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    "question_id": "4272544",
    "url": "\/study-help\/questions\/question-1-the-following-transactions-for-carleton-company-occurred-during-4272544",
    "question_creation_date_js": "2024-06-28T08:20:05-04:00",
    "question_creation_date": "Jun 28, 2024 08:20 AM",
    "meta_title": "[Solved] Question 1: The following transactions fo | SolutionInn",
    "meta_description": "Answer of - Question 1: The following transactions for Carleton Company occurred during January 2016: Jan. 1 Purchased a two-year | SolutionInn",
    "meta_keywords": "question,1,transactions,carleton,company,occurred,january,2016,jan,purchased,two-year,insurance",
    "question_title_h1": "Question 1: The following transactions for Carleton Company occurred during January 2016: Jan. 1 Purchased a two-year insurance policy for cash, $8,400 4 Paid utilities",
    "question_title": "Question 1: The following transactions for Carleton Company occurred during January 2016:",
    "question_title_for_js_snippet": "Question 1  The following transactions for Carleton Company occurred during January 2016  Jan  1 Purchased a two year insurance policy for cash, $8,400 4 Paid utilities bill received December 2015, $450 9 Performed a service on account, $1,200 16 Paid bimonthly salary to employees, $2,700 21 Received $800 from a customer on account 25 Received $600 from January 9 transaction 30 Prepared the adjusting entry for insurance from January 1 transaction 30 Accrued wages of $2,750 Required  Show the total amount of revenue and expense recognized under both the accrual basis and cash basis of accounting  Accrual Basis Revenue Total Expense Total Cash Basis Revenue Total Expense Total Question 2  On December 15, 2015, a public company receives an order from a customer for services to be performed on December 28, 2015  Due to a backlog of orders, the company does not perform the services until January 3, 2016  The customer pays for the services on January 6, 2016  When should revenue be recorded for the company  Why (support your argument with a principle from the textbook)  Question 3  Scranton Motors Ltd faced the following situations  Journalize the adjusting entry needed at year end for each situation  Each scenario should be considered independently  The business has interest expense of $9,000 early in January 2017  Interest revenue of $3,000 has been earned but not yet received  When the business collected $12,000 in advance three months ago, the accountant debited Cash and credited Unearned Revenue  The client was paying for two cars, one delivered in December, the other to be delivered in February 2017  Salary expense is $1,000 per day Monday through Friday and the business pays employees each Friday  For example purposes, assume that this year, December 31 falls on a Tuesday  The unadjusted balance of the Supplies account is $3,100  The total cost of supplies on hand is $800  Equipment was purchased at the beginning of this year at a cost of $60,000  The equipments useful life is five years  Record the depreciation for this year and then determine the equipments carrying amount  Question 4  Prepare the required closing entries for the following selected accounts from the records of ShipIT Transportation Inc  at December 31, 2016 Cost of services sold $11,600 Accumulated depreciation 17,800 Selling, general, and administrative expense 6,900 Retained earnings, December 31, 2015 1,900 Service revenue 23,600 Depreciation expense 4,100 Other revenue 600 Income tax expense 400 Dividends 400 Income tax payable 300 How much net income did ShipIT Transportation Inc  earn during the year ended December 31, 2016  Prepare a T account for Retained Earnings to show the December 31, 2016 balance of Retained Earnings  Question 5  Academic Consultants Inc  had the following selected transactions in August 2016  Aug  1 Prepaid insurance for August through December, $1,000 