21. What are the advantages and disadvantages associated with the unadjusted rate of return method for evaluating capital investments?
Click here for the solution: What are the advantages and disadvantages associated with the unadjusted rate of return method for evaluating capital investments
Showing posts with label Unadjusted. Show all posts
Showing posts with label Unadjusted. Show all posts
Sunday, September 13, 2015
Monday, August 17, 2015
Imperial Carpet has the following unadjusted trial balance as of March 31, 2012
Problem 2-6A Corrected Trial Balance
Imperial Carpet has the following unadjusted trial balance as of March 31, 2012.
AND SO ON
The debit and credit totals are not equal as a result of the following errors:
a. The balance of cash was understated by $12,000.
b. A cash receipt of $13,900 was posted as a debit to Cash of $19,300.
c. A debit of $15,000 to Accounts Receivable was not posted.
d. A return of $90 of defective supplies was erroneously posted as a $900 credit to Supplies.
e. An insurance policy acquired at a cost of $2,500 was posted as a credit to Prepaid Insurance.
f. The balance of Notes Payable was understated by $35,200.
g. A credit of $7,600 in Accounts Payable was overlooked when determining the balance of the account.
h. A debit of $10,000 for a withdrawal by the owner was posted as a credit to Leonardo Pepin, Capital.
i. The balance of $116,200 in Rent Expense was entered as $112,600 in the trial balance.
j. Gas, Electricity, and Water Expense, with a balance of $48,300 was omitted from the trial balance.
Required:
1. Prepare a corrected unadjusted trial balance as of March 31, 2012.
2. Does the fact that the unadjusted trial balance in (1) is balanced mean that there are no errors in the accounts? Explain.
Check: 1. Total of Debit Column: $1,400,000
Click here for the solution: Imperial Carpet has the following unadjusted trial balance as of March 31, 2012
Imperial Carpet has the following unadjusted trial balance as of March 31, 2012.
AND SO ON
The debit and credit totals are not equal as a result of the following errors:
a. The balance of cash was understated by $12,000.
b. A cash receipt of $13,900 was posted as a debit to Cash of $19,300.
c. A debit of $15,000 to Accounts Receivable was not posted.
d. A return of $90 of defective supplies was erroneously posted as a $900 credit to Supplies.
e. An insurance policy acquired at a cost of $2,500 was posted as a credit to Prepaid Insurance.
f. The balance of Notes Payable was understated by $35,200.
g. A credit of $7,600 in Accounts Payable was overlooked when determining the balance of the account.
h. A debit of $10,000 for a withdrawal by the owner was posted as a credit to Leonardo Pepin, Capital.
i. The balance of $116,200 in Rent Expense was entered as $112,600 in the trial balance.
j. Gas, Electricity, and Water Expense, with a balance of $48,300 was omitted from the trial balance.
Required:
1. Prepare a corrected unadjusted trial balance as of March 31, 2012.
2. Does the fact that the unadjusted trial balance in (1) is balanced mean that there are no errors in the accounts? Explain.
Check: 1. Total of Debit Column: $1,400,000
Click here for the solution: Imperial Carpet has the following unadjusted trial balance as of March 31, 2012
Tuesday, August 4, 2015
PB4-4 Learn to Play December 31, 2010
PB4-4 Learn to Play December 31, 2010
Account names Debit Credit
Cash $23,800 as reported on December 31 bank statement
Supplies 300 based on count only $200 supplies still exist
Unearned revenue $1,500 of this amount, $500 received in December lessons and $1,000 for January
Lessons
Wages Payable 0 employee paid $500 for 10 days as of 12/28 not pd 12/29-12/30
Income tax payable 0 paid last year not this year yet
Interest payable 0 paid $100 interest owed on note payable for current period
Notes payable $12,000 one-year note taken out December 1
Contributed capital 1,000 contributed in prior years
Retained earnings 3,000 balance reported at the end of last year
Lesson revenue 25,500 cash when provided, but some customers paid in advance
Wage Expense 18,100 work through December 30, but didn’t work 12/31
Supplies Expense 800 cost of supplies used through November 30
Interest Expense 0 the company hasn’t paid $100 interest owed on the note payable for the current period
Income Tax expense 0
Totals $43,000 $43,000
REQUIRED
Calculate the (preliminary) unadjusted net income for the year ending December 31,2010
Prepare adjusting journal entries that are required at December 31,2010
Calculate the adjusted net income that the company should report for the year ending December 31,2010. By how much did the adjustments in requirement (4) cause net income to increase or decrease?
