Principles of Financial Accounting.
24th Edition
ISBN: 9781260158601
Author: Wild
Publisher: MCG
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Chapter 2, Problem 3MCQ
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Identify the correct option for the given transaction.
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Platinum Corporation belongs to the rubber tire trading industry. Its most recent balance sheet and income statement appear below:
Statement of Financial Position
December 31, Year 2 and Year 1
(in thousands of dollars)
Year 2
Year 1
Assets
Current assets:
Cash....................................................................
$ 30
$ 110
Accounts receivable............................................
210
260
Inventory............................................................
190
170
Prepaid expenses.................................................
70
70
Total current assets................................................
500
610
Plant and equipment, net.......................................
810
740
Total assets.............................................................
$1,310
$1,350…
Platinum Corporation belongs to the rubber tire trading industry. Its most recent balance sheet and income statement appear below:
Statement of Financial Position
December 31, Year 2 and Year 1
(in thousands of dollars)
Year 2
Year 1
Assets
Current assets:
Cash................................................................
$ 30
$ 110
Accounts receivable.......................................
210
260
Inventory........................................................
190
170
Prepaid expenses............................................
70
70
Total current assets............................................
500
610
Plant and equipment, net...................................
810
740
Total assets........................................................
$1,310
$1,350
Liabilities and…
I need prepare the income statement in accordance with genrally accepted accounting principles.
Revenue:
services provides to cotumers.......$17,000
investment by stockholders..............5,000
loan from bank.....................................15,000
total $37,000
expenses:
Payments to long-term creditors...........................$11,700
expenses required to provide
services to cutomers....................................................7,800
purchased of land......................................................16,000
total 35,500
net income $1,500
Chapter 2 Solutions
Principles of Financial Accounting.
Ch. 2 - Amalia Company received its utility bill for the...Ch. 2 - On May 1, Mattingly Lawn Service collected 2,500...Ch. 2 - Prob. 3MCQCh. 2 - A trial balance prepared at year-end shows total...Ch. 2 - Prob. 5MCQCh. 2 - Prob. 1DQCh. 2 - What is the difference between a note payable and...Ch. 2 - Prob. 3DQCh. 2 - Prob. 4DQCh. 2 - Are debits or credits typically listed first in...
Ch. 2 - Prob. 6DQCh. 2 - Prob. 7DQCh. 2 - Prob. 8DQCh. 2 - Prob. 9DQCh. 2 - Prob. 10DQCh. 2 - Prob. 11DQCh. 2 - Prob. 12DQCh. 2 - Prob. 13DQCh. 2 - Define (a) assets, (b) liabilities, (c) equity,...Ch. 2 - Which financial statement is sometimes called the...Ch. 2 - APPLE Review the Apple balance sheet in Appendix...Ch. 2 - Prob. 17DQCh. 2 - Prob. 18DQCh. 2 - Prob. 1QSCh. 2 - Identifying financial statement accounts C2...Ch. 2 - Prob. 3QSCh. 2 - Prob. 4QSCh. 2 - Linking debit or credit with normal balance C4...Ch. 2 - Analyzing transactions and preparing journal...Ch. 2 - Prob. 7QSCh. 2 - Identifying a posting error A trial balance has...Ch. 2 - Prob. 9QSCh. 2 - Prob. 10QSCh. 2 - Prob. 11QSCh. 2 - Preparing an income statement P3 Liu Zhang...Ch. 2 - Prob. 13QSCh. 2 - Preparing a balance sheet P3 Use the information...Ch. 2 - Prob. 15QSCh. 2 - Prob. 1ECh. 2 - Identifying and classifying accounts Enter the...Ch. 2 - Identifying a ledger and chart of accounts C3...Ch. 2 - Prob. 4ECh. 2 - Analyzing effects of a compound entry A1 Groro Co....Ch. 2 - Prob. 6ECh. 2 - Prob. 7ECh. 2 - Preparing T-accounts (ledger) and a trial balance...Ch. 2 - Prob. 9ECh. 2 - Prob. 10ECh. 2 - Prob. 11ECh. 2 - Analyzing and journalizing transactions involving...Ch. 2 - Prob. 13ECh. 2 - Prob. 14ECh. 2 - Prob. 15ECh. 2 - Prob. 16ECh. 2 - Prob. 17ECh. 2 - Prob. 18ECh. 2 - Prob. 19ECh. 2 - Identifying effects of posting errors on the trial...Ch. 2 - Analyzing a trial balance error You are told the...Ch. 2 - Calculating and interpreting the debt ratio A2...Ch. 2 - Prob. 23ECh. 2 - Prob. 5APCh. 2 - Prob. 6APCh. 2 - Prob. 7APCh. 2 - The accounting records of Tama Co. show the...Ch. 2 - Prob. 6BPCh. 2 - Prob. 7BPCh. 2 - Prob. 1AACh. 2 - Prob. 2AACh. 2 - GLOBAL ANALYSIS A2 Key comparative figures for...Ch. 2 - Prob. 1BTNCh. 2 - COMMUNICATING IN PRACTICE Lila Corentine is an...Ch. 2 - Prob. 3BTNCh. 2 - Prob. 5BTNCh. 2 - Prob. 6BTN
