FUNDAMENTALS OF FINANCIAL ACCOUNTING
6th Edition
ISBN: 9781260664386
Author: PHILLIPS, LIBB
Publisher: MCG
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Textbook Question
Chapter 2, Problem 12E
Analyzing the Effects of Transactions Using T-Accounts; Preparing and Interpreting a
Laser Delivery Services. Inc. (LDS) was incorporated January 1. The following transactions occurred during the year:
- a. Received $40,000 cash from the company’s founders in exchange for common stock.
- b. Purchased land for $12,000, signing a two-year note (ignore interest).
- c. Bought two used delivery trucks at the start of the year at a cost of $10,000 each; paid $2,000 cash and signed a note due in three years for $18,000 (ignore interest).
- d. Paid $2,000 cash to a truck repair shop for a new motor, which increased the cost of one of the trucks.
- e. Stockholder Jonah Lee paid $300,000 cash for a house for his personal use.
Required:
- 1. Analyze each item for its effects on the
accounting equation of LDS for the year ended December 31.
TIP: Transaction (a) is presented below as an example.
TIP: The new motor in transaction (d) is treated as an increase to the cost of the truck.
- 2. Record the effects of each item using a
journal entry .
TIP: Use the simplified journal entry format shown in the demonstration case on page 69.
- 3. Summarize the effects of the journal entries by account, using the T-account format shown in the chapter.
- 4. Prepare a classified balance sheet for LDS at December 31.
- 5. Using the balance sheet, indicate whether LDS’s assets at the end of the year were financed primarily by liabilities or stockholders’ equity.
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General entry please...
Record the Year 1 transactions in general journal form.
Laser Delivery Services, Incorporated (LDS), was incorporated January 1. The following transactions occurred during the
year:
a. Received $39,000 cash from the company's founders in exchange for common stock.
b. Purchased land for $15,000, signing a two-year note (ignore interest).
c. Bought two used delivery trucks at the start of the year at a cost of $11,000 each; paid $4,500 cash and signed a note
due in three years for $17,500 (ignore interest).
d. Paid $2,000 cash to a truck repair shop for a new motor, which increased the cost of one of the trucks.
e. Stockholder Jonah Lee paid $340,000 cash for a house for his personal use.
4. Prepare a classified balance sheet for Laser Delivery Services at December 31. Include Retained Earnings on the balance sheet
even though the account has a zero balance.
Current Assets
Cash
Total Current Assets
Land
Equipment
Assets
X Answer is not complete.
LASER DELIVERY SERVICES, INCORPORATED
Balance Sheet
At December 31
$
$
32,500
32,500
15,000
24,000…
Chapter 2 Solutions
FUNDAMENTALS OF FINANCIAL ACCOUNTING
Ch. 2 - Define the following: a. Asset b. Current asset c....Ch. 2 - Define a transaction anti give an example of each...Ch. 2 - For accounting purposes, what is an account?...Ch. 2 - What is the basic accounting equation?Ch. 2 - Prob. 5QCh. 2 - Prob. 6QCh. 2 - Prob. 7QCh. 2 - What is a journal entry? What is the typical...Ch. 2 - What is a T-account? What is its purpose?Ch. 2 - Prob. 10Q
Ch. 2 - Prob. 11QCh. 2 - Which of the following is not an asset account? a....Ch. 2 - Which of the following statements describe...Ch. 2 - Total assets on a balance sheet prepared on any...Ch. 2 - The duality of effects can best be described as...Ch. 2 - The T-account is used to summarize which of the...Ch. 2 - Prob. 6MCCh. 2 - A company was recently formed with 50,000 cash...Ch. 2 - Which of the following statements would be...Ch. 2 - Prob. 9MCCh. 2 - Prob. 10MCCh. 2 - Prob. 1MECh. 2 - Prob. 2MECh. 2 - Matching Terms with Definitions Match each term...Ch. 2 - Prob. 4MECh. 2 - Prob. 5MECh. 2 - Prob. 6MECh. 2 - Prob. 7MECh. 2 - Identifying Events as Accounting Transactions Half...Ch. 2 - Determining Financial Statement Effects of Several...Ch. 2 - Preparing Journal Entries For each of the...Ch. 2 - Posting to T-Accounts For each of the transactions...Ch. 2 - Reporting a Classified Balance Sheet Given the...Ch. 2 - Prob. 13MECh. 2 - Prob. 14MECh. 2 - Identifying Transactions and Preparing Journal...Ch. 2 - Prob. 16MECh. 2 - Prob. 17MECh. 2 - Prob. 18MECh. 2 - Prob. 19MECh. 2 - Prob. 20MECh. 2 - Prob. 21MECh. 2 - Prob. 22MECh. 2 - Prob. 23MECh. 2 - Prob. 24MECh. 2 - Prob. 25MECh. 2 - Prob. 1ECh. 2 - Identifying Account Titles The following are...Ch. 2 - Classifying Accounts and Their Usual Balances As...Ch. 2 - Determining Financial Statement Effects of Several...Ch. 2 - Recording Journal Entries Refer to E2-4. Required:...Ch. 2 - Prob. 6ECh. 2 - Recording Journal Entries Refer to E2-6. Required:...Ch. 2 - Analyzing the Effects of Transactions in...Ch. 2 - Inferring Investing and Financing Transactions and...Ch. 2 - Analyzing Accounting Equation Effects, Recording...Ch. 2 - Recording Journal Entries and Preparing a...Ch. 2 - Analyzing the Effects of Transactions Using...Ch. 2 - Explaining the Effects of Transactions on Balance...Ch. 2 - Calculating and Evaluating the Current Ratio...Ch. 2 - Prob. 15ECh. 2 - Determining Financial Statement Effects of Various...Ch. 2 - Recording Transactions (in a Journal and...Ch. 2 - Recording Transactions (in a Journal and...Ch. 2 - Prob. 1PACh. 2 - Recording Transactions (in a Journal and...Ch. 2 - Recording Transactions (in a Journal and...Ch. 2 - Determining Financial Statement Effects of Various...Ch. 2 - Prob. 2PBCh. 2 - Recording Transactions (in a Journal and...Ch. 2 - Finding and Analyzing Financial Information Refer...Ch. 2 - Finding and Analyzing Financial Information Refer...Ch. 2 - Prob. 4SDCCh. 2 - Prob. 5SDCCh. 2 - Accounting for the Establishment of a Business...
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