Principles of Accounting Volume 2
19th Edition
ISBN: 9781947172609
Author: OpenStax
Publisher: OpenStax College
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 2, Problem 2EB
CPK ** Associates is a mid-size legal firm, specializing in closings and real estate law in the south. In 2019, they generated $945,000 in sales revenue. Their expenses related to this year’s revenue are shown:
Based on the information provided for the year, what was their net operating income?
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
EB2. CPK & Associates is a mid-size legal firm, specializing in closings and real estate law in the south. In 2019, they generated $945,000 in sales revenue. Their expenses related to this year’s revenue are shown: Based on the information provided for the year, what was their net operating income?
Operating Expenses
$312,000
Cost of service
total cost per client
$1,750
clients served in 2019
225
7)
Evergreen traders had the gross profit of RO 78,200, advertising of RO 1,700, salesperson salary of RO 1,500, office rent of RO 7,400, office insurance of RO 1,200, interest expense of RO 500, loss on sale of machinery RO 700, dividend revenue RO 2,500 and repairs and maintenance of RO 450 for the year 2019. Calculate and show the Net income of the business transferred to the balance sheet for the year ended 2019?
a.
RO 68,650
b.
RO 78,200
c.
RO 69,550
d.
RO 67,250
A business has net assets of £296,400 on 31 Jan 2021 and had net assets of £256,250 on 31 Jan 2020. During the year the owner of the business:
1. took goods for his own use which cost £8,000 and had a market value of £12,000;
2. introduced capital of £45,000; and
3. withdrew £35,000 as salary.
What was the profit for the year?
Chapter 2 Solutions
Principles of Accounting Volume 2
Ch. 2 - Which of the following is the primary source of...Ch. 2 - Which of the following is the primary source of...Ch. 2 - Which of the following is the primary source of...Ch. 2 - Which of the following represents the components...Ch. 2 - Which of the following represents the components...Ch. 2 - Which of the following represents the components...Ch. 2 - Conversion costs include all of the following...Ch. 2 - Which of the following is not considered a product...Ch. 2 - Fixed costs are expenses that...Ch. 2 - Variable costs are expenses that...
Ch. 2 - Total costs for ABC Distributing are $250,000 when...Ch. 2 - Which of the following would not be classified as...Ch. 2 - Which of the following are prime costs? A....Ch. 2 - Which of the following statements is true...Ch. 2 - The high-low method and least-squares regression...Ch. 2 - Which of the following methods of cost estimation...Ch. 2 - In the cost equation Y=a+bx, Y represents which of...Ch. 2 - A scatter graph is used to test the assumption...Ch. 2 - Identify the three primary classifications of...Ch. 2 - Explain how the income statement of a...Ch. 2 - Walsh & Coggins, a professional accounting firm,...Ch. 2 - Lizzys is a retail clothing store, specializing in...Ch. 2 - Identify and describe the three types of product...Ch. 2 - Explain the difference between a period cost and a...Ch. 2 - Explain the concept of relevant range and how it...Ch. 2 - Explain the differences among fixed costs,...Ch. 2 - Explain the difference between prime costs and...Ch. 2 - Explain how a scatter graph is used to identify...Ch. 2 - Explain the components of the total cost equation...Ch. 2 - Explain how the high-low method is used for cost...Ch. 2 - Magio Company manufactures kitchen equipment used...Ch. 2 - Park and West, LLC, provides consulting services...Ch. 2 - Canine Couture is a specialty dog clothing...Ch. 2 - Hicks Contracting collects and analyzes cost data...Ch. 2 - Rose Company has a relevant range of production...Ch. 2 - Carr Company provides human resource consulting...Ch. 2 - Western Trucking operates a fleet of delivery...Ch. 2 - Suppose that a company has fixed costs of $18 per...Ch. 2 - The cost data for Evencoat Paint for the year 2019...Ch. 2 - This cost data from Hickory Furniture is for the...Ch. 2 - Markson and Sons leases a copy machine with terms...Ch. 2 - Markson and Sons leases a copy machine with terms...Ch. 2 - Winterfell Products manufactures electrical...Ch. 2 - CPK ** Associates is a mid-size legal firm,...Ch. 2 - Flip or Flop is a retail shop selling a wide...Ch. 2 - Roper Furniture manufactures office furniture and...Ch. 2 - Baxter Company has a relevant range of production...Ch. 2 - Sanchez & Vukmin, LLP, is a full-service...Ch. 2 - Case Airlines provides charter airline services....Ch. 2 - Suppose that a company has fixed costs of $11 per...Ch. 2 - The cost data for BC Billing Solutions for the...Ch. 2 - This cost data from Hickory Furniture is for the...Ch. 2 - Able Transport operates a tour bus that they lease...Ch. 2 - Able Transport operates a tour bus that they lease...Ch. 2 - Ballentine Manufacturing produces and sells...Ch. 2 - Tom West is a land surveyor who operates a small...Ch. 2 - Just Beachy is a retail business located on the...Ch. 2 - Listed as follows are various costs found in...Ch. 2 - Wachowski Company reported these cost data for the...Ch. 2 - Carolina Yachts builds custom yachts in its...Ch. 2 - Hicks Products produces and sells patio furniture...Ch. 2 - Conner ** Scheer, Attorneys at Law, provide a wide...Ch. 2 - Puzzles, Pranks ** Games is a retail business...Ch. 2 - Pocket Umbrella, Inc. is considering producing a...Ch. 2 - Using the costs listed in the previous problem,...Ch. 2 - Gadell Farms produces venison sausage that is...Ch. 2 - In a team of two or three students, interview the...Ch. 2 - This list contains costs that various...
