Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question Help In April, 2018, Norman Industries sold available-for sale debt securities that cost $500,000 and received a check from its broker for $795,000. When

image text in transcribed
Question Help In April, 2018, Norman Industries sold available-for sale debt securities that cost $500,000 and received a check from its broker for $795,000. When the check was deposited, the accounting clerk debited cash and credited Available for-Sale Debt Investments for the full amount. The CFO questioned the entry in December, 2018 . If this is an error, what is the proper correcting entry? (Tax rate is 35%) A. Available-for-Sale Debt Investments 295,000 Realized Gain 295,000 B. Available-for-Sale Debt Investments 295,000 Income Tax Expense Retained Earnings 103,250 191,750 O C. Realized Gain 295,000 Available-for- Sale Debt Investments 295,000 O D. Available-for-Sale Debt Investments 795,000 Realized Gain 295.000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Quality Auditing Note Book Journal Notes Checklist Questions Observations Evidence Log

Authors: Just Visualize It, The Quality Guy

1st Edition

1726688402, 978-1726688406

More Books

Students also viewed these Accounting questions