Sunday 6 January 2013

Morten Corporation had beginning retained earnings of $764,000 and ending retained earnings of $833,000. During the year they issued common stock totaling $47,000. There were no dividends issued. What was their net income for the year? $69,000 $22,000 $116,000 $91,000

On March 1, 2010, Dillon Company hires a new employee who will start the work on March 6. The employee will be paid on the last day of each month. Should a journal entry be made on March 6? Why or why not?

  •               Yes, the company is now obligated to pay the employee, thus that event must be recorded on March 6.
  •                No, hiring an employee is an important event; however, it is not an economic event that should be recorded on March
  •               Yes, failure to record the event on March 6 would cause the financial statements to be misleading.
  •               No, the journal entry should be made on March 1 which is the date of hiring.


                                        


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