Accounting Information Systems
10th Edition
ISBN: 9781337619202
Author: Hall, James A.
Publisher: Cengage Learning,
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Question
Chapter 3, Problem 47RQ
To determine
Explain the purpose of a limit check.
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Cash
Accounts Receivable
Supplies
Prepaid Insurance
Equipment
Notes Payable
Accounts Payable
Debit Balances Credit Balances
20,350
37,000
1,100
200
171,175
36,000
26,000
Common Stock
50,000
Retained Earnings
94,150
Dividends
15,000
Fees Earned
429,850
Wages Expense
270,000
Rent Expense
63,000
Advertising Expense
25,200
Miscellaneous Expense
5,100
608,125
636,000
On October 1, 20Y6, Jay Crowley established Affordable Realty, which completed the following transactions during the month:
Oct.
1
Jay Crowley transferred cash from a personal bank account to an account to be used for the business
in exchange for common stock, $40,000.
2
Paid rent on office and equipment for the month, $4,800.
3 Purchased supplies on account, $2,150.
4
Paid creditor on account, $1,100.
10
5
Earned sales commissions, receiving cash, $18,750.
6
Paid automobile expenses (including rental charge) for month, $1,580, and miscellaneous expenses,
$800.
7
Paid office salaries, $3,500.
8
Determined that the cost of supplies used was $1,300.
9
Paid dividends, $1,500.
Reese, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship. In late December, she received a $20,000 bill from her accountant for consulting services related to her small business. Reese can pay the $20,000 bill anytime before January 30 of next year without penalty. Assume Reese’s marginal tax rate is 32 percent this year and will be 37 percent next year, and that she can earn an after-tax rate of return of 12 percent on her investments.
a. What is the after-tax cost if she pays the $20,000 bill in December?
b. What is the after-tax cost if she pays the $20,000 bill in January 30? Use Exhibit 3.1. (Round your answer to the nearest whole dollar amount.)
Exhibit 3.1 below
4%
5%
6%
7%
8%
9%
10%
11%
12%
Year 1
.962
.952
.943
.935
.926
.917
.909
.901
.893
Year 2
.925
.907
.890
.873
.857
.842
.826
.812
.797
Year 3
.889
.864
.840
.816
.794
.772
.751
.731
.712
Year 4
.855
.823
.792
.763
.735
.708
.683
.659
.636
Year 5…
Chapter 3 Solutions
Accounting Information Systems
Ch. 3 - What is ethics?Ch. 3 - Prob. 2RQCh. 3 - Prob. 3RQCh. 3 - Prob. 4RQCh. 3 - What are the three ethical principles that may...Ch. 3 - What is computer ethics?Ch. 3 - Prob. 7RQCh. 3 - Prob. 8RQCh. 3 - What are the computer ethical issues regarding...Ch. 3 - What are the computer ethical issues regarding...
Ch. 3 - What are the computer ethical issues regarding...Ch. 3 - Prob. 12RQCh. 3 - What are the computer ethical issues regarding the...Ch. 3 - Prob. 14RQCh. 3 - Prob. 15RQCh. 3 - What are the computer ethical issues regarding...Ch. 3 - Prob. 17RQCh. 3 - Prob. 18RQCh. 3 - Name the three fraud-motivating forces.Ch. 3 - Prob. 20RQCh. 3 - Prob. 21RQCh. 3 - Prob. 22RQCh. 3 - Prob. 23RQCh. 3 - What is lapping?Ch. 3 - Prob. 25RQCh. 3 - What is bribery?Ch. 3 - What is economic extortion?Ch. 3 - Prob. 28RQCh. 3 - Define check tampering.Ch. 3 - What is billing (or vendor) fraud?Ch. 3 - Prob. 31RQCh. 3 - Prob. 32RQCh. 3 - Prob. 33RQCh. 3 - Prob. 34RQCh. 3 - Prob. 35RQCh. 3 - Prob. 36RQCh. 3 - Prob. 37RQCh. 3 - Prob. 38RQCh. 3 - Prob. 39RQCh. 3 - Prob. 40RQCh. 3 - Prob. 41RQCh. 3 - Give one example of an error that a check digit...Ch. 3 - Prob. 43RQCh. 3 - Prob. 44RQCh. 3 - What is the objective of a transaction log?Ch. 3 - Prob. 46RQCh. 3 - Prob. 47RQCh. 3 - Prob. 48RQCh. 3 - Prob. 49RQCh. 3 - Prob. 50RQCh. 3 - Distinguish between ethical issues and legal...Ch. 3 - Prob. 2DQCh. 3 - Prob. 3DQCh. 3 - Prob. 4DQCh. 3 - Prob. 5DQCh. 3 - The estimates of losses annually resulting from...Ch. 3 - Prob. 7DQCh. 3 - Prob. 8DQCh. 3 - Prob. 9DQCh. 3 - Prob. 10DQCh. 3 - Prob. 11DQCh. 3 - Prob. 12DQCh. 3 - Prob. 13DQCh. 3 - Prob. 14DQCh. 3 - Distinguish between exposure and risk.Ch. 3 - Prob. 16DQCh. 3 - Prob. 17DQCh. 3 - Prob. 18DQCh. 3 - Prob. 19DQCh. 3 - Prob. 20DQCh. 3 - Prob. 21DQCh. 3 - Prob. 22DQCh. 3 - Prob. 23DQCh. 3 - Prob. 24DQCh. 3 - Prob. 25DQCh. 3 - Prob. 26DQCh. 3 - Prob. 27DQCh. 3 - Prob. 28DQCh. 3 - Explain the problems associated with inappropriate...Ch. 3 - Prob. 30DQCh. 3 - Prob. 31DQCh. 3 - Prob. 32DQCh. 3 - Prob. 33DQCh. 3 - Prob. 34DQCh. 3 - Prob. 35DQCh. 3 - Prob. 36DQCh. 3 - Prob. 37DQCh. 3 - Prob. 1MCQCh. 