Chapter 3 WileyPlus

Chapter 3 WileyPlus

Brief Exercise 1-9

Do It! Review 1-3

Exercise 3-1

Exercise 3-6

Brief Exercise 3-4

Do It! Review 3-4

Problem 3-5A

Brief Exercise 1-9

At the beginning of the year, Goren Company had total assets of $856,100 and total liabilities of $519,000. (Treat each item independently.)

(a) If total assets increased $177,500 during the year and total liabilities decreased $82,900, what is the amount of stockholders’ equity at the end of the year?

Stockholders’ equity$


(b) During the year, total liabilities increased $104,500 and stockholders’ equity decreased $65,800. What is the amount of total assets at the end of the year?

Total assets$

(c) If total assets decreased $83,400 and stockholders’ equity increased $101,700 during the year, what is the amount of total liabilities at the end of the year?

Total liabilities$

Do It! Review 1-3

Marsh Corporation began operations on January 1, 2014. The following information is available for Marsh Corporation on December 31, 2014.

Accounts payable        $ 8,230                        Notes payable              $ 13,460

Accounts receivable    5,230               Rent expense               13,230

Advertising expense    4,260               Retained earnings        ?

Cash                            6,330               Service revenue           31,460

Common stock                        18,230             Supplies                       5,130

Dividends                    5,730               Supplies expense         1,440

Equipment                   30,030

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Prepare an income statement for Marsh Corporation.

Prepare a retained earnings statement for Marsh Corporation. (List items that increase retained earnings first.)

Prepare a balance sheet for Marsh Corporation. (List assets in order of liquidity.)

Exercise 3-1

Selected transactions for Warner Advertising Company, Inc., are listed here.

Describe the effect of each transaction on assets, liabilities, and stockholders’ equity.

1. Issued common stock to investors in exchange for cash received from investors.

2. Paid monthly rent.

3. Received cash from customers when service was performed.

4. Billed customers for services performed.

5. Paid dividend to stockholders.

6. Incurred advertising expense on account.

7. Received cash from customers billed in (4).

8. Purchased additional equipment for cash.

9. Purchased equipment on account.

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Exercise 3-6

Selected transactions for Home Place, an interior decorator corporation, in its first month of business, are as follows.

1. Issued stock to investors for $15,710 in cash.

2. Purchased used car for $10,150 cash for use in business.

3. Purchased supplies on account for $240.

4. Billed customers $4,820 for services performed.

5. Paid $230 cash for advertising start of the business.

6. Received $1,730 cash from customers billed in transaction (4).

7. Paid creditor $360 cash on account.

8. Paid dividends of $390 cash to stockholders.

For each transaction indicate the basic type of account debited and credited (asset, liability, stockholders’ equity); the specific account debited and credited (Cash, Rent Expense, Service Revenue, etc.); whether the specific account is increased or decreased; and the normal balance of the specific account.


Journalize the transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Brief Exercise 3-4

For each of the following accounts, indicate the effect of a debit or a credit on the account and the normal balance.

Debit Effect     Credit Effect    Normal Balance

(a)        Accounts Payable

(b)        Advertising Expense

(c)        Service Revenue

(d)        Accounts Receivable

(e)        Retained Earnings

(f)        Dividends

Do It! Review 3-4

Joel Blocker recorded the following transactions during the month of April.

Apr. 3 Cash                                        1,970

              Service Revenue                                1,970

16        Rent Expense                           410

             Cash                                                  410

20        Salaries and Wages Expense    450

              Cash                                                  450

Post these entries to the Cash account of the general ledger to determine the ending balance in cash. The beginning balance in cash on April 1 was $3,370. (Post entries in the order of journal entries presented in the question.)

Problem 3-5A

Foyle Architects incorporated as licensed architects on April 1, 2014. During the first month of the operation of the business, these events and transactions occurred:

Apr. 1  Stockholders invested $23,584 cash in exchange for common stock of the corporation.

1          Hired a secretary-receptionist at a salary of $491 per week, payable monthly.

2          Paid office rent for the month $1,179.

3          Purchased architectural supplies on account from Burlington Company $1,703.

10        Completed blueprints on a carport and billed client $2,489 for services.

11        Received $917 cash advance from J. Madison to design a new home.

20        Received $3,669 cash for services completed and delivered to M. Svetlana.

30        Paid secretary-receptionist for the month $1,964.

30        Paid $393 to Burlington Company for accounts payable due.

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Journalize the transactions. (If no entry is required, select “No entry” for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

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Post to the ledger T-accounts. (Post entries in the order of journal entries presented in the question.)

Prepare a trial balance on April 30, 2014.

