Accrued and unpaid wages: These wages refer to those wages which are due but have not been paid off duly. Under the accumulation basis of accounting, the outstanding wages that have been earned should be entered as the wages expenditure and the wages payable or accumulated wages owed. The effect of the missing record.

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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 3, Problem 1MCQ

To determine

Accrued and unpaid wages:

These wages refer to those wages which are due but have not been paid off duly. Under the accumulation basis of accounting, the outstanding wages that have been earned should be entered as the wages expenditure and the wages payable or accumulated wages owed.

The effect of the missing record.

Expert Solution & Answer

Explanation of Solution

Option b, overstate net income by $350,000, is correct.

b.

The rectifying adjustment entry to be recorded for the missing record of accrued and unpaid employee wages is to debit the wages expense and credit the wages payable. When this entry is made, the net income is overstated as the wages expense is a revenue statement account and wages payable is a current accountability account that is stated on the balance sheet.

a.

By the adjusting entry, the wages expense is debited and the wages payable is credited. This would result in the overstating of the net income not understating it.

c.

The wages expense records a debit balance and wages payable a credit balance. The wages payable is stated on the balance sheet and by this entry, the net income records an increase. Thus, it is wrong that there is no effect on the net income.

d.

The adjustment entry made to record the missing balance of accrued and unpaid employee wages is by debiting the wages expense and crediting the wages payable. This will not affect the assets. So, the assets will not be overstated.

e.

The adjustment entry made does not affect the balance of the assets as wages expense is an expense account and wages payable is a liability account. Thus, the assets are not understated.

Thus, option b is correct.

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PART 2. (22 marks) Mangal Furnishings produce serving trays for the tourist industry in a five-stage process - Cutting & Shaping, Assembly, Sanding, Finishing and Packaging. Upon entering the finishing process, before the trays are stained and polished, a specialized piece of equipment is used to engrave a logo on each tray. After Packaging, the trays are sent to the business warehouse for delivery to customers. The following data relates to the Finishing Process for the month of March during which 3,800 trays valued at $597.90 each were transferred in from the Sanding Process. Other production costs incurred during the month are summarized as follows: Direct Materials Added Direct Manufacturing Wages Hireage cost of specialized logo equipment Manufacturing Overhead $343,380 $830,150 $21,300 $412,100 Process inspection occurs during the process and normally 2% of the trays entering the Finishing process are rejected and sold as scrap to local retailers at $750 each. During the month…

Cline Manufacturing Company uses a job order system and maintains perpetual inventory records. Indicate the the appropriate account(s) to be debited and credited for the transactions listed below. (On multiple entries enter answers in alphabetical order.) Transactions 1. Raw materials were purchased on account. 2. Issued a check to Dixon Machine Shop for repair work on factory equipment. 3. Direct materials were requisitioned for Job 280. 4. Factory labor was paid as incurred. 5. Recognized direct labor and indirect labor used. 6. The production department requisitioned 7. indirect materials for use in the factory. Manufacturing overhead was applied to production based on a predetermined overhead rate of $8 per labor hour. 8. Goods that were completed were transferred to finished goods inventory. 9. Goods costing $80,000 were sold for $105,000 on account. 10. Paid for raw materials purchased previously on account. Account(s) Debited

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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 3, Problem 1MCQ

To determine

Accrued and unpaid wages:

These wages refer to those wages which are due but have not been paid off duly. Under the accumulation basis of accounting, the outstanding wages that have been earned should be entered as the wages expenditure and the wages payable or accumulated wages owed.

The effect of the missing record.

Expert Solution & Answer

Explanation of Solution

Option b, overstate net income by $350,000, is correct.

b.

The rectifying adjustment entry to be recorded for the missing record of accrued and unpaid employee wages is to debit the wages expense and credit the wages payable. When this entry is made, the net income is overstated as the wages expense is a revenue statement account and wages payable is a current accountability account that is stated on the balance sheet.

a.

By the adjusting entry, the wages expense is debited and the wages payable is credited. This would result in the overstating of the net income not understating it.

c.

The wages expense records a debit balance and wages payable a credit balance. The wages payable is stated on the balance sheet and by this entry, the net income records an increase. Thus, it is wrong that there is no effect on the net income.

d.

The adjustment entry made to record the missing balance of accrued and unpaid employee wages is by debiting the wages expense and crediting the wages payable. This will not affect the assets. So, the assets will not be overstated.

e.

The adjustment entry made does not affect the balance of the assets as wages expense is an expense account and wages payable is a liability account. Thus, the assets are not understated.

Thus, option b is correct.

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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 3, Problem 1MCQ

To determine

Accrued and unpaid wages:

These wages refer to those wages which are due but have not been paid off duly. Under the accumulation basis of accounting, the outstanding wages that have been earned should be entered as the wages expenditure and the wages payable or accumulated wages owed.

The effect of the missing record.

Expert Solution & Answer

Explanation of Solution

Option b, overstate net income by $350,000, is correct.

b.

The rectifying adjustment entry to be recorded for the missing record of accrued and unpaid employee wages is to debit the wages expense and credit the wages payable. When this entry is made, the net income is overstated as the wages expense is a revenue statement account and wages payable is a current accountability account that is stated on the balance sheet.

a.

By the adjusting entry, the wages expense is debited and the wages payable is credited. This would result in the overstating of the net income not understating it.

c.

The wages expense records a debit balance and wages payable a credit balance. The wages payable is stated on the balance sheet and by this entry, the net income records an increase. Thus, it is wrong that there is no effect on the net income.

d.

The adjustment entry made to record the missing balance of accrued and unpaid employee wages is by debiting the wages expense and crediting the wages payable. This will not affect the assets. So, the assets will not be overstated.

e.