Click here for the solution: PB4-4 Learn to Play December 31, 2010
Account names Debit Credit
Cash $23,800 as reported on December 31 bank statement
Supplies 300 based on count only $200 supplies still exist
Unearned revenue $1,500 of this amount, $500 received in December lessons and $1,000 for January
Lessons
Wages Payable 0 employee paid $500 for 10 days as of 12/28 not pd 12/29-12/30
Income tax payable 0 paid last year not this year yet
Interest payable 0 paid $100 interest owed on note payable for current period
Notes payable $12,000 one-year note taken out December 1
Contributed capital 1,000 contributed in prior years
Retained earnings 3,000 balance reported at the end of last year
Lesson revenue 25,500 cash when provided, but some customers paid in advance
Wage Expense 18,100 work through December 30, but didn’t work 12/31
Supplies Expense 800 cost of supplies used through November 30
Interest Expense 0 the company hasn’t paid $100 interest owed on the note payable for the current period
Income Tax expense 0
Totals $43,000 $43,000
REQUIRED
Calculate the (preliminary) unadjusted net income for the year ending December 31,2010
Prepare adjusting journal entries that are required at December 31,2010
Calculate the adjusted net income that the company should report for the year ending December 31,2010. By how much did the adjustments in requirement (4) cause net income to increase or decrease?
Click here for the solution: PB4-4 Learn to Play December 31, 2010
Tuesday, April 28, 2015
Benjamin O'Henry has owned and operated O'Henry's Data Services since its beginning ten years ago
Benjamin O'Henry has owned and operated O'Henry's Data Services since
its beginning ten years ago. From all appearances, the business has
prospered. In the past few years, you have become friends with O'Henry
and his wife. Recently, O'Henry mentioned that he has lost his zest for
the business and would consider selling it for the right price. You are
interested in buying this business, and you obtain its most recent
monthly unadjusted trial balance which follows:
O'Henry's Data Services
O'Henry's Data Services
Unadjusted Trial Balance
November 30, 20XX
Cash……………………………… $9,700
Accounts receivable……………………… 7,900
Prepaid expenses………… 2,600
Furniture, fixtures, & equipment 151,300
Accumulated depreciation $15,600
Accounts payable………… 3,800
Salary payable………………
Unearned service revenue 6,700
Benjamin O'Henry, capital 137,400
Benjamin O'Henry, withdrawals 2,000
Service revenue………… 14,300
Rent expense……………
Salary expense………… 3,400
Utilities expense……… 900
Depreciation expense
Supplies expense……
Total…………………………………………. $177,800 $177,800
Revenues and expenses vary little from month to month, and November is a typical month. Your investigation reveals that the unadjusted trial balance does not include the effects of monthly revenues of $2,100 and monthly expenses totaling $2,750. If you were to buy O'Henry's Data Services, you would hire a manager who would require a monthly salary of $3,000.
The most you would pay for the business is 20 times the monthly net income you could expect to earn from it. Compute this possible price. The least O'Henry will take for the business is his ending capital. Compute this amount. Under these conditions, how much should you offer O'Henry? Give your reason.
Click here for the solution: Benjamin O'Henry has owned and operated O'Henry's Data Services since its beginning ten years ago
Cash……………………………… $9,700
Accounts receivable……………………… 7,900
Prepaid expenses………… 2,600
Furniture, fixtures, & equipment 151,300
Accumulated depreciation $15,600
Accounts payable………… 3,800
Salary payable………………
Unearned service revenue 6,700
Benjamin O'Henry, capital 137,400
Benjamin O'Henry, withdrawals 2,000
Service revenue………… 14,300
Rent expense……………
Salary expense………… 3,400
Utilities expense……… 900
Depreciation expense
Supplies expense……
Total…………………………………………. $177,800 $177,800
Revenues and expenses vary little from month to month, and November is a typical month. Your investigation reveals that the unadjusted trial balance does not include the effects of monthly revenues of $2,100 and monthly expenses totaling $2,750. If you were to buy O'Henry's Data Services, you would hire a manager who would require a monthly salary of $3,000.
The most you would pay for the business is 20 times the monthly net income you could expect to earn from it. Compute this possible price. The least O'Henry will take for the business is his ending capital. Compute this amount. Under these conditions, how much should you offer O'Henry? Give your reason.
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