Matching Concept: According to this principle all the expenses should be recorded in same accounting period in which its revenue is recognized. The primary purpose behind this principle is to show an accurate net income or loss during an accounting period. Describe the three items reflected in the income statement and the balance sheet .

Question

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Answer 1

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 2, Problem 68.2C

To determine

Introduction:

Matching Concept: According to this principle all the expenses should be recorded in same accounting period in which its revenue is recognized. The primary purpose behind this principle is to show an accurate net income or loss during an accounting period.

Describe the three items reflected in the income statement and the balance sheet.

Expert Solution & Answer

Answer to Problem 68.2C

The Shoe Box Partial Income Statement For the December 31, 2019
Expenses:
Insurance Expense	$800
Depreciation Expense	3,700
Interest Expense	533

The Shoe Box Partial Balance Sheet For the December 31, 2019
Current Asset
Prepaid Insurance	$1,600

Plant, Property & Equipment
Accumulated Depreciation - Building	33,300

Explanation of Solution

A. Insurance Expense as of December 31, 2019 Insurance Expense = 3 years Insurance Policy 3 years = $2,400 3 years = $800 Prepaid Insurance = $2,400 − $800 = $1,600

B. Depreciation Expense = $80,000 − $6,000 20 years = $3,700 Accumulated Depreciation = $3,700 X 9 years ( From 2011 to 2019) = $33,300 C.Interest Expense as of December 31, 2019 Interest Expense = 4 12X $1,600 = $533 Note:The remaining of the interest expense is recorded until it is actually incurred.

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Answer 2

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 2, Problem 68.2C

To determine

Introduction:

Matching Concept: According to this principle all the expenses should be recorded in same accounting period in which its revenue is recognized. The primary purpose behind this principle is to show an accurate net income or loss during an accounting period.

Describe the three items reflected in the income statement and the balance sheet.

Expert Solution & Answer

Answer to Problem 68.2C

The Shoe Box Partial Income Statement For the December 31, 2019
Expenses:
Insurance Expense	$800
Depreciation Expense	3,700
Interest Expense	533

The Shoe Box Partial Balance Sheet For the December 31, 2019
Current Asset
Prepaid Insurance	$1,600

Plant, Property & Equipment
Accumulated Depreciation - Building	33,300

Explanation of Solution

A. Insurance Expense as of December 31, 2019 Insurance Expense = 3 years Insurance Policy 3 years = $2,400 3 years = $800 Prepaid Insurance = $2,400 − $800 = $1,600

B. Depreciation Expense = $80,000 − $6,000 20 years = $3,700 Accumulated Depreciation = $3,700 X 9 years ( From 2011 to 2019) = $33,300 C.Interest Expense as of December 31, 2019 Interest Expense = 4 12X $1,600 = $533 Note:The remaining of the interest expense is recorded until it is actually incurred.

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Answer 3

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 2, Problem 68.2C

To determine

Introduction:

Matching Concept: According to this principle all the expenses should be recorded in same accounting period in which its revenue is recognized. The primary purpose behind this principle is to show an accurate net income or loss during an accounting period.

Describe the three items reflected in the income statement and the balance sheet.

Expert Solution & Answer

Answer to Problem 68.2C

The Shoe Box Partial Income Statement For the December 31, 2019
Expenses:
Insurance Expense	$800
Depreciation Expense	3,700
Interest Expense	533

The Shoe Box Partial Balance Sheet For the December 31, 2019
Current Asset
Prepaid Insurance	$1,600

Plant, Property & Equipment
Accumulated Depreciation - Building	33,300

Explanation of Solution

A. Insurance Expense as of December 31, 2019 Insurance Expense = 3 years Insurance Policy 3 years = $2,400 3 years = $800 Prepaid Insurance = $2,400 − $800 = $1,600

B. Depreciation Expense = $80,000 − $6,000 20 years = $3,700 Accumulated Depreciation = $3,700 X 9 years ( From 2011 to 2019) = $33,300 C.Interest Expense as of December 31, 2019 Interest Expense = 4 12X $1,600 = $533 Note:The remaining of the interest expense is recorded until it is actually incurred.

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Answer 4

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 2, Problem 68.2C

To determine

Introduction:

Matching Concept: According to this principle all the expenses should be recorded in same accounting period in which its revenue is recognized. The primary purpose behind this principle is to show an accurate net income or loss during an accounting period.

Describe the three items reflected in the income statement and the balance sheet.

