Financial Accounting (12th Edition) (What's New in Accounting)

9th Edition

ISBN: 9780134726656

Author: Harrison

Publisher: PEARSON

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Financial Transaction Analysis

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business…

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Textbook Question

Chapter 2, Problem 2.17AE

Group A

LO 1, 2, 4

(Learning Objectives 1, 2, 4: Identify transactions, analyze impact on accounting equation, journalize transactions) Cedar Point is an amusement park in Sandusky, Ohio, owned by Cedar Fair Entertainment Company. Over 3.5 million people visit Cedar Point each year between May and October. It covers 364 acres and has more than 150 rides and attractions, including 16 roller coasters. Cedar Point is the second oldest continuously operating amusement park in the United States (the oldest is Lake Compounce in Connecticut.) Millions of events occur at Cedar Point each year The following items are possible events

May 1: Sell admission tickets, $100,000, cash
May 3: Purchase merchandise inventory, $5,000, on account
May 6: Rent lockers to guests, $500, cash
May 8: Sign a letter of intent to switch electric suppliers starting in June
May 15: Pay employees, $75,060. cash
May 18: Make an offer of employment for a new position in the Merchandise & Games office
May 20: Borrow money from bank by signing a six-month note. $200,000

Requirements

1. What criteria does an event have to meet to qualify as a financial transaction? Identify which of the listed events are financial transactions.
2. Journalize each of the transactions.
3. Indicate how the company’s assets, liabilities, and equity would be impacted by each transaction.

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Chapter 2, Problem 2.16S

Chapter 2, Problem 2.18AE

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Chapter 2 Solutions

Financial Accounting (12th Edition) (What's New in Accounting)

Ch. 2 - All of the following events at a sandwich shop are...Ch. 2 - Identify the asset from the following list of...Ch. 2 - Amounts owed to a company by its customers would...Ch. 2 - Thorpe Corporation purchases a new delivery truck...Ch. 2 - Adam Corporation issues stock to Cara Riley in...Ch. 2 - Blake Company completed a consulting job and...Ch. 2 - Prob. 7QC Ch. 2 - Accounts Payable had a normal beginning balance of...Ch. 2 - Which of the following debit and credit rules is...Ch. 2 - A companys beginning Cash balance was 8,000. At...

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Solution Summary: The author explains the criteria that are needed to meet an event as a financial transaction, and identify which of the listed events are the financial transactions.

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