Horngren's Financial & Managerial Accounting, The Financial Chapters (Book & Access Card)
5th Edition
ISBN: 9780134078939
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Textbook Question
Chapter 1, Problem 1.52BP
Using the
Andre Simmon recently opened his own accounting firm, which he operates as a corporation. The name of the new entity is Andre Simmon, CPA. Simmon experienced the following events during the organizing phase of the new business and its first month of operations in 2016.
| Feb. 5 | Simmon deposited $65,000 in a new business bank account titled Andre Simmon, CPA The business issued common stock to Simmon. |
| 6 | Paid $300 cash for letterhead stationery for new office. |
| 7 | Purchased office furniture for the office on account, $6,800. |
| 10 | Consulted with tax client and received $3,300 for services rendered. |
| 11 | Paid utilities, $100. |
| 12 | Finished tax hearings on behalf of a client and submitted a bill for accounting services, $12,500. |
| 18 | Paid office rent, $1,000. |
| 25 | Received amount due from client that was billed on February 12. |
| 27 | Paid full amount of accounts payable created on February 7. |
| 29 | Cash dividends of $3,000 were paid to stockholders. |
Requirements
- 1. Analyze the effects of the events on the accounting equation of Andre Simmon, CPA. Use a format similar to Exhibit 1-6.
- 2. Prepare the following financial statements:
- a. Income statement.
- b. Statement of
retained earnings . - c.
Balance sheet .
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Lisa Frees and Amelia Ellinger had been operating a catering business for several years. In March 2014, the partners were planning to expand by opening a retail sales shop and decided to form the business as a corporation called Traveling Gourmet, Inc. The following transactions occurred in March 2014:
Received $80,000 cash from each of the two shareholders to form the corporation. Gave the two owners each 500 shares of common stock with a par value of $1 per share.
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Analyzing the Effects of Transactions in T-Accounts
Lisa Frees and Amelia Ellinger had been operating a catering business for several years. In March 2014, the partners were planning to expand by opening a retail sales shop and decided to form the business as a corporation called Traveling Gourmet, Inc. The following transactions occurred in March 2014:
Received $80,000 cash from each of the two shareholders to form the corporation. Gave the two owners each 500 shares of common stock with a par value of $1 per share.
Purchased a vacant store for sale in a good location for $360,000, making a $72,000 cash down payment and signing a 10-year mortgage from a local bank for the rest.
Borrowed $50,000 from the local bank on a 10 percent, one-year note.
Purchased and used food and paper supplies costing $10,830 in March; paid cash.
Catered four parties in March for $4,200; $1,600 was billed, and the rest was received in cash.
Made and sold food at the retail store for $11,900 cash.
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Chapter 1 Solutions
Horngren's Financial & Managerial Accounting, The Financial Chapters (Book & Access Card)
Ch. 1 - Prob. 1QCCh. 1 - Prob. 2QCCh. 1 - Prob. 3QCCh. 1 - Prob. 4QCCh. 1 - Prob. 5QCCh. 1 - Which of the following requires accounting...Ch. 1 - At the end of a recent year, Global Cleaning...Ch. 1 - Consider the overall effects on Global Cleaning...Ch. 1 - Assume that Global Cleaning Service performed...Ch. 1 - The balance sheet reports the a. financial...
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