MyLab Accounting with Pearson eText -- Access Card -- for Horngren's Financial & Managerial Accounting, The Financial Chapters (My Accounting Lab)

5th Edition

ISBN: 9780133877281

Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura

Publisher: PEARSON

See similar textbooks

Concept explainers

The Effect Of Prepaid Taxes On Assets And Liabilities

Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can resu…

Final Accounts

Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.

Ledger Posting

A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the a…

Trial Balance and Final Accounts

In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately…

Adjustment Entries

At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial repor…

Videos

Textbook Question

Chapter 5, Problem 5.45CP

Journalizing purchase and sale transactions, making dosing entries, preparing financial statements, and computing the gross profit percentage

This problem continues the Daniels Consulting situation from Problem P4-40 of Chapter 4. Daniels Consulting performs systems consulting. The company has also begun selling accounting software and uses the perpetual inventory system to account for software inventory. During January, Daniels Consulting completed the following transactions:

Jan. 2	Completed a consulting engagement and received cash of $5,700.
2	Prepaid three months office rent, $2.400.
7	Purchased 50 units software inventory on account, $1,050, plus freight in, $50.
18	Sold 40 software units on account, $2,625 (cost $880).
19	Consulted with a client for a fee of $2,500 on account.
20	Paid employee salaries, $1,885, which includes accrued salaries from December.
21	Paid on account, $1,100.
22	Purchased 185 units software inventory on account, $4,810.
24	Paid utilities, $375.
28	Sold 135 units software for cash, $5,265 (cost $3,470).
31	Recorded the following adjusting entries:
	a. Accrued salaries expense, $775
	b. Depreciation on Equipment, $60; Depreciation on Furniture, $50
	c. Expiration of prepaid rent, $800
	d. Physical count of software inventory, 50 units, $1,300

1. Open the following T-accounts in the ledger: Cash, $17,950; Accounts Receivable, $3,600; Software Inventory, $0; Office Supplies, $300; Prepaid Rent, $0; Equipment, $3,600; Accumulated Depreciation—Equipment, $60; Furniture, $3,000; Accumulated Depreciation—Furniture, $50; Accounts Payable, $3,600; Unearned Revenue, $1,800; Salaries Payable, $685; Common Stock, $20,000; Retained Earnings, $2,255; Dividends, $0; Income Summary, $0; Service Revenue, $0; Sales Revenue, $0; Cost of Goods Sold, $0; Salaries Expense, $0; Rent Expense, $0; Utilities Expense, $0; Depreciation Expense—Equipment, $0; and Depreciation Expense—Furniture, $0.

2. Journalize and post the January transactions. Compute each account balance, and denote the balance as Bal.

3. Prepare the month ended January 31, 2017, income statement of Daniels Consulting. Use the multi-step format. List Service Revenue under gross profit and ignore classifying the expenses as selling and administrative.

4. Journalize and post the closing entries. Denote each dosing amount as Clo. After posting all dosing entries, prove the equality of debits and credits in the ledger.

5. Compute the gross profit percentage of Daniels Consulting.

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.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Chapter 5, Problem 5.44BP

Chapter 5, Problem 5.46PS

Students have asked these similar questions

Grass Reed Bayou is a bottling company in The Netherlands. The company uses a normal costing system in which factory overhead is applied on the basis of direct labor costs. Budgeted factory overhead for the year was $680,000, and management budgeted $320,000 of direct labor costs. During the year, the company incurred the following actual costs. Direct materials used $ 382,000 Direct labor 313,000 Factory overhead 650,700 The January 1 balances of inventory accounts are shown below. Materials-all direct $ 64,000 Work-in-process 41,400 Finished goods 25,600 The December 31 balances of these inventory accounts were ten percent lower than the balances at the beginning of the year. The cost of goods manufactured during the year is:

Magna Carta Interiors is a job-order manufacturer. The company uses a predetermined overhead rate based on direct labor hours to apply overhead to individual jobs. For the current year, estimated direct labor hours are 150,000 and estimated factory overhead is $1,140,000. The following information is for September. Job X was completed during September, while Job Y was started but not finished. September 1, inventories: Materials $ 25,700 Work-in-process (All Job X) 55,100 Finished goods 107,300 Materials purchases $ 174,000 Direct materials requisitioned: Job X $ 75,700 Job Y 69,700 Direct labor hours: Job X 8,700 Job Y 7,200 Labor costs incurred: Direct labor ($7.70 per hour) $ 122,430 Indirect labor 50,100 Factory supervisory salaries 12,800 Rental costs: Factory $ 11,000 Administrative offices 4,900 Total equipment depreciation costs: Factory $ 12,100 Administrative offices 4,500 Indirect materials used $ 30,400 The total…

Grass Reed Bayou is a bottling company in The Netherlands. The company uses a normal costing system in which factory overhead is applied on the basis of direct labor costs. Budgeted factory overhead for the year was $680,000, and management budgeted $320,000 of direct labor costs. During the year, the company incurred the following actual costs. Direct materials used $ 382,000Direct labor 313,000Factory overhead 650,700The January 1 balances of inventory accounts are shown below. Materials-all direct $ 64,000Work-in-process 41,400Finished goods 25,600The December 31 balances of these inventory accounts were ten percent lower than the balances at the beginning of the year. The cost of goods manufactured during the year is:

Chapter 5 Solutions

MyLab Accounting with Pearson eText -- Access Card -- for Horngren's Financial & Managerial Accounting, The Financial Chapters (My Accounting Lab)

Ch. 5 - Which account does a merchandiser use that a...Ch. 5 - The two main inventory accounting systems are the...Ch. 5 - The journal entry for the purchase of inventory on...Ch. 5 - JC Manufacturing purchase d inventory for 5,300...Ch. 5 - Prob. 5QC Ch. 5 - Suppose Daves Discounts Merchandise Inventory...Ch. 5 - Which of the following accounts would be closed at...Ch. 5 - What is the order of the subtotals that appear on...Ch. 5 - Prob. 9QC Ch. 5 - The journal entry for the purchase of inventory on...

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Solution Summary: The author explains the rules of debit and credit for journal entries and adjusting entries in books during January.

Concept explainers

Videos

Want to see the full answer?

Chapter 5 Solutions