Exercise 2-1Ir Prepaid vs. unearned, the entity concept L0 2-4, 2-5
On October 1. 2M4. Caldonia Company paid East Alabama Rentals $4,5iil] for a 12-month lease on
a. Record the defen'al and the related December 31. 2014, adjustme
D A survey to collect data on a sample
I a. set of items of interest drawn from the population
0 Methods of organizingr summarizing, and ptesentlng data
a! E The process of malting an estimate. prediction, or decision about a po
a. ldenfyr the events met would require a yearend adjueting entry.
Answer I: complete and current
b. Are edjueting er eldeing eniriee recorded rel?
Burke Company earned $12,000 of service revenue on account during 2014. The company collected
$9,300 cash from accounts receivable during 2014.
Based on this information alone, determine the following for Burke Company. (Hint: Record the events i
Sold merchandlse oostlng $51,500 for $92,900 on aocount to Mables General Store.
Delivered the goods to Mahle's under terms FOB destination. Freight costs were $500 cash.
Reoelved returned goods from Maple's. The goods cost Poole Company 53,200 and w
The following events apply to Brown and Birgin. a public accounting n'rl. for the 2014 accounting period:
1. Performed $90,000 of services for clients on account.
2. Performed $05,000 of services for cash.
3. Incurred 5345.000 of other operating expenses
The balance sheet of the Chesapeake ICIcImcan'_n.ur contained the fellcwlng acccunta and balances:
Cash 5690 Hates Payable $390
Eaaecl en the ahcve lnfcrmatlcn cnly. the amcunt cr balance fer Land must he
Ed Amold started a personal nancial planning business when he accepted $120,000 cash as advance
payment for managing the nancial assets of a large estate. Amold agreed to manage the estate for a one-
year period beginning May 1. 2014.
a. Show the
High-low method = Cost @ high Costs @ low
High level Low level
CM (units) = selling $ per unit variable exp per unit
Difference between total sales $ and total variable exp
Target profit (dollar) = target profit + fixed expense
Carlos Bueso recently started a business. During the first few days of operation, Mr. Bueso transferred
$30,000 from his personal account into a business account for a company he named Bueso Enterprises.
Bueso Enterprises borrowed $40,000 from the State B
INTRODUCTION TO ACCOUNTING AND BUSINESS
Some users of accounting information include managers, employees, investors, creditors,
customers, and the government.
The role of accounting is to provide information for manage
The following selected account balances were drawn from the 2010 balance sheet and income statement of Fultz Company:
4,500 Common Stock