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Posts Tagged ‘Accounting’

Justin Huish Publishing Co. publishes college textbooks that are sold to bookstores on the following terms. Each title has a fixed wholesale price, terms f.o.b. shipping point, and payment is due 60 days after shipment. The retailer may return a maximum of 30% of an order at the retailer’s expense. Sales are made only to retailers who have good credit ratings. Past experience indicates that the normal return rate is 12%, and the average collection period is 72 days.
Instructions
a)Identify alternative revenue recognition tests that Huish could employ concerning textbook sales.
b)Briefly discuss the reasoning for your answers in (a) above.
c)In late July, Huish shipped books invoiced is $16,000,000. Prepare the journal entry to record this event that best confirms to generally accepted accounting principles and your answer to part (b).
d)In October, $2 million of the invoiced July sales were returned according to the return policy, and the remaining $14 million was paid. Prepare the entries recording the return and payment.

On June 3, David Reid Co. sold to Kim Rhode merchandise having a sale price of $5,000 with terms of 2/10, n/60, f.o.b. shipping point. An invoice totaling $120, terms n/30, was received by Rhode on June 8 from the Olympic Transport Service for the freight cost. Upon receipt of goods, June 5, Rhode notified Reid Co. that merchandise costing $400 contained flaws that rendered it worthless. The same day Reid Co. issued a credit memo covering the worthless merchandise and asked that it be returned at company expense. The freight on the returned merchandise was $24, paid by Reid Co. on June 7. On June 12, the company received a check for the balance due from Rhode.
Instructions
a)Prepare journal entries on Reid Co. books to record all the events noted above under each of the following bases.
1.Sales and receivables are entered at gross selling price.
2.Sales and receivables are entered net of cash discounts.
b)Prepare the journal entry under basis 2, assuming that Kim Rhode did not remit payment until August 5.

During 2007 Pierson Co. started a construction job with a contract price of $1,500,000. The job was completed in 2009. The following information is available.
2007 2008 2009
Costs incurred to date$400,000$935,000$1,070,000
Estimated costs to complete 600,000 165,000 -0-
Billings to date 300,000 900,000 1,500,000
Collections to date 270,000 810,000 1,425,000
Instructions
a)Compute the amount of gross profit to be recognized each year assuming the percentage-of-completion method is used.
b)Prepare all necessary journal entries for 2008.
c)Compute the amount of gross profit to be recognized each year assuming the completed-contract method is used.

South Carolina Corp. has one temporary difference at the end of 2007 that will reverse and cause taxable amounts of $55,000 in 2008, $60,000 in 2009, and $65,000 in 2010. South Carolina’s pretax financial income for 2007 is $300,000, and the tax rate is 30% for all years. There are no deferred taxes at the beginning of 2007.
Instructions
a)Compute taxable income and income taxes payable for 2007.
b)Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2007.
c)Prepare the income tax expense section of the income statement for 2007, beginning with the line “Income before income taxes.”

The following information is available for Wenger Corp for 2006.
1.Excess of tax depreciation over book depreciation, $40,000. This $40,000 difference will revenue equally over the years 2007-2010.
2.Deferral, for book purposes, of $20,000 of rent received in advance. The rent will be earned in 2007.
3.Pretax financial income, $300,000.
4.Tax rate for all years, 40%.
Instructions
a)Compute taxable income for 2006.
b)Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2006.
c)Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2007, assuming taxable income of $325,000.

Listed below are items that are commonly accounted for differently for financial reporting purposes than they are for tax purposes.
Instructions
For each item below, indicate whether it involves:
1)A temporary difference that will result in future deductible amounts and, therefore, will usually give rise to a deferred income tax asset.
2)A temporary difference that will result in future taxable amounts and, therefore, will usually give rise to a deferred income tax liability.
3)A permanent difference.
Use the appropriate number to indicate your answers for each.
a)___ The MACRS depreciation system is used for tax purposes, and the straight-line depreciation method is used for financial reporting purposes for some plant assets.
b)___ A landlord collects some rents in advance. Rents received are taxable in
In addition, I am doing my own homework but I compare my answers with answers received and if something is not adding up on my side I go to campus and ask for guidance from head of the department. We all learn in different ways. I like to work things backwards. Gotta love that

OK I need MAJOR help. My textbook is nowhere to be found and I have a lot of hw to do.?
If somebody, Anybody could help. I will love you forever.

