a.
Concept Introduction:
The total assets of L after the purchase of solar panels.
b.
Concept Introduction:
The value of equity after payment of fine for ABX.
c.
Concept Introduction:
Accounting equation: The relation of assets, liability, and equity is reflected in the accounting equation. Assets are resources a company owns or controls, whereas liabilities are what a company owes to outsiders and equity is the claims of the owners on the assets of the company.
The value of equity after the investment.
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Chapter 1 Solutions
FINANCIAL+MANAG.ACCT.
- Merle Company pays $1,000 for this month’s rent in cash. The effect to Assets would be: Merle Company pays $1,000 for this months rent in cash. The effect to Liabilities would be: Merle Company pays $1,000 for this month’s rent in cash. The effect Equity would be: Merle Company earns $9,000 from services preformed. The effect to Assets would be: Merle Company earns $9,000 from services preformed. The effect liabilities would be: Merle Company earns $9,000 from services preformed. The effect to Equity would be: Merle Company pays $3,000 towards the amount owed due to the equipment purchase. The effect to Assets would be:arrow_forwardThe company Young Furniture" has the following business transactions in the year 01. Always assume the standard VAT rate of 19% The business year is the same as the calendar year. Form the posting records for the following business transactions. 1. The company buys a company car worth € 65.000 (net) on credit. 2 The company pays its outstanding invoice of € 2.380 by bank transfer. 3 The company buys raw material with the value of € 11.900 (gross amount). Payment is made directly by bank. 4 The company returns unusable merchandise due to defects to the supplier and receives a price reduction of € 500 (net). The purchase of the merchandise on credit was already booked. 5. The company buys merchandise with a value of 30.000 € (net) on credit and receives a rebate by the supplier of 15%.arrow_forwardThe company made a sale of goods for RO. 15000 (cost RO 10000) and received 30% in cash and balance on the account. Whích of the following is the correct presentation on the accounting equation?arrow_forward
- Triton Publishing completed the following transactions during 2018. Journalize the transactions ( explanations are not required). Round to the nearest dollar. (Record debits first, then credits. Exclude explanations from journal entries.) Oct 1: Sold a six-month subscription (starting on November 1), collecting the cash of $390, plus a sales tax of 4%. What is the single compound entry for this transaction.)arrow_forwardNamekus Company has the following three loans payable scheduled to be repaid in February of next year. The company’s accounting year ends on December 31.A. The company intends to repay Loan 1 for P100,000 when it comes due in February. In the following October, the company intends to get a new loan for P80,000 from the same bank.B. The company intends to refinance Loan 2 for P150,000 when it comes due in February. The refinancing agreement, for P180,000, will be signed in April, after the financial statements for this year have been authorized for issue.C. The company intends to refinance Loan 3 for P200,000 before it comes due in February. The actual refinancing, for P175,000, took place in January, before the financial statements for this year have been authorized for issue. As of December 31 of this year, the total noncurrent liabilities to be reported on the company’s statement of financial position should be:arrow_forwardcreate a income statement for: The following transactions apply to Ozark Sales for Year 1: The business was started when the company received $50,000 from the issue of common stock. Purchased equipment inventory of $380,000 on account. Sold equipment for $510,000 cash (not including sales tax). Sales tax of 8 percent is collected when the merchandise is sold. The merchandise had a cost of $330,000. Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 2 percent of sales. Paid the sales tax to the state agency on $400,000 of the sales. On September 1, Year 1, borrowed $50,000 from the local bank. The note had a 4 percent interest rate and matured on March 1, Year 2. Paid $6,200 for warranty repairs during the year. Paid operating expenses of $78,000 for the year. Paid $250,000 of accounts payable. Recorded accrued interest on the note issued in transaction no. 6.arrow_forward
- Starlight Enterprises has net credit sales for 2019 in the amount of $2,600,325, beginning accounts receivable balance of $844,260, and an ending accounts receivable balance of $604,930. Compute the accounts receivable turnover ratio and the number of days sales in receivables ratio for 2019 (round answers to two decimal places). What do the outcomes tell a potential investor about Starlight Enterprises if the industry average is 1.5 times and the number of days sales ratio is 175 days?arrow_forwardBlue Company, an architectural firm, has a bookkeeper who maintains a cash receipts and disbursements journal. At the end of the year (2019), the company hires you to convert the cash receipts and disbursements into accrual basis revenues and expenses. The total cash receipts are summarized as follows. The accounts receivable from customers at the end of the year are 120,000. You note that the accounts receivable at the beginning of the year were 190,000. The cash sales included 30,000 of prepayments for services to be provided over the period January 1, 2019, through December 31, 2021. a. Compute the companys accrual basis gross income for 2019. b. Would you recommend that Blue use the cash method or the accrual method? Why? c. The company does not maintain an allowance for uncollectible accounts. Would you recommend that such an allowance be established for tax purposes? Explain.arrow_forwardUsing the following select financial statement information from Mover Supply Depot, compute the accounts receivable turnover ratios for 2018 and 2019 (round answers to two decimal places). What do the outcomes tell a potential investor about Mover Supply Depot if the industry average is 4 times?arrow_forward
- The following select financial statement information from Candid Photography. Compute the accounts receivable turnover ratios and the number of days sales in receivables ratios for 2018 and 2019 (round answers to two decimal places). What do the outcomes tell a potential investor about Candid Photography if industry average for accounts receivable turnover ratio is 3 times and days sales in receivables ratio is 150 days?arrow_forwardHomeland Plus specializes in home goods and accessories. In order for the company to expand its business, the company takes out a long-term loan in the amount of $650,000. Assume that any loans are created on January 1. The terms of the loan include a periodic payment plan, where interest payments are accumulated each year but are only computed against the outstanding principal balance during that current period. The annual interest rate is 8.5%. Each year on December 31, the company pays down the principal balance by $80,000. This payment is considered part of the outstanding principal balance when computing the interest accumulation that also occurs on December 31 of that year. A. Determine the outstanding principal balance on December 31 of the first year that is computed for interest. B. Compute the interest accrued on December 31 of the first year. C. Make a journal entry to record interest accumulated during the first year, but not paid as of December 31 of that first year.arrow_forwardWhole Leaves wants to upgrade their equipment, and on January 24 the company takes out a loan from the bank in the amount of $310,000. The terms of the loan are 6.5% annual interest rate, payable in three months. Interest is due in equal payments each month. Compute the interest expense due each month. Show the journal entry to recognize the interest payment on February 24, and the entry for payment of the short-term note and final interest payment on April 24. Round to the nearest cent if required.arrow_forward
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