Additional Business Textbook Solutions
Find more solutions based on key concepts
What is a depreciation schedule?
Construction Accounting And Financial Management (4th Edition)
Quick ratio and current ratio (Learning Objective 7) 1520 min. Consider the following data: COMPANY A B C D Cas...
Financial Accounting, Student Value Edition (5th Edition)
If Oxbow Corporation dees not record a sale mace on account in December until a month later when the customer p...
Financial Accounting (12th Edition) (What's New in Accounting)
Account for mortgages. (LO 3). Curtain Company borrowed $10,000 at 9% for seven years. The loan requires annual...
Financial Accounting
Is reporting an investment at its cost considered relevant? Explain
Intermediate Accounting (2nd Edition)
the relationship between the net income and the average common equity that are invested in the company. Use the...
Horngren's Financial & Managerial Accounting, The Financial Chapters (Book & Access Card)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- The following information is taken from the records of Baklava Bakery for the year 2019. A. Calculate net income or net loss for January. B. Calculate net income or net loss for February. C. Calculate net income or net loss for March. D. For each situation, comment on how a stakeholder might view the firms performance. (Hint: Think about the source of the income or loss.)arrow_forwardThe transactions completed by PS Music during June 2019 were described at the end of Chapter 1. The following transactions were completed during July, the second month of the businesss operations: July 1.Peyton Smith made an additional investment in PS Music by depositing 5,000 in PS Musics checking account. 1.Instead of continuing to share office space with a local real estate agency, Peyton decided to rent office space near a local music store. Paid rent for July, 1,750. 1.Paid a premium of 2,700 for a comprehensive insurance policy covering liability, theft, and fire. The policy covers a one-year period. 2.Received 1,000 cash from customers on account. 3.On behalf of PS Music, Peyton signed a contract with a local radio station, KXMD, to provide guest spots for the next three months. The contract requires PS Music to provide a guest disc jockey for 80 hours per month for a monthly fee of 3,600. Any additional hours beyond 80 will be billed to KXMD at 40 per hour. In accordance with the contract, Peyton received 7,200 from KXMD as an advance payment for the first two months. 3.Paid 250 to creditors on account. 4.Paid an attorney 900 for reviewing the July 3 contract with KXMD. (Record as Miscellaneous Expense.) 5.Purchased office equipment on account from Office Mart, 7,500. 8.Paid for a newspaper advertisement, 200. 11.Received 1,000 for serving as a disc jockey for a party. 13.Paid 700 to a local audio electronics store for rental of digital recording equipment. 14.Paid wages of 1,200 to receptionist and part-time assistant. Enter the following transactions on Page 2 of the two-column journal: 16.Received 2,000 for serving as a disc jockey for a wedding reception. 18.Purchased supplies on account, 850. July 21. Paid 620 to Upload Music for use of its current music demos in making various music sets. 22.Paid 800 to a local radio station to advertise the services of PS Music twice daily for the remainder of July. 23.Served as disc jockey for a party for 2,500. Received 750, with the remainder due August 4, 2019. 27.Paid electric bill, 915. 28.Paid wages of 1,200 to receptionist and part-time assistant. 29.Paid miscellaneous expenses, 540. 30.Served as a disc jockey for a charity ball for 1,500. Received 500, with the remainder due on August 9, 2019. 31.Received 3,000 for serving as a disc jockey for a party. 31.Paid 1,400 royalties (music expense) to National Music Clearing for use of various artists music during July. 31.Withdrew 1,250 cash from PS Music for personal use. PS Musics chart of accounts and the balance of accounts as of July 1, 2019 (all normal balances), are as follows: Instructions 1. Enter the July 1, 2019, account balances in the appropriate balance column of a four-column account. Write Balance in the Item column and place a check mark () in the Posting Reference column. (Hint: Verify the equality of the debit and credit balances in the ledger before proceeding with the next instruction.) 2. Analyze and journalize each transaction in a two-column journal beginning on Page 1, omitting journal entry explanations. 3. Post the journal to the ledger, extending the account balance to the appropriate balance column after each posting. 4. Prepare an unadjusted trial balance as of July 31, 2019.arrow_forwardThe transactions completed by PS Music during June 2019 were described at the end of Chapter 1. The following transactions were completed during July, the second month of the business's operations: July 1. Peyton Smith made an additional investment in PS Music by depositing 5,000 in PS Music's checking account. 1. Instead of continuing to share office space with a local real estate agency, Peyton decided to rent office space near a local music: store. Paid rent for July, 1,750. 