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Sigchi4life
Category:
Business & Finance
Price: $20 USD

Question description

Anthony Leung opens a retail store called The Bead Shop. During the first month of operation, Anthony makes the following accounting transactions:

1.  Invests $100,000 in cash in the business  

Debit:  [ Select ]["inventory", "cash", "equipment", "trade & accounts receivable", "advertising expense", "trade & accounts payables", "bank loan", "revenue", "equity", "salary expense"] Credit:  [ Select ]["trade and accounts payable", "salary expense", "revenue", "equipment", "advertising expense", "bank loan", "cash", "equity", "trade & account receivable", "inventory"]

2.  Buys $50,000 worth of equipment on credit he obtained from the bank  

Debit:  [ Select ]["inventory", "revenue", "trade & accounts receivable", "salary expense", "advertising expense", "equipment", "cash", "trade & accounts payable", "bank loan", "equity"] Credit:  [ Select ]["equipment", "salary expense", "cash", "trade & accounts receivable", "equity", "inventory", "trade & accounts payable", "advertising expense", "bank loan", "revenue"]

3.  Buys $60,000 worth of goods from different suppliers, pays $30,000 in cash, and puts the rest on credit  

Debit:  [ Select ]["salary expense", "bank loan", "equipment", "inventory", "revenue", "cash", "equity", "trade & accounts payable", "trade & accounts receivable", "advertising expense"] Credits:  [ Select ]["trade & accounts payable", "advertising expense", "equipment", "revenue", "salary expense", "inventory", "cash", "trade & accounts receivable", "equity", "bank loan"] [ Select ]["salary expense", "revenue", "trade & accounts receivable", "equipment", "equity", "cash", "trade & accounts payable", "bank loan", "advertising expense", "inventory"]

4.  Spends $5,000 in cash for advertising  

Debit:  [ Select ]["trade & accounts payable", "equity", "advertising", "trade & accounts receivable", "equipment", "revenue", "inventory", "cash", "bank loan", "salary expense"] Credit:  [ Select ]["inventory", "bank loan", "advertising expense", "equity", "trade & accounts payable", "equipment", "cash", "salary expense", "revenue", "trade & accounts receivable"]

5.  Sells $20,000 worth of goods on credit  

Debit:  [ Select ]["trade & accounts receivable", "inventory", "equity", "advertising expense", "revenue", "cash", "salary expense", "trade & accounts payable", "equipment", "bank loan"] Credit:  [ Select ]["advertising expense", "salary expense", "equipment", "trade & accounts receivable", "trade & accounts payable", "bank loan", "inventory", "revenue", "cash", "equity"]

6.  Pays $15,000 in cash for salaries  

Debit:  [ Select ]["inventory", "bank loan", "equity", "trade & accounts payable", "trade & accounts receivable", "equipment", "cash", "advertising expense", "revenue", "salary expense"] Credit:  [ Select ]["cash", "equipment", "salary expense", "advertising expense", "inventory", "bank loan", "trade & accounts payable", "trade & accounts receivable", "revenue", "equity"]

7.  Pays $10,000 to the bank toward the loan  

Debit:  [ Select ]["advertising expense", "bank loan", "equity", "inventory", "equipment", "revenue", "salary expense", "trade & accounts receivable", "trade & accounts payable", "cash"] Credit:  [ Select ]["advertising expense", "revenue", "equity", "salary expense", "inventory", "trade & accounts payable", "cash", "trade & accounts receivable", "bank loan", "equipment"]

8.  Pays $5,000 to a supplier  

Debit:  [ Select ]["trade & accounts receivable", "equity", "bank loan", "trade & accounts payable", "equipment", "inventory", "cash", "advertising expense", "salary expense", "revenue"] Credit:  [ Select ]["bank loan", "salary expense", "equity", "revenue", "cash", "equipment", "inventory", "trade & accounts receivable", "advertising expense", "trade & accounts payable"]

9.  Pays $13,000 for some merchandise that he had purchased on credit  

Debit:  [ Select ]["trade & accounts receivable", "bank loan", "equipment", "advertising expense", "equity", "inventory", "trade & accounts payable", "salary expense", "cash", "revenue"] Credit:  [ Select ]["inventory", "revenue", "cash", "trade & accounts payable", "advertising expense", "bank loan", "equipment", "salary expense", "equity", "trade & accounts receivable"]

10. Pays a salary of $3,000  

Debit:  [ Select ]["equipment", "trade & accounts receivable", "inventory", "bank loan", "salary expense", "cash", "trade & accounts payable", "revenue", "advertising expense", "equity"] Credit:  [ Select ]["inventory", "advertising expense", "cash", "revenue", "trade & accounts payable", "bank loan", "equity", "trade & accounts receivable", "equipment", "salary expense"]

Prepare the following the journal entries identifying the proper debit and credit for the relevant transaction.

