Trial balance : Trial balance is the list of accounts and their debit and credit balances at a given time. It usually prepare at end of the accounting period. Debit balances are listed in left column and credit balances are listed in right column. The totals of debit and credit column should be equal. Trial balance is useful in the preparation of financial statement. Balancing of trial balance: Trial balance may balance even when any of the following errors occurs: 1) a transaction is not journalized, 2) a correct journal entry is not posted in the ledger, 3) a journal entry is posted twice, 4) incorrect accounts are used in journalizing or posting, or 5) Compensating errors are made To determine: whethereach of the following transaction would prevent the trial balance from balancing or not.

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Answer 1

Question

Chapter 3, Problem 22Q

(a)

To determine

Trial balance:

Trial balance is the list of accounts and their debit and credit balances at a given time. It usually prepare at end of the accounting period. Debit balances are listed in left column and credit balances are listed in right column. The totals of debit and credit column should be equal. Trial balance is useful in the preparation of financial statement.

Balancing of trial balance:

Trial balance may balance even when any of the following errors occurs:

1) a transaction is not journalized,

2) a correct journal entry is not posted in the ledger,

3) a journal entry is posted twice,

4) incorrect accounts are used in journalizing or posting, or

5) Compensating errors are made

To determine: whethereach of the following transaction would prevent the trial balance from balancing or not.

(b)

To determine

To determine: whethereach of the following transaction would prevent the trial balance from balancing or not.

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JH, Inc., is a calendar year, accrual basis corporation with Joe as its sole shareholder (basis in his stock is $90,000). On January 1 of the current year, JH Corporation has accumulated E & P of $200,000. Before considering the effect of the distribution described below, the corporation’s current E & P is $50,000. On November 1, JH distributes an office building to Joe. The office building has an adjusted basis of $80,000 (fair market value of $100,000) and is subject to a mortgage of $110,000. Assume that the building has been depreciated using the ADS method for both income tax and E & P purposes. What are the tax consequences of the distribution to JH and to Joe? (In your answer, be sure to describe the effects on taxable income for both JH and Joe, the impact of the distribution on JH’s E & P, and Joe’s basis in the building.)

Joe is the sole shareholder of JH Corporation. Joe sold his stock to Ethan on October 31 for $150,000. Joe’s basis in JH stock was $50,000 at the start of the year. JH distributed land to Joe immediately before the sale. JH’s basis in the land was $20,000 (fair market value of $25,000). On December 31, Ethan received a $75,000 cash distribution from JH. During the year, JH has $20,000 of current E & P and its accumulated E & P balance on January 1 is $10,000. Which of the following statements is true? a. Joe recognizes a $110,000 gain on the sale of his stock. b. Joe recognizes a $100,000 gain on the sale of his stock. c. Ethan receives $5,000 of dividend income.d. Joe receives $20,000 of dividend income. e. None of the above.

Answer 2

Question

Chapter 3, Problem 22Q

(a)

To determine

Trial balance:

Trial balance is the list of accounts and their debit and credit balances at a given time. It usually prepare at end of the accounting period. Debit balances are listed in left column and credit balances are listed in right column. The totals of debit and credit column should be equal. Trial balance is useful in the preparation of financial statement.

Balancing of trial balance:

Trial balance may balance even when any of the following errors occurs:

1) a transaction is not journalized,

2) a correct journal entry is not posted in the ledger,

3) a journal entry is posted twice,

4) incorrect accounts are used in journalizing or posting, or

5) Compensating errors are made

To determine: whethereach of the following transaction would prevent the trial balance from balancing or not.

(b)

To determine

To determine: whethereach of the following transaction would prevent the trial balance from balancing or not.

Expert Solution & Answer

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Answer 3

Question

Chapter 3, Problem 22Q

(a)

To determine

Trial balance:

Trial balance is the list of accounts and their debit and credit balances at a given time. It usually prepare at end of the accounting period. Debit balances are listed in left column and credit balances are listed in right column. The totals of debit and credit column should be equal. Trial balance is useful in the preparation of financial statement.

