Question: The Income Statement columns of the work

> What two measures are used to determine whether a firm has sufficient capital to operate and whether the firm has the ability to pay its debts?

> What are the rules for recognizing whether an adjusting entry should be reversed?

> What are the basic classifications found on an income statement for a merchandising business as compared to a service business?

> What is the order for listing accounts in the Current Assets section of the balance sheet?

> For the university football program’s Unearned Season Tickets account, list the debits and credits for each amount posted to the account and briefly describe each transaction. ACCOUNT Unearned Season Tickets ACCOUNT NO. 214 Balance

> Write the third closing entry to transfer the net income or net loss to the P. Hernandez, Capital account, assuming the following: a. A net income of $3,842 during the first quarter (Jan.–Mar.) b. A net loss of $1,781 during the second quarter (Apr.–Jun.

> Assume that a college receives $84,000 for one semester’s dormitory rent in advance and an entry is made debiting Cash and crediting Unearned Rent. At the end of the year, $68,000 of the rent has been earned. What adjusting entry would be made?

> A merchandising company shows $8,842 in the Supplies account on the preadjusted trial balance. After taking inventory of the actual supplies, the company still owns $3,638. a. How much was used or expired? b. Write the adjusting entry.

> Why is it necessary to adjust the Merchandise Inventory account under a periodic inventory system?

> On a work sheet, where will the amount of the ending merchandise inventory be recorded?

> Using the perpetual inventory system, what account is debited when a business finds that its physical count of inventory is greater than the recorded amount?

> On the Income Summary line of a work sheet, $126,220 appears in the Income Statement Debit column and $123,300 appears in the Income Statement Credit column. Which figure represents the beginning inventory?

> What is a physical inventory? What does the word periodic mean in the term periodic inventory?

> What is the purpose of Form 940? How often is it prepared, and what is the due date?

> What is the purpose of Form 941? How often is it prepared, and what are the due dates?

> What taxes are employers accounting for that increase the debit to Payroll Tax Expense?

> a. Why would a business use a Petty Cash Fund? b. Describe the entry needed to establish a $50 Petty Cash Fund and an entry to reimburse the fund.

> What information is needed to use the wage-bracket withholding table? Where is the table found?

> Describe how a special payroll bank account is useful in paying the wages and salaries of employees.

> What are interim financial statements? Why would a business want to prepare them?

> Considering the following events, determine which month the revenue or expenses would be recorded using the accounting method specified. a. Gerber Company uses the cash basis of accounting. Gerber prepays cash in May for insurance that only covers the fo

> Explain the difference between gross earnings and net earnings for a payroll period.

> List three required deductions and four voluntary deductions from an employee’s total earnings.

> What is the purpose of the Income Summary account? How does it relate to the revenue and expense accounts?

> You are preparing a post-closing trial balance for the company where you work, but it doesn’t balance. You are tired, and besides, you don’t think the company pays you for this much hassle and extra time. You decide to increase the balance of an asset ac

> What is the purpose of the payroll register?

> What information is included in an employee’s individual earnings record?

> What is the purpose of the post-closing trial balance? What is the difference between a trial balance and a post-closing trial balance?

> Why must employers maintain employees’ individual earnings records?

> The financial statements for Cole Company follow. Required Using the statements of Cole Company, prepare a statement of cash flows for the year ended December 31, 2018. Cole Company Income Statement For Year Ended December 31, 2018 Net Sales $540,

> The financial statements for Zhang Company follow. Assume that the withdrawals were in the form of cash. Required Prepare a statement of cash flows for the year ended December 31, 2018. Zhang Company Income Statement For Year Ended December 31, 20

> The financial statements for Romeo and Company follow. Assume that the additional investment and the withdrawals were in the form of cash. Required Prepare a statement of cash flows for the year ended December 31, 2018. Romeo and Company Income St

> Mahoney Company has the following financial statements for 2017 and 2018. Assume that the purchase of equipment and the withdrawals were in the form of cash. Required Prepare a statement of cash flows for the year ended December 31, 2018. Mahoney

> What if the freight charges on a new desk for the owner were journalized and posted to the Freight In account? Would this affect the Cost of Goods Sold section? If so, how?

