Principles of Financial Accounting.
24th Edition
ISBN: 9781260158625
Author: Wild
Publisher: MCG
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Chapter 1, Problem 11DQ
To determine
Explain the manner by which the ethics rules affect auditors’ choice of clients.
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Colleen Company has gathered the following data pertaining to activities it performed for two of its major customers.
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Number of orders
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3
2,000
60
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1
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460 per order
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Journal Entries
Rocky Mountain Tours Co. is a travel agency. The nine transactions recorded by Rocky Mountain Tours during June 20Y2, its first month of operations, are
indicated in the following T accounts:
Cash
(1) 40,000 (2) 4,000
(7) 13,100 (3) 5,000
(4) 6,175
(6) 6,000
(9) 1,500
Equipment
(3) 15,000
Dividends
(9) 1,500
Accounts Receivable
Accounts Payable
Service Revenue
(5) 20,500 (7) 13,100
(6) 6,000 (3) 10,000
(5) 20,500
Supplies
(2) 4,000 (8) 2,200
Common Stock
(1) 40,000
Operating Expenses
(4) 6,175
(8) 2,200
Prepare the nine journal entries from which the postings were made. Journal entry explanations may be omitted. If an amount box does not require an
entry, leave it blank.
Innovative Consulting Co. has the following accounts in its ledger: Cash, Accounts Receivable, Supplies, Office Equipment, Accounts Payable, Common
Stock, Retained Earnings, Dividends, Fees Earned, Rent Expense, Advertising Expense, Utilities Expense, Miscellaneous Expense.
Journalize the following selected transactions for October 2012 in a two-column journal. Journal entry explanations may be omitted. If an amount box does
not require an entry, leave it blank.
Oct. 1. Paid rent for the month, $2,500.
4. Paid advertising expense, $1,000.
5. Paid cash for supplies, $1,800.
6. Purchased office equipment on account, $11,500.
12. Received cash from customers on account, $7,500.
20. Paid creditor on account, $2,700.
27. Paid cash for miscellaneous expenses, $700.
30. Paid telephone bill for the month, $475.
31. Fees earned and billed to customers for the month, $42,400.
31. Paid electricity bill for the month, $900.
31. Paid dividends, $1,500.
Chapter 1 Solutions
Principles of Financial Accounting.
Ch. 1 - Prob. 1MCQCh. 1 - Prob. 2MCQCh. 1 - If the assets of a company increase by 100,000...Ch. 1 - Brunswick borrows 50,000 cash from Third National...Ch. 1 - Geek Squad performs services for a customer and...Ch. 1 - Prob. 1DQCh. 1 - Technology is increasingly used to process...Ch. 1 - Identify four kinds of external users and describe...Ch. 1 - What are at least three questions business owners...Ch. 1 - Identify three actual businesses that offer...
