Molly starts up in business as a florist on 1 April 2004. For the first six months, she has a draft profit of $12,355. On investigation you discover the following: Rent paid for the 12 months ending 31 March 2005 of $800 has not been recorded in the accounts. Closing inventory in the accounts at a cost of $1,000 has a net realisable value of $800. What is the adjusted profit for the period? A $11,355 B $11,755 C $12,155 D $12,555

Molly starts up in business as a florist on 1 April 2004. For the first six months, she has a draft profit of $12,355. On investigation you discover the following: Rent paid for the 12 months ending 31 March 2005 of $800 has not been recorded in the accounts. Closing inventory in the accounts at a cost of $1,000 has a net realisable value of $800. What is the adjusted profit for the period? A $11,355 B $11,755 C $12,155 D $12,555

Name: Molly starts up in business as a florist on 1 April 2004. For the firs
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Description: Molly starts up in business as a florist on 1 April 2004. For the first six months, she has a draft profit of $12,355.On investigation you discover the following:Rent paid for the 12 months ending 31 March 2005 of $800 has not been recorded in the ac

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter7: Accounting Information Systems

Section: Chapter Questions

Problem 3TP: If a customer owed your company $100 on the first day of the month, then purchased $200 of goods on...

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If a customer owed your company $100 on the first day of the month, then purchased $200 of goods on credit on the fifth and paid you $50 on fifteenth, the customers ending balance for the month would show a (debit or credit) of how much?
Wanda B. Rich is the CEO of Outlet Flooring, a discount provider of carpet, tile, wood, and laminate flooring. At the end of the year, the company’s accountant provides Wanda with the following information, before any adjustment. Accounts receivable $10,800,000 Estimated percentage uncollectible 2% Allowance for uncollectible accounts $108,000 (credit) Operating income $2,800,000 Wanda has significant stock ownership in the company and, therefore, would like to keep the stock price high. Analysts on Wall Street expect the company to have operating income of $2,120,000. The fact that actual operating income is well above this amount will make investors happy and help maintain a high stock price. Meeting analysts’ expectations will also help Wanda keep her job. Required: 1. Record the adjustment for uncollectible accounts using the accountant’s estimate of 2% of accounts receivable. (If no entry is required for a particular transaction/event, select "No Journal Entry…
Wanda B. Rich is the CEO of Outlet Flooring, a discount provider of carpet, tile, wood, and laminate flooring. At the end of the year, the company’s accountant provides Wanda with the following information, before any adjustment. Accounts receivable $ 10,800,000 Estimated percentage uncollectible 2 % Allowance for uncollectible accounts $ 108,000 (credit) Operating income $ 2,800,000 Wanda has significant stock ownership in the company and, therefore, would like to keep the stock price high. Analysts on Wall Street expect the company to have operating income of $2,120,000. The fact that actual operating income is well above this amount will make investors happy and help maintain a high stock price. Meeting analysts’ expectations will also help Wanda keep her job. 2-a. After the adjustment is recorded in Part 1, what is the revised amount of operating income? Revised operating income Will Outlet Flooring still meet analysts’…
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Ian bought some goods in May for $600 and sold them in the following August for $950.For the financial year ending on 30 June,which of the following statements is correct? A.Ian has expenses amounting to $600 B.Ian has assets of $600 C.Ian has revenues amounting to $950 D.Ian has a profit of $350 （Why A is correct and D is incorrect?)
Wanda B. Rich is the CEO of Outlet Flooring, a discount provider of carpet, tile, wood, and laminate flooring. At the end of the year, the company’s accountant provides Wanda with the following information, before any adjustment.Accounts receivable $11,000,000Estimated percentage uncollectible 4%Allowance for uncollectible accounts $110,000 (credit)Operating income $2,900,000Wanda has significant stock ownership in the company and, therefore, would like to keep the stock price high. Analysts on Wall Street expect the company to have operating income of $2,200,000. The fact that actual operating income is well above this amount will make investors happy and help maintain a high stock price. Meeting analysts’ expectations will also help Wanda keep her job.Required:1. Record the adjustment for uncollectible accounts using the accountant’s estimate of 4% of accounts receivable.2. After the adjustment is recorded in requirement 1, what is the revised amount of operating income? Will Outlet…