> A music store sells new instruments. The store also sells used instruments for people who are willing to give the store part of the sales price. The sales of used instruments, called commissions, amount to about one-fourth of total sales. On the firm’s c

> Costco is the largest chain of membership warehouse clubs in the world, based on sales volume, and it is the fifth largest general retailer in the United States. Costco focuses on selling products at low prices, often at a very high volume. These goods a

> The following accounts appear in the ledger of Sheldon Company on January 31, the end of this fiscal year. Cash ………………………………………………………………………… $ 16,400 Accounts Receivable …………………………………………………….. 15,100 Merchandise Inventory ……………………………………………….. 55,500 Stor

> The following partial work sheet covers the affairs of Ketcher and Company for the year ended June 30. Required 1. Journalize the six adjusting entries. 2. Journalize the closing entries. 3. Journalize the reversing entry as of July 1, for the salaries

> Record entries in general journal form to record the following: a. Established a Petty Cash Fund, $100. Issued Ck. No. 587. b. Reimbursed the Petty Cash Fund for expenditures of $89: Store Supplies, $39; Office Supplies, $20; Miscellaneous Expense, $30.

> A partial work sheet for McKnight Music Store is presented here. The merchandise inventory at the beginning of the fiscal period was $48,473. W. J. McKnight, the owner, withdrew $40,000 during the year. Required 1. Prepare an income statement. 2. Journ

> The following accounts appear in the ledger of Celso and Company as of June 30, the end of this fiscal year. Cash …………………………………………………………………………. $ 15,349 Accounts Receivable …………………………………………………….. 13,810 Merchandise Inventory ……………………………………………….. 50,280 S

> The following partial work sheet covers the affairs of Masanto and Company for the year ended June 30. Required 1. Journalize the six adjusting entries. 2. Journalize the closing entries. 3. Journalize the reversing entry as of July 1, for the salaries

> A partial work sheet for The Fan Shop is presented here. The merchandise inventory at the beginning of the year was $52,300. P. G. Ochoa, the owner, withdrew $30,500 during the year. Required 1. Prepare an income statement. 2. Journalize the closing en

> From the following information, journalize the last two closing entries and present a statement of owner’s equity for Nishimoto Company. H. Nishimoto, Capital Income Summary Dec. 31 Adj. Dec. 31 Closing 415,000 Dec. 31 Closing 190,

> From the following T accounts, journalize the closing entries dated December 31 for Baylor Company. Purchases Returns Salary Expense H. Baylor, Drawing and Allowances + 65,000 55,000 8,600 Purchases Miscellaneous Expense Rent Expense + 235,600 12,20

> On December 31, 20--, the following selected accounts and amounts appeared on the balance sheet for Duncan Company. Determine the amount of the working capital and the current ratio. (Round to two decimal places.) Building …………………………………………………………………. $18

> Identify each of the following items relating to sections of a balance sheet as Current Assets (CA), Property and Equipment (PE), Current Liabilities (CL), Long-Term Liabilities (LTL), or Owner’s Equity (OE). a. Accounts Payable b. Equipment c. Accounts

> The Income Statement columns of the August 31 (year-end) work sheet for Ralley Company are shown here. From the information given, prepare an income statement for the company. To save time and space, the expenses have been grouped together into two categ

> Identify each of the following items relating to sections of an income statement as Revenue from Sales (S), Cost of Goods Sold (CGS), Selling Expenses (SE), General Expenses (GE), Other Income (OI), or Other Expenses (OE). a. Utilities Expense b. Adverti

> Fill in the missing amounts for the following bank reconciliation: Bank Reconciliation March 31, 20- Bank Statement Balance $3,764.00 Add: Deposit in transit (a) $4,031.00 Deduct: Outstanding checks $212.00 No. 211 (b) No. 225 No. 228 318.00 850.00

> A venture recorded revenues of $1 million last year and net profit of $100,000. Total assets were $800,000 at the end of last year. A. Calculate the venture’s net profit margin. B. Calculate the venture’s asset turnover. C. Calculate the venture’s ret

> Jen Liu and Larry Mestas are seeking venture investors to help fund the expected growth in their Frozen Yogurt venture described in Problems 3 and 4. Use the VOS Indicator guidelines presented in Figures 2.8 and 2.9 to score Jen and Larry’s frozen yogur

> What are the components of a sound business model?

