurred in connection with corporate down-sizing.
4 -It was discovered that depreciation expense for 2018 was understated by $10,000 due to a mathematical error.
5 -Inventory that had a cost of $10,000 had become obsolete. The inventory was sold as scrap for $6,000.
6 -Simon Corporation experienced a foreign currency translation adjustment loss of $12,000.
7 -Investments were sold during the year at a loss of $3,000.
8 -Simon also had unrealized gains of $64,000 for the year on investments.
In: Accounting