Financial Accounting
3rd Edition
ISBN: 9780133791129
Author: Jane L. Reimers
Publisher: Pearson Higher Ed
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Question
Chapter 1, Problem 34EB
To determine
Ascertain the amount of (1) assets of company I at the end of its first month of business, and (2) the amount of net income for the month.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
The following are the transactions of Spotlighter, Incorporated, for the month of January.
a. Borrowed $4,390 from a local bank on a note due in six months.
b. Received $5,080 cash from investors and issued common stock to them.
c. Purchased $1,900 in equipment, paying $650 cash and promising the rest on a note due in one year.
d. Paid $750 cash for supplies.
e. Bought and received $1,150 of supplies on account.
Required:
Post the effects to the appropriate T-accounts and determine ending account balances. Show a beginni
Debit
Beginning Balance
Ending Balance
Debit
F
Cash
Equipment
Credit
Credit
Debit
Beginning Balance
Ending Balance
Debit
Supplies
Accounts Payable
Journalize the following:
1. On the books & records of Company A:
On May 2nd, Company A received $100 of interest income from the bank earned in April. If the books are on an accrual basis, record the entry in April and in May when cash was received
April May
2. On the books & records of Company A:
In January, Company A purchased Investment in XYZ for $100. Payment was made in cash.
In March, Company A sold Investment in XYZ for $150. Payment was received in cash.
3. On the books & records of Company A:
On April 1st, Company A paid $1,200 for insurance expense that covers the year 4/1/17-3/31/18.
Record 4/1/17 entry for payment of $1,200
Record 4/30/17 journal entry
4. There are 2 parallel funds, Fund A and Fund B. Together, the funds will make an investment of $100k, with a 65/35 split. The investment will be paid in cash, however, Fund B does not currently have any cash so Fund…
1. Borrows $8,500 of cash from the bank by signing a formal agreement to repay the loan in 2 years.
2. Buys $6,800 of new equipment on account.
3. Pays off $4,800 of accounts payable.
4. Pays off $2,400 of notes payable.
Required:
a. Show the effect of these transactions on the basic accounting equation.
b. Prepare the journal entries that would be used to record the transactions.
Complete this question by entering your answers in the tabs below.
Required A Required B
Show the effect of these transactions on the basic accounting equation. (Enter any decreases to account balances with a minus sign.)
Transaction Analysis
Liabilities
1. Cash
2. Equipment
3.
Assets
Accounts Pavable
35,261
31
3,200 = Accounts Payable
6,800 - Accounts Payable
II
3,200 +
(6,800) +
tv
Stockholders' Equity
Next >
=
CALONG
X
Help
Sav
C
Chapter 1 Solutions
Financial Accounting
Ch. 1 - 1. What is the main purpose of a business? 2....Ch. 1 - Prob. 2YTCh. 1 - 1. What are the two sources of financing for a...Ch. 1 - 1. What are revenues and expenses? 2. What are the...Ch. 1 - 1. What are the two parts of shareholders equity?...Ch. 1 - Prob. 6YTCh. 1 - Prob. 7YTCh. 1 - Prob. 1QCh. 1 - Prob. 2QCh. 1 - Prob. 3Q
Ch. 1 - Prob. 4QCh. 1 - What are the advantages of the corporate form of...Ch. 1 - What are the disadvantages of the corporate form...Ch. 1 - Prob. 7QCh. 1 - Prob. 8QCh. 1 - What are the basic financial statements? Describe...Ch. 1 - What makes the income statement different from the...Ch. 1 - Prob. 11QCh. 1 - What type of activities relate to what the firm is...Ch. 1 - Prob. 2MCQCh. 1 - Prob. 3MCQCh. 1 - Prob. 4MCQCh. 1 - Prob. 5MCQCh. 1 - Online Pharmacy Company borrowed 5,000 cash from...Ch. 1 - Prob. 7MCQCh. 1 - During its first year of business, West Company...Ch. 1 - Interest is the cost of a. purchasing inventory....Ch. 1 - Prob. 10MCQCh. 1 - Classify business transactions. (LO 2). For each...Ch. 1 - Identify balance sheet items. (LO 4). Classify the...Ch. 1 - Calculate owners equity. (LO 4). Doughnut Company...Ch. 1 - Prob. 4SEACh. 1 - Prob. 5SEACh. 1 - Calculate owners equity. (LO 4). Pasta Enterprises...Ch. 1 - Super Shop had a retained earnings balance of...Ch. 1 - Prob. 8SEBCh. 1 - Prob. 9SEBCh. 1 - Breck Company shows 80,000 worth of assets on its...Ch. 1 - Prob. 11SEBCh. 