
Bundle: Accounting, Loose-Leaf Version, 26th + LMS Integrated for CengageNOW, 2 terms Printed Access Card
26th Edition
ISBN: 9781305715967
Author: Carl Warren, Jim Reeve, Jonathan Duchac
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 11, Problem 11.3CPP
1.
To determine
Comprehensive Problem
To Record: The journal entries.
1.
Expert Solution

Explanation of Solution
The following are the journal entries.
2016 | Particulars | Debit ($) | Credit ($) | |
January | 3 | Petty Cash | 4,500 | |
Cash | 4,500 | |||
February | 26 | Office Supplies | 1,680 | |
Miscellaneous Selling Expense | 570 | |||
Miscellaneous Administrative Expense | 880 | |||
Cash | 3,130 | |||
April | 14 | Inventory | 31,300 | |
Accounts Payable | 31,300 | |||
May | 13 | Accounts Payable | 31,300 | |
Cash | 31,300 | |||
17 | Cash | 21,200 | ||
Cash Short and Over | 40 | |||
Sales | 21,240 | |||
June | 2 | Notes Receivable | 180,000 | |
Accounts Receivable | 180,000 | |||
August | 1 | Cash | 182,400 | |
Notes Receivable | 180,000 | |||
Interest Revenue | 2,400 | |||
24 | Cash | 7,600 | ||
Allowance for Doubtful Accounts | 1,400 | |||
Accounts Receivable | 9,000 | |||
September | 15 | Accounts Receivable | 1,400 | |
Allowance for Doubtful Accounts | 1,400 | |||
15 | Cash | 1,400 | ||
Accounts Receivable | 1,400 | |||
September | 15 | Land | 654,925 | |
Interest Expense | 15,075 | |||
Notes Payable | 670,000 | |||
October | 17 | Cash | 135,000 | |
Notes Receivable | 100,000 | |||
64,000 | ||||
Loss on Sale of Office Equipment | 21,000 | |||
Office Equipment | 320,000 | |||
November | 30 | Sales Salaries Expense | 135,000 | |
Office Salaries Expense | 77,250 | |||
Employees Income Tax Payable | 39,266 | |||
Social Security Tax Payable | 12,735 | |||
Medicare Tax Payable | 3,184 | |||
Salaries Payable | 157,065 | |||
30 | Payroll Tax Expense | 16,229 | ||
Social Security Tax Payable | 12,735 | |||
Medicare Tax Payable | 3,184 | |||
State |
270 | |||
Federal Unemployment Tax Payable | 40 | |||
December | 14 | Notes Payable | 670,000 | |
Cash | 670,000 | |||
31 | Pension Expense | 190,400 | ||
Cash | 139,700 | |||
Unfunded Pension Liability | 50,700 |
Table (1)
2.
To determine
To Prepare: The
2.
Expert Solution

Explanation of Solution
Prepare the bank reconciliation statement for Company K.
K Company | ||
Bank Reconciliation December 31, 2016 | ||
Particulars | Amount ($) | Amount ($) |
Balance according to bank statement | 283,000.00 | |
Adjustments: | ||
Deposit in transit, not recorded by bank | 29,500.00 | |
Deduct outstanding checks | (68,540.00) | |
Total adjustments | (39,040.00) | |
Adjusted balance | 243,960.00 | |
Balance according to company’s records | 245,410.00 | |
Adjustments: | ||
Bank service charges | (750.00) | |
Error in recording check | (700.00) | |
Total adjustments | (1,450.00) | |
Adjusted balance | 243,960.00 |
Table (2)
3.
To determine
To Record: The bank service charges using miscellaneous administrative expense account.
3.
Expert Solution

Answer to Problem 11.3CPP
Record the
2016 | Particulars | Debit ($) | Credit ($) | |
December | 31 | Miscellaneous Expense | 750 | |
Accounts Payable | 700 | |||
Cash | 1,450 |
Table (3)
Explanation of Solution
- Miscellaneous expense is an expense account and it decreases the value of equity by $750. Therefore, debit miscellaneous expense account with $750.
- Accounts payable is a liability and it is decreased by $700. Therefore, debit accounts payable account with $700.
- Cash is an asset and it is decreased by $1,450. Therefore, credit cash account with $1,450.
4.
To determine
To Record: The
4.
Expert Solution

