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A capital lease requires the lessee to record the lease as a purchase of an asset.
Answer:
The residual claim on total assets of a business is known as ________________ and is
equal to total assets minus total liabilities.
Answer:
Petersen Company received a letter from Jane Kimler, a customer. Jane had
purchased $425 worth of clothing from Petersen on credit. She has made
two payments of $50 each. She has missed the last two payments, and has
received a collection letter from Petersen. Her total debt presently, with
interest and late fees, is $3513.
Jane sent a letter to Petersen in which she asked for her debt to be forgiven.
She said she had heard that companies make allowances for accounts they
are doubtful about collecting, and that Petersen certainly should have been
doubtful about her'”that as a college student she had changed her major
three times. She also said that she could not enjoy a high quality of life
when making such high payments, but that she didn't want to be
embarrassed by bill collectors, either. She especially didn't want her
parents to find out that she had not paid her debts. Having Petersen write
off her account seemed to her the best solution in the circumstances. She
added that the clothes she bought at Petersen were among the best she had
ever owned, and that she "told everybody" that Petersen was definitely the
best place to get clothes.
You are the accounting manager for Petersen. Write a short letter to Jane
explaining why her debt cannot be written off.
Answer:
All plant assets (fixed assets) must be depreciated for accounting purposes.
Answer:
Ace Distributors has the following transactions related to notes receivable during the
last month of the year.
Instructions
Journalize the transactions for Ace Distributors.
Answer:
For 2015, the income statement of Hylard Corporation had revenues of $152,000 and
operating expenses of $78,000. Accounts receivable and accounts payable at year-end
were $60,000 and $23,000, respectively. At the beginning of the year, the balances were
$39,000 for accounts receivable and $15,000 for accounts payable. Assume that
accounts payable related to operating expenses. Ignore income taxes.
Instructions
Compute net cash provided by operating activities using the direct method.
Answer:
Scotsman Company prepares monthly financial statements. Below are listed some
selected accounts and their balances in the September 30 trial balance before any
adjustments have been made for the month of September.
(Note: Debit column does not equal credit column because this is a partial listing of
selected account balances)
An analysis of the account balances by the company's accountant provided the
following additional information:
1> A physical count of supplies revealed $1,000 on hand on September 30.
2> A two-year life insurance policy was purchased on June 1 for $4,800.
3> Equipment depreciated $3,000 per year.
4> The amount of rent received in advance that remains unearned at September 30 is
$500.
Instructions
Using the above additional information, prepare the adjusting entries that should be
made by Scotsman Company on September 30.
Answer:
On October 1, Benji's Bicycle Store had an inventory of 20 ten speed bicycles at a cost
of $200 each. During the month of October, the following transactions occurred.
Instructions
Prepare the journal entries to record the transactions assuming the company uses a
perpetual inventory system.
Answer:
Putman Company had cash sales of $75,950 (including taxes) for the month of June.
Sales are subject to 8.5% sales tax. Prepare the entry to record the sale.
Answer:
Collusion may result when one individual circumvents prescribed controls and may
significantly impair the effectiveness of a system.
Answer:
