Analyze each of the following transactions and show the effect on the accounting equation.Transactions1. Issue 10,000 shares of common stock in exchange for $32,000 in cash.2. Purchase land for $19,000. A note payable is signed for the full amount.3. Purchase equipment for $8,000 cash.4. Hire three employees for $2,000 per month. Salaries are not paid until the end of the month.5. Receive cash of $12,000 in rental fees for the current month.6. Purchase office supplies for $2,000 on account.7. Pay employees $6,000 for the first month's salaries.Dual Effect

Step 1: Accounting equation is called the Balance Sheet Equation which shows that total assets are…

Answered: Analyze each of the following…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter3: Analyzing And Recording Transactions

Section: Chapter Questions

Problem 17PA: Prepare journal entries to record the following transactions for the month of November: A. on first...

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19 Dec. Borrowed $28,000 from the bank for personal use. The loan carried an interest rate of 6% a year and the first payment was due on 19 January. Williamson signed a note payable to the bank in the name of the business. How would this be journaled, put on an income statment, balance sheet, and cash flow statment for december 31st?
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Bill Darby started Darby Company on January 1, Year 1. The company experienced the following events during its first year of operation. 1. Earned $1,800 of cash revenue. 2. Borrowed $2,400 cash from the bank. 3. Adjusted the accounting records to recognize accrued interest expense on the bank note. The note, issued on September 1, Year 1, had a one-year term and an 8 percent annual interest rate. Required: a. What is the amount of interest expense in Year 1? b. What amount of cash was paid for interest in Year 1? c. Use a horizontal statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. Indicate whether the event increases, decreases, or increases and decreases each element of the financial statements. In the Statement of Cash Flows column, designate the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA). The first transaction has been recorded as an example. Complete this question…
Marlon, Inc. reported a balance of $143 ub uts cash account at the end of the month. There were $120 of deposits in transit and $115 of checks outstanding. The bank statement showed a balance of $150, service charges of $6, and the collection of a note plus interest. The note had a face value of $15. How much interest did the bank collect for the company? a. $18 b. $3 c. $24 d. $12
York Company engaged in the following transactions for Year 1. The beginning cash balance was $86,000 and the ending cash balance was $59,100. 1. Sales on account were $548,000. The beginning receivables balance was $128,000 and the ending balance was $90,000. 2. Salaries expense for the period was $232,000. The beginning salaries payable balance was $16,000 and the ending balance was $8,000. 3. Other operating expenses for the period were $236,000. The beginning other operating expenses payable balance was $16,000 and the ending balance was $10,000. 4. Recorded $30,000 of depreciation expense. The beginning and ending balances in the Accumulated Depreciation account were $12,000 and $42,000, respectively. 5. The Equipment account had beginning and ending balances of $44,000 and $56,000, respectively. There were no sales of equipment during the period. 6. The beginning and ending balances in the Notes Payable account were $36,000 and $44,000, respectively. There were no payoffs of…
Bill Darby started Darby Company on January 1, Year 1. The company experienced the following events during its first year of operation: 1. Earned $1,700 of cash revenue. 2. Borrowed $2,700 cash from the bank. 3. Adjusted the accounting records to recognize accrued interest expense on the bank note. The note, issued on September 1, Year 1, had a one-year term and an 6 percent annual interest rate. Required a. What is the amount of interest expense in Year 1? b. What amount of cash was paid for interest in Year 1? c. Use a horizontal statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. Indicate whether the event increases (I) or decreases (D), or if there is no effect, leave the cell blank. In the Cash Flows column, designate the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA). The first transaction has been recorded as an example. Complete this question by entering your answers…
Pomona, Inc., began business on January 1. Certain transactions for the year follow: Jun.8 Received a $30,000, 60 day, six percent note on account from R. Elliot. Aug.7 Received payment from R. Elliot on her note (principal plus interest). Sep.1 Received an $18,000, 120 day, seven percent note from B. Shore Company on account. Dec.16 Received a $14,400, 45 day, eight percent note from C. Judd on account. Dec.30 B. Shore Company failed to pay its note. Dec.31 Wrote off B. Shore’s account as uncollectible. Ponoma, Inc. uses the allowance method of providing for credit losses. Dec.31 Recorded expected credit losses for the year by an adjusting entry. Accounts written off during this first year have created a debit balance in the Allowance for Doubtful Accounts of $24,500. An analysis of aged receivables indicates that the desired balance of the allowance account should be $21,300. Dec.31 Made the appropriate adjusting entries for interest. RequiredRecord the…
Yi Min started an engineering firm called Min Engineering. He began operations and completed seventransactions in May, which included his initial investment of $18,000 cash. After those seven transactions,the ledger included the following accounts with normal balances. Cash . . . . . . . . . . . . . . . . . . $37,600Office supplies. . . . . . . . . . 890Prepaid insurance. . . . . . . 4,600Office equipment. . . . . . . $12,900Accounts payable. . . . . . . 12,900Y. Min, Capital. . . . . . . . . . 18,000Y. Min, Withdrawals . . . . . . . . . . . $ 3,370Engineering fees earned. . . . . . . 36,000Rent expense. . . . . . . . . . . . . . . . 7,540 Required 1. Prepare a trial balance for this business as of the end of May. 2. The following seven transactions produced the account balances shown above. a. Y. Min invested $18,000 cash in the business. b. Paid $7,540 cash for monthly rent expense for May. c. Paid $4,600 cash in advance for the annual insurance premium beginning the next period. d.…
The following are the transactions of Spotlighter, Incorporated, for the month of January. a. Borrowed $3.990 from a local bank on a note due in six months. b. Received $4,680 cash from investors and issued common stock to them. C. Purchased $1,100 in equipment, paying $250 cash and promising the rest on a note due in one year. d. Paid $350 cash for supplies. e. Bought and received $750 of supplies on account. Required: Post the effects to the appropriate T-accounts and determine ending account balances. Show a beginning balance of zero.
Austin, Inc., began business on January 1. Several transactions for the year follow: May 2 Received a $30,000, 60 day, ten percent note on account from the Haskins Company. Jul.1 Received payment from Haskins for its note plus interest. Jul.1 Received a $61,000, 120 day, nine percent note from R. Longo Company on account. Oct.29 R. Longo failed to pay its note. Dec.9 Wrote off R. Longo’s account as uncollectible. Austin, Inc., uses the allowance method of providing for credit losses. Dec.11 Received a $42,000, 90 day, 12 percent note from R. Canal on account. Dec.31 Recorded expected credit losses for the year by an adjusting entry. Accounts written off during this first year have created a debit balance in the Allowance for Doubtful Accounts of $61,000. An analysis of aged accounts receivables indicates that the desired balance of the allowance account should be $13,200. Dec.31 Made the appropriate adjusting entries for interest. RequiredRecord the foregoing…
During its first year of operations, G Company provides services on account of $250,000. By the end of the year, cash collections on these accounts total $130,000. The company estimates that 10% of accounts receivable will be uncollectible at the end of the year. On March 13, G Company writes off a customer's account of $3,800. On June 3, the customer unexpectedly pays the $3,800 balance. Required: a) Determine the uncollectible accounts expense for the year b) The balance in Allowance for Doubtful Accounts c) The net realizable value of the accounts receivable d) Explain the relationship of Accounts Receivable and Allowance for Doubtful accounts and what type of questions can be answered by analyzing these two (2) items when checking the company's balance sheet
The following are the transactions of Spotlighter, Incorporated, for the month of January. a. Borrowed $4,390 from a local bank on a note due in six months. b. Received $5,080 cash from investors and issued common stock to them. c. Purchased $1,900 in equipment, paying $650 cash and promising the rest on a note due in one year. d. Paid $750 cash for supplies. e. Bought and received $1,150 of supplies on account. Required: Post the effects to the appropriate T-accounts and determine ending account balances. Show a beginni Debit Beginning Balance Ending Balance Debit F Cash Equipment Credit Credit Debit Beginning Balance Ending Balance Debit Supplies Accounts Payable

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