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    Carillo Industry collected $108,000 from customers in 2017. Of this amount, $25,000 was for services performed in 2016 and $36,000 was for services performed in 2017 but will not be collected until 2018. Carillo also paid $72,000 in expenses in 2017, of which $30,000 was for expenses incurred in 2016 and $42,000 was for expenses incurred in 2017 but will not be paid until 2018.

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    POA

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    Carillo Industry collected $108,000 from customers in 2017. Of this amount, $25,000 was for services performed in 2016 and $36,000 was for services performed in 2017 but will not be collected until 2018. Carillo also paid $72,000 in expenses in 2017, of which $30,000 was for expenses incurred in 2016 and $42,000 was for expenses incurred in 2017 but will not be paid until 2018.

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    Carillo Industry collected $108,000 from customers in 2017. Of this amount, $25,000 was for services performed in 2016 and $36,000 was for services performed in 2017 but will not be collected until 2018. Carillo also paid $72,000 in expenses in 2017, of which $30,000 was for expenses incurred in 2016 and $42,000 was for expenses incurred in 2017 but will not be paid until 2018.

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    400 views7 pages

    POA

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    johnny
    Carillo Industry collected $108,000 from customers in 2017. Of this amount, $25,000 was for services performed in 2016 and $36,000 was for services performed in 2017 but will not be collected until 2018. Carillo also paid $72,000 in expenses in 2017, of which $30,000 was for expenses incurred in 2016 and $42,000 was for expenses incurred in 2017 but will not be paid until 2018.

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    Principles of Accounting

    Class: BBC5.4
    Name: PHAM KHANH HUY

    Chapter 3

    E3-3 Carillo Industry collected $108,000 from customers in 2017. Of the amount
    collected $25,000 was for services performed in 2016. In addition, Carillo performed
    services worth $36,000 in 2017, which will not be collected until 2018.
    Carillo Industry also paid $72,000 for expenses in 2017. Of the amount paid, $30,000
    was for expenses incurred on account in 2016. In addition, Carillo incurred $42,000 of
    expenses in 2017, which will not be paid until 2018.

    Answers:

    A) Compute 2017 cash-basis net income7hy

    Cash received from revenue $108.000


    Cash paid for expenses $72.000
    Cash-basic net income $36.000

    B) Compute 2017 accrual-basis net income


    Revenues $119.000= 83.000 + 36.000
    Expenses $84.000= 42.000 + 42.000
    Accrual-basis net income $35.000

    E3-7 The ledger of Passehl Rental Agency on March 3 of the year includes the selected
    accounts, shown below, before adjusting entries have been prepared:

    No. Account tiles and explanation Debit Credit


    Depreciation expense ($400*3) 1,200
    1
    Accumulated Depreciation-equipment 1,200
    Unearned revenue (9,900*1/3) 3,300
    2
    Rent revenue 3,300
    Interest expense 500
    3
    Interest payable 500
    Supplies expense ($2,800-700) 2,100
    4
    Supplies 2,100
    Insurance expense ($200*3) 600
    5
    Prepaid insurance 600
    E3-10 The income statement of Montee Co. for the month of July shows net income of
    $1,400 based on service revenue $5,500, salaries and wages expense $2,300, supplies
    expense $1,200, and utilities expense $600. In reviewing the statement, you discover the
    following:

    Answers:

    Montee Co.
    Income statement
    For the month of July 2017

    Debit Credit
    Revenue
    Service revenue (5,500+650) $6,150
    Expense
    Salaries and wages (2,300+300) $2,600
    Supplies expenses (1,200-250) 950
    Utilities expenses 600
    Prepaid insurance 400
    Depreciation of equipment 150
    Total expenses 4,700
    Net income $1,450
    Chapter 4

    E4-1 the trial balance columns of the worksheet for Dixon Company at June 30, 2017
    are follows.