 
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ACC 212 Homework 8


Report Issue

Exercise 25-1 Payback period computation; uneven cash flows LO P1

Beyer Company is considering the purchase of an asset for $360,000. It is expected to produce the following net cash flows. The cash flows occur evenly throughout each year.
  Year 1Year 2Year 3Year 4Year 5Total
  Net cash flows $80,000  $50,000  $70,000  $250,000  $13,000  $463,000 
                         
Compute the payback period for this investment. (Cumulative net cash outflows must be entered with a minus sign. Round your answers to 2 decimal places.) A machine can be purchased for $210,000 and used for 5 years, yielding the following net incomes. In projecting net incomes, double-declining balance depreciation is applied, using a 5-year life and a zero salvage value.  Year 1Year 2Year 3Year 4Year 5  Net incomes $13,000  $28,000  $53,000  $40,500  $103,000                        Compute the machine’s payback period (ignore taxes). (Round your intermediate calculations to 3 decimal places and payback period answer to 3 decimal places.) Exercise 25-3 Payback period computation; even cash flows LO P1Compute the payback period for each of these two separate investments:  a.A new operating system for an existing machine is expected to cost $240,000 and have a useful life of four years. The system yields an incremental after-tax income of $69,230 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $9,000.b.A machine costs $180,000, has a $13,000 salvage value, is expected to last seven years, and will generate an after-tax income of $38,000 per year after straight-line depreciation. Exercise 25-4 Accounting rate of return LO P2 A machine costs $300,000 and is expected to yield an after-tax net income of $9,000 each year. Management predicts this machine has a 9-year service life and a $60,000 salvage value, and it uses straight-line depreciation. Compute this machine’s accounting rate of return. (Round your answer to 2 decimal places.) Exercise 25-5 Payback period and accounting rate of return on investment LO P1, P2B2B Co. is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment is expected to cost $480,000 with a 12-year life and no salvage value. It will be depreciated on a straight-line basis. The company expects to sell 192,000 units of the equipment’s product each year. The expected annual income related to this equipment follows.            Sales$300,000   Costs       Materials, labor, and overhead (except depreciation) 160,000     Depreciation on new equipment 40,000     Selling and administrative expenses 30,000      Total costs and expenses 230,000      Pretax income 70,000   Income taxes (30%) 21,000      Net income$49,000    Exercise 25-6 Computing net present value LO P3B2B Co. is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment is expected to cost $368,000 with a 4-year life and no salvage value. It will be depreciated on a straight-line basis. K2B Co. concludes that it must earn at least a 8% return on this investment. The company expects to sell 147,200 units of the equipment’s product each year. The expected annual income related to this equipment follows. (PV of $1FV of $1PVA of $1, and FVA of $1(Use appropriate factor(s) from the tables provided.)           Sales$230,000   Costs          Materials, labor, and overhead (except depreciation) 81,000      Depreciation on new equipment 92,000      Selling and administrative expenses 23,000      Total costs and expenses 196,000      Pretax income 34,000   Income taxes (30%) 10,200      Net income$23,800       Compute the net present value of this investment. (Round “PV Factor” to 4 decimal places. Round your intermediate calculations and final answer to the nearest dollar amount.)  Exercise 25-8 NPV and profitability index LO P3Following is information on two alternative investments being considered by Jolee Company. The company requires a 6% return from its investments. (FV of $1PV of $1FVA of $1PVA of $1FVAD of $1 and PVAD of $1). (Use appropriate factor(s) from the tables provided.))    Project AProject B  Initial investment $(186,325)  $(148,960)   Expected net cash flows in year:          1  53,000    33,000  2  50,000    59,000  3  92,295    57,000  4  94,400    79,000  5  56,000    29,000     1(a)For each alternative project compute the net present value. (Round “PV Factor” to 4 decimal places. Round your intermediate and final answers to the nearest dollar amount.) Exercise 25-11 Keep or replace LO A1Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $38,000 and a remaining useful life of 5 years, at which time its salvage value will be zero. It has a current market value of $48,000. Variable manufacturing costs are $33,000 per year for this machine. Information on two alternative replacement machines follows.   Alternative AAlternative B  Cost$117,000 $117,000   Variable manufacturing costs per year 22,100  10,500      Calculate the total change in net income if Alternative A is adopted. (Cash outflows should be indicated by a minus sign.)  Exercise 25-12 Scrap or rework LO A1A company must decide between scrapping or reworking units that do not pass inspection. The company has 10,000 defective units that cost $5.70 per unit to manufacture. The units can be sold as is for $2.50 each, or they can be reworked for $3.50 each and then sold for the full price of $9.50 each. If the units are sold as is, the company will have to build 10,000 replacement units at a cost of $5.70 each, and sell them at the full price of $9.50 each.   (1)What is the incremental income from selling the units as scrap and reworking and selling the units?  Exercise 25-13 Decision to accept additional business or not LO A1Farrow Co. expects to sell 500,000 units of its product in the next period with the following results.            Sales (500,000 units) $7,500,000   Costs and expenses          Direct materials  1,000,000       Direct labor  2,000,000       Overhead  500,000       Selling expenses  750,000       Administrative expenses  1,285,000       Total costs and expenses  5,535,000       Net income $1,965,000       The company has an opportunity to sell 50,000 additional units at $12 per unit. The additional sales would not affect its current expected sales. Direct materials and labor costs per unit would be the same for the additional units as they are for the regular units. However, the additional volume would create the following incremental costs: (1) total overhead would increase by 16% and (2) administrative expenses would increase by $215,000.   Calculate the combined total net income if the company accepts the offer to sell additional units at the reduced price of $12 per unit. Exercise 25-14 Make or buy decision LO A1Gilberto Company currently manufactures one of its crucial parts at a cost of $3.30 per unit. This cost is based on a normal production rate of 80,000 units per year. Variable costs are $1.80 per unit, fixed costs related to making this part are $80,000 per year, and allocated fixed costs are $40,000 per year. Allocated fixed costs are unavoidable whether the company makes or buys the part. Gilberto is considering buying the part from a supplier for a quoted price of $3.00 per unit guaranteed for a three-year period.   Calculate the total incremental cost of making 80,000 units. (Round cost per unit answers to 2 decimal places.)   Exercise 25-15 Sell or process decision LO A1Cobe Company has already manufactured 25,000 units of Product A at a cost of $25 per unit. The 25,000 units can be sold at this stage for $410,000. Alternatively, the units can be further processed at a $240,000 total additional cost and be converted into 5,600 units of Product B and 11,400 units of Product C. Per unit selling price for Product B is $106 and for Product C is $54.  
  1.Prepare an analysis that shows whether the 25,000 units of Product A should be processed further or not. Exercise 25-16 Analysis of income effects from eliminating departments LO A1[The following information applies to the questions displayed below.]

