(STRETCH QUESTION-Not for credit but helpful practice) On April 15, Year 1, Nonny Co. bought supplies for $5,000 cash. Later in Year 1, Nonny Co. bought $500 of supplies on account. The firm's untrained bookkeepers recorded both transactions with debits to Supplies Expense at the times of the purchases. At the end of Year 1, Nonny Co.'s employees correctly counted $1,500 of Supplies on hand. Nonny Co. did not make any adjusting entries at the end of the year. The net income in Year 1 has been: a. Overstated by $1,500 b. Overstated by $1,000 c. Correctly stated d. Understated by $1,500 e. Understated by $1,000 f. none of the above

(STRETCH QUESTION-Not for credit but helpful practice) On April 15, Year 1, Nonny Co. bought supplies for $5,000 cash. Later in Year 1, Nonny Co. bought $500 of supplies on account. The firm's untrained bookkeepers recorded both transactions with debits to Supplies Expense at the times of the purchases. At the end of Year 1, Nonny Co.'s employees correctly counted $1,500 of Supplies on hand. Nonny Co. did not make any adjusting entries at the end of the year. The net income in Year 1 has been: a. Overstated by $1,500 b. Overstated by $1,000 c. Correctly stated d. Understated by $1,500 e. Understated by $1,000 f. none of the above

Name: 7.(STRETCH QUESTION-Not for credit but helpful practice) On April 15,
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Description: 7.(STRETCH QUESTION-Not for credit but helpful practice) On April 15, Year 1, Nonny Co.bought supplies for $5,000 cash. Later in Year 1, Nonny Co. bought $500 of supplies on account. Thefirm's untrained bookkeepers recorded both transactions with de