Skip to question text.

Anthony Leung opens a retail store called The Bead Shop. During the first month of operation, Anthony makes the following accounting transactions:

1.  Invests $100,000 in cash in the business

2.  Buys $50,000 worth of equipment on credit he obtained from the bank

3.  Buys $60,000 worth of goods from different suppliers, pays $30,000 in cash, and puts the rest on credit

4.  Spends $5,000 in cash for advertising

5.  Sells $20,000 worth of goods on credit

6.  Pays $15,000 in cash for salaries

7.  Pays $10,000 to the bank toward the loan

8.  Pays $5,000 to a supplier

9.  Pays $13,000 for some merchandise that he had purchased on credit

10. Pays a salary of $3,000

Prepare the trial balance as it relates to the above transactions.

The Bead Shop
Trial Balance
(in $)
DebitCredit
Cash[ Select ]["100,000", "19,000", "12,000", "8,000", "20,000", "5,000", "60,000", "40.000", "50,000"]
Trade & accts. receivable[ Select ]["19,000", "60,000", "100,000", "40,000", "12,000", "8,000", "20,000", "5,000", "50,000"]
Trade & accounts payable[ Select ]["20,000", "5,000", "8,000", "100,000", "60,000", "40,000", "12,000", "19,000", "50,000"]
Bank loan[ Select ]["40,000", "5,000", "19,000", "50,000", "60,000", "100,000", "8,000", "20,000", "12,000"]
Inventory[ Select ]["12,000", "60,000", "19,000", "50,000", "20,000", "100,000", "40,000", "5,000", "8,000"]
Equipment [ Select ]["12,000", "20,000", "19,000", "8,000", "5,000", "50,000", "60,000", "40,000", "100,000"]
Equity[ Select ]["5,000", "19,000", "12,000", "60,000", "40,000", "50,000", "8,000", "20,000", "100,000"]
Revenue[ Select ]["50,000", "20,000", "5,000", "40,000", "60,000", "12,000", "100,000", "19,000", "8,000"]
Advertising Expense[ Select ]["8,000", "12,000", "60,000", "40,000", "19,000", "20,000", "5,000", "50,000", "100,000"]
Salary Expense[ Select ]["20,000", "100,000", "40,000", "19,000", "18,000", "12,000", "60,000", "50,000", "5,000"]
Total 172,000172,000

Skip to question text.

  1. Prepare Cougar’s statement of income for the year ended December 31, 2015.  
  2. Calculate Cougar's cash flow for the year.

At the end of December 31, 2015, Cougar Inc.’s accounts are as follows:  

Office salaries

$30,000

Finance costs

3,000

Depreciation (administration)

2,000

Cost of sales

300,000

Income tax expense

35,000

Sales salaries

40,000

Interest income

6,000

Gross revenue

520,000

Advertising

10,000

Lease (administration)

3,000

Promotional expenses

2,000

Sales discounts

20,000

Travel expenses

3,000

Rental charges

5,000

Cougar Inc.
Statement of Income 

For the year ended December 31, 2015

(in $)

