1. Prepare general journal entries for the following transactions of Valdez Services.
a. The company paid $2,000 cash for payment on a 6-month-old account payable for office supplies. b. The company paid $1,200 cash for the just completed two-week salary of the receptionist. c. The company paid $39,000 cash for equipment purchased. d. The company paid $800 cash for this month’s utilities. e. The company paid $4,500 cash in dividends to the owner (sole shareholder). 2. Transactions a, c, and e did not record an expense. Match each transaction (a, c, and e) with one of the following reasons for not recording an expense. This transaction is a distribution of cash to the owner. Even though equity decreased, that decrease did not occur in the process of providing goods or services to customers. This transaction decreased cash in settlement of a previously existing liability (equity did not change). Supplies expense is recorded when assets are used, not necessarily when cash is paid. This transaction involves the purchase of an asset. The form of the company’s assets changed, but total assets did not (and neither did equity).
Net revenue is simply defined as the total amount of money that an economic entity such as an individual or firm makes from sales minus the direct expenses. The net revenue accounts for the refunds, price reductions, and the direct expenses.
From the question, we've been informed that Wolfpack, Inc.provides goods and services to customers during the year totaling $100,000 and that during the year, customers are granted discounts, returns, and allowance of $20,000. Lastly, Wolfpack estimates that an additional $5,000 in discounts, returns, and allowances will occur next year.
The amount of net revenues Wolfpack will report in its current-year income statement will be:
= $100,000 - $20,000 - $5,0000
According to matching concept the revenue and its related expenses should be recognized in the same period in which they incur. In this question discount related to current years sales are expected to be given in the next year so, it should be recognized now because the relevant revenue recorded this year.
Service Revenue $100,000
Discounts, returns, and allowance ($25,000)
($20,000 + $5,000)
Net Revenue $75,000
Matching Concept Requires that the Expense should be recorded in the same period in which it;s corresponding income is recorded.
The $5,000 Discount is related to the current years revenue which is estimated to be given in the coming year. So, this discount should be recorded in the current period.
Revenue for the period $100,000
Less: Granted discounts, returns, and allowance $20,000
Less: Estimated Discount given in next year $5,000
Net Revenue $75,000
B. $ 75000
Gross sales and services = 100000
Discounts = 20000
Estimated additional discounts from this year sales = 5000
Net revenue = Gross Revenue/Sales - (Sales returns, discounts and allowances)
Net revenue = 100000 - 20000 - 5000
Net revenue for current year = $75, 000.
Suppose that ABC overstates its ending inventory for 2018. What effect will this have on the reported amount of cost of goods sold for 2018?
C. Understate cost of goods sold.
Cost of goods sold = beginning inventory + purchases during the period - ending inventory. If ending inventory is overstated, then COGS are understated.
The adjusting entry required when amounts previously recorded as deferred revenues are earned by providing goods or services to customers includes:
B) A debit to a liability.
Deferred revenues are liabilities with credit balances, therefore, when they are actually earned, they must decrease with a debit.
Sales revenue $350,000
Accounts receivable $280,000
Ending inventory $230,000
Cost of goods sold $180,000
Sales returns $50,000
Sales discount $20,000
Given the information in the above table, what is the company's gross profit?
Gross profit = net sales revenue - COGS
net sales revenue = total sales revenue - sales returns - sales discounts
If your employer declares bankruptcy, this can have a major effect on your pension if you are in a
C) Neither Plan
All types of pension plans are currently protected and only a small portion of very high income plans are affected in case of bankruptcy (generally plans that hold over $1 million or those plans with contributions higher than $54,000 per year).
you didn't list the answers but if I was to take a guess I would say charge for time
An accounting principle that states that a company should record revenues when they provide goods and services to customers.