Horngren's Accounting, The Financial Chapters, Student Value Edition Plus MyLab Accounting with Pearson eText - Access Card Package (12th Edition)
12th Edition
ISBN: 9780134642949
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Textbook Question
Chapter 1, Problem P1.43APGA
Preparing financial statements
Learning Objective 5
b. Ending Capital $76,000
Picture Perfect Photography works weddings and prom-type parties. The balance of Williamson. Capital was $16,000 at December 31, 2017. At December 31, 2018, the business's accounting records show these balances:
| Insurance Expense | $6,000 | $13,000 | |
| Cash | 42,000 | Notes Payable | 14,000 |
| Accounts Payable | 11,000 | Williamson, Capital, Dec. 31,2018 | ? |
| Advertising Expense | 4,000 | Salaries Expense | 25,000 |
| Service Revenue | 75,000 | Equipment | 46,000 |
| Williamson, Withdrawals | 8,000 | Owner contribution | 28,000 |
Prepare the following financial statements for Picture Perfect Photography for the year ended December 31,2018:
a. Income statement.
b. Statement of owner’s equity.
c.
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P9-31A Accounting for notes receivable and accruing interest
Learning Objective 4
1. Note 3 Dec. 18, 2016
Cathy Realty loaned money and received the following notes during 2016.
Note
Date
Principal Amount
Interest Rate
Term
(1)
Jun. 1
$ 18,000
8%
1 year
(2)
Sep. 30
24,000
12%
6 months
(3)
Oct. 19
10,000
9%
60 days
Requirements
1. Determine the maturity date and maturity value of each note.
2. Journalize the entries to establisheach Note Receivable and to record collection of
principal and interest at maturity. Include a single adjusting entry on December 31, 2016,
the fiscal year-end, to record accrued interest revenue on any applicable note.
Explanations are not required.
Journal entries
a. $30,000 cash was borrowed on a five-year 10% note payable, dated 5/1/2021.
b. $13,000 cash was paid for land.
c. Earned $118,000 in service revenues for 2020. $53,000 on account and the remainder in cash.
d. Purchased Inventory with $15,000 cash.
e. Sold $12,000 of inventory for $17,000 cash.
f. Issued 4,000 additional shares of $0.50 par value common stock for cash at $1 per share on 1/2/2021.
g. Incurred $114,000 in miscellaneous operating expenses for 2021, $20,000 on credit and the rest paid in cash.
h. Collected $34,000 owned on account.
i. Purchased $17,000 supplies on account.
j. Paid $26,000 accounts payable.
k. A piece of equipment costing $3,000 was stolen. The insurance company reimbursed the company $1,000. The accumulated depreciation on the equipment amounted to $1,000
l. Bid on a $2,000 one-year service contract. If accepted, work is to begin on 2/1/2022.
m. $103,000 was paid for employee wages. This included wages owed from 2021.
n. Declared and paid…
Chapter 1 Solutions
Horngren's Accounting, The Financial Chapters, Student Value Edition Plus MyLab Accounting with Pearson eText - Access Card Package (12th Edition)
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