[ Select ]["Rental Charges", "Sales salaries", "Sales discounts", "Cost of goods sold", "Gross revenue"][ Select ]["300,000", "5,000", "520,000", "20,000", "40,000"]
Less: [ Select ]["Costs of goods sold", "Rental charges", "Sales discounts", "Sales salaries"] [ Select ]["(40,000)", "(20,000)", "(5,000)", "(300,000)"]
Net revenue500,000
[ Select ]["Depreciation", "Income tax expense", "Interest income", "Costs of goods sold"] [ Select ]["(300,000)", "(3,000)", "(35,000)", "(2,000)", "(6,000)"]
Gross profit[ Select ]["200,000", "250,000", "540,000", "170,000", "520,000"]
Other Income
[ Select ]["Finance costs", "Gross revenue", "Interest income", "Depreciation", "Sales discounts"][ Select ]["520,000", "3,000", "20,000", "6,000", "2,000"]
Total Revenue206,000
Distribution costs
[ Select ]["Lease (administration)", "Income tax expense", "Sales salaries", "Rental charges"][ Select ]["(30,000)", "(40,000)", "(35,000)", "(5,000)"]
[ Select ]["", "Advertising expense"][ Select ]["(3,000)", "(5,000)", "(10,000)", "(20,000)"]
[ Select ]["Promotional expenses", "Office salaries", "Lease (administration)", "Rental charges"][ Select ]["(30,000)", "(3,000)", "(5,000)", "(2,000)"]
[ Select ]["Lease (administration)", "Travel expenses", "Office expenses", "Rental expenses"][ Select ]["(30,000)", "(3,000)", "(5,000)", "(2,000)"]
Total distribution costs (55,000)
Administrative expenses
[ Select ]["Sales salaries", "Office salaries", "Promotional expenses", "Income tax expense"][ Select ]["(10,000)", "(30,000)", "(40,000)", "(20,000)"]
[ Select ]["Travel expenses", "Advertising expenses", "Sales salaries", "Lease (administration)"][ Select ]["(10,000)", "(3,000)", "(2,000)", "(6,000)"]
[ Select ]["Sales salaries", "Finance costs", "Rental charges", "Sales discounts"][ Select ]["(6,000)", "(20,000)", "(5,000)", "(10,000)"]
[ Select ]["Depreciation (administration)", "Income tax expense", "Sales discounts", "Advertising expenses"][ Select ]["(6,000)", "(2,000)", "(20,000)", "(10,000)"]
Total administrative expenses (40,000)
[ Select ]["Interest income", "Depreciation", "Finance costs", "Income tax expense"] (3,000)
Total Selling, General & Admin. Expenses (98,000)
Profit before taxes108,000
[ Select ]["Interest income", "Finance costs", "Income tax expense", "Depreciation"] (35,000)
Net Income/(Loss)73,000
CASH FLOW
[ Select ]["Gross profit", "Depreciation", "Income tax expense", "Total revenue", "Net Income/(Loss)"][ Select ]["$200,000", "$35,000", "$108,000", "$520,000", "$73,000"]
Add:  [ Select ]["Depreciation", "Income tax expense", "Total revenue", "Net Income/(Loss)", "Gross profit"][ Select ]["$35,000", "$2,000", "$3,000", "$40,000", "$300,000"]
Cash Flow[ Select ]["$70,000", "$76,000", "$171,000", "$108,000", "$75,000"]

Skip to question text.

On its statement of financial position, a company shows buildings purchased for $700,000, equipment purchased for $350,000, and machinery purchased for $170,000. The depreciation rates for these non-current assets are as follows:

Straight-Line Depreciation

1. Buildings

7%

2. Equipment

25%

3. Machinery

30%

For the first five years of operation, calculate the amount of straight-line depreciation for the non-current assets.  Hint:  It is recommended you create tables inside Excel to arrive at the solutions.