> An analogy used relating to venture opportunity screening makes reference to “caterpillars” and “butterflies.” Briefly describe the use of this analogy.

> Describe the meaning of venture opportunity screening.

> How do public and private financial markets differ?

> What is meant by a viable venture opportunity?

> Briefly describe the process involved in moving from an idea to a business model/plan.

> What is meant by disruptive innovation? What is the “sharing economy” societal trend?

> How do we know whether an idea has the potential to become a viable business opportunity?

> 3. Following are some pairs of famous entrepreneurs. Using the Web if needed, associate the entrepreneurs with the companies they founded: 1.Steve Jobs and Steven Wozniak A. Google  2.Bill Gates and Paul Allen B. Ben & Jerry’s  3.Larry Page and Se

> What are five megatrend sources or categories for finding entrepreneurial opportunities?

> Explain the statement: “The time value of money is not the only cost involved in renting someone’s financial capital.”

> 2. The following ventures have supplied information on how they are being financed. Link the type and sources of financing to where each venture is likely to be in its life cycle. A. Voice River provides media-on-demand services via the Internet. Voice R

> What is entrepreneurship? What are some basic characteristics of entrepreneurs?

> What is the entrepreneurial process?

> In 2016, Jennifer (Jen) Liu and Larry Mestas founded Jen and Larry’s Frozen Yogurt Company, which was based on the idea of applying the microbrew or microbatch strategy to the production and sale of frozen yogurt. [The involved reader may recall that we

> Salza Technology Corporation increased its sales from $375,000 in 2015 to $450,000 in year 2016 as is shown in the firm’s income statements presented below. LeAnn Sands, chief executive officer (CEO) and founder of the firm expressed concern that the ca

> The Castillo Products Company described in Problem 6 had a very difficult operating year in 2015 resulting in a net loss of $65,000 on sales of $900,000. In 2016, sales jumped to $1,500,000 and a net profit after taxes was earned. The firm’s income sta

> Cindy and Robert (Rob) Castillo founded the Castillo Products Company in 2015. The company manufactures components for personal decision assistant (PDA) products and for other hand-held electronic products. Year 2015 proved to be a test of the Castillo P

> During its first year of operations, the SubRay Corporation produced the following income statement results: Net Sales……………………………..$300,000 Cost of Goods Sold………………-180,000 Gross Profit………………………120,000 General & Administrative………60,000 Marketing expense

> This problem is a continuation of Problem 3. Assume you ramp up production to 1,000 units per month in April, May, and June. Sales are expected to be 800 units in April and 1,100 units in each of May and June. Repeat the calculations requested in Problem

> Assume you have developed and tested a prototype electronic product and are about to start your new business. You purchase pre-programmed computer chips at $70 per unit. Other component costs include: plastic casings at $15 per unit and assembly hardware

> Identify the seven principles of entrepreneurial finance.

> Assume you are starting a new business involving the manufacture and sale of a new product. Raw materials costs are $40 per product. Direct labor costs are expected to be $30 per product. You expect to sell each product for $110. You plan to produce 100

> The owners of a new venture have decided to organize as a corporation. The initial equity investment is valued at $100,000 reflecting contributions of the entrepreneur and her family and friends. One hundred thousand shares of stock were initially issued

> From the Headlines -- “Competing to Let the Light Shine”: Describe three financial performance measures that d.light’s venture investors might use to examine whether d.light is measuring up financially as it achieves its “lives touched” goals.

> What is meant by the statement that a balance sheet provides a “snapshot” of a venture’s financial position as of a point in time? Why must a balance sheet be in “balance?”

> Describe the types of resources (assets) needed for a new product venture during its development and startup stages. Comment on the likely revenues and expenses during these early life cycle stages.