Suresh Co. expects its five departments to yield the following income for next year.  Dept. MDept. NDept. ODept. PDept. T  Sales $41,000  $15,700   $34,500  $38,000   $15,700    Expenses                           Avoidable  4,100   13,800    11,300   7,000    18,400      Unavoidable  17,000   7,700    2,700   14,000    5,400                  Total expenses  21,100   21,500    14,000   21,000    23,800                Net income (loss) $19,900  $(5,800)  $20,500  $17,000   $(8,100)               Recompute and prepare the departmental income statements (including a combined total column) for the company under each of the following separate scenarios.    Exercise 25-17 Sales mix determination and analysis LO A1Colt Company owns a machine that can produce two specialized products. Production time for Product TLX is two units per hour and for Product MTV is five units per hour. The machine’s capacity is 2,000 hours per year. Both products are sold to a single customer who has agreed to buy all of the company’s output up to a maximum of 3,400 units of Product TLX and 1,980 units of Product MTV. Selling prices and variable costs per unit to produce the products follow.   Product TLX Product MTV   Selling price per unit $11.50   $6.90    Variable costs per unit  3.45    4.14    Determine the company’s most profitable sales mix and the contribution margin that results from that sales mix. (Round cost per unit answers to 2 decimal places.)
 
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Macro Economics HW

1- Assume that a hypothetical economy with an MPC of 0.75 is experiencing severe recession.

Instructions: In part a, round your answers to 2 decimal places. Enter positive numbers. In part b, enter your answers as whole numbers.

a. By how much would government spending have to rise to shift the aggregate demand curve rightward by $25 billion? $ ___ billion.

How large a tax cut would be needed to achieve the same increase in aggregate demand? $ ___billion.

b. Determine one possible combination of government spending increases and tax increases that would accomplish the same goal without changing the amount of outstanding debt.

Increase spending by $ ____billion.

Increase taxes by $_______ billion.

2-

Real Output DemandedPrice LevelReal Output Supplied Billions
506110513
508105512
510100510
51295507
51490502

Suppose that aggregate demand increases such that the amount of real output demanded rises by $7 billion at each price level.

Instructions: Enter your answers as whole numbers.

a. By what percentage will the price level increase? percent.

Will this inflation be demand-pull inflation or will it be cost-push inflation? (Click to select) Cost-push inflation Demand-pull inflation.

b. If potential real GDP (that is, full-employment GDP) is $510 billion, what will be the size of the positive GDP gap after the change in aggregate demand? $ billion.

c. If the government wants to use fiscal policy to counter the resulting inflation without changing tax rates, would it increase government spending or decrease it? (Click to select)Decrease Increase.

3 Suppose that a country has no public debt in year 1 but experiences a budget deficit of $40 billion in year 2, a budget deficit of $20 billion in year 3, a budget surplus of $10 billion in year 4, and a budget deficit of $2 billion in year 5.

a. What is the absolute size of its public debt in year 5?

Instructions: Enter your answer as a whole number. Do not include a plus or minus sign.

Public Debt = $ billion.

b. If its real GDP in year 5 is $104 billion, what is this country’s public debt as a percentage of real GDP in year 5?

Instructions: Round your answer to 2 decimal places.

Public Debt = percent.

4. Suppose that the investment demand curve in a certain economy is such that investment declines by $130 billion for every 1 percentage point increase in the real interest rate. Also, suppose that the investment demand curve shifts rightward by $150 billion at each real interest rate for every 1 percentage point increase in the expected rate of return from investment. If stimulus spending (an expansionary fiscal policy) by government increases the real interest rate by 2 percentage points, but also raises the expected rate of return on investment by 1 percentage point, how much investment, if any, will be crowded out?

Instructions: Enter your answer as a whole number.

$ billion.

5.

Government Expenditures, GTax Revenues TReal GDP
160110550
160130650
160150750
160170850
160190950

Instructions: Enter your answers as whole numbers.

a. What is the marginal tax rate in Waxwania?

percent.

b. What is the average tax rate?

percent.

c. Which of the following describes the tax system: proportional, progressive, regressive?

