The right answer for the question that is being asked and shown above is that: "c. the revenue recognition principle. " Revenue is reported on the income statement in the period earned. The accounting concept supporting this reporting is <span>the revenue recognition principle. </span>
Answer:
a. Revenues, expenses. and dividends - Temporary accounts
b. List of permanent accounts and their balances - Post-closing trial balance
c. Transfer of temporary balances to retained earnings - Closing entries
d. List of permanent and temporary accounts and their balances - Adjusted trial balance
e. Assets, liabilities, and stockholders' equity - Permanent accounts
Answer:
The journal entries are shown below
Explanation:
The journal entries are as follows
a. Product warranty expense $13,590 ($151,000 × 9%)
To Product warranty payable $13,590
(Being the warranty estimated expense is recorded)
b. Product warranty payable $207
To Supplies $120
To Wages payable $87
(Being the warranty work is recorded)
Only these two entries are passed
Answer:
a. $6,763.40
Explanation:
The computation of the selling price is shown below:
But before that the predetermined overhead rate is
For machining
= ($102000 ÷ 17,000) + $1.70
= $7.7 per machine hour
For fabrication
= ($61200 ÷ 6000) + $4.10
= $14.30 per labour hour
Now the selling price is
Direct material ($720 + $380) $1,100
Direct labor ($900 + $1,500) $2,400
Machining department overhead (7.7 × 80) $616
Fabrication department overhead (50 × 14.3) $715
Total manufacturing cost $4,831
Markup 40% $1,932.40
Selling price $6,763.40
Answer:
Incorrect Statement about the Statement of Cash Flows:
c. The cash dividends of $201,000 paid will be reported as a cash outflow in the cash flow from investing activities section.
Explanation:
Cash dividends of $201,000 will be reported as a cash outflow in the financing activities section and not the investing activities section.
Statement of Cash Flows is broadly divided into three, the operating, investing, and financing activities sections. The operating activities section show the cash flows from the normal business of the enterprise. The investing activities section shows the acquisition and disposal of investments made by the company in cash. While, the financing section shows the inflow and outflow of cash resulting from the funding of the business by stockholders and noncurrent creditors.