Ch. 1 - Describe the internal role of accounting for...Ch. 1 - Prob. 7DQCh. 1 - What type of accounting information might be...Ch. 1 - Why is accounting described as a service activity?Ch. 1 - What are some accounting-related professions?Ch. 1 - Prob. 11DQCh. 1 - Prob. 12DQCh. 1 - What does the concept of objectivity imply for...Ch. 1 - Prob. 14DQCh. 1 - Why is the revenue recognition principle needed?...Ch. 1 - Describe the three basic forms of business...Ch. 1 - Define (a) assets, (b) liabilities, (c) equity,...Ch. 1 - Prob. 18DQCh. 1 - Identify the two main categories of accounting...Ch. 1 - What do accountants mean by the term revenue?Ch. 1 - Prob. 21DQCh. 1 - Prob. 22DQCh. 1 - Prob. 23DQCh. 1 - Give two examples of expenses a business might...Ch. 1 - What is the purpose of the statement of retained...Ch. 1 - Prob. 26DQCh. 1 - Prob. 27DQCh. 1 - Define and explain return on assets.Ch. 1 - Define return and risk. Discuss the trade-off...Ch. 1 - Prob. 30DQCh. 1 - Prob. 31DQCh. 1 - Prob. 32DQCh. 1 - GOOGLE Access the SEC EDGAR database (SEC.gov) and...Ch. 1 - Understanding accounting Choose from the following...Ch. 1 - Identifying accounting users C2 Identify the...Ch. 1 - Prob. 3QSCh. 1 - Prob. 4QSCh. 1 - Prob. 5QSCh. 1 - Identifying accounting principles and assumptions...Ch. 1 - Applying the accounting equation A1 a. Total...Ch. 1 - Applying the accounting equation Use the...Ch. 1 - Use Google 's December 31, 2017, financial...Ch. 1 - Prob. 10QSCh. 1 - Prob. 11QSCh. 1 - Prob. 12QSCh. 1 - Prob. 13QSCh. 1 - Prob. 14QSCh. 1 - Prob. 15QSCh. 1 - Prob. 16QSCh. 1 - Prob. 17QSCh. 1 - Classifying activities reflected in the accounting...Ch. 1 - Prob. 2ECh. 1 - Prob. 3ECh. 1 - Prob. 4ECh. 1 - Prob. 5ECh. 1 - Prob. 6ECh. 1 - Prob. 7ECh. 1 - Using the accounting equation Determine the...Ch. 1 - Using the accounting equation Answer the following...Ch. 1 - Analysis using the accounting equation Zen began a...Ch. 1 - Identifying effects of transactions on the...Ch. 1 - Identifying effects of transactions on the...Ch. 1 - Identifying effects of transactions using the...Ch. 1 - Prob. 14ECh. 1 - Preparing an income statement On October 1, Ebony...Ch. 1 - Preparing a statement of retained earnings Use the...Ch. 1 - Prob. 17ECh. 1 - Preparing a statement of cash flows Use the...Ch. 1 - Prob. 19ECh. 1 - Prob. 20ECh. 1 - Match each transaction a through e to one of tire...Ch. 1 - Prob. 22ECh. 1 - Using the accounting equation A1 Answer the...Ch. 1 - Identifying effects of transactions on financial...Ch. 1 - Computing missing information using accounting...Ch. 1 - Preparing an income statement P2 As of December...Ch. 1 - Prob. 4APCh. 1 - Prob. 5APCh. 1 - Preparing a statement of cash flows P2 Following...Ch. 1 - Prob. 7APCh. 1 - Prob. 8APCh. 1 - Determining expenses, liabilities. equity, and...Ch. 1 - Prob. 11APCh. 1 - Prob. 12APCh. 1 - Describing business activities C5 A start-up...Ch. 1 - Describing business activities An organization...Ch. 1 - Prob. 1BPCh. 1 - Prob. 3BPCh. 1 - Prob. 4BPCh. 1 - Prob. 5BPCh. 1 - Prob. 6BPCh. 1 - Prob. 8BPCh. 1 - Determining expenses, liabilities, equity, and...Ch. 1 - Prob. 11BPCh. 1 - Identifying risk and return All business decisions...Ch. 1 - Prob. 13BPCh. 1 - Prob. 14BPCh. 1 - Prob. 1SPCh. 1 - COMPANY ANALYSIS Key financial figures for Apple's...Ch. 1 - Prob. 2AACh. 1 - Prob. 3AACh. 1 - ETHICS CHALLENGE Tana Thorne works in a public...Ch. 1 - COMMUNICATING IN PRAC TICE APPLE Refer to this...Ch. 1 - TAKING IT TO THE NET A2 Visit the EDGAR database...Ch. 1 - ENTREPRENEURIAL DECISION APPLE Refer to this...
