Damon Davis was putting the finishing touches on the paperwork for Drano Plumbing at the time of this writing. A net profit of $50,000, he predicted, would be generated. Upon tally of the balance sheet's columns, it became clear to him how much money was in the negative column ($400,000) and how much money was in the credit column ($300,000). What was the most likely cause of the mismatch in results, according to you? If this was not the source of the problem, what should he do next in order to determine the source of the issue?

Damon Davis was putting the finishing touches on the paperwork for Drano Plumbing at the time of this writing. A net profit of $50,000, he predicted, would be generated. Upon tally of the balance sheet's columns, it became clear to him how much money was in the negative column ($400,000) and how much money was in the credit column ($300,000). What was the most likely cause of the mismatch in results, according to you? If this was not the source of the problem, what should he do next in order to determine the source of the issue?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter3: Analyzing And Recording Transactions

Section: Chapter Questions

Problem 3TP: Assume that you are the controller of a business that provides legal services to clients. Suppose...

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Damon Davis was concluding Drano Plumbing's paperwork. He predicted a $50,000 net profit. When he tallied up the columns on the Balance Sheet, he found that the debit column amounted to $400,000 and the credit column amounted to $300,000. What was the most likely source of the result discrepancy? If this was not the source of the problem, how might he continue to identify its origin?
Damon Davis was doing the paperwork for Drano Plumbing. He estimated a net profit of $50,000. He discovered that the debit column on the balance sheet totaled $400,000 and the credit column, $300,000, when he added up the columns. What was the difference in the results' most likely cause? What should he do if this wasn't the root of the problem? How can he find out where it came from?
Damon Davis was working on a spreadsheet for the Drano Plumbing Company. He calculated that the net profit would be $50,000. He totaled the columns on the Balance Sheet as follows: debit, $400,000; and credit, $300,000. What was the most likely cause of this disparity? If this was not the case, how should he go about determining the cause of the error?
Putting the final touches on the paperwork for Drano Plumbing was Damon Davis. The net profit, he thought, would be $50,000. He added up the columns on the balance sheet and discovered that the credit column was worth $30,000 and the debit column was $400,000, respectively. What was the most probable cause of the inconsistent results? What should he do to determine the issue's origin if this wasn't the cause of the issue?
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Henry Josstick has just started his first accounting course and has prepared the following balance sheet and income statement for Omega Corp. Unfortunately, although the data for the individual items are correct, he is very confused as to whether an item should go in the balance sheet or income statement and whether it is an asset or liability. fill in the blanks by rearranging the items that are wrong: Balance Sheet Payables $ 35 Inventories $50 Less accumulated depreciation 120 Receivables 35 Total current assets ___?____ Total current liabilities __?____ Long-term debt $350…
Assume that you are the controller of a business that provides legal services to clients. Suppose that the company has had a tough year, so the revenues have been lagging behind, based on previous years standards. What would you do if your boss (the chief executive officer [CEO] of the company) asked to reclassify a transaction to report loan proceeds of $150,000 as if the cash came from service fee revenue from clients instead. Would following the CEOs advice impact the companys accounting equation? How would reclassifying this one transaction change the outcome of the balance sheet, the income statement, and the statement of retained earnings? Would making this reclassification change the perception that users of the financial statements would have of the companys current year success and future year potential? Write a memo, detailing your willingness (or not) to embrace this suggestion, giving reasons behind your decision. Remember to exercise diplomacy, even if you must dissent from the opinion of a supervisor. Note that the challenge of the assignment is to keep your integrity intact, while also keeping your job, if possible.
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Two accountants for the firm of Elwes and Wright are arguing about the merits of presenting an income statement in a multiple-step versus a single-step format. Administrative expense     Officers' salaries $4,900     Depreciation of office furniture and equipment 3,960 Cost of goods sold 60,570 Rent revenue 17,230 Selling expense     Delivery expense 2,690     Sales commissions 7,980     Depreciation of sales equipment 6,480 Sales revenue 96,500 Income tax 9,070 Interest expense 1,860 1) Prepare an income statment for the year 2014 using the single-step form.
Two accountants for the firm of Elwes and Wright are arguing about the merits of presenting an income statement in a multiple-step versus a single-step format. Administrative expense     Officers' salaries $4,900     Depreciation of office furniture and equipment 3,960 Cost of goods sold 60,570 Rent revenue 17,230 Selling expense     Delivery expense 2,690     Sales commissions 7,980     Depreciation of sales equipment 6,480 Sales revenue 96,500 Income tax 9,070 Interest expense 1,860 1) Prepare an income statment for the year 2014 using the multiple step form. Common shares standing for 2014 total 40,550(000 omitted).