GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
17th Edition
ISBN: 9781260218831
Author: Libby
Publisher: MCG CUSTOM
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Textbook Question
Chapter 3, Problem 3.4E
Identifying Expenses
Revenues are normally recognized when a company transfers promised goods or services to customers in the amount the company expects to receive. Expense recognition is guided by an attempt to match the costs associated with the generation of those revenues to the same time period. The following transactions occurred in January:
- a. McGraw-Hill Education uses $3,800 worth of electricity and natural gas in its headquarters building for which it has not yet been billed.
- b. At the beginning of January. Turner Construction Company pays $963 for magazine advertising to run in monthly publications each of the first three months of the year.
- c. Dell pays its computer service technicians $403,000 in salaries for the two weeks ended January 7. Answer from Dell’s standpoint.
- d. The University of Florida orders 60.000 season football tickets from its printer and pays $8,340 in advance for the custom printing. The first game will be played in September. Answer from the university’s standpoint.
- e. The campus bookstore receives 500 accounting texts at a cost of $160 each. The terms indicate that payment is due within 30 days of delivery.
- f. During the last week of January, the campus bookstore sold 500 accounting texts received in (e) at a sales price of $230 each.
- g. Fucillo Automotive Group pays its salespersons $13,800 in commissions related to December auto-mobile sales. Answer from Fucillo’s standpoint.
- h. On January 31, Fucillo Automotive Group determines that it will pay its salespersons $15,560 in commissions related to January sales. The payment will be made in early February. Answer from Fucillo’s standpoint.
- i. A new grill is purchased and installed at a Wendy’s restaurant at the end of the day on January 31: a $12,750 cash payment is made on that day.
- j. Destiny USA (formerly Carousel Mall in Syracuse. NY) had janitorial supplies costing $3,500 in storage. An additional $2,600 worth of supplies was purchased during January. At the end of January. $1,400 worth of janitorial supplies remained in storage.
- k. An Iowa State University employee works eight hours, at SI5 per hour, on January 31: however, payday is not until February 3. Answer from the university’s point of view.
- l. Wang Company paid $4,800 for a fire insurance policy on January 1. The policy covers 12 months beginning on January 1. Answer from Wang’s point of view.
- m. Derek Incorporated has its delivery van repaired in January for $600 and charges the amount on account.
- n. Hass Company, a farm equipment company, receives its phone bill at the end of January for $154 for January calls. The bill has not been paid to date.
- o. Martin Company receives and pays in January a $2,034 invoice (bill) from a consulting firm for services received in January. Answer from Martin’s standpoint.
- p. Parillo’s Taxi Company pays a $595 invoice from a consulting firm for services received and recorded in December.
- q. PVH Corp., manufacturer of IZOD. ARROW. Van Heusen. Calvin Klein, and Tommy Hilfiger apparel, completes production of 450 men’s shirts ordered by Macy’s department stores at a cost of $10 each and delivers the order. Answer from PVH Corp.’s standpoint.
Required:
For each of the transactions, if an expense is to be recognized in January, indicate the expense account title and the amount. If an expense is not to be recognized in January, indicate why.
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Chapter 3 Solutions
GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
Ch. 3 - Prob. 1QCh. 3 - Prob. 2QCh. 3 - Write the income statement equation and define...Ch. 3 - Explain the difference between a. Revenues and...Ch. 3 - Define accrual accounting and contrast it with...Ch. 3 - Prob. 6QCh. 3 - Explain the expense recognition principle.Ch. 3 - Explain why stockholders equity is increased by...Ch. 3 - Explain why revenues are recorded as credits and...Ch. 3 - Complete the following matrix by entering either...
Ch. 3 - Complete the following matrix by entering either...Ch. 3 - Prob. 12QCh. 3 - State the equation for the net profit margin ratio...Ch. 3 - Which of the following is not a specific account...Ch. 3 - Which of the following is not one of the criteria...Ch. 3 - The expense recognition principle controls a....Ch. 3 - Prob. 4MCQCh. 3 - Prob. 5MCQCh. 3 - Prob. 6MCQCh. 3 - Prob. 7MCQCh. 3 - Prob. 8MCQCh. 3 - Prob. 9MCQCh. 3 - Prob. 10MCQCh. 3 - Prob. 3.1MECh. 3 - Reporting Cash Basis versus Accrual Basis Income...Ch. 3 - Identifying Revenues The following transactions...Ch. 3 - Identifying Expenses The following transactions...Ch. 3 - Prob. 3.5MECh. 3 - Prob. 3.6MECh. 3 - Determining the Financial Statement Effects of...Ch. 3 - Prob. 3.8MECh. 3 - Prob. 3.9MECh. 3 - Identifying the Operating Activities in a...Ch. 3 - Prob. 3.11MECh. 3 - Prob. 3.1ECh. 3 - Reporting Cash Basis versus Accrual Basis Income...Ch. 3 - Identifying Revenues Revenues are normally...Ch. 3 - Identifying Expenses Revenues are normally...Ch. 3 - Prob. 3.5ECh. 3 - Determining Financial Statement Effects of Various...Ch. 3 - Recording Journal Entries Sysco, formed in 1969,...Ch. 3 - Prob. 3.8ECh. 3 - Prob. 3.9ECh. 3 - Analyzing the Effects of Transactions in...Ch. 3 - Preparing an Income Statement Refer to E3-10....Ch. 3 - Prob. 3.12ECh. 3 - Analyzing the Effects of Transactions in...Ch. 3 - Prob. 3.14ECh. 3 - Prob. 3.15ECh. 3 - Prob. 3.16ECh. 3 - Prob. 3.17ECh. 3 - Prob. 3.18ECh. 3 - Prob. 3.19ECh. 3 - Prob. 3.20ECh. 3 - Prob. 3.1PCh. 3 - Recording Journal Entries (AP3-2) Ryan Terlecki...Ch. 3 - Prob. 3.3PCh. 3 - Prob. 3.4PCh. 3 - Prob. 3.5PCh. 3 - Prob. 3.6PCh. 3 - Prob. 3.7PCh. 3 - Recording Nonquantitative Journal Entries (P3-1)...Ch. 3 - Prob. 3.2APCh. 3 - Prob. 3.3APCh. 3 - Prob. 3.4APCh. 3 - Prob. 3.5APCh. 3 - Prob. 3.6APCh. 3 - Accounting for Operating Activities in a New...Ch. 3 - Finding Financial Information Refer to the...Ch. 3 - Finding Financial Information Refer to the...Ch. 3 - Comparing Companies within an Industry Refer to...Ch. 3 - Analyzing a Company over Time Refer to the annual...Ch. 3 - Prob. 3.6CPCh. 3 - Evaluating an Ethical Dilemma Mike Lynch is the...
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