6.

Government ExpendituresTax revenuesReal GDP
190110550
190130650
190150750
190170850
190190950

Instructions: Enter your answers as whole numbers.

a. Waxwania is producing $650 of real GDP, whereas the potential real GDP (or full-employment real GDP) is $750. How large is its budget deficit?

$.

How large is its cyclically adjusted budget deficit?

$.

b. How large is its cyclically adjusted budget deficit as a percentage of potential real GDP?

Instructions: Round your answer to 2 decimal places.

Deficit = percent.

c. Is Waxwania’s fiscal policy expansionary or is it contractionary?

 
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Access Database Creating Queries

Shipping Efficiency Query

You will create a query to calculate the number of days between the date an order was placed and the date the order was shipped for each order. The result of your work will be a list of orders that took more than 30 days to ship. The salespeople will be required to review the records and report the source of the delay for each order. The CEO feels there may be issues with one of the shipping companies, and would like data to back that up.

  • a.Create a query using Query Design. From the Customers table, include the fields CompanyName, ContactName, ContactTitle, and Phone. From the Orders table, include the fields OrderID, OrderDate, and ShippedDate.
  • b.Run the query and examine the records. Save the query as Shipping Efficiency.
  • c.Add a calculated field named DaysToShip to calculate the number of days taken to fill each order. (Hint: The expression will include the OrderDate and the ShippedDate; the results will not contain negative numbers.)
  • d.Run the query and examine the results. Does the data in the DaysToShip field look accurate? Save the query.
  • e.Add criteria to limit the query results to include only orders that took more than 30 days to ship.
  • f.Add the Quantity field from the Order Details table and the ProductName field from the Products table to the query. Sort the query by ascending OrderID. When the sales reps contact these customers, these two fields will provide useful information about the orders.
  • g.Add the caption Days to Ship to the DaysToShip field. Switch to Datasheet view to view the results. Adjust column widths as necessary.
  • h.Save and close the query.

Order Summary Query

The CEO is considering the financial impact of discounts. She asked for a query showing the employee name, number of orders they have taken, and the total discount amount they have given customers. She hopes to see if there is a correlation between the discount offered and the number of sales.

  • a.Create a query using Query Design and add the Orders, Order Details, Products, and Customers tables. Add the fields OrderID and OrderDate from the Orders table. Set both fields’ Total row to Group By.
  • b.Add a calculated field in the third column. Name the field ExtendedAmount. This field should multiply the quantity ordered (from the Order Details table) by the unit price for that item (from the Products table). This will calculate the total amount for each order. Format the calculated field as Currency and change the caption to Total Dollars. Change the Total row to Sum.
  • c.Add a calculated field in the fourth column. Name the field DiscountAmount. The field should multiply the quantity ordered, the unit price for that item, and the discount field (from the Customers table). This will calculate the total discount for each order. Format the calculated field as Currency and add a caption of Discount Amt. Change the Total row to Sum.
  • d.Run the query. Examine the results. Most customers should have a discount of 10% of the total dollars, but some customers will have no discount. Save the query as Order Summary. Return to Design view.
  • e.Add criteria to the OrderDate field so only orders made between 1/1/2016 and 12/31/2016 are displayed. Change the Total row to Where. This expression will display only orders that were placed in 2016.
  • f.Run the query and view the results. Adjust column widths as necessary. Save and close the query.

Order Financing Query

The CEO would like the salespeople to discuss financing with customers. In order to do so, she would like you to create a query showing the impact on price for prior orders. This way, the reps can give customers a comparison with an order they have already placed. For the moment, she is considering a 5% interest rate, paid over 12 months. She would like you to leave the results as negative numbers.

  • a.Create a copy of the Order Summary query named Order Financing.
  • b.Open the Order Financing query in Design view and remove the DiscountAmount field.
  • c.Add a new field using the Expression Builder named SamplePayment. Insert the Pmt function with the following parameters:
    • •Use .05/12 for the rate argument (5% interest, paid monthly).
    • •Use the number 12 for the num_periods argument (12 months).
    • •Use the calculated field [ExtendedAmount] for the present_value.
    • •Use the value 0 for both future_value and type.
  • d.Change the Total row to Expression for the SamplePayment field.
  • e.Change the Format for the SamplePayment field to Currency.
  • f.Run the query and examine the results. Adjust column widths as necessary. The results appear as negative numbers, as requested. Save and close the query.

Order Summary by Country Query

The company is planning on opening up some shipping centers internationally. The previous CEO had been considering Brazil, Denmark, and Germany as potential shipping center locations, but he was working from older data. You will provide a list of total shipment value by country for the year before the current CEO started to best inform her decision making.

  • a.Create a copy of the Order Summary query named Order Summary by Country.
  • b.Open the query in Design view. Replace the OrderID field with the Country field from the Customers table.
  • c.Run the query and examine the summary records; there should be 21 countries listed.
  • d.Switch to Design view and change the sort order so that the country with the highest ExtendedAmount is first and the country with the lowest ExtendedAmount is last.
  • e.Run the query and verify the results. Note the ExtendedAmount field has a caption of Total Dollars, so this is the field the query will be sorted by.
  • f.Save and close the query.
 
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ACC- The Chester Company Will Increase Its Automation For The Cute

The Chester company will increase its automation for the Cute product by 2.0. Assuming no further change in capacity, how much will this investment in automation cost?
Select: 1
$7,700,000
$17,600,000
$8,800,000
$15,400,000
Chester has negotiated a new labor contract for the next round that will affect the cost for their product City. Labor costs will go from $7.91 to $8.41 per unit. Assume all period and other variable costs as reported on Chester Income Statement remain the same If Chester were to pass on half the new labor costs to their customers, how many units of product City would need to be sold next round to break even on the product?
528
1800
518
540
Of Chester Corporation’s products, which earned the lowest Net Margin as a percentage of its sales?
Select: 1
Cozy
Cute
Crimp
City
Assuming no brokerage fees, calculate the amount of cash needed to retire Baldwin’s 12.4S2021 bond early.
Select: 1
$5,756,951
$5,517,462
$6,231,321
How much would it cost for Chester Corporation to repurchase all its outstanding shares if new brokerage fees totaled 1% of the underlying transaction?
$198.3 million
$194.3 million
$89.4 million
$91.2 million
The Digby company will continue to train their existing workforce at their current level to help reduce turnover and improve productivity next year. Employee training costs have increased to $30 per hour. How much would their training costs per employee be to the nearest dollar?
1200
2382
400
1182
Suppose you were hired as a consultant for a company that wants to penetrate the Comp-XM market. This company wants to pursue a broad cost leader strategy. From last year’s reports, which company presents the would be the strongest competitor?
Digby
Baldwin
Andrews
Chester

 
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2 Accounting Questions

Question 1

Foxy Investigative Services is an investigative services firm that is owned and operated by Shirley Vickers. On November 30, 2018, the end of the fiscal year, the accountant for Foxy Investigative Services prepared an end-of-period spreadsheet, a part of which follows:

Foxy Investigative ServicesEnd-of-Period SpreadsheetFor the Year Ended November 30, 2018
~Adjusted Trial BalanceAccount Title~Dr.Cr.
~

Cash~23,000
Accounts Receivable~71,800
Supplies~4,500
Prepaid Insurance~2,500
Building~444,000
Accumulated Depreciation-Building~
44,600Accounts Payable~
11,200Salaries Payable~
2,900Unearned Rent~
1,500Common Stock~
80,000Retained Earnings~
293,200Dividends~11,500
Service Fees~
719,450Rent Revenue~
11,500Salaries Expense~525,000
Rent Expense~46,000
Supplies Expense~10,500
Depreciation Expense-Building~7,400
Utilities Expense~7,350
Repairs Expense~2,500
Insurance Expense~2,300
Miscellaneous Expense~6,000

~1,164,3501,164,350




Required:1.A.Prepare an income statement for the year ended November 30, 2018. If a net loss has been incurred, enter that amount as a negative number using a minus sign. Be sure to complete the statement heading. Use the list of Labels and Amount Descriptions for the correct wording of text items other than account names. You will not need to enter colons (:) on the income statement. Refer to the Chart of Accounts for exact wording of account titles.B.Prepare a retained earnings statement for the year ended November 30, 2018. If a net loss is incurred or dividends were paid, enter that amount as a negative number using a minus sign. Be sure to complete the statement heading. Use the list of Labels and Amount Descriptions for the correct wording of text items. Refer to the Chart of Accounts for exact wording of account titles. Refer to the lists of Labels and Amount Descriptions for exact wording of the answer choices for text entries other than account names.C.Prepare a balance sheet as of November 30, 2018. Fixed assets must be entered in order according to account number. Be sure to complete the statement heading. You will not need to enter colons (:) or the word “Less” on the balance sheet; they will automatically insert where necessary. Refer to the Chart of Accounts for exact wording of account titles. Refer to the lists of Labels and Amount Descriptions for exact wording of the answer choices for text entries other than account names. For those boxes in which you must enter subtracted or negative numbers use a minus sign.2.Based upon the end-of-period spreadsheet, journalize the closing entries. Refer to the Chart of Accounts for exact wording of account titles.3.If Retained Earnings had instead decreased $40,000 after the closing entries were posted, and the dividends remained the same, what would have been the amount of net income or net loss? If required, use a minus sign to indicate a net loss.

Chart of Accounts

CHART OF ACCOUNTSFoxy Investigative ServicesGeneral Ledger
ASSETS11Cash12Accounts Receivable13Supplies14Prepaid Insurance17Building18Accumulated Depreciation-Building
LIABILITIES21Accounts Payable22Salaries Payable23Unearned Rent
EQUITY31Common Stock32Retained Earnings33Dividends34Income Summary
REVENUE41Service Fees42Rent Revenue
EXPENSES51Salaries Expense52Rent Expense53Supplies Expense54Depreciation Expense-Building55Utilities Expense56Repairs Expense57Insurance Expense59Miscellaneous Expense

Labels and Amount Descriptions

Labels
Current assets
Current liabilities
Expenses
For the Year Ended November 30, 2018
November 30, 2018
Property, plant, and equipment
Revenues
Amount Descriptions
Change in retained earnings
Dividends
Net income
Net loss
Retained earnings, December 1, 2017
Retained earnings, November 30, 2018
Total assets
Total current assets
Total expenses
Total liabilities
Total liabilities and stockholders’ equity
Total property, plant, and equipment
Total revenues
Total stockholders’ equity

Income Statement

1A. Prepare an income statement for the year ended November 30, 2018. If a net loss has been incurred, enter that amount as a negative number using a minus sign. Be sure to complete the statement heading. Use the list of Labels and Amount Descriptions for the correct wording of text items other than account names. You will not need to enter colons (:) on the income statement. Refer to the Chart of Accounts for exact wording of account titles.