4 Purchased software for cash, $800 5 Performed service and received cash, $900 8 Paid advertising expense, $300 11 Performed service on account, $3,000 19 Purchased computer on account, $1,600 24 Collected for the August 11 service 26 Paid account payable from August 19 29 Paid salary expense, $900 31 Adjusted for August insurance expense (see Aug 1) 31 Earned revenue of $800 that was collected in advance in July Requirements Show how each transaction would be handled using the cash basis and the accrual basis  Under each column, give the amount of revenue or expense for August  Journal entries are not required  Use the following format for your answer, and show your computations  Academic Consultants Inc  Amount of Revenue (Expense) for August 2016 Date Cash Basis Accrual Basis Aug 1 Revenue (Expense) Amount Revenue (Expense) Amount Compute August income (loss) before tax under each accounting method Explain which measure of net income or net loss is preferable ",
    "question_description": "<p>Question 1:<\/p> <p>The following transactions for Carleton Company occurred during January 2016:<\/p> <table><tbody> <tr> <td> <p>Jan.<\/p> <\/td> <td> <p>1<\/p> <\/td> <td> <p>Purchased a two-year insurance policy for cash, $8,400<\/p> <\/td> <\/tr> <tr> <td> <p><\/p> <\/td> <td> <p>4<\/p> <\/td> <td> <p>Paid utilities bill received December 2015, $450<\/p> <\/td> <\/tr> <tr> <td> <p><\/p> <\/td> <td> <p>9<\/p> <\/td> <td> <p>Performed a service on account, $1,200<\/p> <\/td> <\/tr> <tr> <td> <p><\/p> <\/td> <td> <p>16<\/p> <\/td> <td> <p>Paid bimonthly salary to employees, $2,700<\/p> <\/td> <\/tr> <tr> <td> <p><\/p> <\/td> <td> <p>21<\/p> <\/td> <td> <p>Received $800 from a customer on account<\/p> <\/td> <\/tr> <tr> <td> <p><\/p> <\/td> <td> <p>25<\/p> <\/td> <td> <p>Received $600 from January 9 transaction<\/p> <\/td> <\/tr> <tr> <td> <p><\/p> <\/td> <td> <p>30<\/p> <\/td> <td> <p>Prepared the adjusting entry for insurance from January 1 transaction<\/p> <\/td> <\/tr> <tr> <td> <p><\/p> <\/td> <td> <p>30<\/p> <\/td> <td> <p>Accrued wages of $2,750<\/p> <\/td> <\/tr> <\/tbody><\/table> <p><\/p> <p>Required: Show the total amount of revenue and expense recognized under both the accrual basis and cash basis of accounting.<\/p> <table><tbody> <tr><td> <p>Accrual Basis<\/p> <\/td><\/tr> <tr> <td> <p>Revenue Total<\/p> <\/td> <td> <p><\/p> <\/td> <\/tr> <tr> <td> <p>Expense Total<\/p> <\/td> <td> <p><\/p> <\/td> <\/tr> <\/tbody><\/table> <p><\/p> <table><tbody> <tr><td> <p>Cash Basis<\/p> <\/td><\/tr> <tr> <td> <p>Revenue Total<\/p> <\/td> <td> <p><\/p> <\/td> <\/tr> <tr> <td> <p>Expense Total<\/p> <\/td> <td> <p><\/p> <\/td> <\/tr> <\/tbody><\/table> <p><\/p> <p>Question 2:<\/p> <p>On December 15, 2015, a public company receives an order from a customer for services to be performed on December 28, 2015. Due to a backlog of orders, the company does not perform the services until January 3, 2016. The customer pays for the services on January 6, 2016. When should revenue be recorded for the company? Why (support your argument with a principle from the textbook)?<\/p> <p><\/p> <p>Question 3:<\/p> <p>Scranton Motors Ltd faced the following situations. Journalize the adjusting entry needed at year end for each situation. Each scenario should be considered independently.<\/p> <ol> <li>The business has interest expense of $9,000 early in January 2017.<\/li> <li>Interest revenue of $3,000 has been earned but not yet received.<\/li> <li>When the business collected $12,000 in advance three months ago, the accountant debited Cash and credited Unearned Revenue. The client was paying for two cars, one delivered in December, the other to be delivered in February 2017.<\/li> <li>Salary expense is $1,000 per day  Monday through Friday  and the business pays employees each Friday. For example purposes, assume that this year, December 31 falls on a Tuesday.