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AlekseyPX
3 years ago
14

Year 1: Issued $10,000 of common stock for cash. Provided $78,000 of services on account. Provided $36,000 of services and recei

ved cash. Collected $69,000 cash from accounts receivable. Paid $38,000 of salaries expense for the year. Adjusted the accounting records to reflect uncollectible accounts expense for the year. Leach estimates that 5 percent of the ending accounts receivable balance will be uncollectible. Year 2: Wrote off an uncollectible account for $650. Provided $88,000 of services on account. Provided $32,000 of services and collected cash. Collected $81,000 cash from accounts receivable. Paid $65,000 of salaries expense for the year. Adjusted the accounts to reflect uncollectible accounts expense for the year. Leach estimates that 5 percent of the ending accounts receivable balance will be uncollectible. b. Prepare an income statement, statement of changes in stockholders’ equity, balance sheet, and statement of cash flows for Year 1.
Business
1 answer:
swat323 years ago
6 0

Answer:

a) Journal Entries

YEAR 1

Debit bank $10,000 Credit Common stock $10,000

Debit Accounts receivables $78,000 Credit Service revenue $78,000

Debit Bank $36,000 Credit  Service Revenue $36,000

Debit Bank $69,000 Credit Accounts receivables $69,000

Debit Salary and wages expense $38,000 Credit bank $38,000

Debit Allowance for bad debts adjustments $450 Credit Allowance for bad debts $450

Year 2

Debit Bad debt $650, Credit Accounts receivable $650

Debit accounts receivable $88,000 Credit Service revenue $88,000

Debit Bank $32,000 Credit Service revenue $32,000

Debit Bank $81,000 Credit accounts receivables $81,000

Debit Allowance for bad debts adjustment $295 Credit Allowance for dab debts $295

b) Income statement year 1

Service Revenue (78,000+36000)                                      $114,000

Deduct expenses

Salaries                                                                                 -$38,000

Allowance for bad debts adjustment                                 -$450

Net income                                                                            $75,550

STATEMENT OF CHANGES IN EQUITY

                                               Common stock      Retained earnings total

opening balance                         0                                0                         0

Issued stock                              $10000                                                $10000

Net income                                                             $75,550                 $75,550

closing balance                         $10000                $75,550                 $85,550

BALANCE SHEET

ASSETS

Current Assets

Accounts receivable(9000-450)                                            $8,550

Bank (10,000+36,000+69000-38000)                                  $77,000

total Assets                                                                              $85,550

EQUITY AND LIABILITIES

EQUITY

Common stock                                                                        $10,000

Retained earnings                                                                   $75,550

Total equity and liabilities                                                        $85,550

CASH FLOW STATEMENT

Cash Flow from operating Activities                                        $67,000

Net Income                                                 $75,550

adjust non cash items                                $0

Income before changes in Working Capital

changes in working capital

Accounts receivable (0-8550)                   -8550

income generated from operations         $67,000

Cash Flow from Financing Activities                                        $10,000

common stock issued                                $10,000

cash surplus or deficit                                                                 $77,000

opening cash balance                                                                 $0

closing cash balance                                                                   $77,000

Explanation:

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Answer:

C. Ideal standards are better suited for cash budgeting than practical standards

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The standards that basically handles no work interruptions or no machine breakdown is called ideal standards.

8 0
3 years ago
During the first two years, Supplies, Inc. drove the company truck 15,000 and 22,000 miles, respectively, to deliver merchandise
Mnenie [13.5K]

Answer:

option (A) $11,000

Explanation:

Given;

Miles drove in first year = 15,000

Miles drove in second year = 22,000

Cost of the truck = $175,000

Residual value = $25,000

Estimated life = 10 years or 300,000 miles

Now,

using the activity based method

Rate of depreciation per mile driven = \frac{\textup{Cost of truck - Residual value}}{\textup{Estimated life}}

or

Rate of depreciation per mile driven = \frac{\textup{175,000 - 25,000}}{\textup{300,000}}

or

= $0.5 per mile

also,

Number of miles driven in second year = 22,000 miles

Hence,

Depreciation for the second year

= Depreciation rate × Number of miles driven in second year

= 0.5 × 22,000

= $11,000

Hence,

The correct answer is option (A) $11,000

6 0
3 years ago
When financing a car, you must pay ___ on the amount borrowed.
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7 0
3 years ago
"Gamboa, Inc. sold 100 selfie sticks for $25 each. If the selfie sticks had an average cost of $1 to produce, how much profit di
IRISSAK [1]

Answer:

$2400

Explanation:

Average cost is the ratio of total cost of production to the total number of units produced, it is the sum of both the average fixed cost and the average variable cost. The average cost is given by the formula:

Average cost = Total cost / number of units.

Given that:

The total number of units produced = 100 selfie sticks, Average cost = $1 and Price of each selfie stick = $25

From Average cost = Total cost / number of units.

Substituting gibes:

$1 = Total cost / 100 selfie stick

Total cost = $1 × 100 = $100

Total cost = $100

Revenue = Price per item × Number of items

Revenue = $25 × 100 = $2500

Profit = Revenue - Total cost

Profit = $2500 - $100 = $2400

Total cost = $2400

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3 years ago
An organization with an external strategic focus and a high degree of environmental turbulence calls for a(n) ____ culture.
Yuliya22 [10]

Answer:

C. adaptive

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An adaptive culture is the culture that enables the company to adapt the changes in a quickly and in an effective manner with respect to the external pressures

In the given question, it is mentioned that the organization having an focus i.e. external strategic also have a high degree of an environmental calls

So this represent the adaptive culture

8 0
2 years ago
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