Jack Hammer Company completed the following transactions. The annual accounting period ends December 31. April 30 Received $888,000 from Commerce Bank after signing a 12-month, 9.00 percent, promissory note. June 6 Purchased merchandise on account at a cost of $99,000. (Assume a perpetual inventory system.) July 15 Paid for the June 6 purchase. August 31 Signed a contract to provide security service to a small apartment complex starting in September, and collected six months' fees in advance, amounting to $36,000. December 31 Determined salary and wages of $64,000 were earned but not yet paid as of December 31 (ignore payroll taxes). December 31 Adjusted the accounts at year-end, relating to interest. December 31 Adjusted the accounts at year-end, relating to security service. Required: 1. For each listed transaction and related adjusting entry, indicate the accounts, amounts, and effects on the accounting equation. 2. For each item, indicate whether the debt-to-assets ratio is increased or decreased or there is no change. (Assume Jack Hammer's debt-to-assets ratio is less than 1.0.)
Jack Hammer Company completed the following transactions. The annual accounting period ends December 31. April 30 Received $888,000 from Commerce Bank after signing a 12-month, 9.00 percent, promissory note. June 6 Purchased merchandise on account at a cost of $99,000. (Assume a perpetual inventory system.) July 15 Paid for the June 6 purchase. August 31 Signed a contract to provide security service to a small apartment complex starting in September, and collected six months' fees in advance, amounting to $36,000. December 31 Determined salary and wages of $64,000 were earned but not yet paid as of December 31 (ignore payroll taxes). December 31 Adjusted the accounts at year-end, relating to interest. December 31 Adjusted the accounts at year-end, relating to security service. Required: 1. For each listed transaction and related adjusting entry, indicate the accounts, amounts, and effects on the accounting equation. 2. For each item, indicate whether the debt-to-assets ratio is increased or decreased or there is no change. (Assume Jack Hammer's debt-to-assets ratio is less than 1.0.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Subject : Accounting
Transcribed Image Text:Jack Hammer Company completed the following transactions. The annual accounting period ends December 31.
April 30 Received $888,000 from Commerce Bank after signing a 12-month, 9.00 percent, promissory note.
June 6 Purchased merchandise on account at a cost of $99,000. (Assume a perpetual inventory system.)
July 15 Paid for the June 6 purchase.
August 31
Signed a contract to provide security service to a small apartment complex starting in September, and
collected six months' fees in advance, amounting to $36,000.
December 31
Determined salary and wages of $64,000 were earned but not yet paid as of December 31 (ignore payroll
taxes).
Adjusted the accounts at year-end, relating to interest.
December 31
December 31 Adjusted the accounts at year-end, relating to security service.
Required:
1. For each listed transaction and related adjusting entry, indicate the accounts, amounts, and effects on the accounting equation.
2. For each item, indicate whether the debt-to-assets ratio is increased or decreased or there is no change. (Assume Jack Hammer's
debt-to-assets ratio is less than 1.0.)
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
For each listed transaction and related adjusting entry, indicate the accounts, amounts, and effects on the accounting equation. (Do not round intermediate calculations. Round your answers to the nearest whole dollar. Enter any decreases to assets,
liabilities, or stockholders equity with a minus sign. Enter your answers in transaction order provided in the problem statement.)
Date
April 30
June 6
July 15
August 31
December 31
December 31
December 31
Assets
=
=
Liabilities
< Required 1
Required 2 >
+
+
+
+
+
+
+
+
Stockholders' Equity
Transcribed Image Text:Required 1 Required 2
For each item, indicate whether the debt-to-assets ratio is increased or decreased or there is no change. (Assume Jack
Hammer's debt-to-assets ratio is less than 1.0.) (Enter your answers in transaction order provided in the problem statement.)
Date
April 30
June 6
July 15
August 31
December 31
December 31
December 31
Effect on Ratio
Numerator
< Required 1
Denominator
Required 2 >
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