1. Paid a premium of 2,700 for a comprehensive insurance policy covering liability, theft, and fire. The policy covers a one-year period. 2. Received 1,000 cash from customers on account. 3. On behalf of PS Music, Peyton signed a contract with a local radio station, KXMD, to provide guest spots for the next three months. The contract requires PS Music to provide a guest disc jockey for SO hours per month for a monthly fee of 3,600. Any additional hours beyond SO will be billed to KXMD at 40 per hour. In accordance with the contract, Peyton received 7,200 from KXMD as an advance payment for the first two months. 3. Paid 250 to creditors on account. 4. Paid an attorney 900 for reviewing the July 3 contract with KXMD. (Record as Miscellaneous Expense.) 5. Purchased office equipment on account from Office Mart, 7,500. 8. Paid for a newspaper advertisement, 200. 11. Received 1,000 for serving as a disc jockey for a party. 13. Paid 700 to a local audio electronics store for rental of digital recording equipment. 11. Paid wages of 1,200 to receptionist and part-time assistant. Enter the following transactions on Page 2 of the two-column journal: 16. Received 2,000 for serving as a disc jockey for a wedding reception. 18. Purchased supplies on account, 850. July 21. Paid 620 to Upload Music for use of its current music demos in making various music sets. 22. Paid 800 to a local radio station to advertise the services of PS Music twice daily for the remainder of July. 23. Served as disc jockey for a party for 2,500. Received 750, with the remainder due August 4, 2019. 27. Paid electric bill, 915. 28. Paid wages of 1,200 to receptionist and part-time assistant. 29. Paid miscellaneous expenses, 540. 30. Served as a disc jockey for a charity ball for 1,500. Received 500, with the remainder due on August 9, 2019. 31. Received 3,000 for serving as a disc jockey for a party. 31. Paid 1,400 royalties (music expense) to National Music Clearing for use of various artists' music during July. 31. Withdrew l,250 cash from PS Music for personal use. PS Music's chart of accounts and the balance of accounts as of July 1, 2019 (all normal balances), are as follows: 11 Cash 3,920 12 Accounts receivable 1,000 14 Supplies 170 15 Prepaid insurance 17 Office Equipment 21 Accounts payable 250 23 Unearned Revenue 31 Peyton smith, Drawing 4,000 32 Fees Earned 500 41 Wages Expense 6,200 50 Office Rent Expense 400 51 Equipment Rent Expense 800 52 Utilities Expense 675 53 Supplies Expense 300 54 music Expense 1,590 55 Advertising Expense 500 56 Supplies Expense 180 59 Miscellaneous Expense 415 Instructions 1.Enter the July 1, 2019, account balances in the appropriate balance column of a four-column account. Write Balance in the Item column and place a check mark () in the Posting Reference column. (Hint: Verify the equality of the debit and credit balances in the ledger before proceeding with the next instruction.) 2.Analyze and journalize each transaction in a two-column journal beginning on Page 1, omitting journal entry explanations. 3.Post the journal to the ledger, extending the account balance to the appropriate balance column after each posting. 4.Prepare an unadjusted trial balance as of July 31, 2019.arrow_forward
- Using the income statement for Adventure Travel Service shown in Practice Exercise 1-4A, prepare a statement of owners equity for the year ended April 30, 2019. Jerome Foley, the owner, invested an additional 60,000 in the business during the year and withdrew cash of 40,000 for personal use. Jerome Foley, capital as of May 1, 2018, was 1,020,000.arrow_forwardDiscuss how each of the following transactions for Watson, International, will affect assets, liabilities, and stockholders equity, and prove the companys accounts will still be in balance. A. An investor invests an additional $25,000 into a company receiving stock in exchange. B. Services are performed for customers for a total of $4,500. Sixty percent was paid in cash, and the remaining customers asked to be billed. C. An electric bill was received for $35. Payment is due in thirty days. D. Part-time workers earned $750 and were paid. E. The electric bill in C is paid.arrow_forwardProfitability Ratios Tinker Corporation operates in the highly competitive consulting industry. Tinkers balance sheet indicates the following balances as of December 31, 2019. Required: Calculate Tinkers return on equity if Tinkers 2019 net income is $90,000.arrow_forward
