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For each of the following unrelated situations, determine the financial statement effect using the Transaction Analysis Template: a. Equipment purchased at the beginning of the month for $31,200 on account has an estimated useful life of 4 years. One-month's depreciation on the equipment is unrecorded. b. An estimated utilities expense of $1,235 has been incurred in the current month, but the utility bill has not been received. c. On the first day of the current month, payment was made for four months rent in advance in the amount of $31,200. Monthly statements are now being prepared. d. Taylor Medical Equipment provides medical equipment for rent. A local nursing home pays $21,840 in advance for three-months rental rental of hospital beds. At the end of the current period, one month has passed. Note: Use negative signs with answers, when appropriate. Balance Sheet Income Statement Stockholders' Transaction Assets Liabilities Equity Revenues Expenses = Net Income a. To record depreciation. b. To record utilities. c. To record rent. d. To record revenue. O o o o o o o o o o o o O o o o o o o o o o o o

For each of the following unrelated situations, determine the financial statement effect using the Transaction Analysis Template: a. Equipment purchased at the beginning of the month for $31,200 on account has an estimated useful life of 4 years. One-month's depreciation on the equipment is unrecorded. b. An estimated utilities expense of $1,235 has been incurred in the current month, but the utility bill has not been received. c. On the first day of the current month, payment was made for four months rent in advance in the amount of $31,200. Monthly statements are now being prepared. d. Taylor Medical Equipment provides medical equipment for rent. A local nursing home pays $21,840 in advance for three-months rental rental of hospital beds. At the end of the current period, one month has passed. Note: Use negative signs with answers, when appropriate. Balance Sheet Income Statement Stockholders' Transaction Assets Liabilities Equity Revenues Expenses = Net Income a. To record depreciation. b. To record utilities. c. To record rent. d. To record revenue. O o o o o o o o o o o o O o o o o o o o o o o o

FINANCIAL ACCOUNTING
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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# Transaction Analysis and Adjustments For each of the following unrelated situations, determine the financial statement effect using the Transaction Analysis Template: a. Equipment purchased at the beginning of the month for $31,200 on account has an estimated useful life of 4 years. One-month’s depreciation on the equipment is unrecorded. b. An estimated utilities expense of $1,235 has been incurred in the current month, but the utility bill has not been received. c. On the first day of the current month, payment was made for four months rent in advance in the amount of $31,200. Monthly statements are now being prepared. d. Taylor Medical Equipment provides medical equipment for rent. A local nursing home pays $21,840 in advance for three-months rental of hospital beds. At the end of the current period, one month has passed. **Note:** Use negative signs with answers, when appropriate. ## Financial Statement Effects (Table) | Transaction | Balance Sheet | | Income Statement | | | |---------------------------|---------------|----------------------|------------------|--------------------|-------------------| | | Assets | = Liabilities + Equity | Revenues | - Expenses | = Net Income | | a. To record depreciation.| 0 | 0 | 0 | 0 | 0 | | b. To record utilities. | 0 | 0 | 0 | 0 | 0 | | c. To record rent. | 0 | 0 | 0 | 0 | 0 | | d. To record revenue. | 0 | 0 | 0 | 0 | 0 | In this table, placeholders are provided for the recording of depreciation, utilities, rent, and revenue. It illustrates that each transaction affects different components of financial statements, though the specific numeric impact is not yet noted.
Transcribed Image Text:# Transaction Analysis and Adjustments For each of the following unrelated situations, determine the financial statement effect using the Transaction Analysis Template: a. Equipment purchased at the beginning of the month for $31,200 on account has an estimated useful life of 4 years. One-month’s depreciation on the equipment is unrecorded. b. An estimated utilities expense of $1,235 has been incurred in the current month, but the utility bill has not been received. c. On the first day of the current month, payment was made for four months rent in advance in the amount of $31,200. Monthly statements are now being prepared. d. Taylor Medical Equipment provides medical equipment for rent. A local nursing home pays $21,840 in advance for three-months rental of hospital beds. At the end of the current period, one month has passed. **Note:** Use negative signs with answers, when appropriate. ## Financial Statement Effects (Table) | Transaction | Balance Sheet | | Income Statement | | | |---------------------------|---------------|----------------------|------------------|--------------------|-------------------| | | Assets | = Liabilities + Equity | Revenues | - Expenses | = Net Income | | a. To record depreciation.| 0 | 0 | 0 | 0 | 0 | | b. To record utilities. | 0 | 0 | 0 | 0 | 0 | | c. To record rent. | 0 | 0 | 0 | 0 | 0 | | d. To record revenue. | 0 | 0 | 0 | 0 | 0 | In this table, placeholders are provided for the recording of depreciation, utilities, rent, and revenue. It illustrates that each transaction affects different components of financial statements, though the specific numeric impact is not yet noted.
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