1. Yu Suzuki Company has a balance in its Accounts Receivable control account of $11,000 on January 1, 2010. The subsidiary ledger contains three accounts: Smith Company, balance $4,000; Green Company, balance $2,500; and Koyan Company. During January, the following receivable-related transactions occurred.

Credit Sales Collections Returns
Smith Company $9,000 $8,000 $ -0-
Green Company 7,000 2,500 3,000
Koyan Company 8,500 9,000 -0-

Instructions

What is the January 31 balance in the control account?
Compute the balances in the subsidiary accounts at the end of the month.
Smith Company $_____
Green Company $_____
Koyan Company $_____

Which January transaction would not be recorded in a special journal?

2. Nobo Uematsu Company has a balance in its Accounts Payable control account of $8,250 on January 1, 2010. The subsidiary ledger contains three accounts: Jones Company, balance $3,000; Brown Company, balance $1,875; and Aatski Company. During January, the following payable-related transactions occurred.

Purchases Payments
Returns
Jones Company
$6,750

$6,000

$ -0-
Brown Company
5,250

1,875

2,250
Aatski Company
6,375

6,750

-0-

Instructions
What is the January 1 balance in the Aatski Company subsidiary account?
What is the January 31 balance in the control account?
Compute the balances in the subsidiary accounts at the end of the month.
Jones
$
Brown
$
Aatski
$

Which January transaction would not be recorded in a special journal?

3. Montalvo Company uses special journals and a general journal. The following transactions occurred during September 2010.

Sept 2
Sold merchandise on account to T. Hossfeld, invoice no. 101, $720, terms n/30. The cost of the merchandise sold was $420.
10
Purchased merchandise on account from L. Rincon $600, terms 2/10, n/30.
12
Purchased office equipment on account from R. Press $6,500.
21
Sold merchandise on account to P. Lowther, invoice no. 102 for $800, terms 2/10, n/30. The cost of the merchandise sold was $480.
25
Purchased merchandise on account from W. Barone $860, terms n/30.
27
Sold merchandise to S. Miller for $700 cash. The cost of the merchandise sold was $400.

Instructions

Prepare a sales journal and a single-column purchase journal. (Use page 1 for each journal.) Record the transaction(s) for September that should be journalized in the sales journal and the purchases journal. (List transactions in order of occurrence.)

4 .On April 30, the bank reconciliation of Galena Company shows three outstanding checks: no. 254, $650, no. 255, $820, and no. 257, $410. The May bank statement and the May cash payments journal show the following.

Bank Statement Cash Payments Journal

Checks Paid

Checks Issued
Date Check No. Amount Date Check No. Amount
5/4 254 650 5/2 258 159
5/2 257 410 5/5 259 275
5/17 258 159 5/10 260 890
5/12 259 275 5/15 261 500
5/20 261 500 5/22 262 750
5/29 263 480 5/24 263 480
5/30 262 750 5/29 264 560

Instructions

Using step 2 in the reconciliation procedure, list the outstanding checks at May 31. (List check numbers from smallest to largest e.g. 3, 6, 10.)

THANK YOU SO MUCH!

Okay here’s the thing, i’m taking principles of accounting and i have a midterm very soon .
i’ll admit it’s not my favorit subject but still am trying to understand it the best i can .
i solved the exercises i have in the text book and done alot of work on them and one of them was the one i’ll write below …. if some can please give me the answer cause i don’t think i got it right ……… that and if u can name any textbooks that can help me i would be extremely grateful ………………

here’s the problem :
A business has an outstanding credit balance in the provision for doubtful debts amounting to 3,200$ at the beginning of the financial year ; 01.01.2009. the Blance sheet of the business at the year end 31.12.2009 showed a balance of 2020,500$ in the sales ledger. if the earlier experince indicate that 1% of the debtors remain unpaid , compute the amount of provision foe doubtful debt and double entry that will be entered in the accounting books to refelct the above situation at those at the close of business on 31.12.2009 ……..

