Assets Liabilities and Equity Cash $ 51,000 Accounts Payable $ 23,000 Accounts Receivable 43,000 Common Stock 84,000 Land 27,000 Retained Earnings 14,000 Total $ 121,000 Total $ 121,000 The following accounting events apply to Waddell Company's Year 2 fiscal year: Jan. 1 Acquired $46,000 cash from the issue of common stock. Feb. 1 Paid $5,100 cash in advance for a one-year lease for office space. Mar. 1 Paid a $1,900 cash dividend to the stockholders. Apr. 1 Purchased additional land that cost $27,000 cash. May 1 Made a cash payment on accounts payable of $10,000. July 1 Received $8,400 cash in advance as a retainer for services to be performed monthly over the coming year. Sept. 1 Sold land for $24,000 cash that had originally cost $24,000. Oct. 1 Purchased $1,070 of supplies on account. Dec. 31 Earned $63,000 of service revenue on account during the year. 31 Received cash collections from accounts receivable amounting to $61,000. 31 Incurred other operating expenses on account during the year that amounted to $13,000. 31 Recognized accrued salaries expense of $5,200. 31 Had $170 of supplies on hand at the end of the period. 31 The land purchased on April 1 had a market value of $40,000. Required Based on the preceding information, answer the following questions for Waddell Company. All questions pertain to the Year 2 financial statements. (Hint: Enter items in general ledger accounts under the accounting equation before answering the questions.)

a. What amount would Waddell report for land on the balance sheet? b. What amount of net cash flow from operating activities would be reported on the statement of cash flows? c. What amount of rent expense would be reported on the income statement? d. What amount of total liabilities would be reported on the balance sheet? e. What amount of supplies expense would be reported on the income statement? f. What amount of unearned revenue would be reported on the balance sheet? g. What amount of net cash flow from investing activities would be reported on the statement of cash flows? h. What amount of total expenses would be reported on the income statement? i. What amount of service revenue would be reported on the income statement? j. What amount of cash flows from financing activities would be reported on the statement of cash flows? k. What amount of net income would be reported on the income statement? l. What amount of retained earnings would be reported on the balance sheet?

In this problem, assume that the distribution of differences is approximately normal. Note: For degrees of freedom d.f. not in the Student's t table, use the closest d.f. that is smaller. In some situations, this choice of d.f. may increase the P-value by a small amount and therefore produce a slightly more "conservative" answer.

Are America's top chief executive officers (CEOs) really worth all that money? One way to answer this question is to look at row B, the annual company percentage increase in revenue, versus row A, the CEO's annual percentage salary increase in that same company. Suppose a random sample of companies yielded the following data:

Do these data indicate that the population mean percentage increase in corporate revenue (row B) is different from the population mean percentage increase in CEO salary? Use a 5% level of significance. (Let d = B − A.)

(a) What is the level of significance?


State the null and alternate hypotheses.

H₀: μ_d = 0; H₁: μ_d > 0H₀: μ_d > 0; H₁: μ_d = 0    H₀: μ_d = 0; H₁: μ_d < 0H₀: μ_d = 0; H₁: μ_d ≠ 0H₀: μ_d ≠ 0; H₁: μ_d = 0

(b) What sampling distribution will you use? What assumptions are you making?

The Student's t. We assume that d has an approximately normal distribution.The Student's t. We assume that d has an approximately uniform distribution.    The standard normal. We assume that d has an approximately uniform distribution.The standard normal. We assume that d has an approximately normal distribution.

What is the value of the sample test statistic? (Round your answer to three decimal places.)


(c) Find (or estimate) the P-value.

P-value > 0.5000.250 < P-value < 0.500    0.100 < P-value < 0.2500.050 < P-value < 0.1000.010 < P-value < 0.050P-value < 0.010

Sketch the sampling distribution and show the area corresponding to the P-value.

(d) Based on your answers in parts (a) to (c), will you reject or fail to reject the null hypothesis? Are the data statistically significant at level α?