Foxy Investigative Services

Income Statement

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Retained Earnings Statement

1B. Prepare a retained earnings statement for the year ended November 30, 2018. If a net loss is incurred or dividends were paid, enter that amount as a negative number using a minus sign. Be sure to complete the statement heading. Use the list of Labels and Amount Descriptions for the correct wording of text items. Refer to the Chart of Accounts for exact wording of account titles. Refer to the lists of Labels and Amount Descriptions for exact wording of the answer choices for text entries other than account names.

Foxy Investigative Services

Retained Earnings Statement

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Balance Sheet

1C. Prepare a balance sheet as of November 30, 2018. Fixed assets must be entered in order according to account number. Be sure to complete the statement heading. You will not need to enter colons (:) or the word “Less” on the balance sheet; they will automatically insert where necessary. Refer to the Chart of Accounts for exact wording of account titles. Refer to the lists of Labels and Amount Descriptions for exact wording of the answer choices for text entries other than account names. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Foxy Investigative Services

Balance Sheet

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Liabilities

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Stockholders’ Equity

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Journal

2. Based upon the end-of-period spreadsheet, journalize the closing entries. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 11

JOURNAL

ACCOUNTING EQUATION

DATEDESCRIPTIONPOST. REF.DEBITCREDITASSETSLIABILITIESEQUITY

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Closing Entries

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Final Question

3. If Retained Earnings had instead decreased $40,000 after the closing entries were posted, and the dividends remained the same, what would have been the amount of net income or net loss? If required, use a minus sign to indicate a net loss.

Question 2

he unadjusted trial balance of Epicenter Laundry at June 30, 2018, the end of the fiscal year, follows:

Epicenter Laundry
UNADJUSTED TRIAL BALANCE
June 30, 2018

ACCOUNT TITLEDEBITCREDIT1Cash11,000.00 2Laundry Supplies21,500.00 3Prepaid Insurance9,600.00 4Laundry Equipment232,600.00 5Accumulated Depreciation 125,400.006Accounts Payable 11,800.007Common Stock 40,000.008Retained Earnings 65,600.009Dividends10,000.00 10Laundry Revenue 232,200.0011Wages Expense125,200.00 12Rent Expense40,000.00 13Utilities Expense19,700.00 14Miscellaneous Expense5,400.00 15Totals475,000.00475,000.00


The data needed to determine year-end adjustments are as follows:
A.Laundry supplies on hand at June 30 are $3,600.B.Insurance premiums expired during the year are $5,700.C.Depreciation of laundry equipment during the year is $6,500.D.Wages accrued but not paid at June 30 are $1,100.

Required:
Note: Download the spreadsheet on the T Accounts panel, saving the Excel file to your computer. Be sure to save your work in Excel. The spreadsheet input will not be included in your grade in CengageNOW on this problem.1. For each account listed in the unadjusted trial balance, enter the balance in a T account. Identify the balance as “Bal.”2. Using the Excel spreadsheet downloaded from the T Accounts panel, click the Work Sheet tab. Enter the unadjusted trial balance on the end-of-period work sheet and complete the work sheet.3. a. Journalize the adjusting entries on page 10 of the journal. Adjusting entries are recorded on June 30. Refer to the Chart of Accounts for exact wording of account titles.3. b. Post the adjusting entries. In the T accounts, identify the adjustments by “Adj.” and the new balances as “Adj. Bal.” (Be sure to add a posting reference to the journal.)4. Prepare an adjusted trial balance.5. a. Prepare an income statement for the year ended June 30, 2018. If a net loss has been incurred, enter that amount as a negative number using a minus sign. Be sure to complete the statement heading. You will not need to enter colons (:) on the income statement. Refer to the Chart of Accounts for exact wording of account titles. Refer to the lists of Labels and Amount Descriptions for exact wording of the answer choices for text entries other than account names.5. b. Prepare a retained earnings statement for the year ended June 30, 2018. If a net loss is incurred or dividends were paid, enter that amount as a negative number using a minus sign. Be sure to complete the statement heading. Refer to the Chart of Accounts for exact wording of account titles. Refer to the lists of Labels and Amount Descriptions for exact wording of the answer choices for text entries other than account names.5. c. Prepare a balance sheet as of June 30, 2018. Fixed assets must be entered in order according to account number. Be sure to complete the statement heading. You will not need to enter colons (:) on the balance sheet; they will automatically insert where necessary. Refer to the Chart of Accounts for exact wording of account titles. Refer to the lists of Labels and Amount Descriptions for exact wording of the answer choices for text entries other than account names. For those boxes in which you must enter subtracted or negative numbers use a minus sign.6. a. Journalize the closing entries on page 11 of the journal. Refer to the Chart of Accounts for exact wording of account titles. (Note: Complete the adjusted trial balance, the income statement, the retained earnings statement, and the balance sheet BEFORE completing part 6. a.)6. b. Post the closing entries. In the T accounts, identify the closing entries by “Clos.” (Be sure to add a posting reference to the journal.)7. Prepare a post-closing trial balance.

