Cath Maulion is a lawyer who doesn't think that she needs an accountant. She is the one whomade the statement of financial position and statement of comprehensive income for the calendar yearended December 31, 2023. She does not know that she made mistakes classifying different accounts.STATEMENT OF FINANCIAL POSITIONASSETSMaulion Capital (12/31/2023)EquipmentUnearned rentPrepaid rentSalaries payableTotal assetsLiabilitiesAccounts receivableAccounts payableUtilities expenseInsurance expenseTotal LiabilitiesCapitalService incomeTotal Liabilities and CapitalIncome taxes payableCar240,00080,00070,000RegistrationNet income22,00020,000432,000a) How much is the total assets?b) How much is the total liabilities?c) How much is her capital as of December 31, 2023?d) How much is the income generated for 2023?e) How much is her net income?28,00050,00010,000Cath Maulion is a lawyer who doesn't think that she needs an accountant. She is the one whomade the statement of financial position and statement of comprehensive income for the calendar yearended December 31, 2023. She does not know that she made mistakes classifying different accounts.40,000128,000STATEMENT OF COMPREHENSIVE INCOMEIncomeCash in savings accountExpenses304,000432,000200,00060,000110,00020,00010,000

Statement of financial position refers to the statement which shows the assets, liabilities and…

Answered: Cath Maulion is a lawyer who doesn't…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The following information are available: 1. Cate did not bill yet the client for legal services rendered on December 28. On December 29, they won the case and billed the client on January 8, 2022 amounting to 74,780 2. Cate received 52,000 for the services that are yet to be performed on January 2022 to May 2022. 60% will allocate to legal and remaining to accounting. Cate did not record this transaction to her books. 3. A cafeteria is behind on space rental revenue, and this 10,000 of accrued revenues was unrecorded at the time the trial balance was prepared. 4. 34,840 of Unearned Rent account balance was still unearned at year-end 5. Computers and Equipment was bought on January 1, 2019 with 3,600 salvage value and estimated useful life of 6 years. Cate did not record yet any adjustments for 2021. 6. Building are being depreciated starting 2017 with 25,000 salvage value and estimated useful life of 40 years. Cate did not record yet any adjustments for 2021. 7. Actual…
Helen Hernandez, president of Double H Enterprises, applied for a $175,000 loan from Great Nations Bank. The bank requested financial statements as a basis for granting the loan. Helen instructed her accountant to provide the bank with a balance sheet, but to omit the other financial statements because her business incurred a net loss last year. Helen contends that as the owner of the business, it is her right to withhold certain financial statements from the bank. Do you agree with Helen? Why or why not? What type of information would banks require from a loan applicant and why would the loan officer request this information?
Delia Alvarez, the owner of Delia's Lawn Service, wants to borrow money to buy new lawn equipment. A local bank has asked for financial statements. Alvarez has asked you to prepare financial statements for the year ended December 31. You have been given the unadjusted trial balance on page 175, and you suspect that Alvarez expects you to base your statements on this information. You are concerned, however, that some of the account balances may need to be adjusted. In your post, write how you would explain to Alvarez what additional information you need before preparing the financial statements. Alvarez is not familiar with accounting issues. Therefore, explain why you need this information, the potential impact of this information on the financial statements, and the importance of making these adjustments before approaching the bank for a loan.
Balance sheet practice ADVANCED: Sally's Sandwiches is a family run business. They don't have a lot of experience in finance and they hoped to save money by not hiring a professional. Their cousin Lin complied the information, but realized it was too hard to make the balance sheet. Using the information below, create a balance sheet for them so that they don't have to hire someone. Information for Sally's Sandwiches as at 28 February 2022 Trade creditors Non-current assets. Sales revenue Cash Overdraft Cost of good sold Borrowings- long-term Debtors Interest Share capital Short term loans 10 150 45 7 5 13 Expenses Dividends Stock 62 20 15 63 21 34 11 12 Accumulated retained profits 28
George's long-time client, Henrietta, brought in business records this year showing $40,000 of business income and $30,000 of related expenses. In prior years, her expenses have been closer to $10,000. Which of the following should George do to ensure that he complies with his Circular 230 duty of due diligence as to accuracy? Refuse to prepare the return unless Henrietta can provide receipts for each individual expense. Review the records Henrietta provided to see if they adequately explain the sharp increase in expenses. If he has any remaining questions, he should ask Henrietta to explain. Independently investigate by calling a random sample of the vendors listed to verify that Henrietta really paid the amounts claimed. Prepare Henrietta's return using the expenses listed on the prior-year return.
