Explain why the amount of net income differs from the amount

Assignment Help Financial Accounting
Reference no: EM13138904

Exercise 2-19 Closing the accounts

The following information was drawn from the accounting records of Spartan Company as of December 31, 2010, before the temporary accounts had been closed. The cash balance was $3,000, and Notes Payable amounted to $1,300. The company had revenues of $4,500 and expenses of $2,000. The company’s Land account had $5,000 balance. Dividends amounted to $300. There was $1,000 of common stock issued.

a. Identify which accounts would be classified as permanent and which accounts would be classified as temporay.

b. Assuming that Spartan’s beginning balance (as of January 1, 2010) in the Retained Earnings account was $3,500, determine its balance after the nominal accounts were closed at the end of 2010.

c. What amount of net income would Spartan Company report on its 2010 income statement?

d. Explain why the amount of net income differs from the amount of the ending Retained Earnings balance.

e. What are the balances in the revenue, expense, and dividend accounts on January 1, 2011?

Reference no: EM13138904

Questions Cloud

Block diagram and equations for control system water fill : Block diagram and equations for control system water fill, Develop a control system to fill a container with water after it is emptied through a stopcock at the bottom
What was consolidated cost of goods sold : Rand still owned 40% of the goods at the end of the year. Cost of goods sold was $10,800,000 for Webb and $6,400,000 for Rand. What was consolidated cost of goods sold?
Compare a lumped element model of a lossless transmission : Compare a lumped element model of a lossless transmission line (single L and C) with the distributed model. Use the following values for the transmission line in this comparative analysis.
Management is the effective utilization of human material : management is the effective utilization of human material resources to achieve the enterprise objectives ,comment.
Explain why the amount of net income differs from the amount : What amount of net income would Spartan Company report on its 2010 income statement? Explain why the amount of net income differs from the amount of the ending Retained Earnings balance.
Opportunity to students to investigate : This assignment gives the opportunity to students to investigate new area of study totally related to consumer behavior theories but happened in the real life and to fully understand why we need to understand consumers.
What percentage of calls are longer than thirty five minutes : A standard deviation of five minuts. Assuming the call times are normally distributed, what percentage of calls are longer than 35 minutes.
Double-spaced word-processed-research proposal : In one, double-spaced word-processed paragraph, describe the topic you plan to research for your issues paper. Indicate why you are interested in this topic. Be sure to write this clearly. Do not use slang or informal expression.
Define design a synchronous counter using j-k flip-flops : Design of sync counter 0010 to 1101 using JK flip flops, Design a synchronous counter using J-K flip-flops that will count from 0010 to 1101 repetitively.

Reviews

Write a Review

 

Financial Accounting Questions & Answers

  What are the direct labor costs for the period

Factory overhead costs for this period were 3 times as much as the direct material costs. Prime costs totaled $2,000. Conversion costs totaled $3,280. What are the direct labor costs for the period?

  Find minimum unit price to be set to product

Domestic business would be unaffected by this order. What is the minimum unit price Redi-Watt should consider for this order of 1,000 units - Find minimum unit price to be set to product.

  Create bings amortization schedule for lease terms

Create Bing's amortization schedule for lease terms and create all journal entries for Kingdom for 2012. Suppose a calendar year fiscal year.

  Purpose the journal entry to record the impairment loss

Purpose the journal entry to record the impairment loss, if any, and show where the loss would be reported in the income statement.

  List out items that must certified by corporate management

List out the items that must be certified by corporate management in accordance with the provisions of the Sarbanes-Oxley Act. Discuss how these responsibilities have likely changed the period-to-period activities of the certifying managers.

  What will be the distribution of income to barry

As salaries Aaron $10,000 and Barry $12,000; as interest on capital at the beginning of the year 10%; and remaining profits or losses 50%. If income for the year was $50,000, what will be the distribution of income to Barry?

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Illustrate what would expected net income of company

Illustrate what would expected net income be if the company experienced a 10 percent increase in fixed costs and 10 percent increase in sales volume?

  Effects for variable manufacturing cost variance

Profit performance effects for Variable manufacturing cost variance and Identify the major cause of Markley Division's unfavorable profit performance

  Calculation of contribution margin

Calculation of Contribution margin and gross margin using Marginal costing - The company had no beginning or ending inventories and evaluate gross margin for December

  Calculate earth company total overhead variance

In the current month, the company incurred $340,000 actual overhead and 39,000 actual labor hours while producing 19,500 units. Compute Earth Company’s overhead application rate for total overhead. Calculate Earth Company’s total overhead variance.

  Compute general mills'' accounts receivable turnover ratio

Compute General Mills' accounts receivable turnover ratio for 2004. (Assume that all sales are on credit. and determine the average collection period, in days, for an account receivable? Explain your answer.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd