Listed below are several transactions that took place during the first two years of operations for the law firm of Pete, Pete, and Roy. Year 1 $170,000 $220,000 160,000 Year 2 Amounts billed to clients for services rendered Cash collected from clients 190,000 Cash disbursements Salaries paid to employees for services rendered during the year Utilities Purchase of insurance policy 90,000 30,000 60,000 100,000 40,000 In addition, you learn that the firm incurred utility costs of $35,000 in year 1, that there were no liabilities at the end of year 2, no anticipated bad debts on receivables, and that the insurance policy covers a three-year period. Required: 1. & 3. Calculate the net operating cash flow for years 1 and 2 and determine the amount of receivables from clients that the firm would show in its year 1 and year 2 balance sheets prepared according to the accrual accounting model. 2. Prepare an income statement for each year according to the accrual accounting model.

Listed below are several transactions that took place during the first two years of operations for the law firm of Pete, Pete, and Roy. Year 1 $170,000 $220,000 160,000 Year 2 Amounts billed to clients for services rendered Cash collected from clients 190,000 Cash disbursements Salaries paid to employees for services rendered during the year Utilities Purchase of insurance policy 90,000 30,000 60,000 100,000 40,000 In addition, you learn that the firm incurred utility costs of $35,000 in year 1, that there were no liabilities at the end of year 2, no anticipated bad debts on receivables, and that the insurance policy covers a three-year period. Required: 1. & 3. Calculate the net operating cash flow for years 1 and 2 and determine the amount of receivables from clients that the firm would show in its year 1 and year 2 balance sheets prepared according to the accrual accounting model. 2. Prepare an income statement for each year according to the accrual accounting model.

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter19: Corporations: Distributions Not In Complete Liquidation

