Principles Of Auditing & Other Assurance Services
21st Edition
ISBN: 9781259916984
Author: WHITTINGTON, Ray, Pany, Kurt
Publisher: Mcgraw-hill Education,
expand_more
expand_more
format_list_bulleted
Concept explainers
Textbook Question
Chapter 16, Problem 37LOQ
Which of the following events occurring on January 5, 20X2, is most likely to result in an
- (1) A business combination.
- (2) Early retirement of bonds payable.
- (3) Settlement of litigation.
- (4) Plant closure due to a strike.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Which of the following does not affect the current liabilities section of the balance sheet?
Select one:
a. Sale of goods on credit
b. Wages owed to employees but not yet paid
c. Insurance bill to be paid next month
d. Purchase of inventory on credit
e. A probable legal obligation, due within 12 months
Which of the following does not affect the current liabilities section of the balance sheet?
a.
Insurance bill to be paid next month
b.
A probable legal obligation, due within 12 months
c.
Sale of goods on credit
d.
Wages owed to employees but not yet paid
(A) Prepare the journal entries to record the events above dates June 10, July 12, August 10 and October 25.
(B) Prepare the adjusting journal entry to record the bad debt provision for the year ended December 31, 2018.
(C) Show the ledger account for Allowance for Doubtful Accounts with all entries for 2018 and the ending balance after adjustment at December 31, 2018.
Chapter 16 Solutions
Principles Of Auditing & Other Assurance Services
Ch. 16 - Prob. 1RQCh. 16 - Prob. 2RQCh. 16 - Identify three items often misclassified as...Ch. 16 - Prob. 4RQCh. 16 - Prob. 5RQCh. 16 - Prob. 6RQCh. 16 - Prob. 7RQCh. 16 - Prob. 8RQCh. 16 - Prob. 9RQCh. 16 - What safeguards should be employed when the...
Ch. 16 - You are asked by a client to outline the...Ch. 16 - Prob. 12RQCh. 16 - Prob. 13RQCh. 16 - Prob. 14RQCh. 16 - Prob. 15RQCh. 16 - What are loss contingencies? How are such items...Ch. 16 - Prob. 17RQCh. 16 - Prob. 18RQCh. 16 - Prob. 19RQCh. 16 - What is the meaning of the term commitment? Give...Ch. 16 - Prob. 21RQCh. 16 - What are subsequent events?Ch. 16 - Describe the manner in which the auditors evaluate...Ch. 16 - Prob. 24RQCh. 16 - Prob. 25RQCh. 16 - Prob. 26RQCh. 16 - In your audit of the financial statements of Wolfe...Ch. 16 - Prob. 28QRACh. 16 - Prob. 29QRACh. 16 - Prob. 30QRACh. 16 - Prob. 31QRACh. 16 - The auditors opinion on the fairness of financial...Ch. 16 - Prob. 33QRACh. 16 - Prob. 34QRACh. 16 - Prob. 35QRACh. 16 - Prob. 36QRACh. 16 - Prob. 37AOQCh. 16 - Prob. 37BOQCh. 16 - Prob. 37COQCh. 16 - When auditing the statement of cash flows, which...Ch. 16 - The search for unrecorded liabilities for a public...Ch. 16 - The aggregated misstatement in the financial...Ch. 16 - Prob. 37GOQCh. 16 - Prob. 37HOQCh. 16 - Prob. 37IOQCh. 16 - Prob. 37JOQCh. 16 - Prob. 37KOQCh. 16 - Which of the following events occurring on January...Ch. 16 - Prob. 38OQCh. 16 - Prob. 39OQCh. 16 - Prob. 40OQCh. 16 - Match the following terms to the appropriate...Ch. 16 - Prob. 42OQCh. 16 - Prob. 43PCh. 16 - Prob. 44PCh. 16 - Prob. 45PCh. 16 - Prob. 46PCh. 16 - Prob. 47PCh. 16 - Prob. 48PCh. 16 - The audit staff of Adams, Barnes Co. (ABC), CPAs,...Ch. 16 - Prob. 50RDC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- 16. How does an SME account for events after the reporting period that provide evidence of conditions that existed at the end of the reporting period? a. As adjusting events after the end of the reporting period. b. As disclosures only in the notes. c. Either a or b as an accounting policy choice. d. None of these. The PFRS for SMEs does not require SMEs to identify and account for events after the reporting period.arrow_forwardA large account receivable from Taylor Industries was considered fully collectible at September 30, Year 5, the balance sheet date. Taylor suffered a plant explosion on October 25, Year 5. Because Taylor was uninsured, it is unlikely that the account will be paid. How should this event be presented in the entity's financial statements? Adjustment of the financial statements for the year ended September 30, Year 5. No financial statement disclosure. Disclosure in a note to the financial statements. Disclosure by means of supplemental, pro forma financial data.arrow_forwardcompany’s accounting records provide the following information concerning certain account balances and changes in the account balances during the current year. Transaction information is missing from each of the below. Prepare the journal entry to record the information for each account. b. Allowance for Doubtful Accounts: Jan. 1 balance, $1,500; Dec. 31 balance, $2,200; adjusting entry increasing allowance on Dec. 31, $4,800. Record write-off uncollectible accounts receivable. c. Inventory of office supplies: Jan. 1 balance, $1,500; Dec. 31 balance, $1,350; office supplies expense for the year, $9,500. Record purchase of office supplies. d. Equipment: Jan. 1 balance, $20,500; Dec. 31 balance, $18,000; equipment costing $8,000 was sold during the year. Record purchase of equipment. e. Accounts Payable: Jan. 1 balance $9,000; Dec. 31 balance, $11,500; purchases on - account for the year, $48,000. Record cash payments. Please dont provide solution in image thnxarrow_forward
