Bryant Company sells a wide range of inventories, which are initially purchased on account. Occasionally, short-term notes payable are used to obtain cash for current use. The following transactions were selected from those occurring during the year: a. On January 10, purchased merchandise on credit for $26,000. The company uses a perpetual inventory system. b. On March 1, borrowed $56,000 cash from City Bank and signed a promissory note with a face amount of $56,000, due at the end of six months, accruing interest at an annual rate of 7.00 percent, payable at maturity. Required: 1. For each of the transactions, indicate the accounts, amounts, and effects on the accounting equation. 2. What amount of cash is paid on the maturity date of the note? 3. Indicate the impact of each transaction (increase, decrease, and no effect) on the debt-to-assets ratio. Assume Bryant Company had $460,000 in total liabilities and $660,000 in total assets, yielding a debt-to-assets ratio of 0.70, prior to each transaction.
Bryant Company sells a wide range of inventories, which are initially purchased on account. Occasionally, short-term notes payable are used to obtain cash for current use. The following transactions were selected from those occurring during the year: a. On January 10, purchased merchandise on credit for $26,000. The company uses a perpetual inventory system. b. On March 1, borrowed $56,000 cash from City Bank and signed a promissory note with a face amount of $56,000, due at the end of six months, accruing interest at an annual rate of 7.00 percent, payable at maturity. Required: 1. For each of the transactions, indicate the accounts, amounts, and effects on the accounting equation. 2. What amount of cash is paid on the maturity date of the note? 3. Indicate the impact of each transaction (increase, decrease, and no effect) on the debt-to-assets ratio. Assume Bryant Company had $460,000 in total liabilities and $660,000 in total assets, yielding a debt-to-assets ratio of 0.70, prior to each transaction.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
please dont give image with solutions thanks
Transcribed Image Text:Bryant Company sells a wide range of inventories, which are initially purchased on account. Occasionally, short-term notes payable are
used to obtain cash for current use. The following transactions were selected from those occurring during the year.
a. On January 10, purchased merchandise on credit for $26,000. The company uses a perpetual inventory system.
b. On March 1, borrowed $56,000 cash from City Bank and signed a promissory note with a face amount of $56,000, due at the end of
six months, accruing interest at an annual rate of 7.00 percent, payable at maturity.
Required:
1. For each of the transactions, indicate the accounts, amounts, and effects on the accounting equation.
2. What amount of cash is paid on the maturity date of the note?
3. Indicate the impact of each transaction (increase, decrease, and no effect) on the debt-to-assets ratio. Assume Bryant Company had
$460,000 in total liabilities and $660,000 in total assets, yielding a debt-to-assets ratio of 0.70, prior to each transaction.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Required 3
For each of the transactions, indicate the accounts, amounts, and effects on the accounting equation. (Enter any decreases to assets, liabilities, or stockholders equity w
Liabilities
Date
January 10
March 1
Assets
=
Required 2 >
Stockholders' Equity
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 5 steps with 5 images
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.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education