Since the P-value ≤ α, we fail to reject H₀. The data are statistically significant.Since the P-value > α, we reject H₀. The data are not statistically significant.    Since the P-value > α, we fail to reject H₀. The data are not statistically significant.Since the P-value ≤ α, we reject H₀. The data are statistically significant.

(e) Interpret your conclusion in the context of the application.

Reject H₀. At the 5% level of significance, the evidence is sufficient to claim a difference in population mean percentage increases for corporate revenue and CEO salary.Reject H₀. At the 5% level of significance, the evidence is insufficient to claim a difference in population mean percentage increases for corporate revenue and CEO salary.    Fail to reject H₀. At the 5% level of significance, the evidence is insufficient to claim a difference in population mean percentage increases for corporate revenue and CEO salary.Fail to reject H₀. At the 5% level of significance, the e

On November 1, 2019, the account balances of Swifty Corporation were as follows.

During November, the following summary transactions were completed.

Enter the November 1 balances in the ledger accounts.
CASH

date explanation ref debit credit balance

ACCOUNT RECIVABLE

date explanation ref debit credit balance

SUPPLIES

date explanation ref debit credit balance

EQUIPMENT

date explanation ref debit credit balance

ACCUMULATED DEPRECIATION

date explanation ref debit credit balance

ACCOUNT PAYLABLE

date explanation ref debit credit balance

UNEARN REVENUE

date explanation ref debit credit balance

SALARY WAGE PAYLABLE

date explanation ref debit credit balance

COMMON STOCK

date explanation ref debit credit balance

RETAIN EARNING

date explanation ref debit credit balance

2.-) Journalize the November transactions

date /accout tittle / debit / credit

3.- ) Post to the ledger accounts.

cash: date / ref / debit / credit/ balance

account recivable:  date / ref / debit / credit/ balance

supplies :  date / ref / debit / credit/ balance

equipment:  date / ref / debit / credit/ balance

accumulated depreciation equipment:  date / ref / debit / credit/ balance

account paylable:  date / ref / debit / credit/ balance

unearn service revenue:  date / ref / debit / credit/ balance

salary wage paylable:  date / ref / debit / credit/ balance

common stock:  date / ref / debit / credit/ balance

services revenue: date / ref / debit / credit/ balance

salary wage expenses:  date / ref / debit / credit/ balance

rent expenses:  date / ref / debit / credit/ balance

4.- )Prepare a trial balance at November 30.

5.-) Adjustment data consist of:

Journalize the adjusting entries:

date/ account tittle / debit / credit

Sanjeev enters into a contract offering variable consideration. The contract pays him $1,850/month for six months of continuous consulting services. In addition, there is a 70% chance the contract will pay an additional $3,500 and a 30% chance the contract will pay an additional $1,500, depending on the outcome of the consulting contract. Sanjeev concludes that this contract qualifies for revenue recognition over time.

Assume that Sanjeev estimates variable consideration as the most likely amount. After Sanjeev has recognized revenue for two months of the contract, he changes his assessment of the chance the contract will pay him $5,000 to 50%. What adjustment to revenue should Sanjeev recognize to account for that change in estimate?

Multiple Choice

• Debit of $500

• Credit of $1,850

• Debit of $1,850

• Credit of $500

Reliable Enterprises sells distressed merchandise on extended credit terms. Collections on these sales are not reasonably assured, and bad debt losses cannot be reasonably predicted. It is unlikely that repossessed merchandise is in condition to be re-sold. Therefore, Reliable uses the cost recovery method. Merchandise costing $30,000 was sold for $55,000 in 2020. Collections on this sale were $20,000 in 2020, $15,000 in 2021, and $20,000 in 2022.

In its 2021 year-end balance sheet, Reliable would report installment receivables (net) of:

Multiple Choice

• $0.

• $20,000.

• $4,000.