(in $)
Buildings
YearsBeginning BalanceDepreciation @ 7%Ending Balance
1[ Select ]["602,000", "700,000", "602,000", "651,000", "751,000", "553,000"][ Select ]["175,000", "749,000", "45,570", "210,000", "49,000"][ Select ]["602,000", "553,000", "702,000", "651,000", "751,000"]
2[ Select ]["651,000", "553,000", "749,000", "700,000", "602,000"][ Select ]["45,570", "42,140", "35,280", "49,000", "38,710"][ Select ]["700,000", "749,000", "602,000", "651,000", "553,000"]
3[ Select ]["749,000", "651,000", "700,000", "602,000", "553,000"][ Select ]["42,140", "38,710", "49,000", "45,570", "35,280"][ Select ]["602,000", "651,000", "504,000", "700,000", "553,000"]
4[ Select ]["602,000", "455,000", "651,000", "504,000", "553,000"][ Select ]["35,280", "45,570", "38,710", "49,000", "42,140"][ Select ]["700,000", "504,000", "602,000", "455,000", "651,000"]
5[ Select ]["553,000", "504,000", "602,000", "455,000", "406,000"][ Select ]["49,000", "38,710", "42,140", "35,280", "45,570"][ Select ]["602,000", "553,000", "455,000", "651,000", "504,000"]
Equipment
YearsBeginning BalanceDepreciation @ 25%Ending Balance
1[ Select ]["350,000", "0", "262,500", "175,000", "387,500"][ Select ]["65,625", "43,750", "87,500", "0", "21,875"][ Select ]["0", "175,000", "350,000", "262,500", "387,500"]
2[ Select ]["262,500", "0", "175,000", "350,000", "87,500"][ Select ]["87,500", "21,875", "65,625", "0", "43,750"][ Select ]["87,500", "262,500", "350,000", "175,000", "0"]
3[ Select ]["175,000", "262,500", "87,500", "0", "350,000"][ Select ]["43,750", "87,500", "21,875", "0", "65,625"][ Select ]["262,500", "87,500", "350,000", "0", "175,000"]
4[ Select ]["350,000", "0", "262,500", "87,500", "175,000"][ Select ]["65,625", "43,750", "21,875", "0", "87,500"][ Select ]["87,500", "262,500", "0", "175,000", "350,000"]
5[ Select ]["0", "175,000", "350,000", "262,500", "87,500"][ Select ]["87,500", "21,875", "0", "43,750", "65,625"][ Select ]["175,000", "0", "131,250", "43,850", "87,500"]
Machinery
YearsBeginning BalanceDepreciation @ 30%Ending Balance
1[ Select ]["170,000", "68,000", "17,000", "221,000", "119,000"][ Select ]["35,700", "17,000", "20,400", "0", "51,000"][ Select ]["0", "17,000", "119,000", "68,000", "51,000"]
2[ Select ]["17,000", "68,000", "119,000", "0", "170,000"][ Select ]["51,000", "0", "35,700", "20,400", "17,000"][ Select ]["68,000", "20,400", "35,700", "51,000", "0"]
3[ Select ]["68,000", "17,000", "0", "119,000", "221,000"][ Select ]["17,000", "20,400", "35,700", "51,000", "0"][ Select ]["35,700", "0", "20,400", "34,000", "17,000"]
4[ Select ]["68,000", "170,000", "119,000", "17,000", "0"][ Select ]["51,000", "0", "17,000", "35,700", "20,400"][ Select ]["0", "34,000", "20,400", "35,700", "17,000"]
5[ Select ]["51,000", "17,000", "34,000", "68,000", "0"][ Select ]["0", "51,000", "17,000", "20,400", "35,700"][ Select ]["17,000", "34,000", "20,400", "0", "35,700"]

Skip to question text.

Classify the following balance sheet items as current or noncurrent as they would appear on a statement of financial position:

Retained earnings – [ Select ]["current asset", "long-term liability", "current liability", "noncurrent asset"]

Accounts payable – [ Select ]["current liability", "current asset", "long-term liability", "noncurrent asset"]

Prepaid expense – [ Select ]["current liability", "long-term liability", "current asset", "noncurrent asset"]

Plant and equipment – [ Select ]["long-term liability", "current asset", "noncurrent asset", "current liability"]

Inventory – [ Select ]["current liability", "current asset", "noncurrent liability", "noncurrent asset"]

Common stock – [ Select ]["noncurrent asset", "current liability", "current asset", "long-term liability"]

Bonds payable – [ Select ]["noncurrent asset", "long-term liability", "current liability", "current asset"]

Accrued wages payable – [ Select ]["current asset", "current liability", "long-term liability", "noncurrent asset"]

Accounts receivable – [ Select ]["noncurrent asset", "long-term liability", "current asset", "current liability"]

Capital in excess of par – [ Select ]["long-term liability", "current liability", "noncurrent asset", "current asset"]

Preferred stock – [ Select ]["long-term liability", "current liability", "current asset", "noncurrent asset"]

Marketable securities – [ Select ]["noncurrent asset", "current asset", "long-term liability", "current liability"]

Skip to question text.

Fill in the blank spaces with the appropriate financial statement and then, for the balance sheet items, classify the account according to the options provided.

Indicate Whether the item is on Income Statement or Balance Sheet

If the Item is on Balance Sheet, Designate Which Category

Item

[ Select ]["Balance Sheet / Statement of Financial Position", "Income Statement"]

[ Select ]["current liability", "stockholders' equity", "long-term liability", "current asset", "n/a - income statement", "noncurrent asset"]

Accounts Receivable

[ Select ]["Balance Sheet / Statement of Financial Position", "Income Statement"]

[ Select ]["noncurrent asset", "long-term liability", "current liability", "n/a - income statement", "current asset", "stockholders' equity"]

Retained Earnings

[ Select ]["Income Statement", "Balance Sheet / Statement of Financial Position"]

[ Select ]["n/a - income statement", "current asset", "noncurrent asset", "current liability", "long-term liability", "stockholders' equity"] 

Income Tax Expense

[ Select ]["Balance Sheet / Statement of Financial Position", "Income Statement"]

[ Select ]["current asset", "n/a - income statement", "stockholders' equity", "current liability", "long-term liability", "noncurrent asset"]

Accrued Expenses

[ Select ]["Balance Sheet / Statement of Financial Position", "Income Statement"]

[ Select ]["current asset", "noncurrent asset", "long-term liability", "n/a - income statement", "current liability", "stockholders' equity"]

Cash

[ Select ]["Balance Sheet / Statement of Financial Position", "Income Statement"]

[ Select ]["long-term liability", "noncurrent asset", "current liability", "current asset", "stockholders' equity", "n/a - income statement"]

Selling and Administrative expenses

[ Select ]["Balance Sheet / Statement of Financial Position", "Income Statement"]

[ Select ]["noncurrent asset", "current liability", "current asset", "n/a - income statement", "long-term liability", "stockholders' equity"]

Plant & Equipment

[ Select ]["Income Statement", "Balance Sheet / Statement of Financial Position"]

 [ Select ]["current asset", "noncurrent asset", "current liability", "long-term liability", "stockholders' equity", "n/a - income statement"]

Operating Expenses

[ Select ]["Income Statement", "Balance Sheet / Statement of Financial Position"]

[ Select ]["current asset", "n/a - income statement", "current liability", "noncurrent asset", "long-term liability", "stockholders' equity"]

Marketable Securities

[ Select ]["Income Statement", "Balance Sheet / Statement of Financial Position"]

 [ Select ]["noncurrent asset", "stockholders' equity", "current liability", "long-term liability", "current asset", "n/a - income statement"]

Interest Expense

[ Select ]["Balance Sheet / Statement of Financial Position", "Income Statement"]

 [ Select ]["current asset", "noncurrent asset", "long-term liability", "n/a - income statement", "current liability", "stockholders' equity"]

Sales

[ Select ]["Income Statement", "Balance Sheet / Statement of Financial Position"]

[ Select ]["current asset", "long-term liability", "current liability", "stockholders' equity", "noncurrent asset", "n/a - income statement"]

Notes Payable (6 months)

[ Select ]["Balance Sheet / Statement of Financial Position", "Income Statement"]

[ Select ]["noncurrent asset", "current liability", "stockholders' equity", "n/a - income statement", "long-term liability", "current asset"]

Bonds payable (Maturity 2009)

[ Select ]["Balance Sheet / Statement of Financial Position", "Income Statement"]

[ Select ]["current asset", "noncurrent asset", "current liability", "n/a - income statement", "long-term liability", "stockholders' equity"]

Common Stock

[ Select ]["Income Statement", "Balance Sheet / Statement of Financial Position"]

 [ Select ]["n/a - income statement", "current liability", "current asset", "long-term liability", "stockholders' equity", "noncurrent asset"]

Depreciation Expense

[ Select ]["Balance Sheet / Statement of Financial Position", "Income Statement"]

[ Select ]["noncurrent asset", "long-term liability", "current asset", "stockholders' equity", "n/a - income statement", "current liability"]

Inventories

[ Select ]["Balance Sheet / Statement of Financial Position", "Income Statement"]

[ Select ]["stockholders' equity", "current asset", "n/a - income statement", "current liability", "long-term liability", "noncurrent asset"]

Capital in excess of par value

[ Select ]["Balance Sheet / Statement of Financial Position", "Income Statement"]

 [ Select ]["noncurrent asset", "current liability", "n/a - income statement", "long-term liability", "stockholders' equity", "current asset"]

Net Income (Earnings after Taxes)

[ Select ]["Balance Sheet / Statement of Financial Position", "Income Statement"]

[ Select ]["noncurrent asset", "long-term liability", "current liability", "n/a - income statement", "stockholders' equity", "current asset"]

Income tax payable


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