Hello Yahoo Answers Community

I’m confused about these two categories and I would like some clarification. Correct me if I’m wrong, but my impression of the College Accounting book is that it introduces basic concepts while the Principles of Accounting is more like introducing expanded concepts. Would an individual with no accounting experience benefit from the College Accounting textbook or Principles of Accounting textbook? Or could it be both?

Your answer at unraveling this mystery will be appreciated! And just to give you an idea of what I’m talking about, here is the table of contents for a major College Accounting textbook and a major Principles of Accounting textbook (Warning! The info is long!):

College Accounting table of contents

Part 1: ACCOUNTING FOR A SERVICE BUSINESS.
1.Introduction to Accounting.
2. Analyzing Transactions: The Accounting Equation.
3. The Double-Entry Framework.
4. Journalizing and Posting Transactions.
5. Adjusting Entries and the Worksheet.
Appendix: Depreciation Methods.
6. Financial Statements and the Closing Process.
Appendix: Statement of Cash Flows.
Part 2: ACCOUNTING FOR CASH, PAYROLL, AND SERVICE BUSINESSES.
7. Accounting for Cash.
Appendix: Internal Controls.
8. Payroll Accounting: Employee Earnings and Deductions.
9. Payroll Accounting: Employer Taxes and Reports.
Part 3: ACCOUNTING FOR A MERCHANDISING BUSINESS.
10. Accounting for Sales and Cash Receipts.
11. Accounting for Purchases and Cash Payments.
Appendix: The Net-Price Method of Recording Purchases.
12. Special Journals.
13. Accounting for Merchandise Inventory.
Appendix: Perpetual Inventory Method: LIFO and Moving-Average Methods.
14. Adjustments and the Worksheet for a Merchandising Business.
Appendix: Expense Method of Accounting for Prepaid Expenses.
15. Financial Statements and Year-End Accounting for a Merchandising Business.
Part 4: SPECIALIZED ACCOUNTING PROCEDURES FOR MERCHANDISING BUSINESS AND PARTNERSHIPS.
16. Accounting for Accounts Receivable.
17. Accounting for Notes and Interest.
18. Accounting for Long-Term Assets.
19. Accounting for Partnerships.
Part 5: ACCOUNTING FOR CORPORATIONS AND MANUFACTORING BUSINESSES.
20. Corporations: Organization and Capital Stock.
21. Corporations: Earnings, Taxes, Distributions, and the Retained Earnings Statement.
22. Corporations: Bonds.
Appendix: Effective Interest Method.
23. Statements of Cash Flows.
Appendix: Statement of Cash Flows: The Direct Method.
24. Analysis of Financial Statements.
25. Departmental Accounting.
26. Manufacturing Accounting: The Job Order Cost System.
27. Manufacturing Accounting: The Work Sheet and Financial Statements.

And now the Principles of Accounting table of contents

Accounting in Business
Analyzing and Recording Transactions
Adjusting Accounts and Preparing Financial Statements
Completing the Accounting Cycle
Accounting for Merchandising Operations
Inventories and Cost of Sales
Accounting Information Systems
Cash and Internal Controls
Accounting for Receivables
Plant Assets, Natural Resources, and Intangibles
Current Liabilities and Payroll Accounting
Accounting for Partnerships
Accounting for Corporations
Long-Term Liabilities
Investments and International Operations
Reporting the Statement of Cash Flows
Analysis of Financial Statements
Managerial Accounting Concepts and Principles
Job Order Cost Accounting
Process Cost Accounting
Cost Allocation and Performance Measurement
Cost-Volume-Profit Analysis
Master Budgets and Planning
Flexible Budgets and Standard Costs
Capital Budgeting and Managerial Decisions