3 - Prob. 2MCQCh. 3 - Prob. 3MCQCh. 3 - Prob. 4MCQCh. 3 - Prob. 5MCQCh. 3 - Prob. 6MCQCh. 3 - Prob. 7MCQCh. 3 - Prob. 8MCQCh. 3 - Prob. 10MCQCh. 3 - Prob. 12MCQCh. 3 - Which of the following controls would best prevent...Ch. 3 - Prob. 14MCQCh. 3 - Prob. 15MCQCh. 3 - Prob. 16MCQCh. 3 - The fraud scheme that is similar to the concept of...Ch. 3 - Prob. 18MCQCh. 3 - Prob. 19MCQCh. 3 - FRAUD SCHEME - HEALTH INSPECTOR A city health...Ch. 3 - FRAUD SCHEME PURCHASING AGENT A purchasing agent...Ch. 3 - Prob. 3PCh. 3 - Prob. 4PCh. 3 - EXPENSE ACCOUNT FRAUD While auditing the financial...Ch. 3 - Prob. 6PCh. 3 - Prob. 7PCh. 3 - Prob. 8PCh. 3 - Prob. 9PCh. 3 - Prob. 10PCh. 3 - Prob. 11PCh. 3 - Prob. 12PCh. 3 - Prob. 13PCh. 3 - Prob. 14PCh. 3 - Prob. 15PCh. 3 - Prob. 16PCh. 3 - Prob. 17PCh. 3 - Prob. 18PCh. 3 - Prob. 19PCh. 3 - Prob. 20P
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- Manny, a calendar-year taxpayer, uses the cash method of accounting for his sole proprietorship. In late December he performed $20,000 of legal services for a client. Manny typically requires his clients to pay his bills immediately upon receipt. Assume Manny’s marginal tax rate is 37 percent this year and next year, and that he can earn an after-tax rate of return of 12 percent on his investments. a. What is the after-tax income if Manny sends his client the bill in December? b. What is the after-tax income if Manny sends his client the bill in January? Use Exhibit 3.1. (Round your answer to the nearest whole dollar amount.) Exhibit 3.1 below 4% 5% 6% 7% 8% 9% 10% 11% 12% Year 1 .962 .952 .943 .935 .926 .917 .909 .901 .893 Year 2 .925 .907 .890 .873 .857 .842 .826 .812 .797 Year 3 .889 .864 .840 .816 .794 .772 .751 .731 .712 Year 4 .855 .823 .792 .763 .735 .708 .683 .659 .636 Year 5 .822 .784 .747 .713 .681 .650 .621 .593 .567 Year 6 .790 .746…arrow_forwardRocky Mountain Tours Co. is a travel agency. The nine transactions recorded by Rocky Mountain Tours during June 20Y2, its first month of operations, are indicated in the following T accounts: Cash (1) 40,000 (2) 4,000 (7) 13,100 (3) 5,000 (4) 6,175 (6) 6,000 (9) 1,500 Equipment (3) 15,000 Dividends (9) 1,500 Accounts Receivable Accounts Payable Service Revenue (5) 20,500 (7) 13,100 (6) 6,000 (3) 10,000 (5) 20,500 Supplies (2) 4,000 (8) 2,200 Common Stock (1) 40,000 Operating Expenses (4) 6,175 (8) 2,200 a. Prepare an unadjusted trial balance. List all the accounts in the order of Assets, Liabilities, Stockholders' equity, Revenues, and Expenses. Place the amounts in the proper columns. If an entry is not required in an amount box, leave it blank.arrow_forwardTransactions and T Accounts The following selected transactions were completed during July of the current year: 1. Billed customers for fees earned, $112,700. 2. Purchased supplies on account, $4,500. 3. Received cash from customers on account, $88,220. 4. Paid creditors on account, $3,100. a. Journalize these transactions in a two-column journal, using the appropriate number to identify the transactions. Journal entry explanations may be omitted. If an amount box does not require an entry, leave it blank. (1) Accounts Receivable Fees Earned (2) Supplies Accounts Payable (3) Cash Accounts Receivable (4) Accounts Payable Casharrow_forward
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