Section: Chapter Questions

Problem 35P

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Gregorio Corp. purchased a P5,000,000 ordinary life insurance policy on its president. Gregorio is the beneficiary under the policy. The policy year and Gregorio' accounting year coincide. Additional data available for the year ended December 31, 2023 are as follows: Cash surrender value, January 1 Cash surrender value, December 31 Annual advance premium paid January 1 Dividend received on July 1 What amount should be reported as life insurance expense for 2023? P228,000 290,000 120,000 15,000
Fink Insurance collected premiums of $18,300,000 from its customers during the current year. The adjusted balance in the Deferred premiums revenue account increased from $5.0 million to $9.3 million dollars during the year. What is Fink's revenue from insurance premium recognized for the current year? Multiple Choice $9,000,000. $22,600.000. $14,000,000
ok The following transactions took place for Smart Solutions Incorporated. ces 2020 a. July 1 Loaned $70,000 to employees of the company and received back one-year, 10 percent notes. b. December 31 Accrued interest on the notes. 2021 c. July 1 d. July 1 Required: Prepare the journal entries that Smart Solutions Incorporated would record for the above transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Received interest on the notes. (No interest has been recorded since December 31.) Received principal on the notes. Journal entry worksheet 1 Loaned $70,000 to employees of the company and received back one-year, 10 percent notes. Record the transaction. 2 Note: Enter debits before credits. < Date July 01, 2020 < Journal entry worksheet 1 Date Note: Enter debits before credits. December 31, 2020 Record entry 1 Accrued interest on the notes. Record the transaction. 2 Journal entry worksheet 2…
James Cor. is in its first year of operations. The company has pretax income of $400,000. The company has the following items recorded in its records for 2019. Premiums on life insurance of key officers 10,000 Interest on municipal bonds 5300 Warranty Expense 4000 Actual Warranty Repairs 3250 Bad Debt Expense 1400 BeginningBalance in the Allowance for Doubtful Accounts 0 Ending Balance in the Allowance for Doubtful Accounts 800 Rent received in advance from clients that will be recognized evenly over the next 3 years 24000. The tax rate for the current and future years 40% James Purchased $100,000 ni equipment, ti wil be depreciated using straight line over 4years for book purposes and double declining over 4 years for tax purposes. Prepare the deferred tax journal entry for 2019 and show the income statement and balance sheet presentation.
James Cor. is in its first year of operations. The company has pretax income of $400,000. The company has the following items recorded in its records for 2019. Premiums on life insurance of key officers 10,000 Interest on municipal bonds 5300 Warranty Expense 4000 Actual Warranty Repairs 3250 Bad Debt Expense 1400 BeginningBalance in the Allowance for Doubtful Accounts 0 Ending Balance in the Allowance for Doubtful Accounts 800 Rent received in advance from clients that will be recognized evenly over the next 3 years 24000. The tax rate for the current and future years 40% James Purchased $100,000 in equipment, it will be depreciated using straight line over 4years for book purposes and double declining over 4 years for tax purposes. Prepare the deferred tax journal entry for 2019 and show the income statement and balance sheet presentation.
O The Real Estate and Business Brokers Act requires that monies received by a brokerage be deposited into the brokerage's trust account within a specified period of time. Which of the following accurately describes this time period? O Sciect one anseer Funds must be depited into the brokerages commission trat actourt within 24nours of receipt Funds must be deposited into the brokerage's statutory trust account wthin a maimum of five business days of receipt. Funos must be deposted into the brokerages stanutory trust account immediately upon recipt Funds must be deposited into the brokerages commission trust account within a maximum of two business days of receipt
Recognizing pension expense The annual examination of Felton Companys financial statements by its external public accounting firm (auditors) is nearing completion. The following conversation took place between the controller of Felton Company (Francie) and the audit manager from the public accounting firm (Sumana): Sumana: You know, Francie, we are about to wrap up our audit for this fiscal year. Yet, there is one item still to be resolved. Francie: Whats that? Sumana: Well, as you know, at the beginning of the year, Felton began a defined benefit pension plan. This plan promises your employees an annual payment when they retire, using a formula based on their salaries at retirement and their years of service. I believe that a pension expense should be recognized this year, equal to the amount of pension earned by your employees. Francie: Wait a minute. I think you have it all wrong. The company doesnt have a pension expense until it actually pays the pension in cash when the employee retires. After all, some of these employees may not reach retirement, and if they dont, the company doesnt owe them anything. Sumana: Youre not really seeing this the right way. The pension is earned by your employees during their working years. You actually make the payment much laterwhen they retire. Its like one long accrualmuch like incurring wages in one period and paying them in the next. Thus, I think you should recognize the expense in the period the pension is earned by the employees. Francie: Let me see if Ive got this straight. I should recognize an expense this period for something that may or may not be paid to the employees in 20 or 30 years, when they finally retire. How am I supposed to determine what the expense is for the current year? The amount of the final retirement depends on many uncertainties: salary levels, employee longevity, mortality rates, and interest earned on investments to fund the pension. I dont think an amount can be determined even if I accepted your arguments. Evaluate Sumanas position. Is she right, or is Francie correct?
Marc Associates employs Janet Evanovich at its law firm. Her gross income for June is $7,500. Payroll for the month of June follows: federal income tax of $650, state income tax of $60, local income tax of $30, FICA Social Security tax rate at 6.2%, FICA Medicare tax rate at 1.45%, health-care insurance premium of $300, donations to a charity of $50, and pension plan contribution of $200. The employee is responsible for covering 40% of his or her health insurance premium. A. Record the journal entry to recognize employee payroll for the month of June; dated June 30, 2017. B. Record remittance of the employees salary with cash on July 1.
Payroll accounts and year-end entries The following accounts, with the balances indicated, appear in the ledger of Garcon Co. on December 1 of the current year: The following transactions relating to payroll, payroll deductions, and payroll taxes Occurred during December: Dec. 2. Issued Check No. 410 for 3,400 to Jay Bank to invest in a retirement savings account for employees. 2. Issued Check No. 411 to Jay Bank for 27,046, in payment of 9,273 of social security tax, 2,318 of Medicare tax, and 15,455 of employees federal income tax due. 13. Journalized the entry to record the biweekly payroll. A summary of the payroll record follows: Dec. 13. Issued Check No. 420 in payment of the net amount of the biweekly payroll to fund the payroll bank account. 13. Journalized the entry to record payroll taxes on employees earnings of December13: social security tax, 4,632; Medicare tax, 1,158; state unemployment tax, 350; federal unemployment tax, 125. 16. Issued Check No. 424 to Jay Bank for 27,020, in payment of 9,264 of social security tax, 2,316 of Medicare tax, and 15,440 of employees federal income tax due. 19. Issued Check No. 429 to Sims-Walker Insurance Company for 31,500, in payment of the semiannual premium on the group medical insurance policy. 27. Journalized the entry to record the biweekly payroll. A summary of the payroll record follows: 27. Issued Check No. 541 in payment of the net amount of the biweekly payroll to fund the payroll bank account. 27. Journalized the entry to record payroll taxes on employees earnings of December27: social security tax, 4,668; Medicare tax, 1,167; state unemployment tax, 225; federal unemployment tax, 75. 27. Issued Check No. 543 for 20,884 to State Department of Revenue in payment of employees state income tax due on December 31. 31. Issued Check No. 545 to Jay Bank for 3,400 to invest in a retirement savings account for employees. 31. Paid 45,000 to the employee pension plan. The annual pension cost is 60,000. (Record both the payment and unfunded pension liability.) Instructions 1. Journalize the transactions. 2. Journalize the following adjusting entries on December 31: a. Salaries accrued: operations salaries, 8,560; officers salaries, 5,600; office salaries,1,400. The payroll taxes are immaterial and are not accrued. b. Vacation pay, 15,000.
Using the box below, prepare Journal entries for the following transactions: 1 On 9/1/17, AFSPA received an invoice of $36,000 for the annual insurance renewal 2 On 9/15/17, cheek is written for # 1 above 3 10/1/17, the monthly amount is expensed for #1 above 4 On 1/4/18, AFSPA received an invoice from Staples in the amount of S3200 5 On 3/5/18 member pays their quarterly dental insurance premium (this is revenue to AFSPA) in the amount of S300 6 On 3/10/18 the check bounces from # 5 above 7 Record the revenue for April #5 above Date DR Account name Cr Account name Dr Cr GL. description (25 characters)
Kelly Jones and Tami Crawford borrowed $10,500 on a 7-month, 8% note from Gem State Bank to open their business, Oriole’s Coffee House. The money was borrowed on June 1, 2022, and the note matures January 1, 2023. Prepare the entry to record the receipt of the funds from the loan. Date Account Titles and Explanation Debit Credit June 1 enter an account title to record the receipt of the funds from the loan on June 1enter an account title to record the receipt of the funds from the loan on June 1 enter a debit amountenter a debit amount enter a credit amountenter a credit amount enter an account title to record the receipt of the funds from the loan on June 1enter an account title to record the receipt of the funds from the loan on June 1 enter a debit amountenter a debit amount