1DC_7 Let’s examine a case using Gre... [FREE SOLUTION]

Canyon Canoe Company is a service-based company that rents canoes for use on local lakes and rivers. Amber and Zack Wilson graduated from college about 10 years ago. They both worked for one of the “Big Four” accounting firms and became CPAs. Because they both love the outdoors, they decided to begin a new business that will combine their love of outdoor activities with their business knowledge. Amber and Zack decide that they will create a new corporation, Canyon Canoe Company, or CCC for short. The business began operations on November 1, 2018. Nov. 1 Received $16,000 cash to begin the company and issued common stock to Amber and Zack. 2 Signed a lease for a building and paid $1,200 for the first month’s rent. 3 Purchased canoes for $4,800 on account. 4 Purchased office supplies on account, $750. 7 Earned $1,400 cash for rental of canoes. 13 Paid $1,500 cash for wages. 15 Paid $50 dividends to stockholders. 16 Received a bill for $150 for utilities. (Use separate payable account.) 20 Received a bill for $175 for cell phone expenses. (Use separate payable account.) 22 Rented canoes to Early Start Daycare on account, $3,000. 26 Paid $1,000 on account related to the November 3, 2018, purchase. 28 Received $750 from Early Start Daycare for canoe rental on November 22, 2018. 30 Paid $100 dividends to stockholders. Requirements 5. Calculate the return on assets for Canyon Canoe Company for November 2018

Question: Match the accounting terminology to the definitions. 3. Time period concept 4. Revenue recognition principle 5. Matching principle a. Requires companies to record revenue when it satisfies each performance obligation. b. Assumes that a business’s activities can be sliced into small time segments and that financial statements can be prepared for specific periods. c. Guides accounting for expenses, ensures that all expenses are recorded when they are incurred during the period, and matches those expenses against the revenues of the period

Michael McNamee is the proprietor of a property management company,Apartment Exchange, near the campus of Pensacola State College. The business has cash of $8,000 and furniture that cost $9,000 and has a marketvalue of $13,000. The business debts include accounts payable of $6,000. Michael's personal home is valued at $400,000, and his personal bank accounthas a balance of $1,200. Consider the accounting principles and assumptionsdiscussed in the chapter, and identify the principle or assumption that best matches the situation:

a. Michael's personal assets are not recorded on the Apartment Exchange's

balance sheet.

b. The Apartment Exchange records furniture at its cost of \(9,000, not its market

value of \)13,000.

c. The Apartment Exchange reports its financial statements in U.S. dollars.

d. Michael expects the Apartment Exchange to remain in operation for the

foreseeable future

A business purchases an acre of land for $5,000. The current market value is $5,550, and the land was assessed for property tax purposes at $5,250. What value should the land be recorded at, and which accounting principle supports your answer?

Let’s examine a case using Greg’s Tunes and Sal’s Silly Songs. It is now the end of the first year of operations, and the stockholders want to know how well each business came out at the end of the year. Neither business kept complete accounting records, and no dividends were paid. The businesses throw together the data shown on the next page at year-end: $ 23,000 8,000 35,000 22,000 $ 10,000 6,000 44,000 9,000 Total Assets Common Stock Total Revenues Total Expenses Greg’s Tunes: Sal’s Silly Songs: Total Liabilities Common Stock Total Expenses Net Income To gain information for evaluating the businesses, the stockholders ask you several questions. For each answer, you must show your work to convince the stockholders that you know what you are talking about. Requirements 4. Which business brought in more revenue?

Short Answer

Step by step solution

Explanation on Net Income

Explanation on Profitability

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