    Answer:

    DIXON COMPANY
    Worksheet
    For the Month Ended June 30, 2017

    Trial Adj. Trial Income Balance


    Account Titles Balance Adjustments Balance Statement Sheet
    Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr.
    Cash 2,320 2,320 2,320
    Accounts
    Receivable 2,440 2,440 2,440
    Supplies 1,880 1,580 300 300
    Accounts
    Payable 1,120 1,120 1,120
    Unearned
    Revenue 240 140 100 100
    Common
    Stock 3,600 3,600 3,600
    Service
    Revenue 2,400 140 2,540 2,540
    Salaries
    Expense 560 280 840 840
    Miscellaneous
    expense 160 160 160
    Totals 7,360 7,360
    Supplies
    Expense 1,580 1,580 1,580
    Salaries
    Payable 280 280 280
    Totals 2,000 2,000 7,640 7,640 2,580 2,540 5,060 5,100
    Net Loss 40 40
    Totals 2,580 2,580 5,100 5,100
    E4-2 the adjusted trial balance columns of the worksheet for Savaglia Company are as
    follows:

    Answers:

    SAVAGLIA COMPANY
    Worksheet
    For the Month Ended April 30, 2017

    Trial Adjustmen Adj. Trial Income


    Account Titles Balance ts Balance Statement Balance Sheet
    Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr.
    Cash 10,000 10,000
    Accounts Receivable 7,840 7,840
    Prepaid rent 2,280 2,280
    Equipment 23,050 23,050
    Accumulated
    Depreciation-equip. 4,900 4,900
    Note payable 5,700 5,700
    Account payable 4,920 4,920

    Owner’s capital 560 27,960 27,960

    Owner’s drawings 3,650 3,650


    Service revenue 15,590 15,590
    Salaries and wages
    expense 10,840 10,840
    Rent expense 760 760
    Depreciation expense 650 650
    Interest expense 57 57
    Interest payable 57 57
    Totals 59,127 59,127 12,307 43,480
    3,340
    Net Income 3,262 15,590 46,820
    Totals 15,590 15,590 46,820 46,820
    Chapter 5

    E5-1 Mr. McKenzie has prepared the following list of statements about service
    companies and merchandisers:

    Answer:

    1. Measuring net income for a merchandiser is conceptually the same as for a service
    company. True
    2. For a merchandiser, sales less operating expenses is called gross profit. False
    Correct: sales minus cost of goods sold equals Gross profit
    3. For a merchandiser, the primary source of revenues is the sale of inventory. True
    4. Sales salaries and wages is an example of an operating expense. True
    5. The operating cycle of a merchandiser is the same as that of a service company.
    False
    Correct: the added asset account for a merchandising company is the inventory
    account.
    6. In a perpetual inventory system, no detailed inventory records of goods on hand are
    maintained. False
    Correct: perpetual inventory system keep detailed inventory records throughout the
    accounting period.
    7. In a periodic inventory system, the cost of goods sold is determined only at the end
    of the accounting period. True
    8. A periodic inventory system provides better control over inventories than a perpetual
    system. False
    Correct: a perpetual system provides better control over inventories than a periodic
    inventory system.

    E5-9 Presented below is information for Kaila Company for the month of March 2017.

    (a) Multiple-step income statement:

    Kaila Company
    Income Statement
    For the month of March 2017
    Sales
    Sales revenue $380,000
    Less: Sales returns and
    13,000
    allowances
    Sales discounts 8,000 $21,000
    Net sales $359,000
    Cost of goods sold 215,000
    Gross profit $144,000
    Operating expenses
    Rent expense 30,000
    Salaries and wages
    58,000
    expense
    Freight-out 7,000
    Insurance expense 6,000
    Total operating
    $101,000
    expenses
    Income from operations $43,000
    Net income $43,000

    (b) Compute the gross profit rate:


    Answer:
    Gross Profit Rate= Gross Profit / Net Sales= 144,000 / 359,000= 40.1%

    E5-10 In its income statement for the year ended December 31, 2017, Anhad Company
    reported the following condensed data.
    Answer:
    (a) Multiple-step income statement:
    Anhad Company
    Income Statement
    For the ended December 31, 2017

    Net sales $2,200,000


    Cost of goods sold 1,289,000
    Gross profit 911,000
    Operating expenses 725,000
    Income from
    186,000
    operation
    Other revenues and
    gains
    Interest revenue $28,000
    Other expenses and
    losses
    Interest expense $70,000
    Loss on disposal of
    17,000 87,000 (59,000)
    plant assets
    Net income $127,000

    (b) Single-step income statement:

    Anhad Company
    Income Statement
    For the ended December 31, 2017

    Revenues
    Net sales $2,200,000
    Interest revenue 28,000
    Total revenues $2,228,000

    Expenses
    Cost of goods sold 1,289,000
    Operating expenses 725,000
    Interest expense 70,000
    Loss on disposal of
    17,000
    plant assets
    Total expenses $2,101,000
    Net income $127,000

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