Connect Access Card for Fundamentals of Financial Accounting
6th Edition
ISBN: 9781260159509
Author: Fred Phillips Associate Professor, Robert Libby, Patricia Libby
Publisher: McGraw-Hill Education
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Question
Chapter 3, Problem 7ME
To determine
To indicate: The amount and effect of each transaction under the accrual basis of accounting.
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a) Prepare a worksheet showing the October transactions and the October accrual adjustments for the BCE Company.
b) Prepare BCE Company’s income statement and retained earnings statement for October, and its balance sheet (showing current and non-current assets) on October 31st .
c) Answer the following questions:
What would the October’s earnings of the company be, if the portion of unearned revenues recognized in October were £600 rather than £900?
What would be the implications for November’s earnings if the portion of unearned revenues recognized in October were £600 rather than £900?
Do you have reasons to suspect that the revenue may currently have been recognized prematurely?
Listed below are the current Accounting Assumptions and Principles
Economic Entity Assumption
Monetary Unit Assumption
Historical Cost Principle
Going Concern Assumption
Revenue Recognition Principle
Full Disclosure Principle
Time Period Assumption
Matching Principle
Required:
For the following situations, identify whether the situation represents a violation or a correct application of GAAP, and which assumption/principle is applicable.
a. In May 2021, Regent Corporation recorded as revenue $5,000 received in advance from a customer for a job that would be completed in June 2021.
Violation: (Yes/No)
Applicable Assumption/Principle:
b. Sally Maze made sure to keep her personal expenditures separate from her marketing company books.…
Record the effect, if any, of the transaction entry or adjusting entry on the appropriate balance sheet category or on the income statement by entering the account name and amount and indicating whether it is an addition (+) or subtraction (–). Column headings reflect the expanded balance sheet equation; items that affect net income should not be shown as affecting stockholders’ equity. The first transaction is provided as an illustration.
A. During the month, Supplies Expense was debited $2,600 for supplies purchased. The cost of supplies used during the month was $1,900. Record the adjustment to properly reflect the amount of supplies used and supplies still on hand at the end of the month.
B. During the month, the board of directors declared a cash dividend of $14,400, payable next month.
C. Employees were paid $10,500 in wages for their work during the first three weeks of the month.
D. Employee wages of $3,600 for the last week of the month have not been recorded.
E. Revenues from…
Chapter 3 Solutions
Connect Access Card for Fundamentals of Financial Accounting
Ch. 3 - Prob. 1QCh. 3 - When accounting was developed in the 14th and 15th...Ch. 3 - Define accrual basis accounting and contrast it...Ch. 3 - Prob. 4QCh. 3 - What two questions are answered by the core...Ch. 3 - Prob. 6QCh. 3 - What is a performance obligation?Ch. 3 - How do you report revenue from a contract that...Ch. 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 table by entering either...Ch. 3 - Complete the following table by entering either...Ch. 3 - Prob. 14QCh. 3 - Prob. 15QCh. 3 - What is the difference between Accounts Receivable...Ch. 3 - What is the difference between Accounts Payable...Ch. 3 - For each of the following situations, indicate...Ch. 3 - Prob. 19QCh. 3 - Which of the following items is not a specific...Ch. 3 - Which of the following accounts normally has a...Ch. 3 - Prob. 3MCCh. 3 - Which of the following would the core revenue...Ch. 3 - If a company incorrectly records a payment as an...Ch. 3 - Prob. 6MCCh. 3 - Prob. 7MCCh. 3 - Which account is least likely to be debited when...Ch. 3 - Webby Corporation reported the following amounts...Ch. 3 - Which of the following is the entry to be recorded...Ch. 3 - Identifying Performance Obligations Lakeside...Ch. 3 - Prob. 2MECh. 3 - Identifying Accrual Basis Revenues The following...Ch. 3 - Identifying Accrual Basis Expenses The following...Ch. 3 - Recording Accrual Basis Revenues For each of the...Ch. 3 - Recording Accrual Basis Expenses For each of the...Ch. 3 - Prob. 7MECh. 3 - Prob. 8MECh. 3 - Prob. 9MECh. 3 - Prob. 10MECh. 3 - Identifying Accrual Basis Expenses The following...Ch. 3 - Prob. 12MECh. 3 - Recording Accrual Basis Expenses For each of the...Ch. 3 - Prob. 14MECh. 3 - Preparing Accrual Basis Journal Entries for...Ch. 3 - Preparing Accrual Basis Journal Entries for...Ch. 3 - Preparing Accrual Basis Journal Entries and...Ch. 3 - Determining the Accounting Equation Effects of...Ch. 3 - Prob. 19MECh. 3 - Preparing an Income Statement and Calculating Net...Ch. 3 - Preparing Financial Statements from a Trial...Ch. 3 - Preparing an Income Statement and Calculating Net...Ch. 3 - Calculating and Interpreting Net Profit Margin...Ch. 3 - Calculating and Interpreting Net Profit Margin...Ch. 3 - Matching Definitions with Terms Match each...Ch. 3 - Matching Definitions with Terms Match each...Ch. 3 - Identifying Performance Obligations and Timing...Ch. 3 - Identifying Accrual Basis Revenues According to...Ch. 3 - Identifying Accrual Basis Revenues According to...Ch. 3 - Identifying Accrual Basis Expenses Under accrual...Ch. 3 - Identifying Accrual Basis Expenses Under accrual...Ch. 3 - Determining Accounting Equation Effects and Net...Ch. 3 - Determining Accounting Equation Effects and Net...Ch. 3 - Recording Journal Entries and Determining Net...Ch. 3 - Prob. 11ECh. 3 - Recording Journal Entries and Determining Net...Ch. 3 - Recording and Posting Accrual Basis Journal...Ch. 3 - Analyzing Transactions from the Perspectives of...Ch. 3 - Prob. 15ECh. 3 - Determining Accounting Equation Effects of Several...Ch. 3 - Preparing Journal Entries For each of the...Ch. 3 - Prob. 18ECh. 3 - Creating an Unadjusted Trial Balance Based on the...Ch. 3 - Inferring Transactions, Creating Financial...Ch. 3 - Determining the Effects of Various Transactions EZ...Ch. 3 - COACHED PROBLEMS Recording Nonquantitative Journal...Ch. 3 - Prob. 2CPCh. 3 - Prob. 3CPCh. 3 - Prob. 4CPCh. 3 - Prob. 1PACh. 3 - Recording Journal Entries Diana Mark is the...Ch. 3 - Analyzing the Effects of Transactions Using...Ch. 3 - Prob. 4PACh. 3 - Prob. 1PBCh. 3 - Prob. 2PBCh. 3 - Analyzing the Effects of Transactions Using...Ch. 3 - Analyzing, Journalizing, and Interpreting Business...Ch. 3 - Prob. 1COPCh. 3 - Finding Financial Information Refer to the...Ch. 3 - Comparing Financial Information Refer to the...Ch. 3 - Prob. 4SDCCh. 3 - Ethical Decision Making: A Mini-Case Mike Lynch is...Ch. 3 - Accounting for Business Operations Starting in...
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