An auto-body repair shop has been in business for 23 years. Prepare journal entries for the following transactions, which occurred during a recent month, and determine the auto-body shop’spreliminary net income.a. Signed a long-term note and received a $150,000 loan from a local bank.b. Billed a customer $2,000 for repair services just completed. Payment is expected in 45 days.c. Wrote a check for $600 of rent for the current month.d. Received $450 cash from a customer for work done the same day.e. The company incurred $400 in advertising costs for the current month and is planning to paythese costs next month

Question

An auto-body repair shop has been in business for 23 years. Prepare journal entries for the following transactions, which occurred during a recent month, and determine the auto-body shop’s
preliminary net income.
a. Signed a long-term note and received a $150,000 loan from a local bank.
b. Billed a customer $2,000 for repair services just completed. Payment is expected in 45 days.
c. Wrote a check for $600 of rent for the current month.
d. Received $450 cash from a customer for work done the same day.
e. The company incurred $400 in advertising costs for the current month and is planning to pay
these costs next month

Expert Answer

Want to see the step-by-step answer?

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.
Tagged in
Business
Accounting

Financial Accounting

Related Accounting Q&A

Find answers to questions asked by students like you.

Q: Alexander Company purchased a piece of equipment for $12,000 and depreciated it for three years over...

A: Depreciable cost of equipment = Cost of equipment - Residual value                                  ...

Q: Which of the following circumstances would most likely cause an audit team to performextended proced...

A: Audit procedures: These are the methods, techniques, and processes that are performed by the auditor...

Q: At the beginning of 2009, Florida Road Construction entered into a contract to build a road for the ...

A: Revenue Recognition: Revenue recognition is the recording of revenues in the books of the company on...

Q: Describe the ways accountants can assist inprosecuting fraud perpetrators

A: Accountants have a major role in any organisation as they know the in and out of the business transa...

Q: Why do you think companies use revenue recognition as a primary means for inflating profits?

A:  

Q: Suppose your company sells services for $325 cash this month. Your company also pays $100 insalaries...

A: Hi student Since there are multiple sub parts, we will answer only three sub parts. 

Q: Required 1. Prepare an income statement and a statement of owner’s equity for the year and a classif...

A: Hey, since there are multiple questions posted, we will answer first question. If you want any speci...

Q: Fill in each of the following T-accounts for Belle Co.’s seven transactions listed here. The T-accou...

A: T-account: T-account refers to an individual account, where the increases or decreases in the value ...

Q: A lack of reasonable care that may be characterized by the failure of auditors to followGAAS in the ...

A: Generally Accepted Auditing Standards (GAAS): Generally accepted auditing standards (GAAS) states ab...

Q: What is a journal entry?

A: Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. Th...

Q: The Cheesecake Factory Incorporated (NASDAQ: CAKE) is publicly held and had morethan 93 million comm...

A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question...

Q: Ultimate Butter Popcorn issues 7%, 10-year bonds with a face amount of $60,000. The market interest ...

A: Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from ...

Q: Provide examples of procedures that firms have used to monitor their quality control policies andpro...

A:  

Q: Which of the following cases provides auditors the broadest exposure for liability to thirdparties f...

A: Under the case of Rosenblum Inc. v. Adler., auditors are provided the broadest exposure for liabilit...

Q: Define the cost of goods available for sale. How does it relate to cost of goods sold and ending inv...

A: Cost of goods available for sale: Cost of goods available for sale represents the sum of beginning m...

Q: Give examples of substantive proceduresin the finance and investment cycleand relate them to asserti...

A: Click to see the answer

Q: A machine with a cost of $175,000 and accumulated depreciation of $94,000 is sold for $87,000 cash. ...

A: Answer:   Option b.

Q: If a company’s current assets (such as accounts receivableand inventories) are allowed to grow out o...

A: Statement of cash flows is a financial statement, which is prepared to identify and analyze the infl...

Q: Suppose Hoosiers, a specialty clothing store, rents space at a local mall for one year, paying $25,2...

A: Given information is: Hoosiers, a specialty clothing store, rents space at a local mall for one year...

Q: If sales were overstated by recording a false credit sale at the end of the year, where couldyou fin...

A: Click to see the answer

Q: Accounting Question

A: Balance Sheet shows the financial position of the company at a particular point of time. It lists th...

Q: Accounting Question

A: Definition: Taxable income: Income that is computed after all allowable or permissible deductions ar...

