The following selected transactions are from Wilson Company. Year 1 Dec. 16 Accepted a $19,200, 60-day.

Question Completion:

Financial data:

Unearned revenue 3,600

Notes payable 2,800

Accounts payable 4,800

Advertising expense 2,800

Rent expense 4,000

Salaries expense 6,000

Utility expense 2,400

Consulting revenue 34,000

Rental revenue 7,000

Accounts receivable 10,000

Cash 12,000

Equipment 10,200

Notes receivable 5,000

Prepaid insurance 2,000

Supplies 3,000

Common Stock 9,200

Dividends 4,000

Prepare an Income Statement, Statement of Retained Earnings, and Balance Sheet as of December 31.

Answer:

Accel Consulting Firm (managed by Maria Gomez)

a. Income Statement for the month ending December 31:

Consulting revenue            $34,000

Rental revenue                        7,000

Total Revenue                     $41,000

Subtract expenses:

Advertising expense 2,800

Rent expense            4,000

Salaries expense      6,000

Utility expense          2,400   15,200

Net Income                        $25,800

b. Statement of Retained Earnings for December 31:

Net Income                             $25,800

Dividends                                    4,000

Retained earnings, Dec. 31    $21,800

c. Balance Sheet as of December 31:

Assets:

Cash                                  $12,000

Accounts receivable           10,000

Notes receivable                  5,000

Prepaid insurance                2,000

Supplies                                3,000

Equipment                           10,200

Total Assets                     $42,200

Liabilities:

Unearned revenue           $3,600

Notes payable                     2,800

Accounts payable               4,800

Total Liabilities                 $11,200

Common Stock                  9,200

Retained earnings            21,800

Total liabilities + Equity $42,200

Explanation:

The income statement of Accel provides a brief overview of temporary accounts that are not transferred to the next accounting period. These accounts are utilized to measure the financial performance of the consulting firm, including revenues and the associated expenses.

The retained earnings statement of Accel illustrates the difference between the accumulated net income over the years for a longstanding business and the distributed dividends from this income to shareholders. For Maria Gomez's consulting enterprise, this statement indicates the remaining funds after dividend payments for December.

Finally, Accel's balance sheet is necessary to present the firm's financial standing. It displays what the company possesses as assets, what it owes in liabilities for unpaid services, and the equity held by the owner, Maria.

Answer:

The question lacks completeness; below is the full inquiry:

A company experienced a decrease in sales following negative press concerning a scandal linked to safety reports. Are the strategic adjustments made by the company to manage this situation reactive changes?

(A) True

(B) False

The right answer is (A) True

Explanation:

This indicates that external factors impacting the company's environment affect the sales of its goods and services.

Coca-Cola and General Motors exemplify the use of sponsorship as a strategic tool to communicate cultural messages through their promotional endeavors by supporting various small, local sports teams and cultural events globally, particularly in schools. This goes beyond merely displaying logos in exchange for investment; it reflects a commitment to foster community spirit through sports and promote athlete support, thereby engaging with youth in a dynamic and enjoyable manner, using their brand power to encourage sports participation.

Response:

Lonnie Holdiman Co.

A Schedule calculating the adjusted income prior to taxes for 2020 and 2021:

2020 2021

Income before taxes $101,000 $77,400

1. Excess Sales revenue (38,200) 38,200

2. Inventory understated as of December 31, 2020 8,640 (8,640)

3. Discount on amortized bonds not accounted for (1,776) (1,901)

4. Equipment repairs not accounted for (8,500) (9,400)

5. Overstated depreciation from capitalized equipment repairs 850 940

Corrected income before tax $62,014 $96,599

Clarification:

a) Data and Calculations:

Income before tax for 2020 = $101,000

Income before tax for 2021 = $77,400

1. Sales Revenue 2020 $38,200; 2021 Sales Revenue $38,200

2. Understated inventory for 2020 $8,640; 2021 $8,640

3. Unrecorded interest expense on bonds for 2020 $1,776

Interest expense on bonds for 2021 $1,901

4. Unrecorded equipment repairs 2020 $8,500 falsely recorded to Equipment account $8,500

Equipment repairs 2021 $9,400 misclassified to Equipment account $9,400

5. Overstated depreciation expense for 2020 $850

Overstated depreciation expense for 2021 $940.

Bond Calculations:

Outstanding bond value:

Face value of the bond = $250,000

Discount = 15,000

Bond proceeds = $235,000

Bond interest payment = $15,000 ($250,000 * 6%)

Bond interest expense = $16,450 ($235,000 * 7%)

Amortized discount = $1,450

On December 31, 2017:

Bond interest payment = $15,000 ($250,000 * 6%)

Bond interest expense = $16,450 ($235,000 * 7%)

Amortized discount = $1,450 ($16,450 - $15,000)

Outstanding value = $236,450 ($235,000 + 1,450)

On December 31, 2018:

Bond interest payment = $15,000 ($250,000 * 6%)

Bond interest expense = $16,552 ($236,450 * 7%)

Amortized discount = $1,552 ($16,552 - $15,000)

Outstanding value = $238,002 ($236,450 + 1,552)

On December 31, 2019:

Bond interest payment = $15,000 ($250,000 * 6%)

Bond interest expense = $16,660 ($238,002 * 7%)

Amortized discount = $1,660 ($16,660 - $15,000)

Outstanding value = $239,662 ($238,002 + 1,660)

On December 31, 2020:

Bond interest payment = $15,000 ($250,000 * 6%)

Bond interest expense = $16,776 ($239,662 * 7%)

Amortized discount = $1,776 ($16,776 - $15,000)

Outstanding value = $241,438 ($239,662 + 1,776)

On December 31, 2021:

Bond interest payment = $15,000 ($250,000 * 6%)

Bond interest expense = $16,901 ($241,438 * 7%)

Amortized discount = $1,901 ($16,901 - $15,000)

Outstanding value = $243,339 ($241,438 + 1,901)

Depreciation on Capitalized Equipment Repairs:

Excess depreciation expense:

For 2020 = $850 ($8,500 * 10%)

For 2021 = $940 ($9,400 * 10%)