GROUP A PROBLEMS PA10-1 Determining Financial Effects of Transactions Affecting Current Liabilities with Evaluation of Effects on the Debt-to-Assets Ratio Jack Hammer Company completed the following transactions. The annual accounting period ends December 31. Apr. 30 June 6 July 15 Aug. 31 Dec. 31 Dec. 31 Dec. 31 Received $600,000 from Commerce Bank after signing a 12-month, 6 percent, promissory note. Purchased merchandise on account at a cost of $75,000. (Assume a perpetual inventory system.) Paid for the June 6 purchase. Signed a contract to provide security service to a small apartment complex starting in September, and collected six months' fees in advance, amounting to $24,000. Determined salary and wages of $40,000 were earned but not yet paid as of December 31 (ignore payroll taxes). Adjusted the accounts at year-end, relating to interest. Adjusted the accounts at year-end, relating to security service.

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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LO 10-2, 10-5
ne acor-10-assets-ratio
1.
2.
3.
re is no
assets ratio is less than 1.0.)
PA10-2 Recording and Reporting Current Liabilities with Evaluation of Effects on the Debt-to-
Assets Ratio
Using data from PA10-1, complete the following requirements.
Required:
Prepare journal entries for each of the transactions through August 31.
Prepare all adjusting entries required on December 31.
Show how all of the liabilities arising from these items are reported on the balance sheet at
December 31.
Transcribed Image Text:LO 10-2, 10-5 ne acor-10-assets-ratio 1. 2. 3. re is no assets ratio is less than 1.0.) PA10-2 Recording and Reporting Current Liabilities with Evaluation of Effects on the Debt-to- Assets Ratio Using data from PA10-1, complete the following requirements. Required: Prepare journal entries for each of the transactions through August 31. Prepare all adjusting entries required on December 31. Show how all of the liabilities arising from these items are reported on the balance sheet at December 31.
GROUP A PROBLEMS
PA10-1 Determining Financial Effects of Transactions Affecting Current Liabilities with
Evaluation of Effects on the Debt-to-Assets Ratio
Jack Hammer Company completed the following transactions. The annual accounting period ends
December 31.
Apr. 30
June 6
connect
July 15
Aug. 31
Dec. 31
Received $600,000 from Commerce Bank after signing a 12-month, 6 percent,
promissory note.
Purchased merchandise on account at a cost of $75,000. (Assume a perpetual
inventory system.)
Paid for the June 6 purchase.
Signed a contract to provide security service to a small apartment complex
starting in September, and collected six months' fees in advance, amounting
to $24,000.
Determined salary and wages of $40,000 were earned but not yet paid as of
December 31 (ignore payroll taxes).
Dec. 31
Adjusted the accounts at year-end, relating to interest.
Dec. 31 Adjusted the accounts at year-end, relating to security service.
Transcribed Image Text:GROUP A PROBLEMS PA10-1 Determining Financial Effects of Transactions Affecting Current Liabilities with Evaluation of Effects on the Debt-to-Assets Ratio Jack Hammer Company completed the following transactions. The annual accounting period ends December 31. Apr. 30 June 6 connect July 15 Aug. 31 Dec. 31 Received $600,000 from Commerce Bank after signing a 12-month, 6 percent, promissory note. Purchased merchandise on account at a cost of $75,000. (Assume a perpetual inventory system.) Paid for the June 6 purchase. Signed a contract to provide security service to a small apartment complex starting in September, and collected six months' fees in advance, amounting to $24,000. Determined salary and wages of $40,000 were earned but not yet paid as of December 31 (ignore payroll taxes). Dec. 31 Adjusted the accounts at year-end, relating to interest. Dec. 31 Adjusted the accounts at year-end, relating to security service.
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