College Accounting, Chapters 1-27
23rd Edition
ISBN: 9781337794756
Author: HEINTZ, James A.
Publisher: Cengage Learning,
expand_more
expand_more
format_list_bulleted
Question
Chapter 5, Problem 1CP
1.
To determine
Complete Person D’s work sheet by making appropriate adjustments and extensions.
2.
To determine
Provide the best measure of Person D’s net income for the summer.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Although Goldman Sachs paid Heather $100,000.00 per year, she was not satisfied with her job. She had loved going white-water rafting and skiing with her family in Utah since she was a little girl. So last year, she decided to open her own business: Family Adventures. During the summer, she takes families on different white-water trips, and in the winter, she leads clients on skiing trips. To start her business, Heather borrowed $100,000 from a bank and used $70,000.00 of her savings. Her savings earned 10% interest. At the end of the year, she wanted to know whether her new business venture was worthwhile. The table below lists her total revenue and itemized costs for Family Adventures.
Item
Annual Dollar Value
Total revenue
$200,000.00
Employee wages
$100,000.00
Rent on her business office
$25,000.00
Payments on bank loan
$10,000.00
Utility and gas expenses
$5,000.00
Vera decides to set up a business selling flowers. She gets up early in the morning, visits the market, and then sets up a stall by the side of the road. For the first year, all goes well. She sells all the flowers she is able to buy and she derives some income from the business However, Vera feels that she could sell more flowers if she was able to transport more to the place where she sells them, and she also knows that there are several other roads nearby where she could sell flowers, if she could be in two places at once. She could achieve these two things by buying a van and by employing other people to sell flowers in other locations. Vera needs more money to achieve this expansion of her business. She decides to ask her rich friend Peter to invest in the business. Peter can see the potential of Vera's business and wants to invest, but he doesn't want to be involved in the management of the business. He also does not want to have ultimate liability for the debts…
Charlotte has just finished her MBA and started a career in banking investment, she wanted to have a new car as soon as possible. The price of the car is $ 28,320. She must also have clothes and coats for the job which costs $ 3,248. The salary for his job this year is $ 42,000 and next year it will be increasing to $ 46,000. The cost of living this year is $ 34,000. Charlotte plans to make the difference between income and expenditure for consumption by borrowing. Interest on the loan is 15% per year. Charlotte wants to pay the loan and interest within a year. How much money is left for next year that Charlotte can spend (consume)?
Chapter 5 Solutions
College Accounting, Chapters 1-27
Ch. 5 - The matching principle in accounting requires the...Ch. 5 - Prob. 2TFCh. 5 - LO1 As part of the adjustment of supplies, an...Ch. 5 - LO1 Depreciable cost is the difference between the...Ch. 5 - LO1 The purpose of depreciation is to record the...Ch. 5 - LO1 The purpose of depreciation is to (a) spread...Ch. 5 - Prob. 2MCCh. 5 - Prob. 3MCCh. 5 - Prob. 4MCCh. 5 - The first step in preparing a work sheet is to (a)...
Ch. 5 - On December 31, the trial balance indicates that...Ch. 5 - LO2 When posting adjusting entries to the general...Ch. 5 - Prob. 3CECh. 5 - Prob. 4CECh. 5 - LO5 Using the following partial work sheet...Ch. 5 - Prob. 6CECh. 5 - Prob. 1RQCh. 5 - Prob. 2RQCh. 5 - Prob. 3RQCh. 5 - Prob. 4RQCh. 5 - Prob. 5RQCh. 5 - Prob. 6RQCh. 5 - Prob. 7RQCh. 5 - Prob. 8RQCh. 5 - What is an assets depreciable cost?Ch. 5 - Prob. 10RQCh. 5 - Prob. 11RQCh. 5 - Identify the five major column headings on a work...Ch. 5 - List the five steps taken in preparing a work...Ch. 5 - Prob. 14RQCh. 5 - Explain when revenues are recorded under the cash...Ch. 5 - Prob. 16RQCh. 5 - ADJUSTMENT FOR SUPPLIES On December 31, the trial...Ch. 5 - Prob. 2SEACh. 5 - ADJUSTMENT FOR WAGES On December 31, the trial...Ch. 5 - ADJUSTMENT FOR DEPRECIATION OF ASSET On December...Ch. 5 - CALCULATION OF BOOK VALUE On June 1, 20--, a...Ch. 5 - ANALYSIS OF ADJUSTING ENTRY FOR SUPPLIES Analyze...Ch. 5 - Prob. 7SEACh. 5 - POSTING ADJUSTING ENTRIES Two adjusting entries...Ch. 5 - WORK SHEET AND ADJUSTING ENTRIES A partial work...Ch. 5 - JOURNALIZING ADJUSTING ENTRIES From the...Ch. 5 - Prob. 11SEACh. 5 - ANALYSIS OF NET INCOME OR NET LOSS ON THE WORK...Ch. 5 - CASH, MODIFIED CASH, AND ACCRUAL BASES OF...Ch. 5 - ADJUSTMENTS AND WORK SHEET SHOWING NET INCOME The...Ch. 5 - ADJUSTMENTS AND WORK SHEET SHOWING A NET LOSS...Ch. 5 - JOURNALIZE AND POST ADJUSTING ENTRIES FROM THE...Ch. 5 - Prob. 17SPACh. 5 - ADJUSTMENT FOR SUPPLIES On July 31, the trial...Ch. 5 - ADJUSTMENT FOR INSURANCE On July 1, a six-month...Ch. 5 - ADJUSTMENT FOR WAGES On July 31, the trial balance...Ch. 5 - ADJUSTMENT FOR DEPRECIATION OF ASSET On July 1,...Ch. 5 - CALCULATION OF BOOK VALUE On January 1, 20--, a...Ch. 5 - ANALY SIS OF ADJUSTING ENTRY FOR SUPPLIES Analyze...Ch. 5 - ANALY SIS OF ADJUSTING ENTRY FOR INSURANCE Analyze...Ch. 5 - POSTING ADJUSTING ENTRIES Two adjusting entries...Ch. 5 - WORK SHEET AND ADJUSTING ENTRIES A partial work...Ch. 5 - JOURNALIZING ADJUSTING ENTRIES From the...Ch. 5 - EXTENDING ADJUSTED BALANCES TO THE INCOME...Ch. 5 - Prob. 12SEBCh. 5 - CASH, MODIFIED CASH, AND ACCRUAL BASES OF...Ch. 5 - Prob. 14SPBCh. 5 - Prob. 15SPBCh. 5 - JOURNALIZE AND POST ADJUSTING ENTRIES FROM THE...Ch. 5 - CORRECTING WORK SHEET WITH ERRORS A beginning...Ch. 5 - Delia Alvarez, owner of Delias Lawn Service, wants...Ch. 5 - Prob. 1MPCh. 5 - Prob. 1CP
