INTERMEDIATE ACCOUNTING <CUSTOM LL>
10th Edition
ISBN: 9781260887068
Author: SPICELAND
Publisher: MCG CUSTOM
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Textbook Question
Chapter 2, Problem 2.4Q
Explain the difference between permanent accounts and temporary accounts. Why does an accounting system include both types of accounts?
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The comparative balance sheets and an income statement for Raceway Corporation follow.
Balance Sheets
As of December 31
Year 2
Year 1
Assets
Cash
$ 6,300
$ 48,400
Accounts receivable
10,200
7,260
Inventory
45,200
56,000
Prepaid rent
700
2,140
Equipment
140,000
144,000
Accumulated depreciation
(73,400)
(118,000)
Land
116,000
50,000
Total assets
$ 245,000
$ 189,800
Liabilities
Accounts payable (inventory)
$ 37,200
$ 40,000
Salaries payable
12,200
10,600
Stockholders’ equity
Common stock, $50 par value
150,000
120,000
Retained earnings
45,600
19,200
Total liabilities and stockholders’ equity
$ 245,000
$ 189,800
Income Statement
For the Year Ended December 31, Year 2
Sales
$ 480,000
Cost of goods sold
(264,000)
Gross profit
216,000
Operating expenses
Depreciation expense
(11,400)
Rent expense
(7,000)
Salaries expense
(95,200)
Other operating expenses
(76,000)
Net income
$ 26,400
Other Information
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Chapter 2 Solutions
INTERMEDIATE ACCOUNTING <CUSTOM LL>
Ch. 2 - Explain the difference between external events and...Ch. 2 - Each economic event or transaction will have a...Ch. 2 - What is the purpose of a journal? What is the...Ch. 2 - Explain the difference between permanent accounts...Ch. 2 - Describe how debits and credits affect assets,...Ch. 2 - Describe how debits and credits affect temporary...Ch. 2 - What is the first step in the accounting...Ch. 2 - Prob. 2.8QCh. 2 - Prob. 2.9QCh. 2 - Prob. 2.10Q
Ch. 2 - What is an unadjusted trial balance? An adjusted...Ch. 2 - Define adjusting entries and discuss their...Ch. 2 - Define closing entries and their purpose.Ch. 2 - Define prepaid expenses and provide at least two...Ch. 2 - Deferred revenues represent liabilities recorded...Ch. 2 - Define accrued liabilities. What adjusting journal...Ch. 2 - Prob. 2.17QCh. 2 - [Based on Appendix A] What is the purpose of a...Ch. 2 - [Based on Appendix B] Define reversing entries and...Ch. 2 - [Based on Appendix C] What is the purpose of...Ch. 2 - Prob. 2.21QCh. 2 - Transaction analysis LO21 The Marchetti Soup...Ch. 2 - Journal entries LO22 Prepare journal entries for...Ch. 2 - Prob. 2.3BECh. 2 - Journal entries LO22 Prepare journal entries for...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Adjusting entries; income determination LO24,...Ch. 2 - Prob. 2.12BECh. 2 - Journal entries LO22 Prepare journal entries to...Ch. 2 - T-accounts and trial balance LO23 Post the...Ch. 2 - Prob. 2.5ECh. 2 - Debits and credits LO22 Indicate whether a debit...Ch. 2 - Prob. 2.7ECh. 2 - Prob. 2.8ECh. 2 - Reversing entries Appendix 2B The employees of...Ch. 2 - Special journals Appendix 2C The White Companys...Ch. 2 - Prob. 2.24ECh. 2 - Prob. 2.3PCh. 2 - Prob. 2.4PCh. 2 - Prob. 2.8PCh. 2 - Prob. 2.12PCh. 2 - Judgment Case 21 Cash versus accrual accounting;...Ch. 2 - Communication Case 23 Adjusting entries LO24 I...Ch. 2 - Prob. 2.1DA
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