Balancing of trial balance:

Trial balance may balance even when any of the following errors occurs:

1) a transaction is not journalized,

2) a correct journal entry is not posted in the ledger,

3) a journal entry is posted twice,

4) incorrect accounts are used in journalizing or posting, or

5) Compensating errors are made

To determine: whethereach of the following transaction would prevent the trial balance from balancing or not.

(b)

To determine

To determine: whethereach of the following transaction would prevent the trial balance from balancing or not.

Expert Solution & Answer

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Answer 4

Question

Chapter 3, Problem 22Q

(a)

To determine

Trial balance:

Trial balance is the list of accounts and their debit and credit balances at a given time. It usually prepare at end of the accounting period. Debit balances are listed in left column and credit balances are listed in right column. The totals of debit and credit column should be equal. Trial balance is useful in the preparation of financial statement.

Balancing of trial balance:

Trial balance may balance even when any of the following errors occurs:

1) a transaction is not journalized,

2) a correct journal entry is not posted in the ledger,

3) a journal entry is posted twice,

4) incorrect accounts are used in journalizing or posting, or

5) Compensating errors are made

To determine: whethereach of the following transaction would prevent the trial balance from balancing or not.

(b)

To determine

To determine: whethereach of the following transaction would prevent the trial balance from balancing or not.

Expert Solution & Answer

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Answer 5

Chapter 3, Problem 22Q

(a)

To determine

Trial balance:

Trial balance is the list of accounts and their debit and credit balances at a given time. It usually prepare at end of the accounting period. Debit balances are listed in left column and credit balances are listed in right column. The totals of debit and credit column should be equal. Trial balance is useful in the preparation of financial statement.

Balancing of trial balance:

Trial balance may balance even when any of the following errors occurs:

1) a transaction is not journalized,

2) a correct journal entry is not posted in the ledger,

3) a journal entry is posted twice,

4) incorrect accounts are used in journalizing or posting, or

5) Compensating errors are made

To determine: whethereach of the following transaction would prevent the trial balance from balancing or not.

(b)

To determine

To determine: whethereach of the following transaction would prevent the trial balance from balancing or not.

Answer 6

Chapter 3, Problem 22Q

(a)

To determine

Trial balance:

Trial balance is the list of accounts and their debit and credit balances at a given time. It usually prepare at end of the accounting period. Debit balances are listed in left column and credit balances are listed in right column. The totals of debit and credit column should be equal. Trial balance is useful in the preparation of financial statement.

Balancing of trial balance:

Trial balance may balance even when any of the following errors occurs:

1) a transaction is not journalized,

2) a correct journal entry is not posted in the ledger,

3) a journal entry is posted twice,

4) incorrect accounts are used in journalizing or posting, or

5) Compensating errors are made

To determine: whethereach of the following transaction would prevent the trial balance from balancing or not.

Answer 7

Chapter 3, Problem 22Q

(a)

To determine

Trial balance:

Trial balance is the list of accounts and their debit and credit balances at a given time. It usually prepare at end of the accounting period. Debit balances are listed in left column and credit balances are listed in right column. The totals of debit and credit column should be equal. Trial balance is useful in the preparation of financial statement.

Balancing of trial balance:

Trial balance may balance even when any of the following errors occurs:

1) a transaction is not journalized,

2) a correct journal entry is not posted in the ledger,

3) a journal entry is posted twice,

4) incorrect accounts are used in journalizing or posting, or

5) Compensating errors are made

To determine: whethereach of the following transaction would prevent the trial balance from balancing or not.

Answer 8

(b)

To determine

To determine: whethereach of the following transaction would prevent the trial balance from balancing or not.

Answer 9

(b)

To determine

To determine: whethereach of the following transaction would prevent the trial balance from balancing or not.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 3 - Prob. 1Q Ch. 3 - Can a business enter into a transaction that...Ch. 3 - Are the followingevents recorded in the accounting...Ch. 3 - Prob. 4Q Ch. 3 - Prob. 5Q Ch. 3 - Prob. 6Q Ch. 3 - Prob. 7Q Ch. 3 - Misty Reno, a beginning accounting student,...Ch. 3 - Prob. 9Q Ch. 3 - What is the normal balance for each of these...

Solution Summary: The author explains that trial balance is the list of accounts and their debit and credit balances at a given time.

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To determine: whethereach of the following transaction would prevent the trial balance from balancing or not.

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