Expert Solution & Answer

Answer to Problem 68.2C

The Shoe Box Partial Income Statement For the December 31, 2019
Expenses:
Insurance Expense	$800
Depreciation Expense	3,700
Interest Expense	533

The Shoe Box Partial Balance Sheet For the December 31, 2019
Current Asset
Prepaid Insurance	$1,600

Plant, Property & Equipment
Accumulated Depreciation - Building	33,300

Explanation of Solution

A. Insurance Expense as of December 31, 2019 Insurance Expense = 3 years Insurance Policy 3 years = $2,400 3 years = $800 Prepaid Insurance = $2,400 − $800 = $1,600

B. Depreciation Expense = $80,000 − $6,000 20 years = $3,700 Accumulated Depreciation = $3,700 X 9 years ( From 2011 to 2019) = $33,300 C.Interest Expense as of December 31, 2019 Interest Expense = 4 12X $1,600 = $533 Note:The remaining of the interest expense is recorded until it is actually incurred.

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Answer 5

Chapter 2, Problem 68.2C

To determine

Introduction:

Matching Concept: According to this principle all the expenses should be recorded in same accounting period in which its revenue is recognized. The primary purpose behind this principle is to show an accurate net income or loss during an accounting period.

Describe the three items reflected in the income statement and the balance sheet.

Expert Solution & Answer

Answer to Problem 68.2C

The Shoe Box Partial Income Statement For the December 31, 2019
Expenses:
Insurance Expense	$800
Depreciation Expense	3,700
Interest Expense	533

The Shoe Box Partial Balance Sheet For the December 31, 2019
Current Asset
Prepaid Insurance	$1,600

Plant, Property & Equipment
Accumulated Depreciation - Building	33,300

Explanation of Solution

A. Insurance Expense as of December 31, 2019 Insurance Expense = 3 years Insurance Policy 3 years = $2,400 3 years = $800 Prepaid Insurance = $2,400 − $800 = $1,600

B. Depreciation Expense = $80,000 − $6,000 20 years = $3,700 Accumulated Depreciation = $3,700 X 9 years ( From 2011 to 2019) = $33,300 C.Interest Expense as of December 31, 2019 Interest Expense = 4 12X $1,600 = $533 Note:The remaining of the interest expense is recorded until it is actually incurred.

Answer 6

Chapter 2, Problem 68.2C

To determine

Introduction:

Matching Concept: According to this principle all the expenses should be recorded in same accounting period in which its revenue is recognized. The primary purpose behind this principle is to show an accurate net income or loss during an accounting period.

Describe the three items reflected in the income statement and the balance sheet.

Expert Solution & Answer

Answer to Problem 68.2C

The Shoe Box Partial Income Statement For the December 31, 2019
Expenses:
Insurance Expense	$800
Depreciation Expense	3,700
Interest Expense	533

The Shoe Box Partial Balance Sheet For the December 31, 2019
Current Asset
Prepaid Insurance	$1,600

Plant, Property & Equipment
Accumulated Depreciation - Building	33,300

Explanation of Solution

A. Insurance Expense as of December 31, 2019 Insurance Expense = 3 years Insurance Policy 3 years = $2,400 3 years = $800 Prepaid Insurance = $2,400 − $800 = $1,600

B. Depreciation Expense = $80,000 − $6,000 20 years = $3,700 Accumulated Depreciation = $3,700 X 9 years ( From 2011 to 2019) = $33,300 C.Interest Expense as of December 31, 2019 Interest Expense = 4 12X $1,600 = $533 Note:The remaining of the interest expense is recorded until it is actually incurred.

Answer 7

Chapter 2, Problem 68.2C

To determine

Introduction:

Matching Concept: According to this principle all the expenses should be recorded in same accounting period in which its revenue is recognized. The primary purpose behind this principle is to show an accurate net income or loss during an accounting period.

Describe the three items reflected in the income statement and the balance sheet.

Answer 8

Expert Solution & Answer

Answer to Problem 68.2C

The Shoe Box Partial Income Statement For the December 31, 2019
Expenses:
Insurance Expense	$800
Depreciation Expense	3,700
Interest Expense	533

The Shoe Box Partial Balance Sheet For the December 31, 2019
Current Asset
Prepaid Insurance	$1,600

Plant, Property & Equipment
Accumulated Depreciation - Building	33,300

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

A. Insurance Expense as of December 31, 2019 Insurance Expense = 3 years Insurance Policy 3 years = $2,400 3 years = $800 Prepaid Insurance = $2,400 − $800 = $1,600

B. Depreciation Expense = $80,000 − $6,000 20 years = $3,700 Accumulated Depreciation = $3,700 X 9 years ( From 2011 to 2019) = $33,300 C.Interest Expense as of December 31, 2019 Interest Expense = 4 12X $1,600 = $533 Note:The remaining of the interest expense is recorded until it is actually incurred.

Answer 12

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Answer to Problem 68.2C

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