Chart of Accounts


CHART OF ACCOUNTSEpicenter LaundryGeneral LedgerASSETS11Cash13Laundry Supplies14Prepaid Insurance17Laundry Equipment18Accumulated Depreciation
LIABILITIES21Accounts Payable22Wages Payable
EQUITY31Common Stock32Retained Earnings33Dividends34Income SummaryREVENUE41Laundry Revenue
EXPENSES51Wages Expense52Rent Expense53Utilities Expense54Laundry Supplies Expense55Depreciation Expense56Insurance Expense59Miscellaneous Expense

Labels and Amount Descriptions


LabelsCurrent assetsCurrent liabilitiesExpensesFor the Year Ended June 30, 2018June 30, 2018Property, plant, and equipmentAmount DescriptionsChange in retained earningsNet incomeNet lossRetained earnings, June 30, 2018Retained earnings, July 1, 2017Total assetsTotal current assetsTotal expensesTotal liabilitiesTotal liabilities and stockholders’ equityTotal property, plant, and equipmentTotal stockholders’ equity

T Accounts


Note:Download the SPREADSHEET, saving the Excel file to your computer. Be sure to save your work in Excel. The spreadsheet input will not be included in your grade in CengageNOW on this problem.1. For each account listed in the unadjusted trial balance, enter the balance in a T account. Identify the balance as “Bal.”3. b. Post the adjusting entries. In the T accounts, identify the adjustments by “Adj.” and the new balances as “Adj. Bal.”6. b. Post the closing entries. In the T accounts, identify the adjustments by “Clos.”

Work Sheet


2. Using the Excel spreadsheet downloaded from the T Accounts panel, click the Work Sheet tab. Enter the unadjusted trial balance on the end-of-period work sheet and complete the work sheet.

Journal


3. a. Journalize the adjusting entries on page 10 of the journal. Adjusting entries are recorded on June 30. Refer to the Chart of Accounts for exact wording of account titles. 6. a. Journalize the closing entries on page 11 of the journal. Refer to the Chart of Accounts for exact wording of account titles. (Note: Complete the adjusted trial balance, the income statement, the retained earnings statement, and the balance sheet BEFORE completing part 6. a.)
PAGE 10PAGE 11

JOURNAL
ACCOUNTING EQUATION

DATEDESCRIPTIONPOST. REF.DEBITCREDITASSETSLIABILITIESEQUITY1 Adjusting Entries      23456789


Adjusted Trial Balance


4. Prepare an adjusted trial balance. If an amount box does not require an entry, leave it blank.

Epicenter Laundry
ADJUSTED TRIAL BALANCE
June 30, 2018

ACCOUNT TITLEDEBITCREDIT1Cash2Laundry Supplies3Prepaid Insurance4Laundry Equipment5Accumulated Depreciation6Accounts Payable7Wages Payable8Common Stock9Retained Earnings10Dividends11Laundry Revenue12Wages Expense13Rent Expense14Utilities Expense15Laundry Supplies Expense16Depreciation Expense17Insurance Expense18Miscellaneous Expense19Totals


Income Statement



5. a. Prepare an income statement for the year ended June 30, 2018. If a net loss has been incurred, enter that amount as a negative number using a minus sign. Be sure to complete the statement heading. You will not need to enter colons (:) on the income statement. Refer to the Chart of Accounts for exact wording of account titles. Refer to the lists of Labels and Amount Descriptions for exact wording of the answer choices for text entries other than account names.

Epicenter LaundryIncome Statement1 2  3 4 5 6 7 8 9 10 11


Retained Earnings Statement


5. b. Prepare a retained earnings statement for the year ended June 30, 2018. If a net loss is incurred or dividends were paid, enter that amount as a negative number using a minus sign. Be sure to complete the statement heading. Refer to the Chart of Accounts for exact wording of account titles. Refer to the lists of Labels and Amount Descriptions for exact wording of the answer choices for text entries other than account names.

Epicenter LaundryRetained Earnings Statement1 2 3 4 5


Balance Sheet


5. c. Prepare a balance sheet as of June 30, 2018. Fixed assets must be entered in order according to account number. Be sure to complete the statement heading. You will not need to enter colons (:) on the balance sheet; they will automatically insert where necessary. Refer to the Chart of Accounts for exact wording of account titles. Refer to the lists of Labels and Amount Descriptions for exact wording of the answer choices for text entries other than account names. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Epicenter LaundryBalance Sheet1Assets  2  3 4 5 6 7  8 9 10 11 12Liabilities  13  14 15 16 17Stockholders’ Equity  18 19 20 21


Post-closing Trial Balance


7. Prepare a post-closing trial balance.

Epicenter Laundry
POST-CLOSING TRIAL BALANCE
June 30, 2018

ACCOUNT TITLEDEBITCREDIT1Cash2Laundry Supplies3Prepaid Insurance4Laundry Equipment5Accumulated Depreciation6Accounts Payable7Wages Payable8Common Stock9Retained Earnings10Totals

 

 
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Multiple Choice

  1. Panjim’s prepaid expense account consists only of garage rental prepayments. Its 2005 beginning and ending balance were the same. Which one of the following statements must be true?