Explanation of Solution
Record the adjusting entries.
2016 | Particulars | Amount ($) | Amount ($) | |
a | 31-Dec | 18,000 | ||
Allowance for Doubtful Accounts | 18,000 | |||
To record estimated uncollectible accounts | ||||
b | 31-Dec | Cost of Goods Sold | 3,300 | |
Inventory | 3,300 | |||
To record inventory shrinkage. | ||||
c | 31-Dec | Insurance Expense | 22,820 | |
Prepaid Insurance | 22,820 | |||
To record expired insurance. | ||||
d | 31-Dec | Office Supplies Expense | 3,920 | |
Office Supplies | 3,920 | |||
To record supplies used during the period. | ||||
e | 31-Dec | 36,000 | ||
Depreciation Expense—Office Equipment | 44,000 | |||
Depreciation Expense—Store Equipment | 5,000 | |||
Accumulated Depreciation—Buildings | 36,000 | |||
Accumulated Depreciation—Office Equipment | 44,000 | |||
Accumulated Depreciation—Store Equipment | 5,000 | |||
To record depreciation for the period. | ||||
2016 | Particulars | Amount ($) | Amount ($) | |
f | 31-Dec | Amortization Expense—Patents | 6,000 | |
Patents | 6,000 | |||
To record patent amortization | ||||
g | 31-Dec | Depletion Expense | 30,000 | |
Accumulated Depletion | 30,000 | |||
To record depletion. | ||||
h | 31-Dec | Vacation Pay Expense | 10,500 | |
Vacation Pay Payable | 10,500 | |||
To record vacation pay for the period. | ||||
i | 31-Dec | Product Warranty Expense | 76,000 | |
Product Warranty Payable | 76,000 | |||
To record product warranty for the period. | ||||
j | 31-Dec | Interest Receivable | 1,875 | |
Interest Revenue | 1,875 | |||
To record interest earned on note receivable. |
Table (4)
5.
To determine
To Prepare: The
5.
Expert Solution