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- Cash Accounts Receivable Supplies Prepaid Insurance Equipment Notes Payable Accounts Payable Debit Balances Credit Balances 20,350 37,000 1,100 200 171,175 36,000 26,000 Common Stock 50,000 Retained Earnings 94,150 Dividends 15,000 Fees Earned 429,850 Wages Expense 270,000 Rent Expense 63,000 Advertising Expense 25,200 Miscellaneous Expense 5,100 608,125 636,000arrow_forwardOn October 1, 20Y6, Jay Crowley established Affordable Realty, which completed the following transactions during the month: Oct. 1 Jay Crowley transferred cash from a personal bank account to an account to be used for the business in exchange for common stock, $40,000. 2 Paid rent on office and equipment for the month, $4,800. 3 Purchased supplies on account, $2,150. 4 Paid creditor on account, $1,100. 10 5 Earned sales commissions, receiving cash, $18,750. 6 Paid automobile expenses (including rental charge) for month, $1,580, and miscellaneous expenses, $800. 7 Paid office salaries, $3,500. 8 Determined that the cost of supplies used was $1,300. 9 Paid dividends, $1,500.arrow_forwardReese, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship. In late December, she received a $20,000 bill from her accountant for consulting services related to her small business. Reese can pay the $20,000 bill anytime before January 30 of next year without penalty. Assume Reese’s marginal tax rate is 32 percent this year and will be 37 percent next year, and that she can earn an after-tax rate of return of 12 percent on her investments. a. What is the after-tax cost if she pays the $20,000 bill in December? b. What is the after-tax cost if she pays the $20,000 bill in January 30? Use Exhibit 3.1. (Round your answer to the nearest whole dollar amount.) Exhibit 3.1 below 4% 5% 6% 7% 8% 9% 10% 11% 12% Year 1 .962 .952 .943 .935 .926 .917 .909 .901 .893 Year 2 .925 .907 .890 .873 .857 .842 .826 .812 .797 Year 3 .889 .864 .840 .816 .794 .772 .751 .731 .712 Year 4 .855 .823 .792 .763 .735 .708 .683 .659 .636 Year 5…arrow_forward
- Manny, a calendar-year taxpayer, uses the cash method of accounting for his sole proprietorship. In late December he performed $20,000 of legal services for a client. Manny typically requires his clients to pay his bills immediately upon receipt. Assume Manny’s marginal tax rate is 37 percent this year and next year, and that he can earn an after-tax rate of return of 12 percent on his investments. a. What is the after-tax income if Manny sends his client the bill in December? b. What is the after-tax income if Manny sends his client the bill in January? Use Exhibit 3.1. (Round your answer to the nearest whole dollar amount.) Exhibit 3.1 below 4% 5% 6% 7% 8% 9% 10% 11% 12% Year 1 .962 .952 .943 .935 .926 .917 .909 .901 .893 Year 2 .925 .907 .890 .873 .857 .842 .826 .812 .797 Year 3 .889 .864 .840 .816 .794 .772 .751 .731 .712 Year 4 .855 .823 .792 .763 .735 .708 .683 .659 .636 Year 5 .822 .784 .747 .713 .681 .650 .621 .593 .567 Year 6 .790 .746…arrow_forwardRocky Mountain Tours Co. is a travel agency. The nine transactions recorded by Rocky Mountain Tours during June 20Y2, its first month of operations, are indicated in the following T accounts: Cash (1) 40,000 (2) 4,000 (7) 13,100 (3) 5,000 (4) 6,175 (6) 6,000 (9) 1,500 Equipment (3) 15,000 Dividends (9) 1,500 Accounts Receivable Accounts Payable Service Revenue (5) 20,500 (7) 13,100 (6) 6,000 (3) 10,000 (5) 20,500 Supplies (2) 4,000 (8) 2,200 Common Stock (1) 40,000 Operating Expenses (4) 6,175 (8) 2,200 a. Prepare an unadjusted trial balance. List all the accounts in the order of Assets, Liabilities, Stockholders' equity, Revenues, and Expenses. Place the amounts in the proper columns. If an entry is not required in an amount box, leave it blank.arrow_forwardTransactions and T Accounts The following selected transactions were completed during July of the current year: 1. Billed customers for fees earned, $112,700. 2. Purchased supplies on account, $4,500. 3. Received cash from customers on account, $88,220. 4. Paid creditors on account, $3,100. a. Journalize these transactions in a two-column journal, using the appropriate number to identify the transactions. Journal entry explanations may be omitted. If an amount box does not require an entry, leave it blank. (1) Accounts Receivable Fees Earned (2) Supplies Accounts Payable (3) Cash Accounts Receivable (4) Accounts Payable Casharrow_forward
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