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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3. On January 1 of the current year, Neptune, Inc. had the following accounts on its books: Accounts Receivable $240,000 (debit) Allowance for Doubtful Accounts 8,000 (credit) During this year, credit sales were $1,200,000 and collections on account were $1,160,000. a. Prepare general journal entries for the following transactions that occurred during the year: (1) Wrote off N. Purcell’s account, $6,800. (2) Wrote off J. Stein’s account, $2,400. (3) J. Stein, who is in bankruptcy, paid $800 in final settlement of the account written off in transaction. (2). This amount is not included in the $1,160,000 collections. (4) On December 31, estimated the year’s bad debts expense at 1% of credit sales. b. Show how Accounts Receivable and the Allowance for Doubtful Accounts would appear on the year-end balance sheet.
Show the solution in good accounting form. Thank you! Main Corporation has operated a branch in Cavite for one year. Shipments are billed to the branch at cost. The branch carries its own accounts receivable, makes its own collections, and pays its own expenses. The branch reported an inventory on December 31, 2021: Outsiders, P3,391; Home office, P7,625 The transactions for the year are given effect to in the trial balance below: (see photo attached) 1. Determine the net profit of the Cavite Branch for 2021. 2. Using the same information above, determine the branch current account in the Home Office books on January 1, 2022. 3. Using the same information above, shipments to the Branch account in the Home Office books on January 1, 2022.
At the beginning of Year 3 Omega Company had a $75,000 balance in its accounts receivable account and a $10,400 balance in allowance for doubtful accounts. During Year 3 Omega experienced the following events. (1) Earned $256,000 of revenue on account. (2) Collected $248,000 cash from accounts receivable. (3) Wrote off $8,500 of accounts receivable as uncollectible. Omega estimates uncollectible accounts to be 4% of receivables. The December 31, Year 3 ending balance in the allowance for doubtful accounts account (balance after expense recognition) is: Multiple Choice $2,980. $8,500. $2,660. $3,300.
I am having trouble with this problem. The beginning-of-the-period cash balance for the Travis Company was a $7,200 debit. Cash sales for the month were $3,600 and sales on account were $4,800. The company paid $1,500 cash for current-period purchases and also paid $1,800 cash for amounts due from last month.What is the ending debit or credit balance in the Cash account?
Keiasia Coates Company sold merchandise for $2,000. The cost of the merchandise was $1,500. Five days later, the customer returns 20% of the merchandise, which is defective, and is not restored to Keasia Company’s merchandise inventory. On day 10, the customer sends a check for the amount due. Assuming the net method, indicate how these transactions combined would affect the following five financial statement items: assets, liabilities, owners equity, revenue, and expenses? Answer: assets:increase, Liabilities: decrease, owners equity:increase, revenue:increase, expenses: increase why and how would liabilites be decreased in this scenario? explain process to answer of this problem
Use the information in each of the following separate cases to calculate the unknown amount. a. Corentine Company had $157,000 of accounts payable on September 30 and $135,000 on October 31. Total purchases on credit during October were $286,000. Determine how much cash was paid on accounts payable during October. b. On September 30, Valerian Company had a $105,000 balance in Accounts Receivable. During October, the company collected $105,390 from its credit customers. The October 31 balance in Accounts Receivable was $94,000. Determine the amount of sales on credit that occurred in October. c. During October, Alameda Company had $107,500 of cash receipts and $108,150 of cash disbursements. The October 31 Cash balance was $21,100. Determine how much cash the company had at the close of business on September 30. Complete this question by entering your answers in the tabs below. Required A Required B Required C On September 30, Valerian Company had a $105,000 balance in Accounts…
atel Service Company does make a few sales on account but is mostly a cash business. Consequently, it uses the direct write-off method to account for uncollectible accounts. During Year 1, Patel Service Company earned $37,700 of cash revenue and $9,425 of revenue on account. Cash operating expenses were $26,624. After numerous attempts to collect a $265 account receivable from Sam Stephens, the account was determined to be uncollectible in Year 1. Required: Show the effects of (1) cash revenue, (2) revenue on account, (3) cash expenses, and (4) write off of the uncollectible account on the financial statements using a horizontal statements model. In the Statement of Cash Flows column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). Use "NC" for net change in cash. Leave blank to indicate that an element is not affected by the event. What amount of net income did Patel Service Company report on the Year 1 income statement?…
Show the solution in good accounting form. Thank you! Main Corporation has operated a branch in Cavite for one year. Shipments are billed to the branch at cost. The branch carries its own accounts receivable, makes its own collections, and pays its own expenses. The branch reported an inventory on December 31, 2021: Outsiders, P3,391; Home office, P7,625 The transactions for the year are given effect to in the trial balance below: (see photo attached) 1. Determine the net profit of the Cavite Branch for 2021.
King Enterprises is a book wholesaler. King hired a new accounting clerk on January 1 of the current year. The new clerk does not understand accrual accounting and recorded the following transactions based on when cash receipts and disbursements changed hands rather than when the transaction occurred. King uses a perpetual inventory system, and its accounting policy calls for inventory purchases to be recorded net of any discounts offered. Jan. 10 Paid Aztec Enterprises $11,100 for books that it received on December 15. (This purchase was recorded as a debit to Inventory and a credit to Accounts Payable on December 15 of last year, but the accounting clerk ignores that fact.) Dec. 27 Received books from McSaw Inc. for $26,500; terms 2/10, n/30. Dec. 30 Sold books to Booksellers Unlimited for $43,000; terms 1/10, n/30. The cost of these books to King was $34,000. Required: a) As a result of the accounting clerk's errors, compute the amount by which How much…
In the first year of operations, Ralph's Repair Service recognized $482,000 of service revenue earned on account. The ending accounts receivable balance was $88,900. Ralph estimates that 2% of sales on account will not be collected. During the year, Ralph wrote off a $200 receivable that was determined to be uncollectible. Assume there were no other transactions affecting accounts receivable. Required: a. What amount of cash was collected in Year 1? b. What amount of uncollectible accounts expense was recognized In Year 1? c. What will be Ralph's net realizable value of receivables on the December 31, Year 1 balance sheet? a. Cash collected b. Uncollectible accounts expense c. Net realizable value of receivables