Financial Accounting, Student Value Edition (12th Edition)

12th Edition

ISBN: 9780134727066

Author: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.

Publisher: PEARSON

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Textbook Question

Chapter 3, Problem 3.25AE

(Learning Objective 5: Close the books) Prepare the closing entries from the following selected accounts from the records of North Pole Enterprises at December 31, 2018:

Cost of services sold...........	$14,800	Service revenue......................	$32,200
Accumulated depreciation...	41,100	Depreciation expense...........	4,100
Selling, general, and administrative expenses....	6,200	Other revenue .....................	1,000
Selling, general, and administrative expenses....	6,200	Dividends declared...............	500
Retained earnings, December 31, 2017…………	2,000	Income tax expense..............	900
Retained earnings, December 31, 2017…………	2,000	Income tax payable………...	600

How much net income did North Pole Enterprises earn during 2018? Prepare a T-account for Retained Earnings to show the December 31, 2018, balance of Retained Earnings.

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Chapter 3, Problem 3.24AE

Chapter 3, Problem 3.26AE

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Aerotrino produces and sells popular t-shirts. Following is information about its t-shirts for 2014: Selling price $15.00 per t-shirt Variable costs: Production (manufacturing costs) - $3.50 per t-shirt Selling & administration - $1.00 per t-shirt Fixed costs: Production (manufacturing costs) - $1,000,000 per year Selling & administration - $2,000,000 per year During 2014, the company produced 400,000 t-shirts and sold 350,000 of them. Assume that there was no beginning inventory. How much is the net income under variable costing?

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Chapter 3 Solutions

Financial Accounting, Student Value Edition (12th Edition)

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Solution Summary: The author explains that closing entries produce a zero balance in each temporary account. The net income for Enterprise NP is 7,200.

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