New Wave Images is a graphics design firm that prepares its financial statements usinga calendar year. Manny Kinn, the company treasurer and vice president of finance, hasprepared a classified balance sheet as of December 31. In January, this balance sheet willbe submitted along with an application for a loan from First Peoples Community Bank.An excerpt from the balance sheet follows:$ 25,000CashAccounts receivable85,000......Total assets$250,000The accounts receivable balance includes a $56,000 loan to Tom Morrow, the companypresident. Tom borrowed the money from New Wave 18 months earlier for a down pay-ment on a new home. Tom has orally assured Manny that he will pay off the loan withinthe next year. Because Tom is the company president, Manny treats the amount due aspart of its normal accounts receivable. In addition, Manny knows that the bank will con-sider a large balance in accounts receivable more favorably than a large personal loan toa single individual. Manny reported the $56,000 in the same manner on the precedingyear's balance sheet.Is Manny behaving ethically by reporting the loan to Tom as a trade account1.receivable? Why or why not?Who will be affected by Manny's decision?2.

1.Mannyy is not behaving ethically by reporting loan to Tom as a trade account receivable.The trade…

Answered: New Wave Images is a graphics design…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Jenkins Inc. had the following transactions. Sep 1 Loaned $20,000 to an employee, who signed a 9-month, 9% note. Interest and principal will all be due on May 31. Dec. 31- Accrued interest on the note. (Round to the nearest whole dollar amount.) May 31 Received the interest on the note's maturity date. PE May 31 amount.) Required: Prepare the required journal entries. Use the MSWord link for the table to write your journal entries. After you have written the journal entries on the table in the MSWord document provided, Received the principal on the note's maturity date. (Round to the nearest whole dollar
Yi Min started an engineering firm called Min Engineering. He began operations and completed seventransactions in May, which included his initial investment of $18,000 cash. After those seven transactions,the ledger included the following accounts with normal balances. Cash . . . . . . . . . . . . . . . . . . $37,600Office supplies. . . . . . . . . . 890Prepaid insurance. . . . . . . 4,600Office equipment. . . . . . . $12,900Accounts payable. . . . . . . 12,900Y. Min, Capital. . . . . . . . . . 18,000Y. Min, Withdrawals . . . . . . . . . . . $ 3,370Engineering fees earned. . . . . . . 36,000Rent expense. . . . . . . . . . . . . . . . 7,540 Required 1. Prepare a trial balance for this business as of the end of May. 2. The following seven transactions produced the account balances shown above. a. Y. Min invested $18,000 cash in the business. b. Paid $7,540 cash for monthly rent expense for May. c. Paid $4,600 cash in advance for the annual insurance premium beginning the next period. d.…
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