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Need help with FINC605 work.

Questions reference boo, Financial Accounting 11th edition.

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FINANCIAL ACCOUNTING - Eleventh Edition E3-21A - Please go to this problem in your textbook to view the data sets. Compute the amounts that have been left blank for each situation. For situations 1 and 2, journalize the needed transaction. Consider each situation separately. Solution: Missing amounts in italics. 1 2 Situation 3 4 Beginning Supplies Add: Purchases of supplies during the year Total amount to account for Less: Ending Supplies Supplies Expense Journal entries: Situation 1: Supplies Cash or Accounts Payable Situation 2: Supplies Expense Supplies Chapter 3: Accrual Accounting and Income Page 1 of 19 FINANCIAL ACCOUNTING - Eleventh Edition E3-23A - Please go to this problem in your textbook to view the data sets. Childtime Toys prepaid three years’ rent ($54,000) on January 1, 2016. At December 31, 2016, Childtime prepared a trial balance and then made the necessary adjusting entry at the end of the year. Childtime adjusts its accounts once each year—on December 31. Solution: What amount appears for Prepaid Rent on a. Childtime’s unadjusted trial balance at December 31, 2016? a. b. Childtime’s adjusted trial balance at December 31, 2016? b. What amount appears for Rent Expense on c. Childtime’s unadjusted trial balance at December 31, 2016? c. d. Childtime’s adjusted trial balance at December 31, 2016? d. Chapter 3: Accrual Accounting and Income Page 2 of 19 FINANCIAL ACCOUNTING - Eleventh Edition E3-24A - Please go to this problem in your textbook to view the data sets. Requirement 1. Prepare Honeybell, Inc.’s single step income statement and statement of retained earnings for the year ended December 31, 2016, and its balance sheet on that date. Solution: Honeybell, Inc. Income Statement Year Ended December 31, 2016 Thousands Revenues: Sales revenue Expenses: Cost of goods sold Selling, administrative, and general expenses Total expenses Income before tax Income tax expense Net income $ - Honeybell, Inc. Statement of Retained Earnings Year Ended December 31, 2016 Thousands Retained earnings, December 31, 2015 Add: Net income Subtotal Less: Dividends declared Retained earnings, December 31, 2016 Chapter 3: Accrual Accounting and Income $ - Page 3 of 19 FINANCIAL ACCOUNTING - Eleventh Edition ASSETS Cash Accounts receivable Inventories Prepaid expenses Prop., plant, equip. Less: Accum. Deprec. Other assets Total assets Honeybell, Inc. Balance Sheet December 31, 2016 Thousands LIABILITIES Accounts payable Income tax payable Other liabilities Total liabilities STOCKHOLDERS’ EQUITY Common stock Retained earnings Total stockholders’ equity Total liabilities and $ - stockholders’ equity Chapter 3: Accrual Accounting and Income $ - Page 4 of 19 FINANCIAL ACCOUNTING - Eleventh Edition E3-25A - Please go to this problem in your textbook to view the data sets. Compute the amount of sales revenue, insurance expense, and other operating expenses to report on the income statement for the year ended August 31, 2016. Solution: Amounts in millions Receivables Beg. bal. Sales revenue Collections End. bal. Prepaid Insurance Beg. bal. Payment Insurance expense End. bal. Accrued Liabilities Payable Beg. bal. Payments Other operating expenses End. bal. Chapter 3: Accrual Accounting and Income Page 5 of 19 FINANCIAL ACCOUNTING - Eleventh Edition E3-27A - Please go to this problem in your textbook to view the data sets. Requirement 1. Journalize the adjusting and closing entries of Winwood Production Company at December 31. There was only one adjustment to Service Revenue. Solution: DATE Journal ACCOUNT TITLES DEBIT CREDIT Adjusting Entries Dec. 31 Unearned Service Revenue Service Revenue ($19,900 − $13,600) 31 Salary Expense ($5,200 − $4,500) Salary Payable 31 Rent Expense ($1,900 − $1,100) Prepaid Rent 31 Depreciation Expense ($400 − $0) Accumulated Depreciation 31 Income Tax Expense ($1,200 − $0) Income Tax Payable Closing Entries 31 Service Revenue Retained Earnings 31 Retained Earnings Salary Expense Rent Expense Depreciation Expense Income Tax Expense 31 Retained Earnings Dividends Chapter 3: Accrual Accounting and Income Page 6 of 19 FINANCIAL ACCOUNTING - Eleventh Edition E3-28A - Please go to this problem in your textbook to view the data sets. Requirements 1. Use the data in the partial worksheet to prepare Winwood Production Company’s classified balance sheet at December 31 of the current year. Use the report format. First you must compute the adjusted balance for several of the balance-sheet accounts. 