Question: Kaffen Company, a ski tuning, and repair shop, opened on November 1, 2013. The company carefully kept track of all its cash receipts and cash payments. The following information is available at the end of the ski season, April 30, 2014. Issuance of common shares Payment to purchase repair shop equipment Rent payments Newspaper advertising payment Cash Receipts $ 22,000 Cash Payments $9,100 1,260 370 Utility bill payments 920 Part-time helper's wage payments 2,900 Income tax payment 10,200 Cash receipts from ski and snowboard repair 31,830 services Subtotals 53.830 24,750 Cash balance 29,080 Totals $53,830 $ 53,830 The repair shop equipment was purchased on November 1 and has an estimated useful life of 5 years. The company rents space at a cost of $180 per month on a one-year lease. The lease contract requires payment of the first and last months' rent in advance, which was done. The part- time helper is owed $530 on April 30, 2014, for unpaid wages. On April 30, 2014, customers owe Kaffen Company $480 for services they have received but have not yet paid for.1. Prepare an accrual-basis income statement for the 6 months ended April 30, 2014.2. Prepare April 30, 2014, classified balance sheet.A CPA observed another CPA engaging in an act that was undeniably discreditable to the profession. The Acts Discreditable Rule of the AICPA:a. Requires the observing CPA to report this violation to a designated officer of the AICPA.b. Requires the observing CPA to report this violation to a designated officer of the applicable states accountancy licensing board.c. Expressly states that a CPA has no duty to report the observed misconduct.d. Does not express an opinion on whether the observing CPA does or does not have a reporting duty.
Question: Kaffen Company, a ski tuning, and repair shop, opened on November 1, 2013. The company carefully kept track of all its cash receipts and cash payments. The following information is available at the end of the ski season, April 30, 2014. Issuance of common shares Payment to purchase repair shop equipment Rent payments Newspaper advertising payment Cash Receipts $ 22,000 Cash Payments $9,100 1,260 370 Utility bill payments 920 Part-time helper's wage payments 2,900 Income tax payment 10,200 Cash receipts from ski and snowboard repair 31,830 services Subtotals 53.830 24,750 Cash balance 29,080 Totals $53,830 $ 53,830 The repair shop equipment was purchased on November 1 and has an estimated useful life of 5 years. The company rents space at a cost of $180 per month on a one-year lease. The lease contract requires payment of the first and last months' rent in advance, which was done. The part- time helper is owed $530 on April 30, 2014, for unpaid wages. On April 30, 2014, customers owe Kaffen Company $480 for services they have received but have not yet paid for.1. Prepare an accrual-basis income statement for the 6 months ended April 30, 2014.2. Prepare April 30, 2014, classified balance sheet.A CPA observed another CPA engaging in an act that was undeniably discreditable to the profession. The Acts Discreditable Rule of the AICPA:a. Requires the observing CPA to report this violation to a designated officer of the AICPA.b. Requires the observing CPA to report this violation to a designated officer of the applicable states accountancy licensing board.c. Expressly states that a CPA has no duty to report the observed misconduct.d. Does not express an opinion on whether the observing CPA does or does not have a reporting duty.
Century 21 Accounting Multicolumn Journal
11th Edition
ISBN:9781337679503
Author:Gilbertson
Publisher:Gilbertson
Chapter18: Acquiring Capital For Growth And Development
Section: Chapter Questions
Problem 1MP
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Transcribed Image Text:Question:
Kaffen Company, a ski tuning, and repair shop, opened on
November 1, 2013. The company carefully kept track of all
its cash receipts and cash payments. The following
information is available at the end of the ski season, April
30, 2014.
Issuance of common shares
Payment to purchase repair shop equipment
Rent payments
Newspaper advertising payment
Cash
Receipts
$ 22,000
Cash
Payments
$9,100
1,260
370
Utility bill payments
920
Part-time helper's wage payments
2,900
Income tax payment
10,200
Cash receipts from ski and snowboard repair
31,830
services
Subtotals
53.830
24,750
Cash balance
29,080
Totals
$53,830
$ 53,830
The repair shop equipment was purchased on November 1
and has an estimated useful life of 5 years. The company
rents space at a cost of $180 per month on a one-year
lease. The lease contract requires payment of the first and
last months' rent in advance, which was done. The part-
time helper is owed $530 on April 30, 2014, for unpaid
wages. On April 30, 2014, customers owe Kaffen Company
$480 for services they have received but have not yet paid
for.1. Prepare an accrual-basis income statement for the 6
months ended April 30, 2014.2. Prepare April 30, 2014,
classified balance sheet.A CPA observed another CPA
engaging in an act that was undeniably discreditable to the
profession. The Acts Discreditable Rule of the AICPA:a.
Requires the observing CPA to report this violation to a
designated officer of the AICPA.b. Requires the observing
CPA to report this violation to a designated officer of the
applicable states accountancy licensing board.c. Expressly
states that a CPA has no duty to report the observed
misconduct.d. Does not express an opinion on whether the
observing CPA does or does not have a reporting duty.
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