CENGAGENOW FOR CORP. FINC
14th Edition
ISBN: 9781305878907
Author: WARREN
Publisher: Cengage Learning
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Textbook Question
Chapter 1, Problem 1.4APR
Transactions; financial statements
On August 1, 2018, Brooke Kline established Western Realty. Brooke completed the following transactions during the month of August:
- A. Opened a business bank account with a deposit of $35,000 in exchange for common stock.
- B. Purchased supplies on account, $2,750.
- C. Paid creditor on account, $1,800.
- D. Earned sales commissions, receiving cash, $52,800.
- E. Paid rent on office and equipment for the month, $4,500.
- F. Paid dividends, $3,000.
- G. Paid automobile expenses for month, $1,100, and miscellaneous expenses, $1,200.
- H. Paid office salaries, $5,250.
- I. Determined that the cost of supplies on hand was $1,750; therefore, the cost of supplies used was $1,000.
Instructions
1. Indicate the effect of each transaction and the balances after each transaction, using the following tabular headings:
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Consolidation Working Paper One Year after Acquisition, Bargain Purchase
On January 1, 2022, Paxon Corporation acquired 90 percent of the outstanding common stock of Saxon Company for $1.8 billion cash. The fair value of the 10 percent noncontrolling interest in Saxon was estimated to be $150 million at the date of acquisition. Paxon uses the complete equity method to report its investment. The trial balances of Paxon and Saxon
(in millions)
Cash and receivables
Inventory
Equity method investments
Investment in Saxon
Dr(Cr)
Paxon Saxon
$3,225 $855
2,260
530
December 31, 2022, appear below:
2,441.5
Land
650
300
Buildings and equipment, net
3,600 1,150
Current liabilities
(2,020)
(1,200)
Long-term debt
(5,000) (450)
(500)
(50)
Common stock, par value
Additional paid-in capital
Retained earnings, January 1
Dividends
Sales revenue
(1,200) (200)
(2,410) (600)
500
250
(30,000) (12,000)
Equity in net income of Saxon
(616.5)
Gain on acquisition
(250)
Gain on sale of securities
(150)
Cost of…
KIARA LIMITED
STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER:
ASSETS
Property, plant and equipment (cost)
Accumulated depreciation
Long-term investments
Inventory
Accounts receivable
Company tax paid in advance
Bank
EQUITY AND LIABILITIES
2024
2023
R
R
2 490 000
1 620 000
(630 000)
660 000
1 050 000
1 230 000
30 000
(480 000)
450 000
1 290 000
900 000
0
750 000
660 000
5 580 000
4 440 000
Ordinary share capital
2 700 000
2 000 000
Retained income
1 500 000
1 158 000
Long-term loan from Kip Bank (15%)
900 000
1 000 000
Accounts payable
480 000
228 000
Company tax payable
0
54 000
5 580 000
4 440 000
ADDITIONAL INFORMATION
All purchases and sales are on credit.
Interim dividends paid during the year amounted to R150 750.
Credit terms of 3/10 net 60 days are granted by creditors.
Accounting Question
Chapter 1 Solutions
CENGAGENOW FOR CORP. FINC
Ch. 1 - Name some users of accounting information.Ch. 1 - Prob. 2DQCh. 1 - Prob. 3DQCh. 1 - Josh Reilly is the owner of Dispatch Delivery...Ch. 1 - 5. On July 12, Reliable Repair Service extended an...Ch. 1 - Prob. 6DQCh. 1 - Describe the difference between an account...Ch. 1 - Prob. 8DQCh. 1 - Prob. 9DQCh. 1 - The financial statements are interrelated. (A)...
Ch. 1 - Cost principle On June 25, Ritts Roofing extended...Ch. 1 - Prob. 1.2BECh. 1 - Transactions Interstate Delivery Service is owned...Ch. 1 - Income statement The revenues and expenses of...Ch. 1 - Prob. 1.5BECh. 1 - Balance sheet Using the following data for...Ch. 1 - Statement of cash flows A summary of cash flows...Ch. 1 - Prob. 1.1EXCh. 1 - Prob. 1.2EXCh. 1 - Prob. 1.3EXCh. 1 - Prob. 1.4EXCh. 1 - Accounting equation The total assets and total...Ch. 1 - Accounting equation Determine the missing amount...Ch. 1 - Prob. 1.7EXCh. 1 - Asset, liability, and stockholders equity items...Ch. 1 - Effect of transactions on accounting equation What...Ch. 1 - Effect of transactions on accounting equation A. A...Ch. 1 - Prob. 1.11EXCh. 1 - Transactions The following selected transactions...Ch. 1 - Nature of transactions Teri West operates her own...Ch. 1 - Net income and dividends The income statement for...Ch. 1 - Net income and stockholders equity for four...Ch. 1 - Balance sheet items From the following list of...Ch. 1 - Income statement items From the following list of...Ch. 1 - Prob. 1.18EXCh. 1 - Prob. 1.19EXCh. 1 - Prob. 1.20EXCh. 1 - Balance sheets, net income Financial information...Ch. 1 - Financial statements Each of the following items...Ch. 1 - Prob. 1.23EXCh. 1 - Prob. 1.24EXCh. 1 - Financial statements We-Sell Realty, organized as...Ch. 1 - Transactions On September 1 of the current year,...Ch. 1 - Financial statements The amounts of the assets and...Ch. 1 - Financial statements Seth Feye established...Ch. 1 - Transactions; financial statements On August 1,...Ch. 1 - Transactions; financial statements DLite Dry...Ch. 1 - Missing amounts from financial statements The...Ch. 1 - Transactions Amy Austin established an insurance...Ch. 1 - Financial statements The amounts of the assets and...Ch. 1 - Financial statements Jose Loder established Bronco...Ch. 1 - Prob. 1.4BPRCh. 1 - Transactions; financial statements Bevs Dry...Ch. 1 - Missing amount from financial statements The...Ch. 1 - Peyton Smith enjoys listening to all types of...Ch. 1 - Prob. 1.1ADMCh. 1 - Home Depot: Ratio of liabilities to stockholders'...Ch. 1 - Lowes: Ratio of liabilities to stockholders equity...Ch. 1 - Prob. 1.4ADMCh. 1 - Prob. 1.1TIFCh. 1 - Prob. 1.3TIF
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