<\/li> <li>The unadjusted balance of the Supplies account is $3,100. The total cost of supplies on hand is $800.<\/li> <li>Equipment was purchased at the beginning of this year at a cost of $60,000. The equipments useful life is five years. Record the depreciation for this year and then determine the equipments carrying amount.<\/li> <\/ol> <p>Question 4:<\/p> <p>Prepare the required closing entries for the following selected accounts from the records of ShipIT Transportation Inc. at December 31, 2016<\/p> <table><tbody> <tr> <td> <p>Cost of services sold<\/p> <\/td> <td> <p>$11,600<\/p> <\/td> <\/tr> <tr> <td> <p>Accumulated depreciation<\/p> <\/td> <td> <p>17,800<\/p> <\/td> <\/tr> <tr> <td> <p>Selling, general, and administrative expense<\/p> <\/td> <td> <p>6,900<\/p> <\/td> <\/tr> <tr> <td> <p>Retained earnings, December 31, 2015<\/p> <\/td> <td> <p>1,900<\/p> <\/td> <\/tr> <tr> <td> <p>Service revenue<\/p> <\/td> <td> <p>23,600<\/p> <\/td> <\/tr> <tr> <td> <p>Depreciation expense<\/p> <\/td> <td> <p>4,100<\/p> <\/td> <\/tr> <tr> <td> <p>Other revenue<\/p> <\/td> <td> <p>600<\/p> <\/td> <\/tr> <tr> <td> <p>Income tax expense<\/p> <\/td> <td> <p>400<\/p> <\/td> <\/tr> <tr> <td> <p>Dividends<\/p> <\/td> <td> <p>400<\/p> <\/td> <\/tr> <tr> <td> <p>Income tax payable<\/p> <\/td> <td> <p>300<\/p> <\/td> <\/tr> <\/tbody><\/table> <p> How much net income did ShipIT Transportation Inc. earn during the year ended December 31, 2016? Prepare a T-account for Retained Earnings to show the December 31, 2016 balance of Retained Earnings.<\/p> <p>Question 5:<\/p> <p>Academic Consultants Inc. had the following selected transactions in August 2016:<\/p> <p><\/p> <table><tbody> <tr> <td> <p>Aug.<\/p> <\/td> <td> <p>1<\/p> <\/td> <td> <p>Prepaid insurance for August through December, $1,000<\/p> <\/td> <\/tr> <tr> <td> <p><\/p> <\/td> <td> <p>4<\/p> <\/td> <td> <p>Purchased software for cash, $800<\/p> <\/td> <\/tr> <tr> <td> <p><\/p> <\/td> <td> <p>5<\/p> <\/td> <td> <p>Performed service and received cash, $900<\/p> <\/td> <\/tr> <tr> <td> <p><\/p> <\/td> <td> <p>8<\/p> <\/td> <td> <p>Paid advertising expense, $300<\/p> <\/td> <\/tr> <tr> <td> <p><\/p> <\/td> <td> <p>11<\/p> <\/td> <td> <p>Performed service on account, $3,000<\/p> <\/td> <\/tr> <tr> <td> <p><\/p> <\/td> <td> <p>19<\/p> <\/td> <td> <p>Purchased computer on account, $1,600<\/p> <\/td> <\/tr> <tr> <td> <p><\/p> <\/td> <td> <p>24<\/p> <\/td> <td> <p>Collected for the August 11 service<\/p> <\/td> <\/tr> <tr> <td> <p><\/p> <\/td> <td> <p>26<\/p> <\/td> <td> <p>Paid account payable from August 19<\/p> <\/td> <\/tr> <tr> <td> <p><\/p> <\/td> <td> <p>29<\/p> <\/td> <td> <p>Paid salary expense, $900<\/p> <\/td> <\/tr> <tr> <td> <p><\/p> <\/td> <td> <p>31<\/p> <\/td> <td> <p>Adjusted for August insurance expense (see Aug 1)<\/p> <\/td> <\/tr> <tr> <td> <p><\/p> <\/td> <td> <p>31<\/p> <\/td> <td> <p>Earned revenue of $800 that was collected in advance in July<\/p> <\/td> <\/tr> <\/tbody><\/table> <p><\/p> <p>Requirements<\/p> <ol> <li>Show how each transaction would be handled using the cash basis and the accrual basis. Under each column, give the amount of revenue or expense for August. Journal entries are not required. Use the following format for your answer, and show your computations. <table><tbody> <tr><td> <p>Academic Consultants Inc.<\/p> <\/td><\/tr> <tr><td> <p>Amount of Revenue (Expense) for August 2016<\/p> <\/td><\/tr> <tr> <td> <p>Date<\/p> <\/td> <td> <p><\/p> <\/td> <td> <p>Cash Basis<\/p> <\/td> <td> <p>Accrual Basis<\/p> <\/td> <\/tr> <tr> <td> <p>Aug<\/p> <\/td> <td> <p>1<\/p> <\/td> <td> <p>Revenue\/(Expense)<\/p> <\/td> <td> <p>Amount<\/p> <\/td> <td> <p>Revenue\/(Expense)<\/p> <\/td> <td> <p>Amount<\/p> <\/td> <\/tr> <\/tbody><\/table> <\/li> <li>Compute August income (loss) before tax under each accounting method<\/li> <li>Explain which measure of net income or net loss is preferable.<\/li> <\/ol>",
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