48. PR.03-19 Problem 3-19 Bad Debts (LO 3.10) Sharon is an orthopedic surgeon. She performed a surgery 2 years ago and billed $10,000 to her patient. After 2 years of attempting to collect the money, it is clear that Sharon will not be able to collect anything. Sharon reports income on her tax return on the cash basis, so she only reports the income she actually receives in cash each year. Can she claim a bad debt deduction for the $10,000? because a deduction is allowed to the extent that income arising from the services
Hugo Garcia is preparing his balance sheet and income and expense statement for the year ending December 31, 2020. He is having difficulty classifying a few items and asks for your help. Which of the transactions are assets, liabilities, income, or expense items? a. Hugo rents a house for $1,350 a month. b. Hugo bought diamond earrings for his wife and charged them using his Visa card. The earrings cost $900, but he hasn’t yet received the bill. c. Hugo borrowed $3,500 from his parents last fall, but so far, he has made no payments to them. d. Hugo makes monthly payments of $225 on an installment loan; about half of it is interest, and the balance is repayment of principal. He has 20 payments left, totaling $4,500. e. Hugo paid $3,800 in taxes during the year and is due a tax refund of $650, which he hasn’t yet received. f. Hugo invested $2,300 in a mutual fund. g. Hugo’s Aunt Lydia gave him a birthday gift of $300.
The following information are available: 1. Cate did not bill yet the client for legal services rendered on December 28. On December 29, they won the case and billed the client on January 8, 2022 amounting to 74,780 2. Cate received 52,000 for the services that are yet to be performed on January 2022 to May 2022. 60% will allocate to legal and remaining to accounting. Cate did not record this transaction to her books. 3. A cafeteria is behind on space rental revenue, and this 10,000 of accrued revenues was unrecorded at the time the trial balance was prepared. 4. 34,840 of Unearned Rent account balance was still unearned at year-end 5. Computers and Equipment was bought on January 1, 2019 with 3,600 salvage value and estimated useful life of 6 years. Cate did not record yet any adjustments for 2021. 6. Building are being depreciated starting 2017 with 25,000 salvage value and estimated useful life of 40 years. Cate did not record yet any adjustments for 2021. 7. Actual drawing shows…
A customer has filed a lawsuit against your company. Your attorneys have reviewed the facts of the case. They believe that it is reasonably possible (but not probable or certain) that the judge will award the plaintiff (your customer) up to $100,000. Which of the following is the proper accounting treatment for your company? Disclose the basic facts about the lawsuit in a financial statement footnote but do not record a liability. Record a liability by debiting a liability account and crediting retained earnings. Record a liability by debited a loss account and crediting a liability account. Record a liability by debiting retained earnings and crediting a liability account. Record a liability by debiting a liability account and crediting a loss account. Neither disclose the basic facts about the lawsuit nor record a liability
Steinar loaned a friend $9,500 to buy some stock 3 years ago. In the current year the debt became worthless. a. How much is Steinar's deduction for the bad debt for this year? (Assume he has no other capital gains or losses.) 4,750 X as a nonbusiness ✓ bad debt. Feedback ▼ Check My Work Bad debts fall into one of two categories, business bad debts or nonbusiness bad debts. Debts that arise from the taxpayer's trade or busin are classified as business bad debts, while all other debts are considered nonbusiness bad debts. The distinction between the two types of debts is important, since business bad debts are ordinary deductions and nonbusiness bad debts are short-term capital losses. b. What can Steinar do with the deduction not used this year? The remaining $ 0x can be carried forward as a short-term capital loss and deducted in future years, subject to an annual limitation
Zach Allen is the accountant for a large retail company. It is now the end of the accounting period and time to prepare financial statements. Zach has requested that the company's sales manager give him an estimate of uncollectible credit sales for the period. Zach says that he needs this information so that he can record bad debt expense. The sales manager tells Zach to "not worry about it. You can just record the expense as the accounts become uncollectible." Comment on this situation and who you think is right. Do you see any problem with the "wait and record approach"?
An employee working on her first trial balance discovers that the Equipment account has a credit balance of $2500 and a customer's A/R account has a credit balance of $25. Based on the knowledge you have gained in this course and how account balances are recorded and increase/decrease, has the accountant made a mistake in her records or are these situations possible?

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