Knowledge Booster
Similar questions
- Carlos opens a dry cleaning store during the year. He invests 30,000 of his own money and borrows 60,000 from a local bank. He uses 40,000 of the loan to buy a building and the remaining 20,000 for equipment. During the first year, the store has a loss of 24,000. How much of the loss can Carlos deduct if the loan from the bank is nonrecourse? How much does Carlos have at risk at the end of the first year?arrow_forwardLavell started out mowing lawns in the neighborhood when he was 13 years old. He did such good work that, without advertising, his business grew steadily each year. After college, Lavell decided to continue the business as a full-time career. One of his concerns, however, is the number of hours he is putting in. Once school lets out, he finds himself working long hours nearly every day of the week. Although he has added workers, his business now handles mowing, trimming, and landscaping for residential, corporate, and nonprofit clients. He is considering adding managers but is no quite sure how to structure the organization. Lavell wants to focus on building the business rather than doing the daily work, so he knows a decentralized structure will be best. He has asked you to develop a potential organizational chart to help him envision the best way to organize the business. Describe the advantages to this approach as well as any concerns he should have.arrow_forwardAt the end of her first year of university, Sandra Robinson decided that she should start a business to help finance her education, so she set up her own courier service. She invested savings of $2,100 in the company, which she called Oriole Ltd. In addition, her parents lent the company $3,800 to help it get started. Since this was a business venture, Sandra insisted on paying interest on this loan, and her parents agreed to charge a rate of 6% per year. Sandra then negotiated the purchase of a used car for the business for $8,500. The company made a down payment of $2,300 on the car and financed the remainder ofthe purchase price at an interest rate of 9% per year. Due to all ofthe kilometres that would be put on the car while it was used in the courier business, Sandra estimated that the car could be sold at the end ofthe summer for $7,000. Oriole began operations on May 1 and continued until August 31.Although Sandra did not keep any formal accounting records, at the end ofthe…arrow_forward
- Jackie owns and operates a website design business. To keep up with new technology, she spends $5,000 per year upgrading her computer equipment. She runs the business out of a room in her home. If she didn’t use the room as her business office, she could rent it out for $2,000 per year. Jackie knows that if she didn’t run her own business, she could return to her previous job at a large software company that would pay her a salary of $60,000 per year. Jackie has no other expenses. a. How much total revenue does Jackie need to make in order to break even in the eyes of her accountant? That is, how much total revenue would give Jackie an accounting profit of just zero? b. How much total revenue does Jackie need to make in order for her to want to remain self-employed? That is, how much total revenue would give Jackie an economic profit of just zero?arrow_forwardMaria will be a college sophomore next year, and she is determined to have her own credit card. She will not be employed during the school year but is convinced that she can pay for credit card expenses based on her summer earnings. Maria's parents have read a number of articles about the problems of credit cards and college students, including examples of students leaving school after a downward spiral of credit cards, overspending, working to pay bills, worrying about bills, working more hours to pay bills, and eventually withdrawing from school. When Maria showed up with a handful of applications including Visa, a Gold MasterCard, Discover, a Visa sponsored by her university, an American Express, a secured MasterCard, and a gas company card her parents were overwhelmed. Maria admitted she didn't want them all. "I'm not stupid," she declared. Since Maria obviously needed to learn about credit cards, her parents agreed to co-sign her application on one condition. She…arrow_forwardMaria will be a college sophomore next year, and she is determined to have her own credit card. She will not be employed during the school year but is convinced that she can pay for credit card expenses based on her summer earnings. Maria's parents have read a number of articles about the problems of credit cards and college students, including examples of students leaving school after a downward spiral of credit cards, overspending, working to pay bills, worrying about bills, working more hours to pay bills, and eventually withdrawing from school. When Maria showed up with a handful of applications including Visa, a Gold MasterCard, Discover, a Visa sponsored by her university, an American Express, a secured MasterCard, and a gas company card her parents were overwhelmed. Maria admitted she didn't want them all. "I'm not stupid," she declared. Since Maria obviously needed to learn about credit cards, her parents agreed to co-sign her application on one condition. She…arrow_forward
