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Effect of accounting events on the income statement and statement of cash flows:
Required:
Explain how each of the following events or series of events and any related adjusting entry will affect the amount of net income and the amount of cash flow from operating activities reported on the year end financial statements. Identify the direction of change (increase, decrease, or NA) and the amount of the change. Organize your answers according to the following table. The first event is recorded as an example. If an event does not have a related adjusting entry, record only the effects of the event.a. Paid $9,000 cash on October 1 to purchase a one year insurance policy. b. Purchased $2,000 of supplies on account. Paid $500 cash on accounts payable. The ending balance in the Supplies account, after adjustment, was $300. c. Provided services for $10,000 cash. d. Collected $2,400 in advance for services to be performed in the future. The contract called for services to start on May 1 and to continue for one year. e. Accrued salaries amounting to $5,600. f. Sold land that cost $3,000 for $3,000 cash. g. Acquired $15,000 cash from the issue of common stock. h. Earned $12,000 of revenue on account. Collected $8,000 cash from accounts receivable. i. Paid cash operating expenses of$4,500.
Prepare a trial balance for Patel Rentals as of June 30, 2011 and compare and contrast how the issues of recognition, valuation, and classification are settled in the transactions of June 3 and 10.
Evaluate ending cash balance
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Describe how the perpetual inventory system works. What are some advantages of using the perpetual inventory system? Is it necessary to take a physical inventory when using the perpetual inventory system?
Discuss how a hospital records the value of goods taken on consignment. For example, art work available for sale in the hospital's gift shop.
How much profit or loss, if any, does Shawna realize on the transfer? Does Shawna recognize any profit or loss? If so, how much? What is Shawna's basis in her LLC interest?
Prepare a contribution margin income statement for Cardinal assuming it sells 1,100 birdhouses this year - Determine how many birdhouses it must sell to generate this amount of profit
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The trial balances before and after adjustment for Matthews Company at the end of its fiscal year are presented on the next page.
1.Many airline frequent flier programs upgrade elite (high volume) flyers one, three, or five days in advance from economy to first class.
Determine the budgeted overhead absorption rate for Machine Shop A. Determine the budgeted overhead absorption rate for Machine Shop B.
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