Q: The cost of equity is ________. Group of answer choices A. the interest associated with debt B. t...

A: Cost of equity: Cost of equity is the percentage amount of dividend and growth to the paid to the sh...

Q: Wentz Co. made it a priority to negotiate better credit terms with its suppliers so it could defer p...

A: Defer payments are those payments which got delayed and no interest or principal amount is paid duri...

Q: Archer Co. completed the following transactions and uses a perpetual inventory system. Aug. 4 Sold $...

A: Click to see the answer

Q: Which of the following statements are true regarding the control of cash receipts and cash payments?...

A: To control cash receipts and cash payments, Over-the-counter cash sales should be recorded on a cash...

Q: You are explaining time value of money factors to your friend. Which factor would you explain as bei...

A: Time value of money concept dictates that if there is opportunity to earn a rate of return on the mo...

Q: how to correct a credit invoice (issued by the business) has not been recorded at all?

A: When customers return goods due to various reasons like damaged goods within the warranty period, pu...

Q: Link Williams began an office cleaning business on April 1, 2014. Selected business transactions for...

A: Click to see the answer

Q: How is the accounting for a purchase of a company’s own stock (treasury stock) different from the pu...

A: A company’s stock is the shares a company holds or the shares on which a company has its ownership t...

Q: Perisher Pty Ltd (Perisher) is a Ski equipment manufacturer that operates around Mt Hotham in Victor...

A: Definition: Tax is the liability of an individual or an organization over their income which is the ...

Q: Paid part-time receptionist for two weeks’ salary including the amount owed on April 30, $750

A: The journal entry for the above is as follows: Salary Expense            $630 Salaries Payable      ...

Q: Use the following information to determine cash flows from financing activities. a. Issued common st...

A: Statement of cash flows: Cash flow statement is also known as statement of cash flows. It is a finan...

Q: Rooney Modems, Inc. makes modem cards that are used in notebook computers. The company completed the...

A: Depreciation = ( cost of Asset - salvage value ) / useful life

Q: Why would a company use graphs to highlight its performance on an annual report? ( minimal 1 paragra...

A: The annual report of a company gives all the important information about the company which are criti...

Q: Which of the following items isreported net of related income taxes?a. Gain or loss from discontinue...

A: Click to see the answer

Q: Once the auditor detects a control deficiency, which of the following steps must he or shetake first...

A: Internal control is the process of achieving objectives in operational efficiency and effectiveness....

Q: distinguish between dilutive and antidilutive securities, and describe the implications of each for ...

A: Diluted Securities are the financial instruments that can be converted into common stock and may res...

Q: Briefly discuss the features of activity based costing system?

A: Activity-Based Costing System: ABC costing system can be defined as the accounting method which reco...

Q: The Danica, Gaga & Oprah partnership was begun with investments by the partners as follows: Dani...

A: Click to see the answer

Q: The duality of effects can best be described as follows:a. When a transaction is recorded in the acc...

A: Click to see the answer

Q: Identify the following as intangible assets (IA), natural resources (NR), or some other asset (O). T...

A: Intangible assets are those assets which do not have physical substance and which we can not see or ...

Q: What are the three major elements of a product's cost in a manufacturing company.  Think of two real...

A: Product costs: The costs incurred to acquire the merchandise, ship the stock, prepare the merchandis...

Q: On September 30, 2012, Pharoah Company issued 10% bonds with a par value of $480,000 due in 20 years...

A: Prepare journal entries to record the redemption of the old issue and the sale of the new issue on S...

Q: When prices are rising, would you choose a FIFO or weighted average cost flow assumption? Explain, u...

A: Cost Flow Assumptions: It is an assumption that determines the way or order in which the costs shoul...

Q: How do the concepts of cognitive dissonance and organizational/ethical dissonance relate to whether ...

A: Click to see the answer

Q: Read and T for True and F for False of the following phrases 1-standardization means eliminating all...

A: Standardization: Standardization can be defined as a process of setting up the most significant acco...

Q: If costs are rising, which of the following will be true?a. The cost of goods sold will be greater i...

A: Click to see the answer

Q: Gibson Manufacturing Company (CMC) was started when it acquired $92,000 by issuing common stock. Dur...

A: Income tax expense is the part of income paid to the government in the form of tax at a specified ra...

Q: Which duties should be separated in the payroll cycle?

A: Payroll System:   A payroll system is a system within an organization that is responsible for managi...