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FINANCIAL ACCOUNTING
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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Emerald Corp. had total inventory of $65,000 at the beginning of February 2020. On February 2, it purchased inventory from a seller for $22,500 on credit with terms 2/15, n/30. Emerald received goods on February 10 and paid the total amount due on February 14. There were no other transactions during the month. Assuming a perpetual inventory system, what would be the cost of inventory at the end of February? =65000+22500(2%) =$64540 Steel Inc. was incorporated on January 1, 2019. At the end of 2019, it reported the following information for its first year of operations: net earnings $17,500, dividends $8,100, and contributed capital $180,000. At the end of 2020, it reported the following information: net earnings $28,000, dividends $11,000, and contributed capital $230,000. What was retained earnings at the end of 2020? 2019=0+17500-8100 =9400 2020=9400+28000-11000 =$25400
Transcribed Image Text:Emerald Corp. had total inventory of $65,000 at the beginning of February 2020. On February 2, it purchased inventory from a seller for $22,500 on credit with terms 2/15, n/30. Emerald received goods on February 10 and paid the total amount due on February 14. There were no other transactions during the month. Assuming a perpetual inventory system, what would be the cost of inventory at the end of February? =65000+22500(2%) =$64540 Steel Inc. was incorporated on January 1, 2019. At the end of 2019, it reported the following information for its first year of operations: net earnings $17,500, dividends $8,100, and contributed capital $180,000. At the end of 2020, it reported the following information: net earnings $28,000, dividends $11,000, and contributed capital $230,000. What was retained earnings at the end of 2020? 2019=0+17500-8100 =9400 2020=9400+28000-11000 =$25400
Baek Inc. provided services to customers amounting to $500,000 during 2019; the related cash was collected as follows: $420,000 in 2019; $80,000 in 2020. During 2019, $380,000 was incurred for wages expense; the related cash payments were made as follows: $250,000 in 2019; $130,000 in 2020. Based only on these data, what was the amount of wages expense for 2019 and 2020 on accrual basis? 2019: $380,000 2020: $0 On the last day of the year, inventory costing $14,000 that Jing's Shop had ordered was in transit between the supplier's location and Jing's location. The terms for this shipment were FOB shipping point. At the same time, inventory with a cost of $7,000 that had been shipped by Jing to a customer was also in transit between Jing's location and the customer's location. The terms for this shipment were FOB shipping point. Jing has recorded nothing with regard to these two transactions and the inventory balance is currently $25,000. Based on the above facts, the net change in inventory, if both items were recorded, would be: =25,000-14,000-7000 =4,000 =25000-4000 =$21,000
Transcribed Image Text:Baek Inc. provided services to customers amounting to $500,000 during 2019; the related cash was collected as follows: $420,000 in 2019; $80,000 in 2020. During 2019, $380,000 was incurred for wages expense; the related cash payments were made as follows: $250,000 in 2019; $130,000 in 2020. Based only on these data, what was the amount of wages expense for 2019 and 2020 on accrual basis? 2019: $380,000 2020: $0 On the last day of the year, inventory costing $14,000 that Jing's Shop had ordered was in transit between the supplier's location and Jing's location. The terms for this shipment were FOB shipping point. At the same time, inventory with a cost of $7,000 that had been shipped by Jing to a customer was also in transit between Jing's location and the customer's location. The terms for this shipment were FOB shipping point. Jing has recorded nothing with regard to these two transactions and the inventory balance is currently $25,000. Based on the above facts, the net change in inventory, if both items were recorded, would be: =25,000-14,000-7000 =4,000 =25000-4000 =$21,000
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