1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Mila [183]
2 years ago
7

The income summary account has a debit balance of $10,000 prior to closing. the owner's drawing account has a balance of $7,000

before closing. the owner's capital account will
Business
1 answer:
lana [24]2 years ago
5 0

Decrease by $17,000.

An income summer with a debit balance means that the company had a loss in that accounting cycle. In order to close an income summary with a debit balance you need to credit the income summary account and debit the capital account, which decreases the owner’s equity.

The drawing account is the money that the owner has withdrawn from the company. In order to close this account you will need to credit drawing and debit the capital account, which decreases the balance.

Both items will decrease the capital account, for a total of $17,000.

You might be interested in
Discuss the propriety of showing: a) treasury stock as an asset - b) ""gain"" or ""loss"" on sale of treasury stock as additions
r-ruslan [8.4K]

Answer:

a. Treasury stock cannot be shown as an asset because a company cannot buy itself.

b) Gain or loss on sale of treasury stock is not to be treated as income, it should be added or subtracted from share capital because it is a capital transaction.

c). Treasury stock is not an asset. Dividends received from treasury stock cannot be treated as income, it is only assets that generates income.

Explanation:

When corporations for some strategic reasons and the desire to maintain and stabilize the shareholders wealth decide to buy back some of its shares, that is what is known as treasury stock. It is also called reacquired stock

a. The treasury stock is like a corporation acquiring itself, so it cannot be shown as an asset, it is only a reclassification within the same balance sheet.

b. Gains or loss on sale of treasury stock is not an income transaction, it is a transaction that affects the share capital of the corporation and must be charged to the share capital not the income.

c. Since treasury stock is not an asset, dividend received on treasury stock is not to be treated as income, it is only assets that generates income. it should affect retained earnings.

6 0
3 years ago
The _______ is the act of Limiting the amount of certain goods that civilians can buy
Drupady [299]

Rationing is is the act of Limiting the amount of certain goods that civilians can buy. Rationing became common during the Second World War. Ration stamps were often used. These were redeemable stamps or coupons, and every family was issued a set number of each kind of stamp based on the size of the family, ages of children and income.

7 0
3 years ago
Which of the following is a source of insurance? *
emmasim [6.3K]

Answer:

Court ruling

Regulations

4 0
2 years ago
When consumers start to examine the content of media messages they can turn into media-literate viewers. One skill such viewers
EleoNora [17]
It is manipulation because they’re assuming
4 0
3 years ago
On January 1, 2016, Phoenix Co. acquired 100 percent of the outstanding voting shares of Sedona Inc. for $784,000 cash. At Janua
stiv31 [10]

Answer:

a) Consolidated net income for Phoenix and Sedona for 2018

Phoenix revenues                      $648,000

-Phoenix expenses                    ($412,000)

Phoenix Net Income                  $236,000

2018 Income from Sedona        <u>$54,075</u>

Consolidated net income for   $290,075

Phoenix and Sedona for 2018  

b) Phoenix’s consolidated retained earnings balance at December 31, 2018

Phoenix’s consolidated retained earnings balance at December 31, 2018  = $347,075.00  (same as Phoenix because of equity method use)  

c) What amount should Phoenix report for Sedona’s customer list?

Consideration transferred at fair value      $784,000

Book value acquired                                   <u>($548,800)</u>

Excess fair over book value                        $235,200

To Equipment                                               <u>$95,000   </u>

To customer list (4 year life)                        <u> $140,200 </u>

Three years since acquisition of customer list = $140,200/4 years = $35,050. Hence, Phoenix report $35,050 as Sedona’s customer list.

4 0
2 years ago
Other questions:
  • According to Mintzberg, managers averaged ____ written and _____ verbal contacts per day with most of these activities lasting l
    7·1 answer
  • Home / study / business / economics / questions and answers / 1.if individual income tax accounts for more total ...
    12·1 answer
  • Ray presents information about the office supplies his company sells to a
    7·2 answers
  • Flannigan Company manufactures and sells a single product that sells for $450 per unit; variable costs are $270. Annual fixed co
    11·2 answers
  • Smith Company manufactures washing machines in their own facility. They sell them to stores like Best Buy and Lowes for ultimate
    15·1 answer
  • Alex's Furniture Mart produces and sells tables in a perfectly competitive market. When Alex's Furniture Mart produces and sells
    8·1 answer
  • Tim wants to buy an apartment that costs $2,225,000 with an 85% LTV mortgage. Tim got a 30 year, 3/1 ARM with an initial teaser
    6·1 answer
  • Research indicates that when it comes to the diversification-performance relationship, the highest economic performance occurs w
    11·1 answer
  • A corporation: Select one: A. Is less costly to organize than a partnership B. Is subject to less regulation and supervision tha
    6·1 answer
  • 8. Wayne is an insurance company's AML compliance officer. He has been asked by FinCEN to provide the agency with a copy of the
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!