Transaction Analysis TRANSACTION 1. INVESTMENT BY STOCKHOLDERS Ray and Barbara Neal decide to start a smartphone app development company that they incorporate as Softbyte SA. On September 1, 2017, they invest €15,000 cash in the business in exchange for €15,000 of ordinary shares. The ordinary shares indicates the ownership interest that the Neals have in Softbyte SA. This transaction results in an equal increase in both assets and equity.

Transaction Analysis TRANSACTION 1. INVESTMENT BY STOCKHOLDERS Ray and Barbara Neal decide to start a smartphone app development company that they incorporate as Softbyte SA. On September 1, 2017, they invest €15,000 cash in the business in exchange for €15,000 of ordinary shares. The ordinary shares indicates the ownership interest that the Neals have in Softbyte SA. This transaction results in an equal increase in both assets and equity.

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Description: 659:.1ch01.pptx >Transaction AnalysisTRANSACTION 1. INVESTMENT BY STOCKHOLDERS Ray andBarbara Neal decide to start a smartphone app development company thatthey incorporate as Softbyte SA. On September 1, 2017, they invest€15,000 cash in the busines

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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1 of 1 Class Activity Kand A are partners in a firm. They share profits and the losses in the ratio of 4:1. They decide to dissolve thefirm on March 31,2021, their balance sheet is as follows: Liabilities RO Assets RO Bank loan 8250 Trade mark 6600 Creditors for goods 44000 Machine 66000 Bills payable 2750 Furniture 2200 K's Capital Ac 88000 Stock 33000 A's Capital Ac 33000 Debtors Less: Provision for bad debt 49500-2200 47300 O Cash in hand O Profit & loss Ac 15400 5500 Total 176000 Total 176000 The realization shows the following results: Debtors were realized at book value less 10% Goodwill was sold for 5500 Trade mark was realized for 4400 Machinery and stock were taken over by K for 99000 An unrecorded asset was sold for 1100 A creditor for goods was settled at discount of The expenses on realization were Pass Journal Entries and Prepare Realization A/c, Capital A/cs and Cash/Bank A/c. 440 2200
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A, B and C are partners sharing profits and losses in the ratio of 3 : 2 :1 respectively. With effect from 1.4.2015 they decided to share future profits equally. For this purpose the assets and liabilities were revalued as under : Particulars Old Values ($) Revised Values ($) 30,000 54,000 24,500 14,70,000 50,800 Furniture 28,000 Computers Land and Buildings Machinery Sundry Creditors 12,90,000 46,500 34,870 30,860 Prepare Revaluation Account and give necessary journal entries for recording the above changes in assets and liabilities.
Three investors wish to start a manufacturing business. The business is expected to generate a large income which it will reinvest for many years. Investor #1 has substantial assets which he plans to contribute to the business. Investor #1 is also concenred about showing too much business income on his personal return. Which business structure(s) would be most appropriate for the business? 1. A limited partnership with Investor #1 as the limited partner. 2. A business trust with all three as equal partners. 3. An S corporation with all three as equal shareholders. 4. AC corporation with all three as shareholders
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Required information [The following information applies to the questions displayed below.] During 2022, your clients, Mr. and Mrs. Howell, owned the following investment assets: Investment Assets 300 shares of IBM common 200 shares of IBM common Date Acquired 11/22/2019 4/3/2020 12/12/2020 3,000 shares of Apple preferred 2,100 shares of Cisco common 8/14/2021 420 shares of Vanguard mutual fund 3/2/2022 *No commissions are charged when no-load mutual funds are bought and sold. Investment Assets 300 shares of IBM common 3,000 shares of Apple preferred 2,100 shares of Cisco common 451 shares of Vanguard mutual fund Purchase Price. $ 10,520 43,420 164,000 54,200 16,400 Because of the downturn in the stock market, Mr. and Mrs. Howell decided to sell most of their stocks and the mutual fund in 2022 and to reinvest in municipal bonds. The following investment assets were sold in 2022: Date Sold 5/6 10/5 8/15 12/21 Broker's Commission Paid at Time of Purchase. $100 300 1,300 550 No-load fund…
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I - PROBLEM SOLVING: Eugene and Alfred are partners in their Ghost Fighting business. Alfred is the managing partner. As of December 2020, their capital account showed the following: Eugene Capital_ 45000 300000 1-Jan Alfred Capital 90000450000 1-Jan 1-Jul -Apr 1-Dec 30000 30000 1-Apr 1-Dec 105000 150000 1-Jun 105000 1-Nov 195000 1-0ct 75000 435000 195000 795000| CASE I: Assuming the partnership earned a net profit of P360,000. CASE II: Assuming the partnership incurred a net los of P60,000 Required: On your answer sheet (yellow pad), using the following agreements, distribute the profit and losses in Case I & II to Eugene & Alfred. Make a journal entry after your computation. 1) Equally 2:4 ratio to Eugene and Alfred, respectively 3) 2) 4) 5) 6) Based on average capital balances 60%:40% ratio respectively Based on beginning capital balances Based on ending capital balances Using Case I only, the partners agreed to divide the net profit by: a) allowing 10% interest on average…
Insta Corp. invests in shares of other companies in 2015 for generating profit as shown below; Market Value Dec. 31 Security Purchase date 2016 Date sold Selling price Cost 2015 DT June 2015 48.000TL 54.000TL T 60.800TL Feb. 2017 59.600TL EA June 2015 116.000TL 104.800TL March 114.000TL 2016 a. Classify each investment as trading or available for sale. DT: EA: b. Prepare the necessary journal entries for Insta Corp. (Hint: entries for purchase of securities, adjusting entries at Dec.31 2015 and 2016, entries for sale of securities).
Through dividends and capital gains on changes in stock market prices, investing in the capital market is one approach to boost a company's income. On September 22, 2015, a business paid IDR. 20,000,000,000 for 20,000,000 PT Liana shares at the Indonesia Stock Exchange, plus IDR. 200,000,000 in expenditures directly related to the purchase of the shares. The market price of PT Liana Shares was Rp2,050 per share on September 31, 2015. On October 1, 2015, the corporation sold all PT Liana shares for IDR. 2,100 per share due to an unexpected need for cash. A total of IDR 60,000,000 was spent on the sale. If the shares are classed as available for sale, a. As of September 31, 2015, what was the change in the fair value of PT Liana Shares recognized in other comprehensive income? b. What was the PT Liana Shares cost per share on September 22, 2015? Calculations and explanations must be included! c. On October 1, 2015, how much profit or loss was reported on the sale of PT Liana Shares?
Required information While James Craig and his former classmate Paul Dolittle both studied accounting at school, they ended up pursuing careers in professional cake decorating. Their company, Good to Eat (GTE), specializes in custom-sculpted cakes for weddings, birthdays, and other celebrations. James and Paul formed the business at the beginning of 2023, and each contributed $80,000 in exchange for a 50 percent ownership interest. GTE also borrowed $320,000 from a local bank. Both James and Paul had to personally guarantee the loan. Both owners provide significant services for the business. The following information pertains to GTE's 2023 activities: • GTE uses the cash method of accounting (for both book and tax purposes) and reports income on a calendar-year basis. • GTE received $600,000 of sales revenue and reported $280,000 of cost of goods sold (it did not have any ending inventory). • GTE paid $45,000 compensation to James, $45,000 compensation to Paul, and $55,000 of…