2. Compute Winwood Production Company’s net working capital, current ratio, and debt ratio at December 31. A year ago, net working capital was $3,900, the current ratio was 1.40, and the debt ratio was 0.64. Indicate whether the company’s ability to pay its debts—both current and total—improved or deteriorated during the current year. Solution: Req. 1 Winwood Production Company Balance Sheet December 31, 2016 ASSETS Current assets: Cash Prepaid rent ($1,600 − $800) Total current assets Plant assets: Equipment Less accumulated depreciation ($3,300 + $400) Total assets LIABILITIES Current liabilities: Accounts payable Salary payable ($5,200 − $4,500) Unearned service revenue ($9,200 − $6,300) Income tax payable Total current liabilities Note payable, long-term Total liabilities STOCKHOLDERS’ EQUITY Common stock… Retained earnings ($11,400 + $19,900 − $5,200 − $1,900 − $400 − $1,200 − $1,300) Total stockholders’ equity Total liabilities and stockholders’ equity Chapter 3: Accrual Accounting and Income - $ - Page 7 of 19 FINANCIAL ACCOUNTING - Eleventh Edition Req. 2 Current Year Net working = capital Total current assets − current liabilities = $14,100 − $9,700 = Current ratio = Total current assets Total Current liabilities = $14,100 $9,700 = Debt ratio = Total assets Total liabilities = $25,700 $55,400 = Chapter 3: Accrual Accounting and Income Prior Year Page 8 of 19 FINANCIAL ACCOUNTING - Eleventh Edition E3-29A - Please go to this problem in your textbook to view the data sets. Determine whether each transaction improved or hurt Landry’s current ratio and debt ratio. Solution: a. b. c. Current ratio = = Debt ratio = = Current ratio = = Debt ratio = = Current ratio = = Debt ratio = = Debt ratio = = Debt ratio = = Collecting cash in advance hurts both ratios. d. Current ratio = = Accruing an expense hurts both ratios. e. Current ratio = = Chapter 3: Accrual Accounting and Income Page 9 of 19 FINANCIAL ACCOUNTING - Eleventh Edition P3-59A - Please go to this problem in your textbook to view the data sets. Requirements 1. Show how each transaction would be handled (in terms of recognizing revenues and expenses) using the cash basis and the accrual basis. 2. Compute October income (loss) before tax under each accounting method. 3. Indicate which measure of net income or net loss is preferable. Use the transactions on October 11 and October 24 to explain. Solution: Req. 1 & 2 Date Oct. 1 4 5 8 11 19 24 26 29 31 31 31 Masters Consulting Amount of Revenue (Expense) for October Cash Basis Expense Expense Revenue Expense Revenue Accrual Basis Revenue Expense Expense Expense Revenue Expense Income (loss) before tax Req. 3 Chapter 3: Accrual Accounting and Income Page 10 of 19 FINANCIAL ACCOUNTING - Eleventh Edition P3-61A - Please go to this problem in your textbook to view the data sets. Requirements 1. Prepare the adjusted trial balance of Spateness, Inc., at December 31, 2016. 2. Prepare the single step monthly income statement, the statement of retained earnings, and the classified balance sheet. Solution: Req. 1 Spateness, Inc. Adjusted Trial Balance December 31, 2016 TRIAL BALANCE ADJUSTMENTS ACCOUNT TITLE Cash Accounts receivable Prepaid rent Supplies Furniture Accum. Depreciation Accounts payable Salary payable Common stock Retained earnings Dividends Service revenue Salary expense Rent expense Utilities expense Depreciation expense Supplies expense DEBIT CREDIT Chapter 3: Accrual Accounting and Income DEBIT CREDIT ADJUSTED TRIAL BALANCE DEBIT CREDIT Page 11 of 19 FINANCIAL ACCOUNTING - Eleventh Edition Req. 2 Spateness, Inc. Income Statement Month Ended December 31, 2016 Revenues: Service revenue Expenses: Salary expense Supplies expense Rent expense Depreciation expense, furniture Utilities expense Total expenses Net income Spateness, Inc. Statement of Retained Earnings Month Ended December 31, 2016 Retained earnings, December 1, 2016 Add: Net income Subtotal Less: Dividends declared Retained earnings, December 31, 2016 Spateness, Inc. Balance Sheet 31-Dec-16 ASSETS Current assets: Cash Accounts receivable Prepaid rent Supplies Total current assets Furniture Less: Accum. deprec. Total assets Chapter 3: Accrual Accounting and Income LIABILITIES Current liabilities: Accounts payable Salary payable Total current liabilities STOCKHOLDERS’ EQUITY Common stock Retained earnings Total stockholders’ equity Total liabilities and stockholders’ equity Page 12 of 19 FINANCIAL ACCOUNTING - Eleventh Edition E4-17A - Please go to this problem in your textbook to view the data sets. Evaluate the internal controls in each situation as strong or weak, and give the reason for your answer. Solution: Chapter 4: Internal Control and Cash Page 13 of 19 FINANCIAL ACCOUNTING - Eleventh Edition E4-19A - Please go to this problem in your textbook to view the data sets. Requirement 1. Prepare Hardy’s bank reconciliation at October 31, 2017. Solution: F.L. Hardy Bank Reconciliation October 31, 2017 BANK: Balance, October 31 Add: Deposit in transit Less: Outstanding checks: Check No. 626 627 Adjusted bank balance BOOKS: Balance, October 31 Less: Correction of book error — Recorded $86 check as $68 NSF check Service charge Adjusted book balance Chapter 4: Internal Control and Cash $ - Page 14 of 19 FINANCIAL ACCOUNTING - Eleventh Edition E4-22A - Please go to this problem in your textbook to view the data sets. Write a memo to convince the store manager that there is an internal control weakness over cash receipts. Identify the weakness that gives an employee the best opportunity to steal cash, and state how to prevent such a theft. Solution: TO: FROM: SUBJECT: Store Manager Student Evaluation of internal control and plan for improvement Chapter 4: Internal Control and Cash Page 15 of 19 FINANCIAL ACCOUNTING - Eleventh Edition E4-23A - Please go to this problem in your textbook to view the data sets. Identify the main internal control weakness in this situation, state how the weakness can hurt Linus Manufacturing, and propose a way to correct the Solution: Chapter 4: Internal Control and Cash Page 16 of 19 FINANCIAL ACCOUNTING - Eleventh Edition E4-25B - Please go to this problem in your textbook to view the data sets. Identify the internal control weakness in the given situations. State how the person can hurt the company. Solution: Chapter 4: Internal Control and Cash Page 17 of 19 FINANCIAL ACCOUNTING - Eleventh Edition E4-29B - Please go to this problem in your textbook to view the data sets. How much cash does Neal actually have at October 31, 2016? Solution: Neal's Rink Bank Reconciliation October 31, 2016 BANK: Balance, October 31 Add: Deposit in transit Less: Outstanding checks Adjusted bank balance BOOKS: Balance, October 31 Add: EFT collection — rent Less: Service charge NSF checks Charge for printed checks Correction of book error — recorded $310 check as $31 Adjusted book balance Chapter 4: Internal Control and Cash $ - Page 18 of 19 FINANCIAL ACCOUNTING - Eleventh Edition E4-30B - Please go to this problem in your textbook to view the data sets. Use the data from Exercise 4-29B to make the journal entries that Neal should record on October 31 to update his Cash account. Include an explanation for each entry. Solution: Journal DATE ACCOUNT TITLES AND EXPLANATION Aug. 31 Cash Rent Revenue EFT collection of rent. DEBIT CREDIT 31 Miscellaneous Expense ($10 + $11) Cash Bank service charge and charge for printed checks. 31 Accounts Receivable Cash NSF checks returned by bank. 31 Salary Expense ($310 − $31) Cash Correction of book error. Chapter 4: Internal Control and Cash Page 19 of 19
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