> A. Calculate the dollar amount of NOPAT if Jen and Larry’s venture achieves her forecasted $1.2 million in sales in year 2017. What would NOPAT be as a percent of sales? B. Calculate the NOPAT breakeven point for year 2017 in terms of NOPAT breakeven re

> A. Calculate Salza’s NOPAT breakeven in terms of NOPAT breakeven revenues for year 2016. B. Calculate the NOPAT breakeven point for 2017 for Salza in terms of NOPAT breakeven revenues.

> A. Estimate the NOPAT breakeven amount in terms of revenues necessary for the SubRay Corporation to break even next year. B. Assume that the product selling price is $50 per unit. Calculate the NOPAT breakeven point in terms of the number of units that

> Identify and explain the formula for finding the NOPAT breakeven revenues. Relate this to breakeven in terms of EBIT.

> Define the terms EVA and NOPAT and describe the meaning of NOPAT breakeven and NOPAT breakeven revenues.

> Assume that you have been working on a first-generation “prototype” for a new product. An angel investor is waiting in the “wings” wanting to invest in a second-generation model or prototype. Unfortunately, you have run out of money and aren’t able to fi

> Now let’s assume that Francine Delgado (see Problem 10) organizes the HairCare Products Company as a proprietorship, is married, and files a joint tax return with her husband, Franco. A. Calculate the tax liability (using tax tables presented in the chap

> Francine Delgado has developed a business plan for producing and selling a new hair care product that emits nutrients to the scalp when used and the product residues have been judged to be environmentally safe. Following are her projected partial financ

> The organizers for Dick and Barbara’s cooperative had great success and many inquiries from other neighborhoods on how to organize and operate. After helping several other groups organize, the time commitment grew to the point where the organizers decide

> Several years ago, Dick and Barbara Harris were asked to attend an organizational meeting for a newly-forming neighborhood baby-sitting cooperative. The idea was simple. Concerned and caring parents would join together in the cooperative and exchange bab

> Interact Systems, Inc. has developed software tools that help hotel chains solve application integration problems. Interact’s Application Integration Server (AIS) provides a two-way interface between central reservations systems (CRS) and property manage

> Francine Delgado, founder of the HairCare Products Company, has developed HairCarePlus which is a shampoo product containing healthy nutrients that are absorbed through the scalp when the product is used. She also believes that preliminary tests of HairC

> Rolf Lee is also considering organizing the Capital-Ideas Company as a limited liability company. A. Use information contained in Problem 6 to estimate the federal income tax liability in the second year of operation if Capital-Ideas is an LLC. B. What w

> Rolf Lee is now exploring whether it might be better to organize the Capital-Ideas Company as a subchapter S corporation. A. Calculate the amount of federal income tax that Capital-Ideas Company would pay next year. B. What would be the marginal tax rate

> In the second year of operation, the Capital-Ideas Company forecasts revenues to grow to $5 million dollars, and expenses before income tax to be 70 percent of revenues. A. Earnings before taxes = $5,000,000 x (1 - 0.70) = $1,500,000. Taxed as a proprie

> The Capital-Ideas Company is in its development stage and is deciding how to formally organize its business venture. The founder, Rolf Lee, is considering organizing as either a proprietorship or as a corporation. He expects revenues to be $2 million n

> What is e-commerce? Why are the Internet economy and e-commerce here to stay?

> As your venture has moved from the development stage to the startup stage, a number of trade secrets have been developed along with an extensive client list. You are in the business of developing and installing computer networks for law firms. A. Your ma

> In addition to your venture’s taxable income of $50,000, you expect to personally earn another $10,000 from a second job. A. Filing as a single individual: B. Married filing jointly: C. Taxed as a Corporation plus personal taxable income:

> Assume your new venture, organized as a proprietorship, is in its first year of operation. You expect to have taxable income of $50,000. Use the income tax rate information contained in Figure 3.6 to estimate the amount of income taxes you would have t

> Phil Young, founder of the Pedal Pushers Company, has developed several prototypes of a pedal replacement for children’s bicycles. The Pedal Pusher will replace existing bicycle pedals with an easy release stirrup to help smaller children hold their feet