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- On May 1, Donovan Company reported the following account balances:Current assets . . . . . . . . . . . . $ 90,000Buildings & equipment (net) . 220,000Total assets . . . . . . . . . . . .. . $310,000Liabilities . . . . . . . . . . . . . . . . $ 60,000Common stock . . . . . . . . . . . . . 150,000Retained earnings . . . . . . . . . 100,000Total liabilities and equities . $310,000On May 1, Beasley paid $400,000 in stock (fair value) for all of the assets and liabilities of Donovan, which will cease to exist as a separate entity. In connection with the merger, Beasley incurred $15,000 in accounts payable for legal and accounting fees.Beasley also agreed to pay $75,000 to the former owners of Donovan contingent on meeting certain revenue goals during the following year. Beasley estimated the present value of its probability adjusted expected payment for the contingency at $20,000. In determining its offer, Beasley noted the following:∙ Donovan holds a building with a fair value…arrow_forwardOn May 1, Donovan Company reported the following account balances:Current assets . . . . . . . . . . . . $ 90,000Buildings & equipment (net) . 220,000Total assets . . . . . . . . . . . .. . $310,000Liabilities . . . . . . . . . . . . . . . . $ 60,000Common stock . . . . . . . . . . . . . 150,000Retained earnings . . . . . . . . . 100,000Total liabilities and equities . $310,000On May 1, Beasley paid $400,000 in stock (fair value) for all of the assets and liabilities of Donovan, which will cease to exist as a separate entity. In connection with the merger, Beasley incurred $15,000 in accounts payable for legal and accounting fees.Beasley also agreed to pay $75,000 to the former owners of Donovan contingent on meeting certain revenue goals during the following year. Beasley estimated the present value of its probability adjusted expected payment for the contingency at $20,000. In determining its offer, Beasley noted the following:∙ Donovan holds a building with a fair value…arrow_forward13. On June 1, Cline Co. paid $800,000 cash for all of the issued and outstanding common stock of Renn Corp. The carrying values for Renn’s assets and liabilities on June 1 follow: Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $150,000 Accounts receivable . . . . . . . . . . . . . . . . . . . 180,000 Capitalized software costs. . . . . . . . . . . . . . . 320,000 Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000 Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . (130,000) Net assets . . . . . . . . . . . . . . . . . . . . . . . . . … $620,000 On June 1, Renn’s accounts receivable had a fair value of $140,000. Additionally, Renn’s in process research and development was estimated to have a fair value of $200,000. All other items were stated at their fair values. On Cline’s June 1 consolidated balance sheet, how much is reported for goodwill? A. $320,000. B. $120,000. C. $80,000. D. $20,000.arrow_forward
- June 1, Cline Co. paid $800,000 cash for all of the issued and outstanding common stock of Renn Corp. The carrying values for Renn’s assets and liabilities on June 1 follow: Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $150,000 Accounts receivable . . . . . . . . . . . . . . . . . . . 180,000 Capitalized software costs. . . . . . . . . . . . . . . 320,000 Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000 Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . (130,000) Net assets . . . . . . . . . . . . . . . . . . . . . . . . . … $620,000 On June 1, Renn’s accounts receivable had a fair value of $140,000. Additionally, Renn’s in process research and development was estimated to have a fair value of $200,000. All other items were stated at their fair values. On Cline’s June 1 consolidated balance sheet, how much is reported for goodwill? A. $320,000. B. $20,000. C. $80,000. D $120,000. E.Non of the Abovearrow_forwardGulf Cement, Inc. reports the following assets and liabilities, Compute the totals that would appear in the corporation's basic accounting equation (Assets = Liabilities + Stockholders' Equity (Capital Stock)). Cash...Asset.. OMR 37,000 Assets e Yi abilities + Equity- Accounts Payable....liabi libies OMR 15,000 30 800 Supplies....A seps. OMR 1, 800 Loan Payable. ibiliies OMR 9,000 Inventory....AScts. OMR 12,000arrow_forwardJanus Company had the following journal entry: Debit Credit Cash $30,000 Common Stock $30,000 From this entry, we can determine that Janus: a Purchased $30,000 of another company’s common stock b Repurchased $30,000 of their own common stock. c Issued $30,000 of their own common stock d urchased $30,000 of Investments.arrow_forward
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- Presented below is the balance sheet for Sabino Family Dentistry on January 1 of the current year. SABINO FAMILY DENTISTRY Statement of Financial Position (Balance Sheet) January 1, 20__ Assets Liabilities & Shareholders’ Equity Cash $ 33,000 Liabilities: Accounts receivable......... 51,150 Accounts payable .............................. $ 74,250 Land 313,500 Total liabilities................................. $ 74,250 Building........................... 371,250 Equity: Equipment........................ 57,750 Share capital.................................... 752,400 Total liabilities and Total assets....................... $826,650 equity................................................... $826,250 During the…arrow_forwardGirard Unlimited, a new company, completed these transactions.1. Stockholders invested $55,000 cash and inventory with a fair value of $30,000.2. Sales on account, $25,000.What will Girard’s total assets equal?a. $110,000b. $85,000c. $55,000d. $80,000arrow_forward1. Issued $46000 of par value common stock for cash. 2. Repaid a 6 year note payable in the amount of $21300. 3. Acquired land by issuing common stock of par value $100000. 4. Declared and paid a cash dividend of $2300. 5. Sold a long-term investment (cost $3300) for cash of $8000. 6. Acquired an investment in IBM stock for cash of $14800. What is the net cash provided used by investing activities? $8000 O $30300 O($6800) O $14800arrow_forward
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