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Nicole Martins is the controller at UMC Corp., a publicly-traded manufacturing company. Last year, UMC had annual sales revenue of $15 million. The first quarter of this year just ended, and Nicole needs to prepare a trial balance so she can prepare the quarterly financial statements. However, the trial balance is out of balance by $750 (credits exceed debits). Nicole is running out of time aside as the report is due today! Therefore, she decides to balance by plugging the $750 into the account called depreciation expense account. She chooses this account because it is one that is adjusted during the year-end. Three basic principles of accrual accounting are that revenue must be recognized in the period it is earned, expenses must be recorded in the period they support revenue and are generated, and debits equal credits. 1) Does this violate any of these basic principles? If so, which ones? 2) When the trial balance does not balance, what might this indicate? 3) Explain the ethical…
The following information is available for M&M Johnson Inc.: The December 31, 2020, supplies inventory balance is $85,000. A count of supplies reveals that the company actually has $30,000 of supplies on hand. As of December 31, 2020, Johnson Inc. had not paid the rent for December. The monthly rent is $2,400. On December 20, 2020, Johnson collected $18,000 in customer advances for the subsequent performance of a service. Johnson recorded the $18,000 as unearned revenue, and as of December 31 two-thirds of the service had been performed. The total cost of Johnson’s fixed assets is $500,000. Johnson estimates that the assets have a useful life of ten years with zero salvage value and uses the straight-line method of depreciation. Johnson borrowed $10,000 at an annual rate of 12 percent on July 1, 2020. The first interest payment will be made on January 1, 2021. Johnson placed several ads in local newspapers during December. On December 31, the company received a $28,000 bill for…
The following information is available for M&M Johnson Inc.: The December 31, 2020, supplies inventory balance is $85,000. A count of supplies reveals that the company actually has $30,000 of supplies on hand. As of December 31, 2020, Johnson Inc. had not paid the rent for December. The monthly rent is $2,400. On December 20, 2020, Johnson collected $18,000 in customer advances for the subsequent performance of a service. Johnson recorded the $18,000 as unearned revenue, and as of December 31 two-thirds of the service had been performed. The total cost of Johnson’s fixed assets is $500,000. Johnson estimates that the assets have a useful life of ten years with zero salvage value and uses the straight-line method of depreciation. Johnson borrowed $10,000 at an annual rate of 12 percent on July 1, 2020. The first interest payment will be made on January 1, 2021. Johnson placed several ads in local newspapers during December. On December 31, the company received a $28,000 bill for…
The following information is available for M&M Johnson Inc.: The December 31, 2020, supplies inventory balance is $85,000. A count of supplies reveals that the company actually has $30,000 of supplies on hand. As of December 31, 2020, Johnson Inc. had not paid the rent for December. The monthly rent is $2,400. On December 20, 2020, Johnson collected $18,000 in customer advances for the subsequent performance of a service. Johnson recorded the $18,000 as unearned revenue, and as of December 31 two-thirds of the service had been performed. The total cost of Johnson’s fixed assets is $500,000. Johnson estimates that the assets have a useful life of ten years with zero salvage value and uses the straight-line method of depreciation. Johnson borrowed $10,000 at an annual rate of 12 percent on July 1, 2020. The first interest payment will be made on January 1, 2021. Johnson placed several ads in local newspapers during December. On December 31, the company received a $28,000 bill for…
The following information is available for M&M Johnson Inc.: The December 31, 2020, supplies inventory balance is $85,000. A count of supplies reveals that the company actually has $30,000 of supplies on hand. As of December 31, 2020, Johnson Inc. had not paid the rent for December. The monthly rent is $2,400. On December 20, 2020, Johnson collected $18,000 in customer advances for the subsequent performance of a service. Johnson recorded the $18,000 as unearned revenue, and as of December 31 two-thirds of the service had been performed. The total cost of Johnson’s fixed assets is $500,000. Johnson estimates that the assets have a useful life of ten years with zero salvage value and uses the straight-line method of depreciation. Johnson borrowed $10,000 at an annual rate of 12 percent on July 1, 2020. The first interest payment will be made on January 1, 2021. Johnson placed several ads in local newspapers during December. On December 31, the company received a $28,000 bill for…