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3 years ago

Review and complete the following statement regarding the Income Summary account.

Business

1 answer:

torisob [31]3 years ago

8 0

Answer:

Revenues are Credited, Expenses are Debited and the difference of Revenue and Expenses is credited in the Retained Earnings.

Explanation:

The revenue and retained earnings account are credit in nature and expenses are debit in nature.

This can be Explained from the following equation:

Closing Equity = Opening Equity + (Revenue - Expenses)

Closing Equity - Opening Equity = (Revenue - Expenses)

Earnings Retained by the Company = (Revenue - Expenses)

So the difference of the revenues and expenses goes to retained earnings. If the answer of the difference is positive then the retained earnings are credited otherwise it is credited. So as I said that revenues are credit in nature so if their is profit (credit is in access of debit or in other words revenues are in excess of expenses) then the retained earnings will be credited and if their is a loss then the retained earnings account will be debited.

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At the beginning of Year 2, the company repurchased and retired 1,100 shares at $8.10 per share. Prepare the appropriate journal

Tema [17]

Answer:

Explanation:

We have two journal entries to be able record the repurchase and retirement of the shares

First journal to record the share repurchased

Dr Treasury stock 8,910

Cr Cash 8,910

While the second journal is to record the retirement of share repurchased:

Dr Common stock 1,100

Dr Paid-in capital common stock 2,310

Dr Retained Earning 5,500

Cr Treasury stock 8,910

To record the share repurchased:

The Treasury stock account is debited with the amount that is equals to cash paid for stock that is been repurchased, therefore, offsetting entry is credit Cash account = Number of share repurchased multiply Price purchase

= 1,100 * 8.1

= $8,910

Also, to record the retirement of share repurchased:

The common stock account is been debited at the amount = Par value multiply by Share retired

= 1 * 1,100

= $1,100

As one common stock is carried $2.1 value excess of par ( which is calculated as 168,210 / 80,100); paid-in capital account is debited by $2,310 ( 1,100 * 2.1)

The retained earning is been debited by the amount is calculated as follows,;

Number of share retired multiply by ( Price at retired - Par value - Excess of par value) = 1,100 * ( 8.1 -1-2.1) = $5,500

Treasury account is debited $8,910 to bring the balance of this account to zero as stocks repurchased are fully retired.

5 0

3 years ago

You have recently graduated from college with an MBA. Upon graduation, you start working for Roosevelt Power Plant. The boss, Mr

kvv77 [185]

Explanation:

Honesty in the workplace:

Honesty can give good reputation
Will stay focused on the work and the environment
Will keep commitments and thus increase productivity
It will increase the sense of responsibility to achieve success at higher rates
Increases mutual respect and thus gives good collaboration

Positive work environment:

Employee feel safe
Ability to achieve one's best
Gains greater energy to contribute
Provides an happy environment
Yields positive result from both individual and team work

These these factors will help Mr. Jones to understand that fraud will be prevented and detected.

3 0

3 years ago

Distribution Corporation collects 35% of a month's sales in the month of sale, 45% in the month following sale, and 20% in the s

Alisiya [41]

Answer:

B. $183,000

Explanation:

Calculation to determine The amount of cash that will be collected in July is budgeted to be

Budgeted collection in July = July sales (190,000*35%) + June sales (210,000*45%) + May sales (110,000*20%)

Budgeted collection in July =$66,500 +$94,500 + $22,000

Budgeted collection in July=$183,000

Therefore The amount of cash that will be collected in July is budgeted to be $183,000

3 0

2 years ago

Mr. Slake sold 1,580 shares of publicly traded DDL stock (tax basis $49,240) for $40,000 cash on February 13. He paid $43,000 ca

garik1379 [7]

Answer:

$9,240 loss recognized

$43,000 basis

Explanation:

Tax basis of share purchase is the cost of share together with any tax related to this purchase.

Mr. Slake's loss recognized on the February 13 sale is $9,240 = total cost of 1,580 share purchased in the past - total amount collected from sales of these share = $49,240 - $40,000 = $9,240

His tax basis in purchase of 1,600 shares on Mar 2 is $43,000, the total cost he paid to acquire 1,600 shares

5 0

3 years ago

What happens if you lose the money you invested in your stock?

saveliy_v [14]

If that happen, other investors that bet for the opposite cause of your investment would be the one that gained that money, and you will still able to keep that stocks to collect dividend as long as you don't sell it.
(this circumtances won't happen if the reason you lost the money is the firm going into bankruptcy)

7 0

3 years ago