Explanation of Solution
Prepare the balance sheet.
K Company | |||
Balance Sheet | |||
As on December 31, 2016 | |||
Assets | Amount ($) | Amount ($) | Amount ($) |
Current assets: | |||
Petty cash | 4,500 | ||
Cash | 243,960 | ||
Notes receivable | 100,000 | ||
Accounts receivable | 470,000 | ||
Allowance for doubtful accounts | (16,000) | ||
Accounts receivable, net | 454,000 | ||
Inventory | 320,000 | ||
Interest receivable | 1,875 | ||
Prepaid insurance | 45,640 | ||
Office supplies | 13,400 | ||
Total current assets | 1,183,375 | ||
Property, plant, and equipment: | |||
Land | 654,925 | ||
Buildings | 900,000 | ||
Accumulated depreciation—buildings | (36,000) | ||
Book value—buildings | 864,000 | ||
Office equipment | 246,000 | ||
Accumulated depreciation— office equipment | (44,000) | ||
Book value—office equipment | 202,000 | ||
Store equipment | 112,000 | ||
Accumulated depreciation— store equipment | (5,000) | ||
Book value—store equipment | 107,000 | ||
Mineral rights | 546,000 | ||
Accumulated depletion—mineral rights | (30,000) | ||
Book value—mineral rights | 516,000 | ||
Total property, plant, and equipment Intangible assets: | 2,343,925 | ||
Patents | 42,000 | ||
Total assets | 3,569,300 | ||
Liabilities | |||
Current liabilities: | |||
Social security tax payable | 25,470 | ||
Medicare tax payable | 4,710 | ||
Employees federal income tax payable | 40,000 | ||
State unemployment tax payable | 270 | ||
Federal unemployment tax payable | 40 | ||
Salaries payable | 157,000 | ||
Accounts payable | 131,600 | ||
Interest payable | 28,000 | ||
Product warranty payable | 76,000 | ||
Vacation pay payable (current portion) | 7,140 | ||
Notes payable (current portion) | 70,000 | ||
Total current liabilities | 540,230 | ||
Long-term liabilities: | |||
Vacation pay payable | 3,360 | ||
Unfunded pension liability | 50,700 | ||
Notes payable | 630,000 | ||
Total long-term liabilities | 684,060 | ||
Total liabilities | 1,224,290 | ||
Stockholders’ Equity | |||
Common stock | 500,000 | ||
Retained earnings | 1,845,010 | ||
Total stockholders’ equity | 2,345,010 | ||
Total liabilities and stockholders’ equity | 3,569,300 |
Table (5)
Want to see more full solutions like this?
Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
Nicole organized a new corporation. The corporation began business on April 1 of year 1. She made the following
expenditures associated with getting the corporation started:
Expense
Date
Amount
Attorney fees for articles of incorporation
February 10 $ 40,500
March 1-March 30 wages
March 30
6,550
March 1-March 30 rent
Stock issuance costs
March 30
2,850
April 1-May 30 wages
Note: Leave no answer blank. Enter zero if applicable.
April 1
May 30
24,000
16,375
a. What is the total amount of the start-up costs and organizational expenditures for Nicole's corporation?
Start-up costs
Organizational expenditures
What is the return on investment of this financial accounting question?
Last Chance Mine (LCM) purchased a coal deposit for $2,918,300. It estimated it would extract 18,950 tons of coal from the
deposit. LCM mined the coal and sold it, reporting gross receipts of $1.24 million, $13 million, and $11 million for years 1
through 3, respectively. During years 1-3, LCM reported net income (loss) from the coal deposit activity in the amount of
($11,400), $550,000, and $502,500, respectively. In years 1-3, LCM extracted 19,950 tons of coal as follows:
(1) Tons of
Coal
18,950
Depletion
(2) Basis (2)(1) Rate
$2,918,300 $154.00
Tons Extracted per Year
Year 1
4,500
Year 2
8,850
Year 3
6,600
Note: Leave no answer blank. Enter zero if applicable. Enter your answers in dollars and not in millions of dollars.
b. What is LCM's percentage depletion for each year (the applicable percentage for coal is 10 percent)?
Percentage
Depletion
Year 1
Year 2
Year 3
$
0
Chapter 11 Solutions
Bundle: Accounting, Loose-Leaf Version, 26th + LMS Integrated for CengageNOW, 2 terms Printed Access Card
Ch. 11 - Does a discounted note payable provide credit...Ch. 11 - Employees are subject to taxes withheld from their...Ch. 11 - Prob. 3DQCh. 11 - Prob. 4DQCh. 11 - Prob. 5DQCh. 11 - Prob. 6DQCh. 11 - To match revenues and expenses properly, should...Ch. 11 - Prob. 8DQCh. 11 - When should the liability associated with a...Ch. 11 - Prob. 10DQ
