Mullins Corp., a start‑up company, uses the accrual accounting method. In Year 1, Mullins provided services that were acceptable to its customers and billed those customers for $620,000. However, Mullins collected only $520,000 cash in Year 1, and the remaining $100,000 was collected in Year 2. Mullins’ employees earned $300,000 in Year 1 wages that were not paid until the first week of Year 2. Based only on this information, how much net income does Mullins report for Year 1?
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Mullins Corp., a start‑up company, uses the accrual accounting method. In Year 1, Mullins provided services that were acceptable to its customers and billed those customers for $620,000. However, Mullins collected only $520,000 cash in Year 1, and the remaining $100,000 was collected in Year 2. Mullins’ employees earned $300,000 in Year 1 wages that were not paid until the first week of Year 2. Based only on this information, how much net income does Mullins report for Year 1?
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- Cude Corp., a start‑up company, uses the accrual basis of accounting. In Year 1, Cude provided services that were acceptable to its customers and billed those customers for $620,000. However, Cude collected only $520,000 cash in Year 1, and the remaining $100,000 was collected in Year 2. Cude’s employees earned $300,000 in Year 1 wages that were not paid until the first week of Year 2. Based only on this information, how much net income does Cude report for Year 2?In providing accounting services to small businesses, you encounter the following situations. 1. 2. Waterway Corporation rings up cash sales and sales taxes separately on its cash register. On April 10, the register totals are pre-tax sales of sales $6,500 plus GST of $325 and PST of $520. (i) During the month of March, Concord Corporation's employees earned and were paid gross salaries of $60,000. Withholdings deducted from employee earnings related to these salaries were $3,254 for CPP, $948 for El, $7,750 for income taxes. (ii) Concord's employer portions were $3,254 for CPP and $1,327 for El for the month. Prepare the journal entries to record the above transactions. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. List all debit entries before credit entries.) No. Account Titles 1. Debit Credit 2 (i). 2 (ii).During year 6, Kincaid, Inc. earned $85,000 of cash revenue. The company incurs all operating expenses on account. The year 6 begginning balance in Kincaid's account payable was $2,000, while the ending balance was $25,000. The company made cash payments of $40,000 to reduce accounts payable during year 6. Based on the information provided, determine the amount of operating expense recognized, the amount of net income earned, and the amount of cash flow from operating activities.
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- Below are four independent cases (a to d) affecting Wong Auto Repair Inc. (WARI) in 2019. a. Each Friday, WARI pays employees for the current week's work. The amount of the payroll is $6,000 for a five-day week. The current accounting period ends on Monday. b. WARI has received notes receivable from some clients for services. During the current year, WARI has earned accrued interest revenue of $3,250, which will be received next year. c. The beginning balance of supplies was $15,500. During the year, then entity purchased supplies costing $55,400, and at December 31 the inventory of supplies on hand is $12,650. d. WARI is conducting test of new hinges to be used in the rebuilding of a dump truck, and the client paid WARI $15,000 at the start of the project. WARI recorded this amount as Unearned Service Revenue. The tests will take several months to complete. WARI executives estimate that the company has earned two-thirds of the total fee during the current year. Required Journalize the…Below are four independent cases (a to d) affecting Wong Auto Repair Inc. (WARI) in 2019.a. Each Friday, WARI pays employees for the current week’s work. The amount of the payroll is$6,000 for a five-day week. The current accounting period ends on Monday.b. WARI has received notes receivable from some clients for services. During the current year, WARIhas earned accrued interest revenue of $3,250, which will be received next year.c. The beginning balance of supplies was $15,500. During the year, then entity purchased suppliescosting $55,400, and at December 31 the inventory of supplies on hand is $12,650.d. WARI is conducting test of new hinges to be used in the rebuilding of a dump truck, and the clientpaid WARI $15,000 at the start of the project. WARI recorded this amount as Unearned ServiceRevenue. The tests will take several months to complete. WARI executives estimate that thecompany has earned two-thirds of the total fee during the current year.RequiredJournalize the adjusting…Ralph Henwood was paid a salary of $79,200 during 20-- by Odesto Company. In addition, during the year Henwood started his own business as a public accountant and reported a net business income of $64,000 on his income tax return for 20--. Compute the following: a. The amount of FICA taxes that was withheld from his earnings during 20-- by Odesto Company. OASDI HI b. Henwood's self-employment taxes on the income derived from the public accounting business for 20--. OASDI HI
- Norma Smith is the controller of Baylor Corporation and is responsible for the preparation of the year-end financial statements. The following transactions occurred during the year. a. On December 20, 2020, a former employee filed a legal action against Baylor for $100,000 for wrongful dismissal. Management believes the action to be frivolous and without merit. The likelihood of payment to the employee is remote. b. Bonuses to key employees based on net income for 2020 are estimated to be $150,000. c. On December 1, 2020, the company borrowed $600,000 at 8% per year. Interest is paid quarterly. d. Accounts receivable at December 31, 2020, is $10,000,000. An aging analysis indicates that Baylor’s expense provision for doubtful accounts is estimated to be 3% of the receivables balance. e. On December 15, 2020, the company declared a $2.00 per share dividend on the 40,000 shares of common stock outstanding, to be paid on January 5, 2021. f. During the year, customer…The WGN Company has a bonus arrangement, which grants the financial vice president and other executives a $15,000 bonus if the net income exceeds the previous year's by $1,000,000. Noting that the current financial statements report an increase of $950,000 in the net income, Vice President Jack Brickhouse asks Louise Boudreau, the controller, to reduce the estimate of warranty expense to $60,000. The present estimate of warranty expense is $500,000 and is known by both Brickhouse and Boudreau to be a fairly "soft" amount. Answer the following questions: 1. Should Boudreau lower her estimate? 2. What ethical issue is at stake? Would anyone be harmed by the change in estimate? 3. Is Brickhouse acting ethically?Ralph Henwood was paid a salary of $82,400 during 20-- by Odesto Company. In addition, during the year Henwood started his own business as a public accountant and reported a net business income of $66,500 on his income tax return for 20--. Compute the following: The amount of FICA taxes that was withheld from his earnings during 20-- by Odesto Company. OASDI $fill in the blank 1 HI $fill in the blank 2 b. Henwood's self-employment taxes on the income derived from the public accounting business for 20--. OASDI $fill in the blank 3 HI $fill in the blank 4