Jack Hammer Company completed the following transactions. The annual accounting period ends December 31. Apr. 30 Received $672,000 from Commerce Bank after signing a 12-month, 9.00 percent, promissory note. 6 Purchased merchandise on account at a cost of $81,000. (Assume a perpetual inventory system.) June July 15 Paid for the June 6 purchase. Aug. 31 Signed a contract to provide security service to a small apartment complex starting in September, and collected six n fees in advance, amounting to $27,000. Dec. 31 Determined salary and wages of $46,000 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. Required: 1. For each listed transaction and related adjusting entry, indicate the accounts, amounts, and effects on the accounting equatio 2. For each item, indicate whether the debt-to-assets ratio is increased or decreased or there is no change. (Assume Jack Hamm debt-to-assets ratio is less than 1.0.)

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Jack Hammer Company completed the following transactions. The annual accounting period ends December 31.
Apr. 30 Received $672,000 from Commerce Bank after signing a 12-month, 9.00 percent, promissory note.
6 Purchased merchandise on account at a cost of $81,000. (Assume a perpetual inventory system.)
June
July 15 Paid for the June 6 purchase.
Aug. 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 $27,000.
Dec. 31 Determined salary and wages of $46,000 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.
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.)
Transcribed Image Text:Jack Hammer Company completed the following transactions. The annual accounting period ends December 31. Apr. 30 Received $672,000 from Commerce Bank after signing a 12-month, 9.00 percent, promissory note. 6 Purchased merchandise on account at a cost of $81,000. (Assume a perpetual inventory system.) June July 15 Paid for the June 6 purchase. Aug. 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 $27,000. Dec. 31 Determined salary and wages of $46,000 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. 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.)
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
Effect on Ratio
Numerator
Denominator
Apr. 30
June 6
July 15
Aug. 31
Dec. 31
Dec. 31
Dec. 31
< Required 1
Required 2 >
Transcribed Image Text: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 Effect on Ratio Numerator Denominator Apr. 30 June 6 July 15 Aug. 31 Dec. 31 Dec. 31 Dec. 31 < Required 1 Required 2 >
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