College Accounting (Book Only): A Career Approach
13th Edition
ISBN: 9781337280570
Author: Scott, Cathy J.
Publisher: South-Western College Pub
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Chapter 4, Problem 1A
To determine
Indicate the
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Roy Akins was the accounting manager at Zelco, a tire manufacturer, and he played golf with Hugh Stallings, the CEO who was something of a celebrity in the community. The CEO stood to earn a substantial bonus if Zelco increased net income by year-end. Roy was eager to get into Hugh’s elite social circle. He boasted to Hugh he knew of some accounting tricks to increase the company’s income by simply revising a few journal entries for rental payments on storage units. At the end of the year, Roy changed the debits form “rent expense” to “prepaid rent” on several entries. Later Hugh got his bonus, and the deviations were never discovered.
How did the change in the journal entries affect the net income of the company at year-end?
Who gained and who lost as a result of these actions?
Roy Akins was the accounting manager at Zelco, a tire manufacturer, and he played golf with Hugh Stallings, the CEO, who was something of a celebrity in the community. The CEO stood to earn a substantial bonus if Zelco increased net income by year-end. Roy was eager to get into Hugh’s elite social circle; he boasted to Hugh that he knew some accounting tricks that could increase company income by simply revising a few journal entries for rental payments on storage units. At the end of the year, Roy changed the debits from “rent expense” to “prepaid rent” on several entries. Later, Hugh got his bonus, and the deviations were never discovered.
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How did the change in the journal entries affect the net income of the company at year-end?
How did the change in the journal entries affect the net income of the company at year-end?
Corvallis Canoe Company is a service company that rents canoes and kayaks for use on local lakes and rivers. The company was started by Lucy and Ricky, who met in college while suffering through accounting. Because they both love the outdoors, they started a business that combined their love of outdoor activities with their business expertise. Thus, Corvallis Canoe Company began operations on November 1, 2018. After the first two months in operation, Corvallis Canoe Company had a decent net income of $4,970, and they could afford to hire you as their accountant. Pleased with the growth of their company, Lucy and Ricky decided to invest their temporary excess cash in a brokerage account. The company had the following securities transactions in 2019:
Jul. 1
Purchased 8,000 shares in Adobe Outdoor Adventure Company for $3 per share. Corvallis Canoe does not have significant influence over Adobe.
7
Purchased 35% of the stock of Bison Backpacks consisting of 43,750…
Chapter 4 Solutions
College Accounting (Book Only): A Career Approach
Ch. 4 - The __________ represents the sequence of steps in...Ch. 4 - The __________ is a working paper used by...Ch. 4 - On the work sheet, assets are recorded in which of...Ch. 4 - Rainy Day Services had 430 of supplies reported on...Ch. 4 - On the work sheet, Accumulated Depreciation,...Ch. 4 - The __________ requires that expenses be matched...Ch. 4 - Accumulated Depreciation, Equipment is reported a....Ch. 4 - What is the purpose of a work sheet?Ch. 4 - What is the purpose of adjusting entries?Ch. 4 - Prob. 3DQ
Ch. 4 - Prob. 4DQCh. 4 - Prob. 5DQCh. 4 - Define depreciation as it relates to a van you...Ch. 4 - Prob. 7DQCh. 4 - Why is it necessary to journalize and post...Ch. 4 - 1. List the following classifications of accounts...Ch. 4 - Classify each of the accounts listed below as...Ch. 4 - Place a check mark next to any account(s)...Ch. 4 - A partial work sheet for Marges Place is shown...Ch. 4 - Complete the work sheet for Ramey Company, dated...Ch. 4 - Journalize the adjusting entries from the partial...Ch. 4 - Journalize the adjusting entries from the partial...Ch. 4 - Journalize the following adjusting entries that...Ch. 4 - Determine on which financial statement each...Ch. 4 - Prob. 1PACh. 4 - The trial balance of Clayton Cleaners for the...Ch. 4 - The trial balance for Game Time on July 31 is as...Ch. 4 - The trial balance for Benner Hair Salon on March...Ch. 4 - The trial balance for Masons Insurance Agency as...Ch. 4 - The trial balance of The New Decors for the month...Ch. 4 - The trial balance for Harris Pitch and Putt on...Ch. 4 - The trial balance for Wilson Financial Services on...Ch. 4 - Prob. 1ACh. 4 - You are the bookkeeper for a small but thriving...Ch. 4 - Prob. 3ACh. 4 - Your client is preparing financial statements to...Ch. 4 - Prob. 1CP
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