On January 2, Summers Company received a machine that the company had ordered with an invoice price of $85,000. Freight costs of $1000 were paid by the vendor per the sales agreement. The company exchanged the following on January 2 to acquire the machine: a Issued 2,000 shares of Summers Company common stock, par value $1 (market value, $3.50 per share). b. Signed a note payable for $60,000 with an 1.5 percent interest rate (principal plus interest are due April 1 of the current year). c The balance of the invoice price was on account with the vendor, to be paid in cash by January 12. On January 3, Summers Company paid $2,400 cash for installation costs to prepare the machine for use. On January 12. Summers Company paid the balance due on its accounts payable to the vendor, 3. Indicate the effects of the purchase and subsequent cash payment on the accounting equation. (Enter decreases to account categories as negative amounts.)

On January 2, Summers Company received a machine that the company had ordered with an invoice price of $85,000. Freight costs of $1000 were paid by the vendor per the sales agreement. The company exchanged the following on January 2 to acquire the machine: a Issued 2,000 shares of Summers Company common stock, par value $1 (market value, $3.50 per share). b. Signed a note payable for $60,000 with an 1.5 percent interest rate (principal plus interest are due April 1 of the current year). c The balance of the invoice price was on account with the vendor, to be paid in cash by January 12. On January 3, Summers Company paid $2,400 cash for installation costs to prepare the machine for use. On January 12. Summers Company paid the balance due on its accounts payable to the vendor, 3. Indicate the effects of the purchase and subsequent cash payment on the accounting equation. (Enter decreases to account categories as negative amounts.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

6. Celeste Company provided the following transactions, among others, for the current year. 1 Sold merchandise to XYZ Company for P500,000, terms 2/10, n/30. 2 the above account to Solid Finance under the following agreement June 1 Commission based on gross amount 5%. Hold back based on gross amount 25%. 9 Granted XYZ Company a credit allowance of P50,000 for damage in the shipment. 11 XYZ Company paid in full its account to Solid Finance. 15. Final settlement was made with Solid Finance. How much was the total amount received from the factoring? а. 500,000 b. 350,000 c. 416,000 d. 375,000
None
am. 134.
None
Bondi Bank agrees to lend Tawonga Construction Company Ltd $200 000 on 1 January. Tawonga Construction Company Ltd signs a $200 000, 4%, 9-month note. The entry made by Tawonga Construction Company Ltd on 1 January to record the proceeds and issue of the note is: O Dr Interest Expense 6 000 Dr Cash 194 000 Cr Notes Payable 200 000 O Dr Cash 200 000 Cr Notes Payable 200 000 O Dr Cash 200 000 Dr Interest Expense 6 000 Cr Notes Payable 206 000 O Dr Cash 200 000 Dr Interest Expense 6 000 Cr Notes Payable 200 000 Cr Interest Payable 6 000
! Required information [The following information applies to the questions displayed below.] During Year 1, Ashkar Company ordered a machine on January 1 at an invoice price of $28,000. On the date of delivery, January 2, the company paid $7,000 on the machine, with the balance on credit at 9 percent interest due in six months. On January 3, it paid $1,500 for freight on the machine. On January 5, Ashkar paid installation costs relating to the machine amounting to $2,700. On July 1, the company paid the balance due on the machine plus the interest. On December 31 (the end of the accounting period), Ashkar recorded depreciation on the machine using the straight-line method with an estimated useful life of 10 years and an estimated residual value of $3,400. Required: 1. Indicate the effects of each transaction on the accounting equation. Note: Enter decreases to account categories as negative amounts. If the transaction does not impact the accounting equation choose "No effect" in the…