Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN: 9781305654174
Author: Gary A. Porter, Curtis L. Norton
Publisher: Cengage Learning
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Chapter 1, Problem 1.6AP
Income Statement and
Fort Worth Corporation began business in January 2016 as a commercial carpet-cleaning and drying service. Shares of stock were issued to the owners in exchange for cash. Equipment was purchased by making a down payment in cash and signing a note payable for the balance. Services are performed for local restaurants and office buildings on open account, and customers are given 15 days to pay their accounts. Rent for office and storage facilities is paid at the beginning of each month. Salaries and wages are paid at the end of the month. The following amounts are from the records of Fort Worth Corporation at the end of its first month of operations:
Required
- Prepare an income statement for the month ended January 31, 2016.
- Prepare a balance sheet at January 31, 2016.
- What information would you need about Notes Payable to fully assess Fort Worth’s longterm viability? Explain your answer.
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WINTER WHOLESALE COMPANY BEGAN OPERATIONSON AUGUST, 2021.
THE FOLLOWING TRANSACTIONS TOOK PLACE DURING THE MONTH OF AUGUST
A. OWNERS INVESTED P 50,000 CASH IN THE CORPORATION IN EXCHANGE FOR 5,000
SHARES OF EQUITY CAPITAL
B. EQUIPMENT WAS PURCHASED FOR P 20,000 CASH
C. ON THE FIRST DAY OF AUGUST, P 6,000 RENT ON A BUILDING WAS PAID FOR THE
MONTHS OF AUGUST AND SEPTEMBER.
D. MERCHANDISE COSTING P 38,000 WAS PURCHASED ON ACCOUNT. THE COMPANY USES
PERPETUAL INVENTORY SYSTEM.
E. P 30,000 WAS BORROWED FROM A LOCAL BANK, AND A NOTE PAYABLE WAS SIGNED
F. CREDIT SALES FOR THE MONTH WERE P 40,000. THE COST OF MERCHANDISE SOLD WAS
P 22,000.
G. P 15,000 WAS COLLECTED ON ACCOUNT FROM CUSTOMERS
H. P 20,000 WAS PAID ON ACCOUNT TO SUPLIERS OF MERCHANDISE
I. SALARIES OF P7,000 WERE PAID TO EMPLOYEES FOR AUGUST
J. A BILL FOR P 2,000 WAS RECEIVED FROM A LOCAL UTILITY COMPANY FOR THE MONTH
OF AUGUST
K. P 20,000 CASH WAS LOANED TO ANOTHER COMPANY, EVIDENCED BY A NOTE
RECEIVABLE.
L. THE CORPORATION PAID…
None
In providing accounting services to small businesses, you encounter the following situations.
1.
2.
Waterway Corporation rings up cash sales and sales taxes separately on its cash register. On April 10, the register totals are
pre-tax sales of sales $6,500 plus GST of $325 and PST of $520.
(i) During the month of March, Concord Corporation's employees earned and were paid gross salaries of $60,000.
Withholdings deducted from employee earnings related to these salaries were $3,254 for CPP, $948 for El, $7,750 for
income taxes. (ii) Concord's employer portions were $3,254 for CPP and $1,327 for El for the month.
Prepare the journal entries to record the above transactions. (Credit account titles are automatically indented when the amount is
entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. List all
debit entries before credit entries.)
No. Account Titles
1.
Debit
Credit
2 (i).
2 (ii).
Chapter 1 Solutions
Financial Accounting: The Impact on Decision Makers
Ch. 1 - Prob. 1.1KTQCh. 1 - Prob. 1.1ECh. 1 - Prob. 1.2ECh. 1 - The Accounting Equation For each of the following...Ch. 1 - The Accounting Equation Ginger Enterprises began...Ch. 1 - The Accounting Equation Using the accounting...Ch. 1 - Changes in Owners Equity The following amounts are...Ch. 1 - The Accounting Equation For each of the following...Ch. 1 - Classification of Financial Statement Items...Ch. 1 - Classification of Financial Statement Items Regal...
Ch. 1 - Net Income (or Loss) and Retained Earnings The...Ch. 1 - Statement of Retained Earnings Ace Corporation has...Ch. 1 - Accounting Principles and Assumptions The...Ch. 1 - Prob. 1.13ECh. 1 - Prob. 1.14ECh. 1 - Prob. 1.15MCECh. 1 - Prob. 1.16MCECh. 1 - Prob. 1.1PCh. 1 - Users of Accounting Information and Their Needs...Ch. 1 - Prob. 1.3PCh. 1 - Prob. 1.4PCh. 1 - Income Statement, Statement of Retained Earnings,...Ch. 1 - Income Statement and Balance Sheet Green Bay...Ch. 1 - Prob. 1.7PCh. 1 - Statement of Retained Earnings for The Coca-Cola...Ch. 1 - Prob. 1.9PCh. 1 - Prob. 1.10MCPCh. 1 - Prob. 1.1APCh. 1 - Users of Accounting Information and Their Needs...Ch. 1 - Prob. 1.3APCh. 1 - Prob. 1.4APCh. 1 - Income Statement, Statement of Retained Earnings,...Ch. 1 - Income Statement and Balance Sheet Fort Worth...Ch. 1 - Corrected Financial Statements Heidis Bakery Inc....Ch. 1 - Statement of Retained Earnings for Brunswick...Ch. 1 - Prob. 1.9APCh. 1 - Prob. 1.10AMCPCh. 1 - Prob. 1.1DCCh. 1 - Reading and Interpreting Chipotles Financial...Ch. 1 - Comparing Two Companies in the Same Industry:...Ch. 1 - Prob. 1.5DCCh. 1 - Prob. 1.6DCCh. 1 - Prob. 1.7DC
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