Ch. 11 - Prob. 11.1APECh. 11 - Proceeds from notes payable On January 26, Nyree...Ch. 11 - Prob. 11.2APECh. 11 - Prob. 11.2BPECh. 11 - Prob. 11.3APECh. 11 - Prob. 11.3BPECh. 11 - Prob. 11.4APECh. 11 - Prob. 11.4BPECh. 11 - Prob. 11.5APECh. 11 - Prob. 11.5BPECh. 11 - Prob. 11.6APECh. 11 - Prob. 11.6BPECh. 11 - Prob. 11.7APECh. 11 - Estimated warranty liability Quantas Industries...Ch. 11 - Quick ratio Nabors Company reported the following...Ch. 11 - Quick ratio Adieu Company reported the following...Ch. 11 - Current liabilities Bon Nebo Co. sold 25,000...Ch. 11 - Entries for discounting notes payable Griffin...Ch. 11 - Evaluating alternative notes A borrower has two...Ch. 11 - Entries for notes payable A business issued a...Ch. 11 - Prob. 11.5EXCh. 11 - Prob. 11.6EXCh. 11 - Prob. 11.7EXCh. 11 - Calculate payroll An employee earns 32 per hour...Ch. 11 - Calculate payroll Diego Company has three...Ch. 11 - Summary payroll data In the following summary of...Ch. 11 - Prob. 11.11EXCh. 11 - Payroll entries The payroll register for Proctor...Ch. 11 - Payroll entries Widmer Company had gross wages of...Ch. 11 - Prob. 11.14EXCh. 11 - Prob. 11.15EXCh. 11 - Prob. 11.16EXCh. 11 - Prob. 11.17EXCh. 11 - Prob. 11.18EXCh. 11 - Prob. 11.19EXCh. 11 - Accrued product warranty General Motors...Ch. 11 - Prob. 11.21EXCh. 11 - Quick ratio Gmeiner Co. had the following current...Ch. 11 - Quick ratio The current assets and current...Ch. 11 - Liability transactions The following items were...Ch. 11 - Entries for payroll and payroll taxes The...Ch. 11 - Wage and tax statement data on employer FICA tax...Ch. 11 - Prob. 11.4APRCh. 11 - Payroll accounts and year-end entries The...Ch. 11 - Prob. 11.1BPRCh. 11 - Entries for payroll and payroll taxes The...Ch. 11 - Prob. 11.3BPRCh. 11 - Prob. 11.4BPRCh. 11 - Payroll accounts and year-end entries The...Ch. 11 - Prob. 11.3CPPCh. 11 - Ethics and professional conduct in business Tonya...Ch. 11 - Prob. 11.2CPCh. 11 - Prob. 11.3CPCh. 11 - Contingent liabilities Altria Group, Inc., has...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Can you please solve this accounting issue without use Ai?arrow_forwardBrown Company estimates that monthly sales will be as follows. January $100,000 February 150,000 March 180,000 Historical trends indicate that 40 percent of sales are collected during the month of sale, 50 percent are collected in the month following the sale, and 10 percent are collected two months after the sale. Brown's accounts receivable balance as of December 31 totals $80,000 ($72,000 from December's sales and $8,000 from November's sales). The amount of cash Brown can expect to collect during the month of January is?arrow_forwardgiven answer General accounting questionarrow_forward
- provide answer of this General accounting questionarrow_forwardOn January 1, 2024, Packard Corporation leased equipment to Hewlitt Company. The lease term is 9 years. The first payment of $457,000 was made on January 1, 2024. Remaining payments are made on December 31 each year, beginning with December 31, 2024. The equipment cost Packard Corporation $2,956,548. The present value of the lease payments is $2,986,412. The lease is appropriately classified as a sales-type lease. Assuming the interest rate for this lease is 9%, what will be the balance reported as a liability by Hewlitt in its balance sheet on December 31, 2025?arrow_forwardWhat is the cost of goods sold on these financial accounting question?arrow_forward
- Nicole organized a new corporation. The corporation began business on April 1 of year 1. She made the following expenditures associated with getting the corporation started: Expense Date Amount Attorney fees for articles of incorporation February 10 $ 40,500 Stock issuance costs March 1-March 30 wages March 1-March 30 rent April 1-May 30 wages Note: Leave no answer blank. Enter zero if applicable. March 30 6,550 March 30 2,850 April 1 May 30 24,000 16,375 b. What amount of the start-up costs and organizational expenditures may the corporation immediately expense in year 1 (excluding the portion of the expenditures that are amortized over 180 months)? Start-up costs expensed Organizational expenditures expensedarrow_forwardGeneral accountingarrow_forwardAfter several profitable years running her business, Ingrid decided to acquire the assets of a small competing business. On May 1 of year 1, Ingrid acquired the competing business for $354,000. Ingrid allocated $59,000 of the purchase price to goodwill. Ingrid's business reports its taxable income on a calendar-year basis. Note: Do not round intermediate calculations. Round your answers to the nearest whole dollar amount. a. How much amortization expense on the goodwill can Ingrid deduct in year 1, year 2, and year 3? Year 1 Deductible Amortization Expense Year 2 Year 3arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Financial AccountingAccountingISBN:9781337272124Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage LearningFinancial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage LearningFinancial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,

Financial Accounting
Accounting
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning

Financial Accounting
Accounting
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Cengage Learning

Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,