1 - For each of the following, calculate the missing...Ch. 1 - Prob. 13SEBCh. 1 - M Company had a retained earnings balance of 4,200...Ch. 1 - Prob. 15EACh. 1 - Analyze business transactions using the accounting...Ch. 1 - Prob. 17EACh. 1 - Prob. 18EACh. 1 - Enter each transaction below into the accounting...Ch. 1 - Prob. 20EACh. 1 - For each of the transactions given, tell whether...Ch. 1 - Prob. 22EACh. 1 - Enter each transaction into the accounting...Ch. 1 - Prob. 24EACh. 1 - Relationship between income statement and balance...Ch. 1 - Bob started a pool cleaning business on the first...Ch. 1 - Prob. 27EACh. 1 - Retained earnings and cash. (LO 4). Checkmate...Ch. 1 - Prob. 29EACh. 1 - Prob. 30EBCh. 1 - Prob. 31EBCh. 1 - Prob. 32EBCh. 1 - Prob. 33EBCh. 1 - Prob. 34EBCh. 1 - Classify business transactions. (LO 2). For each...Ch. 1 - Prob. 36EBCh. 1 - Prob. 37EBCh. 1 - Enter each transaction into the accounting...Ch. 1 - Prob. 39EBCh. 1 - Prob. 40EBCh. 1 - Frank Frock started a consulting business on the...Ch. 1 - Prob. 42EBCh. 1 - Prob. 43EBCh. 1 - Prob. 44EBCh. 1 - Prob. 45PACh. 1 - Prob. 46PACh. 1 - Prob. 47PACh. 1 - Analyze business transactions and the effect on...Ch. 1 - Prob. 49PACh. 1 - Analyze business transactions and prepare the...Ch. 1 - Prob. 51PACh. 1 - Prob. 52PBCh. 1 - Analyze business transactions using the accounting...Ch. 1 - Prob. 54PBCh. 1 - Prob. 55PBCh. 1 - Prob. 56PBCh. 1 - Prob. 57PBCh. 1 - Prob. 58PBCh. 1 - Prob. 1FSACh. 1 - Prob. 2FSACh. 1 - Prob. 3FSACh. 1 - What is the Walt Disney Companys key objective? Go...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Discuss how each of the following transactions for Watson, International, will affect assets, liabilities, and stockholders equity, and prove the companys accounts will still be in balance. A. An investor invests an additional $25,000 into a company receiving stock in exchange. B. Services are performed for customers for a total of $4,500. Sixty percent was paid in cash, and the remaining customers asked to be billed. C. An electric bill was received for $35. Payment is due in thirty days. D. Part-time workers earned $750 and were paid. E. The electric bill in C is paid.arrow_forwardDetermine the following amounts: a. The amount of the liabilities of a business that has 60,800 in assets and in which the owner has 34,500 equity. b. The equity of the owner of a tour bus that cost 57,000 and on which is owed 21,800 on an installment loan payable to the bank. c. The amount of the assets of a business that has 11,780 in liabilities and in which the owner has 28,500 equity.arrow_forwardPrepare general journal entries for the following transactions of Valdez Services.arrow_forward
- The comoany borrowed $3,940 from a local bank on a note due in six months.What are the assets,liabilities and Shareholder' Equity?arrow_forwardYou run a consulting firm. During Year 1, your firm collected $200,000 from clients (all of these payments were for work previously done). On January 1, Year 1, the Accounts Receivable account had a balance of $40,000. On December 31, Year 1, the Accounts Receivable account had a balance of $60,000. Based on this information, what amount should your firm recognize as revenue for Year 1?arrow_forwardIn order to prepare the statement of Financial position, you identified the following assets and liabilities of Ms. Santos after she made an investment of 159,000. A. Her store has cash deposited in a bank account amounting to 25,000.B. Her store has a lot of uncollected sales from customers amounting to 75,000.C. The total amount of merchandise left inside the store is 30,000.D. He already paid one year's rent in advance amounting to 12,000.E. The value of all the company's furniture amounted to 100,000F. He bought merchandise from his supplier amounting to 25,000 and the supplier agreed that payment can be made 2 months after year end.G. SSS, PHILHEALTH and PAG-IBIG payables for his one employee totaled 5,000.H. The sari-sari store had outstanding Liabilities to utility companies amounting to 3,000.I. She had a loan from the bank amounting to 50,000 to be paid in 3 years. Please make the statement of Financial position.arrow_forward
