ent #2 - Chapter 2esDeliberate Speed Corporation (DSC) was incorporated as a private company. The company's accounts included the following at June30:Accounts PayableFactory BuildingCashContributed CapitalEquipment$ 21,000103,30029,300191,000129,000LandNotes Payable (long-term)Retained EarningsSuppliesSavedDuring the month of July, the company had the following transactions:a. Issued 3,780 shares for $378,000 cash.$ 211,0004,200264,5008,100b. Borrowed $112,000 cash from a local bank, payable in two years.c. Bought a factory building for $204,000; paid $93,000 in cash and signed a three-year note for the balance.d. Paid cash for equipment that cost $222,000.e. Purchased supplies for $33,300 on account.Required:1. Analyze transactions (a)-(e) to determine their effects on the accounting equation. (Enter any decreases to account balances with aminus sign.)

The accounting equation, also known as the balance sheet equation, is a fundamental principle in…

Answered: Deliberate Speed Corporation (DSC) was…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Selected financial data for Wilmington Corporation is presented below. WILMINGTON CORPORATION Balance Sheet As of December 31 Year 7 Year 6 Current Assets Cash and cash equivalents $ 634,527 $ 335,597 Marketable securities 166,106 187,064 Accounts receivable (net) 284,226 318,010 Inventories 466,942 430,249 Prepaid expenses 60,906 28,060 Other current assets 83,053 85,029 Total Current Assets 1,695,760 1,384,009 Property, plant and equipment 1,384,217 625,421 Long-term investment 568,003 425,000 Total Assets $3,647,980 $2,434,430 Current Liabilities Short-term borrowings $ 306,376 $ 170,419 Current portion of long-term debt 155,000 168,000 Accounts payable 279,522 314,883 Accrued liabilities 301,024 183,681 Income taxes payable 107,509 196,802 Total Current Liabilities 1,149,431…
During its first year of operations, Buffalo Corporation had the following transactions pertaining to its common stock. Jan. Issued 84,800 shares for cash at $6 per share. 10 Issued 5,000 shares to attorneys in payment of a bill for $37,000 for services rendered in helping the company to incorporate. Mar. 1 July Issued 32,700 shares for cash at $8 per share. 1 Sept. Issued 61,700 shares for cash at $10 per share. 1
American Laser, Inc., reported the following account balances on January 1. Accounts Receivable Accumulated Depreciation. Additional Paid-in Capital Allowance for Doubtful Accounts Bonds Payable Buildings. Cash Common Stock, 10,000 shares of $1 part Notes Payable (long-term) Retained Earnings Treasury Stock TOTALS Requirement View transaction list General Journal
Instructions On October 31, Legacy Rocks Inc., a marble contractor, issued for cash 72,900 shares of $10 par common stock at $14, and on November 19, it issued for cash 20,640 shares of preferred stock, $50 par at $52. Required: A. Journalize the entries for October 31 and November 19. Refer to the Chart of Accounts for exact wording of account titles. B. What is the total amount invested (total paid-in capital) by all stockholders as of November 19? Journal JOURNAL DESCRIPTION POST. REF. DEBIT CREDIT DATE
BBP, Inc., with sales of $600,000, has the following balance sheet: BBP, Incorporated Balance Sheet as of 12/31/X0 Assets Liabilities and Equity Cash $ 30,000 Accounts payable $ 18,000 Accounts receivable 90,000 Accruals 36,000 Inventory 108,000 Notes payable 70,000 Current assets 228,000 Current liabilities 124,000 Fixed assets 180,000 Common stock 120,000 Retained earnings 164,000 Total assets $ 408,000 Total liabilities and equity $ 408,000 The firm earns 15 percent on sales and distributes 25 percent of its earnings. Using the percent of sales, determine whether the firm will need external funds and forecast the new balance sheet for sales of $780,000 assuming that cash changes with sales and that the firm is not operating at capacity. Use newly issued short-term debt to cover any needs for additional finance. If the firm has excess funds, add them to cash. Round your answers to the nearest dollar. Enter your…
A company declared a cash dividend of $.35 per common share to the shareholders of record on July 15. The cash dividend will be paid on July 31. This company has 500,000 shares authorized and 100,000 shares outstanding. What is the entry to record the payment on the payment date? O debit Common Dividend Payable 35,000 and credit Cash 35,000 O debit Common Dividend Payable 175,000 and credit Cash 175,000 O no entry on payment date O debit Retained Earnings 175,000; credit Common Dividend Payable 175,000 79°F Rain t
