Required information [The following information applies to the questions displayed below] The following are transactions for the Sky Blue Corporation: a. Collected $2,850 rent for the period October 1 to December 31, which was credited to Deferred Revenue on October 1 b. Paid $1,560 for a two-year insurance premium on October 1 and debited Prepaid Insurance for that amount. c. Used a machine purchased on October 1 for $49,800. The company estimates annual depreciation of $4,980. uired: each of the above transactions for the Sky Blue Corporation, give the accounting equation effects of the adjustments required at end of the month on October 31. (Enter any decreases to Assets, Liabilities, or Stockholders' Equity with a minus sign.) ansaction Assets Liabilities Stockho

Required information [The following information applies to the questions displayed below] The following are transactions for the Sky Blue Corporation: a. Collected $2,850 rent for the period October 1 to December 31, which was credited to Deferred Revenue on October 1 b. Paid $1,560 for a two-year insurance premium on October 1 and debited Prepaid Insurance for that amount. c. Used a machine purchased on October 1 for $49,800. The company estimates annual depreciation of $4,980. uired: each of the above transactions for the Sky Blue Corporation, give the accounting equation effects of the adjustments required at end of the month on October 31. (Enter any decreases to Assets, Liabilities, or Stockholders' Equity with a minus sign.) ansaction Assets Liabilities Stockho

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On September 1, Year 1, Laredo Company purchased equipment making a down payment of $15,500 cash and signing a one- year note payable on the $22,500 balance. The note carried an interest rate of 6%, and all interest was to be paid on the maturity date. Which of the following correctly shows the combined effect of the purchase as well as the accrual of interest on December 31, Year 1? Net Income (450) ΝΑ (450) (450) None of the above Operating (450) (450) ΝΑ ΝΑ Cash Flows Investing (15,500) ΝΑ (15,500) (15,500) Financing ΝΑ 22,500 22,500 ΝΑ
Question: The following transactions apply to Ozark Sales for Year 1: 1. The business was started when the company received $48,500 from the issue of common stock. 2. Purchased equipment inventory of $175,000 on account. 3. Sold equipment for $204,500 cash (not including sales tax). Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $129,500. 4. Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 4 percent of sales. 5. Paid the sales tax to the state agency on $154,500 of the sales. 6. On September 1, Year 1, borrowed $21,500 from the local bank. The note had a 6 percent interest rate and matured on March 1, Year 2. 7. Paid $5,700 for warranty repairs during the year. 8. Paid operating expenses of $56,000 for the year. 9. Paid $124,100 of accounts payable. 10. Recorded accrued interest on the note issued in transaction no. 6. 1. Prepare the income statement for Year 1. 2.…
Required information [The following information applies to the questions displayed below.] Tyrell Company entered into the following transactions involving short-term liabilities. Year 1 April 20 Purchased $40,250 of merchandise on credit from Locust, terms n/30. May 19 Replaced the April 20 account payable to Locust with a 90-day, 10%, $35,000 note payable along with paying $5,250 in cash. July 8 Borrowed $80,000 cash from NBR Bank by signing a 120-day, 9%, $80,000 note payable. Paid the amount due on the note to Locust at the maturity date. Paid the amount due on the note to NBR Bank at the maturity date. November 28 Borrowed $42,000 cash from Fargo Bank by signing a 60-day, 88, $42,000 note payable. December 31 Recorded an adjusting entry for accrued interest on the note to Fargo Bank. Year 2 ? Paid the amount due on the note to Fargo Bank at the maturity date. 4. Determine the interest expense recorded in Year 2. Note: Do not round your Intermediate calculations. Use 360 days a…
Presented below are three revenue recognition situations. (a) Groupo sells goods to MTN for $1,060,000, payment due at delivery. (b) Groupo sells goods on account to Grifols for $723,000, payment due in 30 days. (c) Groupo sells goods to Magnus for $458,000, payment due in two installments, the first installment payable in 18 months and the second payment due 6 months later. The present value of the future payments is $421,000. Indicate the transaction price for each of these situations and when revenue will be recognized. (a) (b) (c) Transaction Price $enter a dollar amount $enter a dollar amount $enter a dollar amount Revenue will be recognized choose when revenue will be recognized At the point of saleAt delivery choose when revenue will be recognized At the point of saleAt the time of payment choose when revenue will…
Bhil
Marr Company reported rental revenue of P2,210,000 in its cash basis income tax return for the year ended November 30, 2010 . Additional information is as follows: Rent receivable – November 30, 2010 1,060,000; Rent receivable – November 30, 2009 800,000; Under the accrual basis, Marr should report rental revenue of Choices; 1,920,000 1,950,000 2,440,000 2,470,000
State the accounting entries required if a business made sales on credit of $10,000, on which it must account for sales tax at the rate of 20%.
ABD Company pays a weekly payroll of $285,000 that includes federal taxes withheld of $38,100, FICA taxes withheld of $23,670, and 401(k) withholdings of $27,000. (Although not required, preparing journal entries may help you answer questions 1A- What is the effect of assets from the transaction(s)? TWO ANSWERS REQUIRED - (Increase or decrease and $ how much) 1B- What is the effect of liabilities from the transaction(s)? TWO ANSWERS REQUIRED - (Increase or decrease and $ how much)
The following transactions apply to Walnut Enterprises for Year 1, its first year of operations:Received $43,000 cash from the issue of a short-term note with a 5 percent interest rate and a one-year maturity. The note was made on April 1, Year 1.Received $117,000 cash plus applicable sales tax from performing services. The services are subject to a sales tax rate of 7 percent.Paid $73,000 cash for other operating expenses during the year.Paid the sales tax due on $97,000 of the service revenue for the year. Sales tax on the balance of the revenue is not due until Year 2.Recognized the accrued interest at December 31, Year 1. The following transactions apply to Walnut Enterprises for Year 2:Paid the balance of the sales tax due for Year 1.Received $142,000 cash plus applicable sales tax from performing services. The services are subject to a sales tax rate of 7 percent.Repaid the principal of the note and applicable interest on April 1, Year 2.Paid $86,000 of other operating expenses…
On March 15, Calloway, Inc., paid property taxes of $480,000 for the calendar year. The journal entry at March 15 to record the payment of property taxes would include which of the following? Choose the correct.a. A debit to Property Tax Expense of $480,000.b. A credit to Cash of $120,000.c. A debit to Prepaid Property Taxes of $360,000.d. A credit to Prepaid Property Taxes of $40,000.
The following transactions apply to Walnut Enterprises for Year 1, its first year of operations: Received $50,000 cash from the issue of a short-term note with a 6 percent interest rate and a one-year maturity. The note was made on April 1, Year 1. Received $130,000 cash plus applicable sales tax from performing services. The services are subject to a sales tax rate of 6 percent. Paid $62,000 cash for other operating expenses during the year. Paid the sales tax due on $110,000 of the service revenue for the year. Sales tax on the balance of the revenue is not due until Year 2. Recognized the accrued interest at December 31, Year 1. The following transactions apply to Walnut Enterprises for Year 2: Paid the balance of the sales tax due for Year 1. Received $201,000 cash plus applicable sales tax from performing services. The services are subject to a sales tax rate of 6 percent. Repaid the principal of the note and applicable interest on April 1, Year 2. Paid $102,500 of other…
Record the Year 1 transactions in general journal form.