- During the year, the Flight Company experienced the following accounting transactions: 1. Issued common stock in the amount of $150,0002. Paid a $30,000 cash dividend3. Borrowed $25,000 from a bank4. Made a principal payment of $3,500 on an outstanding bank loan5. Made an interest payment of $1,200 on an outstanding bank loan Using the accounting equation, record each of the transactions in columnar format using the following template:Use negative signs with answers, when appropriate.arrow_forwardam. 110.arrow_forwardOn Jan. 1, XYZ started a new business. The shareholders made an initial cash investment of $1,000,000. During the year, the company provided $10,500,000 of services to customers. On December 31, XYZ had a balance in Accounts Receivable of $1,200,000. Also, during the year, the company incurred expenses of $8,800,000 and ended the year with a balance in Accounts Payable of $920,000. What is XYZ's income before income taxes for the year, under the Cash and Accrual basis? A. Cash Basis: $9,300,000 Accrual Basis: $10,500,000 B. Cash Basis: $1,700,000 Accrual Basis: $1,420,000 C. Cash Basis: $1,420,000 Accrual Basis: $1,700,000 D. Cash Basis: $500,000 Accrual Basis: $2,620,000arrow_forward
- The following transactions occurred during a recent year: a. Paid wages of $1,000 for the current period (example). b. Borrowed $5,000 cash from local bank using a short-term note. c. Purchased $2,000 of equipment on credit. d. Earned $400 of sales revenue; collected cash. e. Received $800 of utilities services, on credit. f. Earned $1,700 of service revenue, on credit. g. Paid $300 cash on account to a supplier. h. Incurred $70 of travel expenses; paid cash. i. Earned $400 of service revenue; collected half in cash, with balance on credit. j. Collected $100 cash from customers on account. k. Incurred $300 of advertising costs; paid half in cash, with balance on credit. Required: 1. For each of the transactions, complete the following table, indicating the account, amount, and direc and for decrease) of each transaction under the accrual basis. Include revenues and expenses as equity, as shown for the first transaction, which is provided as an example. 2. Determine the company's…arrow_forwardfor each of the 5 transation, state whether the transaction represented revenue to the firm during the month of May. could you give me the reason for your decision in each case. a. the firm received $300,000 cash by using additional share of capital b. Collected cash of $25,000 fom account receivable. The receivable originated in April from services rendered to a client. c. Borrowed $60,000 from Century Bank to be repaid in three months. d. Earneds $250 interest on a company of saving account during the month of May. No withdrawals were made from this account in May. e. Completed plans for a guesthouse, pool, and spa for a client. The $7,000 fee for this project was billed to the client in May, but will not be collected until June 25.arrow_forwardOn August 1, 20Y9, 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 $28,000 in exchange for common stock. b. Paid rent on office and equipment for the month, $3,600. c. Paid automobile expenses for month, $1,300, and miscellaneous expenses, $700. d. Purchased office supplies on account, $1,250. e. Earned sales commissions, receiving cash, $18,400. f. Paid creditor on account, $750. g. Paid office salaries, $3,000. h. Paid dividends, $3,300. i. Determined that the cost of supplies on hand was $500; therefore, the cost of supplies used was $750. Required: 1. Indicate the effect of each transaction and the balances after each transaction, using the tabular headings in the exhibit below. In each transaction row (rows indicated by a letter), you must indicate the math sign (+ or -) in columns affected by the transaction. You will not need to…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
College Accounting (Book Only): A Career ApproachAccountingISBN:9781337280570Author:Scott, Cathy J.Publisher:South-Western College Pub
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
College Accounting (Book Only): A Career Approach
Accounting
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:South-Western College Pub
The accounting cycle; Author: Alanis Business academy;https://www.youtube.com/watch?v=XTspj8CtzPk;License: Standard YouTube License, CC-BY