• $15,000

Lake Power Sports sells jet skis and other powered recreational equipment. Customers pay one-third of the sales price of a jet ski when they initially purchase the ski, and then pay another one-third each year for the next two years. Because Lake has little information about the ability to collect these receivables, it uses the cost recovery method to recognize revenue on these installment sales. In 2020, Lake began operations and sold jet skis with a total price of $900,000 that cost Lake $450,000. Lake collected $300,000 in 2020, $300,000 in 2021, and $300,000 in 2022 associated with those sales. In 2021, Lake sold jet skis with a total price of $1,500,000 that cost Lake $900,000. Lake collected $500,000 in 2021, $400,000 in 2022, and $400,000 in 2023 associated with those sales. In 2023, Lake also repossessed $200,000 of jet skis that were sold in 2021. Those jet skis had a fair value of $75,000 at the time they were repossessed.

In 2022, Lake would recognize realized gross profit of:

Multiple Choice

• $0.

• $300,000.

• $310,000.

• $700,000.

Holmgren Seafoods, Inc. catches and processes salmon and tuna caught off the coast of Maine. In May 2021, it placed 100 freshly caught wild salmon with a retail price of $75 each in Joe’s Fish Shop. Holmgren’s contract with the shop stipulates that the shop will earn a 15% commission on each salmon sold. Joe’s is responsible for purchasing any fish that remain unsold at the end of a three-day period.

Required:
During the three-day period, Joe’s Fish Shop was able to sell 88 of the 100 salmon. How much revenue should Holmgren recognize with respect to this transaction?

1.
Which of the following does not correctly describe the following adjusting journal entry?

Wages expense. xxx
Wages payable. xxx

A. Total assets do not change.
B. The transaction is an example of an accrual.
C. Stockholders' equity decreases.
D. Net income is not affected.
This journal entry increases expenses and liabilities; the increase in expenses decreases net income, retained earnings, and thus stockholders' equity.

2.Which of the following does not correctly describe the following adjusting journal entry?

Interest receivable. xxx
Interest revenue. xxx

A. Total assets increase.
B. The transaction is an example of an accrual.
C. Stockholders' equity decreases.
D. Net income increases.

3.Which of the following correctly describes the following adjusting journal entry?

Accounts receivable. xxx

Restaurant sales revenue. xxx

A. Total assets do not change.
B. The transaction is an example of an accrual.
C. Stockholders' equity decreases.
D. Net income is not affected.

4.Which of the following does not correctly describe the following adjusting journal entry?

Rent expense. xxx
Prepaid rent. xxx

A. Total assets decrease.
B. Retained earnings are not affected.
C. Stockholders' equity decreases.
D. Net income decreases.

5.Which of the following correctly describes the following adjusting journal entry?

Depreciation expense. xxx
Accumulated depreciation. xxx

A. Total assets decrease.
B. Liabilities will increase.
C. Stockholders' equity is not affected.
D. Net income increases.

6.Which of the following correctly describes the following adjusting journal entry?

Utilities expense. xxx

Utilities payable. xxx

A. Total assets decrease and net income decreases.
B. Stockholders' equity decreases and liabilities increase.
C. The transaction is an example of a deferral.
D. Net income decreases and stockholders' equity does not change.
7.On January 1, 2016, the general ledger of Global Corporation included supplies of $1,000. During 2016, supplies purchased amounted to $5,000. A physical count of inventory on hand at December 31, 2016 determined that the amount of supplies on hand was $1,200. How much is the supplies expense for year 2016?

A. $6,000.
B. $5,200.
C. $4,800.
D. $1,000.
8.Which of the following adjusting journal entries is created as the result of an accrual?
A. Wages expense. xxx
Wages payable. xxx
B. Depreciation expense. xxx
Accumulated depreciation. xxx
C.
Prepaid Rent xxx
Rent expense. xxx
D.
Accounts receivable xxx
Unearned revenue. xxx

9.
Which of the following adjusting journal entries is not created as the result of an accrual?

A.
Interest expense. xxx
Interest payable xxx

B.

Accounts receivable. xxx
Service revenue. xxx

C.

Prepaid Rent. xxx
Rent expense. xxx

D.

