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galina1969 [7]
3 years ago
11

Long and Short, CPAs, were auditing Island Corporation for the year ended December 31, 2014. On January 11, 2015, a major custom

er of Island Corporation declared bankruptcy as the result of an uninsured loss due to a major fire in their warehouse on January 8, 2015. As a result, a material accounts receivable from the customer was determined to be uncollectible. Long and Short, CPAs, would expect the client to:____________.
A) treat the loss as a subsequent event and adjust the 2014 financial statements to record the loss on uncollectible accounts.
B) record the loss on uncollectible accounts as a routine transaction in the year 2015.
C) treat the loss as a subsequent event and provide a footnote about the loss in the 2014 financial statements.
D) file a lawsuit against the customer in hopes of collecting some of the money owed to the client.
Business
1 answer:
dusya [7]3 years ago
8 0

Answer: C) treat the loss as a subsequent event and provide a footnote about the loss in the 2014 financial statements.

Explanation:

The event happened in January 2015 which was after the books ended in December 2014. This makes it a subsequent event which is an event that occurs after the accounting period but before the Financial results are released.

The loss is therefore a subsequent event and must be treated by putting a footnote in the financial statement to reflect that the event happened after the accounting period.

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eggy's Pillows produces and sells a decorative pillow for $75.00 per unit. In the first month of operation, 2,000 units were pro
vivado [14]

Answer:

Total cost of goods sold per unit is $35,000

Explanation:

Given Data:

cost for decorative pillow =$75.00 per unit

Total sold unit = 1750

Per unit manufacturing cost

we know that  Variable Costing includes only manufacturing cost

Therefore, the total cost of goods as per variable costing can be computed as follow  

$20 \times  1750 = $35,000

The total cost of goods sold per unit is $35,000

4 0
3 years ago
The johnsons have accumulated a nest egg of $50,000 that they intend to use as a down payment toward the purchase of a new house
algol13
Hell no to the no no no
6 0
3 years ago
The trial balance of Woods Company includes the following balance sheet accounts. Identify the accounts that might require adjus
White raven [17]

Answer:

Woods Company

Accounts Requiring Adjustment, Type of Adjusting Entry, and the Related Account:

 Account                         Type of Adjustment           Related Account

a) Account receivable  Accrued revenue              Service revenue

b) Prepaid insurance  Prepaid expense              Insurance expense

c) Equipment                   Not required                      Not required  

d) Accumulated depreciation Accrued expense       Depreciation expense

e) Notes Payable             Not required                      Not required

f) Interest Payable          Accrued expense              Interest expense

g) Unearned service revenue Unearned revenue Service revenue

Explanation:

End of period adjustments are made to accounts in order to bring them in line with the accrual concept and matching principle of accounting.  These principles require that expenses and revenues for the period are matched in order to determine the appropriate profit generated for the period.  The implication is that transactions are recorded when they are incurred and not when cash is exchanged.  For example, if rent expense is incurred for the year and payment is made in the following year, the expense must be recognized in the current year.  The same applies to revenue.

4 0
2 years ago
Consider the US market for chocolate, a market in which the government has imposed a price ceiling. Which of the following event
natita [175]

Answer:

D) South American cocoa bean producers refuse to ship to chocolate producers in the US.

Explanation:

A nonbinding rice ceiling means that the equilibrium price is below the price ceiling, so it will have no effect in real life. In order for the price ceiling to become binding and start to negatively affect the market, the equilibrium price must increase.  

The only option that would increase the equilibrium price is option D, since the shortage of a key input will probably result in an increase in the price of the key input. If the price of a key input increases, the cost of producing chocolate will increase, resulting in a leftward shift of the supply curve.

A leftward shift of the supply curve will decrease the total quantity supplied and it will increase the price of chocolate at every level of quantity demanded. This will result in an increase in the equilibrium price which might ultimately change the price ceiling from nonbinding to binding.

6 0
2 years ago
2. Realized income is also known as ____. a) gross pay. b) net income. c) real income. d) descretionary income. . 3) You are pai
iris [78.8K]

Answer:

a) gross pay

c) $1,496.34.

Explanation:

The realized income is the amount you actually received and it is taxable. According to this, the answer is gross pay as it is the money you earn before taxes are deducted.

-Realized income:

$12.75*40= 510*4 = $2,040

FICA (7.65%)= $156,06

Federal withholding (12%)= $244,8

state withholding (7%)= $142,8

$2,040-$156,06-$244,8-$142,8= $1,496.34

6 0
3 years ago
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