- The transition date is the date: a. when a company no longer reports under its national standards. b. when the company issues its most recent financial statement under IFRS. c. three years prior to the reporting date. d. None of the above.arrow_forwardDarin Development Company engaged in the following transactions during the current year. (Click the icon to view the transactions.) Requirement Identify and classify the noncash assets and liabilities resulting from the current-year transactions. Assume that your classification is made as of the end of the current year. (If an input field is not used in the table leave the input field empty; do not select a label or enter a zero.) a. b. C. d. e. f. Account Name Classification Amount Transactions a. Borrowed $400,000 from Pleasantville Community Bank at the beginning of the year. The terms of the note call for annual payments of $50,000. The first annual payment has not been paid as of the end of the current year. (Ignore any interest payable.) b. Made sales for the current year amounting to $2,900,000 with 40% collected during the current year. c. Acquired inventory costing $345,000 on account. d. Incurred taxes due on the current year's income of $76,000. e. Paid $60,000 for a…arrow_forwardFor each of the following scenarios, indicate the amount of the adjusting journal entry for Bad Debt expense to be recorded, the balance in Allowance for Doubtful Accounts after adjustment at December 31, and the net realizable value of Accounts Receivable at December 31. a. Based on an analysis of Simmon's Company's $380,000 balance in Accounts Receivable at December 31, it was estimated that $15,500 will be uncollectible. There is a credit balance of $1,200 in Allowance for Doubtful Accounts before adjustment. Bad Debt Expense $fill in the blank 1 Allowance for Doubtful Accounts at Dec. 31 fill in the blank 2 Net Realizable Value of A/R at Dec. 31 fill in the blank 3 b. Blake Company had credit sales of $900,000 at year-end, and has an Accounts Receivable balance of $425,000 at December 31, and an Allowance for Doubtful Accounts credit balance of $11,000 before adjustment. Blake estimates bad debt expense as 3/4 of 1% of credit sales. Bad Debt Expense $fill in the…arrow_forward
- If Oxbow Corporation does not record a sale made on account in December until a monthlater when the customer pays its invoice, how will Oxbow’s December financial statementsbe impacted?a. Assets will be understated on the balance sheet, while revenues will be overstated on theincome statement.b. Assets will be understated on the balance sheet, while revenues will be understated onthe income statement.c. Assets will be overstated on the balance sheet, while revenues will be overstated on theincome statement.d. Assets will be overstated on the balance sheet, while revenues will be understated on theincome statement.arrow_forwardWhich of the following adjusting entries involves the recognition of an accrued expense? a. recording depreciation on a long-lived asset b. writing off the portion of an insurance policy that has expired c. recognition of salaries owed to employees for work done during the current period that will be paid during the next accounting period d. recognition of bad debt losses that are expected to result from making sales on credit termsarrow_forwardFor each of the following scenarios, indicate the amount of the adjusting journal entry for Bad Debt Expense to be recorded, the balance in Allowance for Doubtful Accounts after adjustment at December 31, and the net realizable value of Accounts Receivable at December 31. a. Based on an analysis of Simmons Company's $380,000 balance in Accounts Receivable at December 31, it was estimated that $15,500 will be uncollectible. There is a credit balance of $1,200 in Allowance for Doubtful Accounts before adjustment. Bad Debt Expense $ Allowance for Doubtful Accounts at Dec. 31 Net Realizable Value of Accounts Receivable at Dec. 31 b. Blake Company had credit sales of $900,000 at year-end, an Accounts Receivable balance of $425,000 at December 31, and an Allowance for Doubtful Accounts credit balance of $11,000 before adjustment. Blake estimates bad debt expense as ¾ of 1% of credit sales. Bad Debt Expense $ Allowance for Doubtful Accounts at Dec. 31 Net Realizable…arrow_forward
- Required: (a) Prepare journal entries to record the impairment loss of receivable in 2021 under Statement of Financial Position approach. (b) Prepare partial Statement of Financial Positions to show the accounts receivables at 31 December 2021.arrow_forward) Using the requirements set out in HKAS 10 ‘Events after the Reporting Period’, which of thefollowing would be classified as an adjusting event after the reporting period in financialstatements ended 31 March 2018 that were approved by the directors on 31 August 2018?A A reorganisation of the entity, proposed by a director on 31 January 2018 and agreed by theboard on 10 July 2018B A strike by the workforce which started on 1 May 2018 and stopped all production for 10weeks before being settledC The receipt of cash from a claim on an insurance policy for damage caused by a fire in awarehouse on 1 January 2018. The claim was made in January 2018 and the amount of theclaim had not been recognised at 31 March 2018 as it was uncertain that any money wouldbe paid. The insurance entity settled with a payment of $1.5 million on 1 June 2018D The entity had made large export sales to the United States during the year. The year-endreceivables included $2 million for amounts outstanding that were…arrow_forwardarkman Sporting Goods is preparing its annual report for its fiscal year. The company's controller has asked for your help in determining how best to disclose information about the following items: Required: Indicate whether each item should be disclosed (A) in the summary of significant accounting policies note, (B) in a separate disclosure note, or (C) on the face of the balance sheet. 1. A related-party transaction.2. Depreciation method.3. Allowance for uncollectible accounts.4. Composition of investments.5. Composition of long-term debt.6. Inventory costing method.7. Number of shares of common stock authorized, issued, and outstanding.8. Employee benefit plans.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Auditing: A Risk Based-Approach (MindTap Course L...AccountingISBN:9781337619455Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:Cengage Learning
Auditing: A Risk Based-Approach (MindTap Course L...
Accounting
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Cengage Learning
The accounting cycle; Author: Alanis Business academy;https://www.youtube.com/watch?v=XTspj8CtzPk;License: Standard YouTube License, CC-BY