On October 31, Legacy Rocks Inc., a marble contractor, issued for cash 74,600 shares of $10 par common stock at $12, and on November 19, it issued for cash 15,640 shares of preferred stock, $40 par at $56. Required: A. Journalize the entries for October 31 and November 19. Refer to the Chart of Accounts for exact wording of account titles. B. What is the total amount invested (total paid-in capital) by all stockholders as of November 19? CHART OF ACCOUNTSLegacy Rocks Inc.General Ledger ASSETS 110 Cash 120 Accounts Receivable 131 Notes Receivable 132 Interest Receivable 141 Merchandise Inventory 145 Office Supplies 151 Prepaid Insurance 181 Land 193 Equipment 194 Accumulated Depreciation-Equipment LIABILITIES 210 Accounts Payable 221 Notes Payable 226 Interest Payable 231 Cash Dividends Payable 236 Stock Dividends Distributable 241 Salaries Payable 261 Mortgage Note Payable EQUITY 311 Common Stock 312 Paid-In…
Lloyd Inc. has sales of $500,000, a net income of $45,000, and the following balance sheet: Cash $133,200 Accounts payable $142,800 Receivables 180,000 Notes payable to bank 90,000 Inventories 612,000 Total current liabilities $232,800 Total current assets $925,200 Long-term debt 158,400 Net fixed assets 274,800 Common equity 808,800 Total assets $1,200,000 Total liabilities and equity $1,200,000 The new owner thinks that inventories are excessive and can be lowered to the point where the current ratio is equal to the industry average, 2x, without affecting sales or net income. If inventories are sold and not replaced (thus reducing the current ratio to 2x); if the funds generated are used to reduce common equity (stock can be repurchased at book value); and if no other changes occur, by how much will the ROE change? Do not round intermediate calculations. Round your answer to two decimal places. % What will be the firm's new quick ratio? Do not round intermediate calculations. Round…
The Davidson Corporation's balance sheet and income statement are provided here. Davidson Corporation: Balance Sheet as of December 31, 2021 (millions of dollars) Assets Liabilities and Equity Cash and equivalents $ 20 Accounts payable $ 140 Accounts receivable 475 Accruals 310 Inventories 890 Notes payable 225 Total current assets $ 1,385 Total current liabilities $ 675 Net plant and equipment 2,560 Long-term bonds 1,500 Total liabilities $ 2,175 Common stock (100 million shares) 270 Retained earnings $ 1,500 Common equity $ 1,770 Total assets $ 3,945 Total liabilities and equity $ 3,945 Davidson Corporation: Income Statement for Year Ending December 31, 2021 (millions of dollars) Sales $ 8,500 Operating costs excluding depreciation and amortization 5,650 EBITDA $ 2,850 Depreciation and amortization 500 EBIT $ 2,350 Interest 230 EBT $ 2,120…
The financial statements for Castile Products, Inc., are given below: Castile Products, Inc. Balance Sheet December 31 Assets Current assets: Cash Accounts receivable, net Merchandise inventory Prepaid expenses $ 6,500 35,000 70,000 3,500 115,000 185,000 Total current assets Property and equipment, net Total assets $300,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities $ 50,000 Bonds payable, 10% Total liabilities 80,000 130,000 Stockholders' equity: Common stock, $5 par value Retained earnings Total stockholders' equity 30,000 140,000 170,000 Total liabilities and stockholders' equity $300,000 Castile Products, Inc. Income Statement For the Year Ended December 31 Sales $420,000 Cost of goods sold Gross margin Selling and administrative expenses 292,500 127,500 89,500 Net operating income Interest expense Net income before taxes 38.000 8,000 30,000 Income taxes (30%) 9,000 Net income $ 21,000 Account balances at the beginning of the year were: accounts…
Following are the transactions of JonesSpa Corporation, for the month of January. a Borrowed $30,000 from a local bank; the loan is due in 9 months. b. Lent $10,000 to an affiliate; accepted a note due in one year. c. Sold to investors 100 additional shares of stock with a par value of $0.10 per share and a market price of $5 per share; received cash. d. Purchased $15,000 of equipment, paying $5,000 cash and signing a note for the rest due in one year. e. Declared $2,000 in cash dividends to stockholders, to be paid in February. Prepare the journal entry to record each of the above transactions for the month of January, Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet Record the receipt of the bank loan of $30,000. Note: Enter debits before credits Transaction 5 Record entry General Journal Clear entry Debit Credit View general journal
Selected financial data for Wilmington Corporation is presented below. WILMINGTON CORPORATION Balance Sheet As of December 31 Year 7 Year 6 Current Assets Cash and cash equivalents $ 634,527 $ 335,597 Marketable securities 166,106 187,064 Accounts receivable (net) 284,226 318,010 Inventories 466,942 430,249 Prepaid expenses 60,906 28,060 Other current assets 83,053 85,029 Total Current Assets 1,695,760 1,384,009 Property, plant and equipment 1,384,217 625,421 Long-term investment 568,003 425,000 Total Assets $3,647,980 $2,434,430 Current Liabilities Short-term borrowings $ 306,376 $ 170,419 Current portion of long-term debt 155,000 168,000 Accounts payable 279,522 314,883 Accrued liabilities 301,024 183,681 Income taxes payable 107,509 196,802 Total Current Liabilities 1,149,431…

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