Interest receivable xxx
Interest revenue. xxx

10.
Which of the following accounts is used to record an accrual for expenses?

A. Prepaid rent.
B. Unearned revenues.
C. Accounts receivable.
D. Interest payable.

Expense accrual journal entries recognize expenses that have been incurred but will be paid in the subsequent accounting period, with a credit to a liability.

Adger Corporation is a service company that measures its output based on the number of customers served. The company provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results for May as shown below:

When preparing its planning budget the company estimated that it would serve 35 customers per month; however, during May the company actually served 40 customers.

Foundational 9-1

Required:

1. What amount of revenue would be included in Adger’s flexible budget for May?

2. What amount of employee salaries and wages would be included in Adger’s flexible budget for May?

3. What amount of travel expenses would be included in Adger’s flexible budget for May?

4. What amount of other expenses would be included in Adger’s flexible budget for May?

5. What net operating income would appear in Adger’s flexible budget for May?

6. What is Adger’s revenue variance for May? (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.)

7. What is Adger’s employee salaries and wages spending variance for May? (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.)

8. What is Adger’s travel expenses spending variance for May? (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.)

9. What is Adger’s other expenses spending variance for May? (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.)

10. What amount of revenue would be included in Adger’s planning budget for May?

11. What amount of employee salaries and wages would be included in Adger’s planning budget for May?

12. What amount of travel expenses would be included in Adger’s planning budget for May?

13. What amount of other expenses would be included in Adger’s planning budget for May?

14. What activity variance would Adger report in May with respect to its revenue? (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.)

15. What activity variances would Adger report with respect to each of its expenses for May? (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.)

Governments often place so-called sin taxes on goods or services such as cigarettes and alcohol. These kinds of taxes are popular with politicians because they are usually more palatable to voters than income taxes. To understand the effect of such a tax, consider the monthly market for rum, which is shown on the following graph. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. 0 20 40 60 80 100 120 140 160 180 200 40 36 32 28 24 20 16 12 8 4 0 PRICE (Dollars per bottle) QUANTITY (Bottles) Demand Supply Graph Input Tool Market for Rum Quantity (Bottles) 80 Demand Price (Dollars per bottle) 24.00 Supply Price (Dollars per bottle) 16.00 Tax Wedge (Dollars per bottle) 8.00 Suppose the government imposes an $8-per-bottle tax on suppliers. At this tax amount, the equilibrium quantity of rum is 80 bottles, and the government collects $640 in tax revenue. Now calculate the government's tax revenue if it sets a tax of $0, $8, $16, $20, $24, $32, or $40 per bottle. (Hint: To find the equilibrium quantity after the tax, adjust the “Quantity” field until the Tax Wedge equals the value of the per-unit tax.) Using the data you generate, plot a Laffer curve by using the green points (triangle symbol) to plot total tax revenue at each of those tax levels. Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. Laffer Curve 0 4 8 12 16 20 24 28 32 36 40 1600 1440 1280 1120 960 800 640 480 320 160 0 TAX REVENUE (Dollars) TAX (Dollars per bottle) Suppose the government is currently imposing a $24-per-bottle tax on rum. True or False: The government can raise its tax revenue by decreasing the per-unit tax on rum. True False Consider the deadweight loss generated in each of the following cases: no tax, a tax of $16 per bottle, and a tax of $32 per bottle. On the following graph, use the black curve (plus symbols) to illustrate the deadweight loss in these cases. (Hint: Remember that the area of a triangle is equal to 12×Base×Height . In the case of a deadweight loss triangle found on the graph input tool, the base is the amount of the tax and the height is the reduction in quantity caused by the tax.) Deadweight Loss 0 4 8 12 16 20 24 28 32 36 40 1600 1440 1280 1120 960 800 640 480 320 160 0 DEADWEIGHT LOSS (Dollars) TAX (Dollars per bottle) As the tax per bottle increases, deadweight loss .

Adger Corporation is a service company that measures its output based on the number of customers served. The company provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results for May as shown below:

When preparing its planning budget the company estimated that it would serve 35 customers per month; however, during May the company actually served 40 customers.

