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S&X Co. is a retail store owned by Paul Tuner. During the monthof November, the equity accounts were affected by the followingevents: Nov.9 Turner invested an additional $15,000 in the business. Nov.15 Tuner withdrew $1,500 for his salary for the first two weeksof the month. Nov.30 Turner withdrew $1,500 for his salary for the second twoweeks of the month. Nov.30 S&X distributed $1,000 or earnings to Turner. INSTRUCTIONS: a.Assuming that the business is organized as a soleproprietorship: 1.Prepare the journal entries to record the above events in theaccounts of S&X. 2.Prepare the closing entries for the month of November. Assumethat after closing all of the revenue and expense accounts, theIncome Summary account has a balance of $5,000. Hint: Record the investment in a separate capital account and thewithdrawals (salary) in a separate drawing account. Close thedrawing account into the capital account as part of the closingentries. b. Assuming that the business is organized as a corporation. 3.Prepare the journal entries to record above events. Assume thatthe distribution of the earnings on November 30 was payment of adividend that was declared on November 20. 4. Prepare the journal entries to record above events. Assume thatafter closing all of the revenue & expense accounts (exceptIncome Tax Expense) the Income Summary account has a a balance of$2000. Before preparing the closing entries, prepare the entries toaccrue income tax expense for the month and to close the Income TaxExpense account to the Income Summary account. Assume that thecorporate income tax rate is 30%. c. Explain the causes of the differences in the net income betweenS&X as a sole proprietorship and S&X as a corporation. d. Describe the effects of the business operations on Turnersindividual income tax return, assuming that the business isorganized as 1) a sole proprietorship and 2) a corporation.
Calculate the income recognized by Edwards under the percentage-of-completion method of accounting in each of the years 2012, 2013, 2014.
On January 1, 2010, Branson Designers issued $900 Million of its 8% bonds $836 million. The bonds were then prices to yield 10%. The interest will be payable on June 30 and December 31.
Average storage bin usage for various inventories was estimated to be 200 per day. The costs and cost drivers were determined to be as follows:
M estimated that there were 200 vacation days available at December 31, 2009. M's employees earn an average of $150 per day. In its December 31, 2009, balance sheet, what amount of liability for compensated absences is M required to report?
On July 1, 2011, Tremen Corporation acquired 40% of the shares of Delany Company. Tremen paid $3,000,000 for the investment, and that amount is exactly equal to 40% of the fair value of identifiable net assets on Delany's balance sheet.
What was the amount of the gain or loss on retirement of the bonds? Prepare the journal entry needed at April 1, 2011 to record retirement of the bonds. Assume that interest and premium discount amortization have been recorded through January 1, 20..
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Patrice sells a parcel of land for $50,000 cash and the buyer assumes Patrice's liability of $7,000 on the land. Patrice's basis in the land is $40,000. What is the gain or loss she will recognize on the sale?
How would you assess the usefulness of the Income Summary account as it relates to the closing process?
What is the economic and tax policy rationale regarding corporate formation? When will a transfer be deemed a taxable event? How is basis determined? What if assets are contributed to a corporation by a non shareholder such as a government entity?
Al is a medical doctor who conducts his practice as a sole proprietor. During 2011, he received cash of $280,000 for medical services. Of the amount collected, $40,000 was for services provided in 2010.
The University of Danville is a private not-for-profit university that starts the current year with $700,000 in net assets: $400,000 unrestricted, $200,000 temporarily restricted, and $100,000 permanently restricted.
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