Required: 1. For each listed transaction and related adjusting entry, indicate the accounts, amounts, and effects on the accounting equation. 2. For each transaction and related adjusting entry, indicate whether the debt-to-assets ratio is increased or decreased or there is no change. (Assume EZ Curb Company's debt-to-assets ratio has always been less than 1.0.)
Required: 1. For each listed transaction and related adjusting entry, indicate the accounts, amounts, and effects on the accounting equation. 2. For each transaction and related adjusting entry, indicate whether the debt-to-assets ratio is increased or decreased or there is no change. (Assume EZ Curb Company's debt-to-assets ratio has always been less than 1.0.)
Chapter12: Current Liabilities
Section: Chapter Questions
Problem 8PA: Serene Company purchases fountains for its inventory from Kirkland Inc. The following transactions...
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![EZ Curb Company completed the following transactions. The annual accounting period ends December 31.
January 8 Purchased merchandise on account at a cost of $17,500. (Assume a perpetual inventory system.)
January 17 Paid for the January 8 purchase.
April 1
Received $45,600 from National Bank after signing a 12-month, 9.5 percent, promissory note.
June 3
Purchased merchandise on account at a cost of $21,500.
July 5
Paid for the June 3 purchase.
July 31 Rented out a small office in a building owned by EZ Curb Company and collected six months' rent in advance, amounting to $8,100. (Use an account called Deferred Revenue.)
December 20 Collected $170 cash on account from a customer.
December 31 Determined that wages of $7,900 were earned but not yet paid on 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 rent.
Required:
1. For each listed transaction and related adjusting entry, indicate the accounts, amounts, and effects on the accounting equation.
2. For each transaction and related adjusting entry, indicate whether the debt-to-assets ratio is increased or decreased or there is no change. (Assume EZ Curb Company's debt-to-assets ratio has always been less than 1.0.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fac136482-6e4d-4697-9678-666157c0f600%2Fb5a35dfb-ef3e-43ae-83bb-193a8265a86f%2F3s1hkrh_processed.jpeg&w=3840&q=75)
Transcribed Image Text:EZ Curb Company completed the following transactions. The annual accounting period ends December 31.
January 8 Purchased merchandise on account at a cost of $17,500. (Assume a perpetual inventory system.)
January 17 Paid for the January 8 purchase.
April 1
Received $45,600 from National Bank after signing a 12-month, 9.5 percent, promissory note.
June 3
Purchased merchandise on account at a cost of $21,500.
July 5
Paid for the June 3 purchase.
July 31 Rented out a small office in a building owned by EZ Curb Company and collected six months' rent in advance, amounting to $8,100. (Use an account called Deferred Revenue.)
December 20 Collected $170 cash on account from a customer.
December 31 Determined that wages of $7,900 were earned but not yet paid on 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 rent.
Required:
1. For each listed transaction and related adjusting entry, indicate the accounts, amounts, and effects on the accounting equation.
2. For each transaction and related adjusting entry, indicate whether the debt-to-assets ratio is increased or decreased or there is no change. (Assume EZ Curb Company's debt-to-assets ratio has always been less than 1.0.)
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