- Maria will be a college sophomore next year, and she is determined to have her own credit card. She will not be employed during the school year but is convinced that she can pay for credit card expenses based on her summer earnings. Maria's parents have read a number of articles about the problems of credit cards and college students, including examples of students leaving school after a downward spiral of credit cards, overspending, working to pay bills, worrying about bills, working more hours to pay bills, and eventually withdrawing from school. When Maria showed up with a handful of applications including Visa, a Gold MasterCard, Discover, a Visa sponsored by her university, an American Express, a secured MasterCard, and a gas company card her parents were overwhelmed. Maria admitted she didn't want them all. "I'm not stupid," she declared. Since Maria obviously needed to learn about credit cards, her parents agreed to co-sign her application on one condition. She…arrow_forwardPhoebe Jones is now employed as the managing editor of a well-known business journal. Although she thoroughly enjoys her job and the people she works with, what she would really like to do is open a bookstore of her own. She would like to open her store in about eight years and figures she'll need about $ 60,000 in capital to do so. Given that Phoebe thinks she can make about 8 percent on her money. How much would Phoebe have to invest today, in one lump sum, to end up with $60,000 in eight years? Round the answer to two decimal places. $_________________ If she's starting from scratch, how much would she have to put away annually to accumulate the needed capital in eight years? Round the answer to two decimal places. $ __________________ How about if she already has $20,000 socked away, how much would she have to put away annually to accumulate the required capital in eight years? Round the answer to two decimal places. $___________________ Given that Phoebe has…arrow_forwardHeather and Dan Holt met while both were employed in the interior trim and upholstery department of an auto manufacturer. After their marriage, they decided to earnsomeextra income by doing small jobs involving canvas, vinyl, and upholstered products. Their work was considered excellent, and at the urging of their customers, they decided to go into business for themselves, operating out of the basement of the house they owned. To do this, they invested $120,000 cash in their business. They spent $10,500 for a sewing machine (expected life 10 years) and $12,000 for other miscelianeous tools and equipment (expected life 5 years). They undertook only custom work, with the customers purchasing the required materials, to avoid stocking any inventory other than supplies. Generally, they required an advance deposit on all jobs. The business seemed successful from the start, as the Holts received orders from many customers. But they felt something was wrong. They worked hard and charged…arrow_forward
- After graduating from college, Shelley Williams held several different jobs but found that she did not enjoy working for other people. Finally, she and Yvonne Hargrove, her college roommate, decided to start a business of their own. They rented a small building and opened a florist shop selling cut flowers such as roses and chrysanthemums that they bought from a local greenhouse. Williams and Hargrove agreed orally to share profits and losses equally, although they also decided to take no money from the operation for at least four months. No other arrangements were made, but the business did reasonably well, and after the first four months had passed, each began to draw out $500 in cash every week. At year-end, they took their financial records to a local accountant so that they could get their income tax returns completed. He informed them that they had been operating as a partnership and that they should draw up formal articles of partnership agreement or consider incorporation or…arrow_forward“But I intended to pay it all back, I really did,” Mr. J said as he talked to his manager. How did I ever get into this situation, he thought. Two years ago, Mr. J received the promotion for which he had been working so hard for. In addition, Mr. J’s new manager told him that Mr. J had a very promising future at the company. Mr. J and his wife quickly purchased a new home. Not long after, Mr. J and Janae had their fourth child, and life was great. After having their fourth child, Janae quit work to spend more time with her kids. Suddenly, things started to turn upside down. The economy took a downturn and had a negative impact on Mr. J’s company. His pay, which was based on commission, was reduced nearly 50 percent. Mr. J still worked hard but thought he should be paid more. Unable to find another job, Mr. J resentfully decided he would stay with the company even with the lower pay. Not long after he started receiving lower commissions, Mr. J noticed that the internal controls…arrow_forwardJing, a recent engineering graduate, never took engineering economics. When she graduated, she was hired by a prominent engineering firm. The earnings from this job allowed her to deposit $1000 each quarter into a savings account. There were two banks that offered savings accounts in her town (a small town!). The first bank was offering 5.0% interest compounded continuously. The second bank offered 5.125% compounded monthly. Jing decided to deposit in the first bank because it offered continuous compounding. Did she make the right decision?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,
- Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College