1. What amount of revenue would be included in Adger’s flexible budget for May?

2. What amount of employee salaries and wages would be included in Adger’s flexible budget for May?

3. What amount of travel expenses would be included in Adger’s flexible budget for May?

4. What amount of other expenses would be included in Adger’s flexible budget for May?

5. What net operating income would appear in Adger’s flexible budget for May?

6. What is Adger’s revenue variance for May? (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.)

7. What is Adger’s employee salaries and wages spending variance for May? (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.)

8. What is Adger’s travel expenses spending variance for May? (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.)

9. What is Adger’s other expenses spending variance for May? (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.)

10. What amount of revenue would be included in Adger’s planning budget for May?

11. What amount of employee salaries and wages would be included in Adger’s planning budget for May?

12. What amount of travel expenses would be included in Adger’s planning budget for May?

13. What amount of other expenses would be included in Adger’s planning budget for May?

14. What activity variance would Adger report in May with respect to its revenue? (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.)

15. What activity variances would Adger report with respect to each of its expenses for May? (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.)

15. What activity variances would Adger report with respect to each of its expenses for May? (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.)

Sales and Notes Receivable Transactions

The following were selected from among the transactions completed during the current year by Danix Co., an appliance wholesale company:

Jan. 13. Sold merchandise on account to Black Tie Co., $30,300. The cost of goods sold was $18,180.
Mar. 10. Accepted a 60-day, 6% note for $30,300 from Black Tie Co. on account.
May 9. Received from Black Tie Co. the amount due on the note of March 10.
June 10. Sold merchandise on account, terms 2/10, n/30, to Holen for $11,400. Record the sale net of the discount. The cost of goods sold was $6,840.
15. Loaned $24,000 cash to Pioneer Co., receiving a 30-day, 8% note.
20. Received from Holen the amount due on the invoice of June 10, less 2% discount.
July 15. Received the interest due from Pioneer Co. and a new 60-day, 9% note as a renewal of the loan of June 15. (Record both the debit and the credit to the notes receivable account.)
Sept. 13. Received from Pioneer Co. the amount due on its note of July 15.
13. Sold merchandise on account toWycoff Co., $60,000. The cost of goods sold was $36,000.
Oct. 12. Accepted a 60-day, 6% note for $60,000 from Wycoff Co. on account.
Dec. 11. Wycoff Co. dishonored the note dated October 12.
26. Received from Wycoff Co. the amount owed on the dishonored note, plus interest for 15 days at 12% computed on the maturity value of the note.

Required:

Journalize the entries to record the transactions. Assume 360 days in a year. For a compound entry, if an amount box does not require an entry, leave it blank. Assume this is a year in which February has 28 days.

Jan. 13-sale Accounts Receivable-Black Tie Co.
Sales
Jan. 13-cost Cost of Goods Sold
Inventory
Mar. 10 Notes Receivable
Accounts Receivable-Black Tie Co.
May 9 Cash
Notes Receivable
Interest Revenue
June 10-sale Accounts Receivable-Holen
Sales
June 10-cost Cost of Goods Sold
Inventory
June 15 Notes Receivable
Cash
June 20 Cash
Accounts Receivable-Holen
July 15 Notes Receivable
Cash
Notes Receivable
Interest Revenue
Sept. 13- note Cash
Notes Receivable
Interest Revenue
Sept. 13-sale Accounts Receivable-Wycoff Co.
Sales
Sept. 13-cost Cost of Goods Sold
Inventory
Oct. 12 Notes Receivable
Accounts Receivable-Wycoff Co.
Dec. 11 Accounts Receivable-Wycoff Co.
Notes Receivable
Interest Revenue
Dec. 26 Cash
Accounts Receivable-Wycoff Co.
Incorrect
Interest Revenue

Feedback

The due date is the date the note is to be paid.

Remember the interest rate is stated on an annual basis, while the term is expressed as days. Assume a 360 day year. The maturity value is the amount that must be paid at the due date of the note.

At the due date, the company records the receipt of payment on the note.

Learning Objective 6.

Check My Work