PA10-1 (Algo) Determining Financial Effects of Transactions Affecting Current Liabilities with Evaluation of Effects on the Debt-to-Assets Ratio [LO 10-2, LO 10-5] Jack Hammer Company completed the following transactions. The annual accounting period ends December 31. April 30 Received 1648,000 from Connerce Bank after signing a 12-month, 8.00 percent, promissory note. June 6 Purchased merchandise on account at a cost of $79,000. (Assune 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 $26,000. December 31 Determined salary and vages of $44,000 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) Complete this question by entering your answers in the tabs below.
PA10-1 (Algo) Determining Financial Effects of Transactions Affecting Current Liabilities with Evaluation of Effects on the Debt-to-Assets Ratio [LO 10-2, LO 10-5] Jack Hammer Company completed the following transactions. The annual accounting period ends December 31. April 30 Received 1648,000 from Connerce Bank after signing a 12-month, 8.00 percent, promissory note. June 6 Purchased merchandise on account at a cost of $79,000. (Assune 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 $26,000. December 31 Determined salary and vages of $44,000 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) Complete this question by entering your answers in the tabs below.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:148.29
PA10-1 (Algo) Determining Financial Effects of Transactions Affecting Current Liabilities with Evaluation
of Effects on the Debt-to-Assets Ratio [LO 10-2, LO 10-5)
Jack Hammer Company completed the following transactions. The annual accounting period ends December 31.
April 30 Received 3648,000 from Connerce Bank after signing a 12-month, 8.00 percent, promissory note.
June 6 Purchased merchandise on account at a cost of $79,000. (Assune 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 $26,000.
December 31 Determined salary and wages of $44,000 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)
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. (Oo not round intermediate calculations. F
liabilities, or stockholders equity with a minus sign. Enter your answers in transaction order provided in the problem statement)
Transcribed Image Text:Complete this question by entering your answers in the tabs below.
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.)
Effect on Ratio
Numerator
Denominator
Date:
April 30
June 6
July 15
August 31
December 31
December 31
December 31
< Required 1
Required 2 >
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