• Panjim had no garage rental expenses during 2005

• Panjim’s prepaid expense account balance never varied during 2005

• Panjim’s prepaid expense account balance varied during 2005

• None of the above statements is true

  1. Juan Foods purchases a computer system in 2005 for $20,000. Its expected useful life is 5 years. At the end of 2005, it has to record depreciation on the computer system of $2,000.

What is the correct journal entry to record the depreciation?

• Debit computer system $2,000; credit depreciation expense $2,000

• Debit accumulated depreciation $2,000; credit computer system $2,000

• Debit depreciation expense $2,000; credit accumulated depreciation $2,000

• Debit computer system $2,000; credit accumulated depreciation $2,000

  1. Jackie’s Crafts is a successful retailer of fabric by the yard and other sewing supplies. If Jackie were to shut down the store, the bolts of fabrics and the bins of lace and trim, inventory valued at $20,000, on average, at any point in time, would have to be sold for about 10% of that value. But, Jackie’s accountant does not feel the need to reduce the value of the inventory on the books.

This is a reflection of the:

• Consistency concept

• Materiality concept

• Historical cost concept

• Going-concern concept

  1. Weldon Engineering owes one of its creditors $20,000. To settle the debt, Weldon pays $5,000 cash and also issues common stock valued at $15,000 to the creditor.

How would this repayment of the $20,000 debt be recorded in Weldon’s books?

• Debit debt owed $20,000; credit cash $5,000; credit common stock $15,000

• Debit common stock $15,000; debit cash $5,000; credit debt owed $20,000

• Debit common stock $15,000; debit debt owed $5,000; credit cash $20,000

• Debit debt owed $5,000; credit cash $5,000

 
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with Intravalley Health has been well received.

1.        Using the following national income accounting data, compute (a) GDP, (b) NDP, and (c) NI. All figures are in billions.

CategoryValue
Compensation of employees$196.2
U.S. exports of goods and services19.8
Consumption of fixed capital11.8
Government purchases59.4
Taxes on production and imports14.4
Net private domestic investment52.1
Transfer payments13.9
U.S. imports of goods and services16.5
Personal taxes40.5
Net foreign income2.2
Personal consumption expenditures219.1
Statistical discrepancy0.0


Instructions: Round your answers to one decimal place.

a. GDP = $

If the growth rate in year 3 had been a positive 5 percent rather than a negative 2 percent, what would have been the average growth rate? [removed]%

8.        Suppose that Glitter Gulch, a gold mining firm, increased its sales revenues on newly mined gold from $75 million to $150 million between one year and the next. Assuming that the price of gold increased by 100 percent over the same period, by what numerical amount did Glitter Gulch’s real output change?

[removed]

If the price of gold had not changed, what would have been the change in Glitter Gulch’s real output?

$ [removed]million

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9.        A mathematical approximation called the rule of 70 tells us that the number of years that it will take something that is growing to double in size is approximately equal to the number 70 divided by its percentage rate of growth. Thus, if Mexico’s real GDP per person is growing at 7 percent per year, it will take about 10 years (= 707) to double.

Apply the rule of 70 to solve the following problem. Real GDP per person in Mexico in 2005 was about $11,000 per person, while it was about $44,000 per person in the United States. If real GDP per person in Mexico grows at the rate of 2 percent per year, how long will it take Mexico’s real GDP per person to reach the level that the United States was at in 2005? (Hint: How many times would Mexico’s 2005 real GDP per person have to double to reach the United States’ 2005 real GDP per person?)

[removed]years

 
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250 Forum

Political polls typically sample randomly from the U.S population to investigate the percentage of voters who favor some candidate or issue. The number of people polled is usually on the order of 1000. Suppose that one such poll asks voters how they feel about the President’s handling of the crisis in the financial markets. The results show that 575 out of the 1280 people polled say they either “approve” or “strongly approve” of the President’s handling of this matter. Based on the sample referenced above, find a 95% confidence interval estimate for the proportion of the entire voter population who “approve” or “strongly approve” of the President’s handling of the crisis in the financial markets.

Now, here’s an interesting twist. If the same sample proportion was found in a sample twice as large—that is, 1150 out of 2560—how would this affect the confidence interval?

Please keep in mind that my evaluation of your post will be based on the extent to which you participated and fostered a positive and effective learning environment–for yourself and others.  Participating and sharing are the keys.  Naturally, simply copying another person’s post is prohibited.  

Instructions: 

To make a post to this week’s Discussion Forum, click on the Building a Confidence Interval Estimate link, then click Start a New Conversation.  In the title block of the dialog box that appears insert your first and last name; compose your post in the message box–do not make your post in an attachment; and then click Post Message.

 
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