- The Accounting Equation Using the accounting equation, answer each of the following independent questions. Burlin Company starts the year with $100,000 in assets and $80,000 in liabilities. Net income for the year is $25,000, and no dividends are paid. How much is owners equity at the end of the year? Chapman Inc. doubles the amount of its assets from the beginning to the end of the year. Liabilities at the end of the year amount to $40,000, and owners equity is $20,000. What is the amount of Chapmans assets at the beginning of the year? During the year, the liabilities of Dixon Enterprises triple in amount. Assets at the beginning of the year amount to $30,000, and owners equity is $10,000. What is the amount of liabilities at the end of the year?arrow_forwardConner ** Scheer, Attorneys at Law, provide a wide range of legal services for their clients. They employ several paralegal and administrative support staff in order to provide high-quality legal services at competitive prices. For the year ending December 31, 2017, the firm reported these income and expenses. Using this information, construct an income statement to reflect the firm’s net income for 2017.arrow_forwardThe Accounting Equation Ginger Enterprises began the year with total assets of $500,000 and total liabilities of $250,000. Using this information and the accounting equation, answer each of the following independent questions. What was the amount of Gingers owners equity at the beginning of the year? If Gingers total assets increased by $100,000 and its total liabilities increased by $77,000 during the year, what was the amount of Gingers owners equity at the end of the year? If Gingers total liabilities increased by $33,000 and its owners equity decreased by $58,000 during the year, what was the amount of its total assets at the end of the year? If Gingers total assets doubled to $1,000,000 and its owners equity remained the same during the year, what was the amount of its total liabilities at the end of the year?arrow_forward
- Elite Realty acts as an agent in buying, selling, renting, and managing real estate. The unadjusted trial balance on March 31, 2019, follows: The following business transactions were completed by Elite Realty during April 2019: Apr. 1. Paid rent on office for month, 6,500. 2.Purchased office supplies on account, 2,300. 5.Paid insurance premiums, 6,000. 10.Received cash from clients on account, 52,300. 15.Purchased land for a future building site for 200,000, paying 30,000 in cash and giving a note payable for the remainder. 17.Paid creditors on account, 6,450. 20.Returned a portion of the office supplies purchased on April 2, receiving full credit for their cost, 325. 23.Paid advertising expense, 4,300. Enter the following transactions on Page 19 of the two-column journal: 27.Discovered an error in computing a commission; received cash from the salesperson for the overpayment, 2,500. 28.Paid automobile expense (including rental charges for an automobile), 1,500. 29.Paid miscellaneous expenses, 1,400. 30.Recorded revenue earned and billed to clients during the month, 57,000. 30.Paid salaries and commissions for the month, 11,900. 30.Withdrew cash for personal use, 4,000. 30.Rented land purchased on April 15 to local merchants association for use as a parking lot in May and June, during a street rebuilding program; received advance payment of 10,000. Instructions 1. Record the April 1, 2019, balance of each account in the appropriate balance column of a four-column account, write Balance in the item section, and place a check mark () in the Posting Reference column. 2. Journalize the transactions for April in a two-column journal beginning on Page 18. Journal entry explanations may be omitted. 3. Post to the ledger, extending the account balance to the appropriate balance column after each posting. 4. Prepare an unadjusted trial balance of the ledger as of April 30, 2019. 5. Assume that the April 30 transaction for salaries and commissions should have been 19,100. (a) Why did the unadjusted trial balance in (4) balance? (b) Journalize the correcting entry. (c) Is this error a transposition or slide?arrow_forwardAnnie Rasmussen is the owner and operator of Go44, a motivational consulting business.At the end of its accounting period, December 31, 2018, Go44 has assets of $720,000 and liabilities of $180,000. Using the accounting equation and considering each case independently,determine the following amounts:a. Annie Rasmussen, capital, as of December 31, 2018.b. Annie Rasmussen, capital, as of December 31, 2019, assuming that assets increased by $96,500 and liabilities increased by $30,000 during 2019.c. Annie Rasmussen, capital, as of December 31, 2019, assuming that assets decreased by $168,000 and liabilities increased by $15,000 during 2019.d. Annie Rasmussen, capital, as of December 31, 2019, assuming that assets increased by $175,000 and liabilities decreased by $18,000 during 2019.e. Net income (or net loss) during 2019, assuming that as of December 31, 2019, assets were $880,000, liabilities were $220,000, and there were no additional investments or withdrawals.arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT
Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Financial AccountingAccountingISBN:9781337272124Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
Individual Income Taxes
Accounting
ISBN:9780357109731
Author:Hoffman
Publisher:CENGAGE LEARNING - CONSIGNMENT
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Financial Accounting
Accounting
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning
The KEY to Understanding Financial Statements; Author: Accounting Stuff;https://www.youtube.com/watch?v=_F6a0ddbjtI;License: Standard Youtube License