The adjustment entry made does not affect the balance of the assets as wages expense is an expense account and wages payable is a liability account. Thus, the assets are not understated.

Thus, option b is correct.

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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 3, Problem 1MCQ

To determine

Accrued and unpaid wages:

These wages refer to those wages which are due but have not been paid off duly. Under the accumulation basis of accounting, the outstanding wages that have been earned should be entered as the wages expenditure and the wages payable or accumulated wages owed.

The effect of the missing record.

Expert Solution & Answer

Explanation of Solution

Option b, overstate net income by $350,000, is correct.

b.

The rectifying adjustment entry to be recorded for the missing record of accrued and unpaid employee wages is to debit the wages expense and credit the wages payable. When this entry is made, the net income is overstated as the wages expense is a revenue statement account and wages payable is a current accountability account that is stated on the balance sheet.

a.

By the adjusting entry, the wages expense is debited and the wages payable is credited. This would result in the overstating of the net income not understating it.

c.

The wages expense records a debit balance and wages payable a credit balance. The wages payable is stated on the balance sheet and by this entry, the net income records an increase. Thus, it is wrong that there is no effect on the net income.

d.

The adjustment entry made to record the missing balance of accrued and unpaid employee wages is by debiting the wages expense and crediting the wages payable. This will not affect the assets. So, the assets will not be overstated.

e.

The adjustment entry made does not affect the balance of the assets as wages expense is an expense account and wages payable is a liability account. Thus, the assets are not understated.

Thus, option b is correct.

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Answer 5

Chapter 3, Problem 1MCQ

To determine

Accrued and unpaid wages:

These wages refer to those wages which are due but have not been paid off duly. Under the accumulation basis of accounting, the outstanding wages that have been earned should be entered as the wages expenditure and the wages payable or accumulated wages owed.

The effect of the missing record.

Expert Solution & Answer

Explanation of Solution

Option b, overstate net income by $350,000, is correct.

b.

The rectifying adjustment entry to be recorded for the missing record of accrued and unpaid employee wages is to debit the wages expense and credit the wages payable. When this entry is made, the net income is overstated as the wages expense is a revenue statement account and wages payable is a current accountability account that is stated on the balance sheet.

a.

By the adjusting entry, the wages expense is debited and the wages payable is credited. This would result in the overstating of the net income not understating it.

c.

The wages expense records a debit balance and wages payable a credit balance. The wages payable is stated on the balance sheet and by this entry, the net income records an increase. Thus, it is wrong that there is no effect on the net income.

d.

The adjustment entry made to record the missing balance of accrued and unpaid employee wages is by debiting the wages expense and crediting the wages payable. This will not affect the assets. So, the assets will not be overstated.

e.

The adjustment entry made does not affect the balance of the assets as wages expense is an expense account and wages payable is a liability account. Thus, the assets are not understated.

Thus, option b is correct.

Answer 6

Chapter 3, Problem 1MCQ

To determine

Accrued and unpaid wages:

These wages refer to those wages which are due but have not been paid off duly. Under the accumulation basis of accounting, the outstanding wages that have been earned should be entered as the wages expenditure and the wages payable or accumulated wages owed.

The effect of the missing record.

Expert Solution & Answer

Explanation of Solution

Option b, overstate net income by $350,000, is correct.

b.

The rectifying adjustment entry to be recorded for the missing record of accrued and unpaid employee wages is to debit the wages expense and credit the wages payable. When this entry is made, the net income is overstated as the wages expense is a revenue statement account and wages payable is a current accountability account that is stated on the balance sheet.

a.

By the adjusting entry, the wages expense is debited and the wages payable is credited. This would result in the overstating of the net income not understating it.

c.

The wages expense records a debit balance and wages payable a credit balance. The wages payable is stated on the balance sheet and by this entry, the net income records an increase. Thus, it is wrong that there is no effect on the net income.

d.

The adjustment entry made to record the missing balance of accrued and unpaid employee wages is by debiting the wages expense and crediting the wages payable. This will not affect the assets. So, the assets will not be overstated.

e.

The adjustment entry made does not affect the balance of the assets as wages expense is an expense account and wages payable is a liability account. Thus, the assets are not understated.

Thus, option b is correct.

Answer 7

Chapter 3, Problem 1MCQ

To determine

Accrued and unpaid wages:

These wages refer to those wages which are due but have not been paid off duly. Under the accumulation basis of accounting, the outstanding wages that have been earned should be entered as the wages expenditure and the wages payable or accumulated wages owed.

The effect of the missing record.

Answer 8

Expert Solution & Answer

Explanation of Solution

Option b, overstate net income by $350,000, is correct.

b.

The rectifying adjustment entry to be recorded for the missing record of accrued and unpaid employee wages is to debit the wages expense and credit the wages payable. When this entry is made, the net income is overstated as the wages expense is a revenue statement account and wages payable is a current accountability account that is stated on the balance sheet.

a.

By the adjusting entry, the wages expense is debited and the wages payable is credited. This would result in the overstating of the net income not understating it.

c.

The wages expense records a debit balance and wages payable a credit balance. The wages payable is stated on the balance sheet and by this entry, the net income records an increase. Thus, it is wrong that there is no effect on the net income.

d.

The adjustment entry made to record the missing balance of accrued and unpaid employee wages is by debiting the wages expense and crediting the wages payable. This will not affect the assets. So, the assets will not be overstated.

e.

The adjustment entry made does not affect the balance of the assets as wages expense is an expense account and wages payable is a liability account. Thus, the assets are not understated.

Thus, option b is correct.