29 Jun Question Question 1 Transactions for Mehta Company f
Question
Question 1
Transactions for Mehta Company for the month of May are presented below.
May 1 B.D. Mehta invests $3,091 cash in exchange for common stock of Mehta Company, a small welding corporation.
3 Buys equipment on account for $1,153.
13 Pays $659 to landlord for May rent.
21 Bills Noble Corp. $539 for welding work done.
Prepare journal entries for each of these transactions.
Question 2
On July 1, 2012, Crowe Co. pays $18,673 to Zubin Insurance Co. for a 3-year insurance contract. Both companies have fiscal years ending December 31. For Crowe Co. journalize the entry on July 1 and the adjusting entry on December 31. (Round answers to zero decimal places, e.g. 2,555.)
Question 3
Dresser Company’s weekly payroll, paid on Fridays, totals $7,700. Employees work a 5-day week. Prepare Dresser’s adjusting entry on Wednesday, December 31, and the journal entry to record the $7,700 cash payment on Friday, January 2. (List multiple debit/credit entries from largest to smallest amount, e.g. 10, 5, 2.)
Question 4
Side Kicks has year-end account balances of Sales $886,140; Interest Revenue $15,570; Cost of Goods Sold $564,230; Operating Expenses $213,480; Income Tax Expense $37,660; and Dividends $21,348. Prepare the year-end closing entries. (List multiple debit/credit entries from largest to smallest amount, e.g. 10, 5, 2.)
Question 5
Financial information exhibits the characteristic of consistency when
extraordinary gains and losses are not included on the income statement.
accounting procedures are adopted which give a consistent rate of net income.
expenses are reported as charges against revenue in the period in which they are paid.
companies apply the same accounting treatment to similar events, from period to period.
Question 6
What is the relationship between the Securities and Exchange Commission and accounting standard setting in the United States?
The SEC coordinates with the AICPA in establishing accounting standards.
The SEC reviews financial statements for compliance.
The SEC requires all companies listed on an exchange to submit their financial statements to the SEC.
The SEC has a mandate to establish accounting standards for enterprises under its jurisdiction.
Question 7
Starr Co. had sales revenue of $621,700 in 2012. Other items recorded during the year were:
Cost of goods sold $330,000
Wage expense 129,300
Income tax expense 26,400
Increase in value of company reputation 15,100
Other operating expenses 12,500
Unrealized gain on value of patents 20,600
Prepare a single-step income statement for Allen for 2012. Allen has 100,000 shares of stock outstanding. (List multiple entries from largest to smallest amount, e.g. 10, 5, 2. Round earnings per share to 2 decimal places, e.g. 0.20. Enter all amounts as positive amounts and subtract where necessary.)
Question 8
Portman Corporation has retained earnings of $728,900 at January 1, 2012. Net income during 2012 was $1,897,010, and cash dividends declared and paid during 2012 totaled $77,690. Prepare a retained earnings statement for the year ended December 31, 2012. Assume an error was discovered: land costing $86,630 (net of tax) was charged to repairs expense in 2009. (Enter all amounts as positive amounts and subtract where necessary.)
Question 9
On January 1, 2012, Richards Inc. had cash and common stock of $62,700. At that date the company had no other asset, liability or equity balances. On January 2, 2012, it purchased for cash $21,030 of equity securities that it classified as available-for-sale. It received cash dividends of $4,200 net of tax during the year on these securities. In addition, it has an unrealized holding gain on these securities of $5,520 net of tax. Determine the following amounts for 2012: (a) net income; (b) comprehensive income; (c) other comprehensive income; and (d) accumulated other comprehensive income (end of 2012).
(a) Net income $
(b) Comprehensive income $
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