
Financial Accounting
14th Edition
ISBN: 9781305088436
Author: Carl Warren, Jim Reeve, Jonathan Duchac
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 11, Problem 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 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
need help this questions
Selected comparative financial statements of Korbin Company follow.
Sales
KORBIN COMPANY
Comparative Income Statements
For Years Ended December 31
2021
2020
$ 512,008 $ 392,240
2019
$ 272,200
Cost of goods sold
308,229
245,542
174,208
Gross profit
203,779
146,698
97,992
Selling expenses
72,705
54,129
35,930
Administrative expenses
46,081
34,517
22,593
Total expenses
118,786
88,646
58,523
Income before taxes
.84,993
58,052
39,469
Income tax expense
15,809
11,901
8,012
Net income
$ 69,184
$ 46,151
$ 31,457
KORBIN COMPANY
Comparative Balance Sheets
Assets
Current assets
Long-term investments
Plant assets, net
Total assets
Liabilities and Equity
Current liabilities
Common stock
Other paid-in capital
Retained earnings
December 31
2021
2020
2019
$ 54,370
0
$ 36,390
600
$ 48,645
3,870
99,436
90,776
53,339
Total liabilities and equity
$ 153,806 $ 127,766 $ 105,854
$ 22,456 $ 19,037
$ 18,524
68,000
68,000
50,000
8,500
8,500
5,556
54,850
32,229
31,774
$ 153,806 $ 127,766 $ 105,854
provide correct answer me
Chapter 11 Solutions
Financial Accounting
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 - Prob. 7DQCh. 11 - Prob. 8DQCh. 11 - When should the liability associated with a...Ch. 11 - Prob. 10DQ
Ch. 11 - On October 12, Belleville Co. borrowed cash from...Ch. 11 - Proceeds from notes payable On January 26, Nyree...Ch. 11 - Prob. 2PEACh. 11 - Prob. 2PEBCh. 11 - Prob. 3PEACh. 11 - Prob. 3PEBCh. 11 - The payroll register of Konrath Co. indicates...Ch. 11 - Journalize period payroll The payroll register of...Ch. 11 - Prob. 5PEACh. 11 - Prob. 5PEBCh. 11 - Prob. 6PEACh. 11 - Prob. 6PEBCh. 11 - Prob. 7PEACh. 11 - Prob. 7PEBCh. 11 - Quick ratio Nabors Company reported the following...Ch. 11 - Quick ratio Adieu Company reported the following...Ch. 11 - Bon Nebo Co. sold 25,000 annual subscriptions of...Ch. 11 - Entries for notes payable Cosimo Enterprises...Ch. 11 - Evaluating alternative notes A borrower has two...Ch. 11 - Entries for notes payable A business issued a...Ch. 11 - A business issued a 60-day note for 75,000 to a...Ch. 11 - On June 30, Collins Management Company purchased...Ch. 11 - Prob. 7ECh. 11 - Prob. 8ECh. 11 - Prob. 9ECh. 11 - Summary payroll data In the following summary of...Ch. 11 - Prob. 11ECh. 11 - The payroll register for Proctor Company for the...Ch. 11 - Prob. 13ECh. 11 - Prob. 14ECh. 11 - Prob. 15ECh. 11 - A business provides its employees with varying...Ch. 11 - Prob. 17ECh. 11 - Prob. 18ECh. 11 - Prob. 19ECh. 11 - Accrued product warranty General Motors...Ch. 11 - Prob. 21ECh. 11 - Quick ratio Gmeiner Co. had the following current...Ch. 11 - The current assets and current liabilities for...Ch. 11 - The following items were selected from among the...Ch. 11 - The following information about the payroll for...Ch. 11 - Prob. 3PACh. 11 - Prob. 4PACh. 11 - Payroll accounts and year-end entries The...Ch. 11 - Prob. 1PBCh. 11 - Entries for payroll and payroll taxes The...Ch. 11 - Jocame Inc. began business on January 2, 2015....Ch. 11 - Prob. 4PBCh. 11 - Payroll accounts and year-end entries The...Ch. 11 - Prob. 3CPPCh. 11 - Tonya Latirno is a certified public accountant...Ch. 11 - Recognizing pension expense The annual examination...Ch. 11 - Prob. 3CPCh. 11 - Prob. 5CP
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
- general accountingarrow_forwardE3-17 (Algo) Calculating Equivalent Units, Unit Costs, and Cost Assigned (Weighted-Average Method) [LO 3-2] Vista Vacuum Company has the following production Information for the month of March. All materials are added at the beginning of the manufacturing process. Units . • Beginning Inventory of 3,500 units that are 100 percent complete for materials and 28 percent complete for conversion. 14,600 units started during the period. Ending Inventory of 4,200 units that are 14 percent complete for conversion. Manufacturing Costs Beginning Inventory was $20,500 ($10,100 materials and $10,400 conversion costs). Costs added during the month were $28,400 for materials and $51,500 for conversion ($26.700 labor and $24,800 applied overhead). Assume the company uses Weighted-Average Method. Required: 1. Calculate the number of equivalent units of production for materials and conversion for March. 2. Calculate the cost per equivalent unit for materials and conversion for March. 3. Determine the…arrow_forwardNonearrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Financial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage LearningFinancial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,College Accounting (Book Only): A Career ApproachAccountingISBN:9781305084087Author:Cathy J. ScottPublisher:Cengage Learning
- College Accounting (Book Only): A Career ApproachAccountingISBN:9781337280570Author:Scott, Cathy J.Publisher:South-Western College PubAuditing: A Risk Based-Approach (MindTap Course L...AccountingISBN:9781337619455Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:Cengage LearningCentury 21 Accounting Multicolumn JournalAccountingISBN:9781337679503Author:GilbertsonPublisher:Cengage

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,

College Accounting (Book Only): A Career Approach
Accounting
ISBN:9781305084087
Author:Cathy J. Scott
Publisher:Cengage Learning

College Accounting (Book Only): A Career Approach
Accounting
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:South-Western College Pub

Auditing: A Risk Based-Approach (MindTap Course L...
Accounting
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Cengage Learning
Century 21 Accounting Multicolumn Journal
Accounting
ISBN:9781337679503
Author:Gilbertson
Publisher:Cengage