INTERMEDIATE ACCOUNTING(LL)-W/CONNECT
9th Edition
ISBN: 9781260216141
Author: SPICELAND
Publisher: MCG CUSTOM
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Chapter 2, Problem 2.1BE
Transaction analysis
• LO2–1
The Marchetti Soup Company entered into the following transactions during the month of June: (1) purchased inventory on account for $165,000 (assume Marchetti uses a perpetual inventory system); (2) paid $40,000 in salaries to employees for work performed during the month; (3) sold merchandise that cost $120,000 to credit customers for $200,000; (4) collected $180,000 in cash from credit customers; and (5) paid suppliers of inventory $145,000. Analyze each transaction and show the effect of each on the
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Exercise 1
The following were selected from among the transactions completed by Greco Co. during the current
year. Greco Co. sells and installs home and business security systems. It uses the periodic inventory
system and the allowance method in accounting for its uncollectible accounts receivables.
Loaned P6,000 cash to Mark Tift, receiving a 90-day, 8% note.
Jan 08
Feb 12
Purchased merchandise on account from Gwyn Co., list price P25,000.
Trade discount 5%. Terms: 2/10, n/60.
Mar 20
Wrote off a P1,000 account from Rodel Co as uncollectible.
Apr 03
Sold merchandise on account to Messina and Son, P18,000. Terms: 3/5,
2/10, 1/15, n/45.
Apr 08
Mark Tift dishonored the note.
Apr 13
Issued a 60-day, 12% note for the Feb 12 transaction.
Accepted a 30-day, 12% note for the Apr 03 transaction.
May 18
Jun 07
Received from Mark Tift the amount owed on the dishonored note, plus
interest from the date the note was dishonored until the payment date at
10% on the maturity value of the note.
Settled…
PROBLEM 15
Examination of the records of Hopper Company for the year ended December 31, 2021 revealed the following:
• Inventory at January 1, 2021 was overstated by P71,000.
• Inventory at December 31, 2021 was understated by P96,000.
•
During 2021, Hopper received a P60,000 cash advance from a customer for merchandise to be manufactured
and shipped during 2022. The P60,000 was credited to sales revenue.
• Profit (before adjustments) reported on the 2021 profit or loss was P658,000.
Explain the right profit for 2021
Question 7 of 34
In Step 1, a company orders $200 of Inventory "on credit," without paying for any of it in cash.
In Step 2, it turns this Inventory into finished products and sells and delivers it to customers for $400 in sales.
However, the customers do not pay upfront in cash, so the company cannot pay its suppliers for this Inventory yet.
Finally, in Step 3, the company collects the $400 in owed cash and pays its suppliers.
Explain how the company's Cash balance changes in Steps 1-2 (combined) and then in Steps 1-3 (combined).
A
B
с
D
Cash is down by $250 in the first two steps; over all three steps, it's up by $150.
Cash is down by $150 in the first two steps; over all three steps, it's up by $75.
Cash is down by $50 in the first two steps; over all three steps, it's up by $150.
Cash is up by $350 in the first two steps; over all three steps, it's up by $150.
Chapter 2 Solutions
INTERMEDIATE ACCOUNTING(LL)-W/CONNECT
Ch. 2 - Explain the difference between external events and...Ch. 2 - Each economic event or transaction will have a...Ch. 2 - What is the purpose of a journal? What is the...Ch. 2 - Explain the difference between permanent accounts...Ch. 2 - Describe how debits and credits affect assets,...Ch. 2 - Describe how debits and credits affect temporary...Ch. 2 - What is the first step in the accounting...Ch. 2 - Prob. 2.8QCh. 2 - Prob. 2.9QCh. 2 - Prob. 2.10Q
Ch. 2 - What is an unadjusted trial balance? An adjusted...Ch. 2 - Define adjusting entries and discuss their...Ch. 2 - Define closing entries and their purpose.Ch. 2 - Define prepaid expenses and provide at least two...Ch. 2 - Deferred revenues represent liabilities recorded...Ch. 2 - Define accrued liabilities. What adjusting journal...Ch. 2 - Prob. 2.17QCh. 2 - [Based on Appendix A] What is the purpose of a...Ch. 2 - [Based on Appendix B] Define reversing entries and...Ch. 2 - [Based on Appendix C] What is the purpose of...Ch. 2 - Prob. 2.21QCh. 2 - Transaction analysis LO21 The Marchetti Soup...Ch. 2 - Journal entries LO22 Prepare journal entries for...Ch. 2 - Prob. 2.3BECh. 2 - Journal entries LO22 Prepare journal entries for...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Adjusting entries; income determination LO24,...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Income determination LO24 If none of the...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Financial statements LO26 The following account...Ch. 2 - Financial statements LO26 The following account...Ch. 2 - Closing entries LO27 The year-end adjusted trial...Ch. 2 - Prob. 2.13BECh. 2 - Transaction analysis LO21 The following...Ch. 2 - Journal entries LO22 Prepare journal entries to...Ch. 2 - T-accounts and trial balance LO23 Post the...Ch. 2 - Journal entries LO22 The following transactions...Ch. 2 - Prob. 2.5ECh. 2 - Debits and credits LO22 Indicate whether a debit...Ch. 2 - Transaction analysis; debits and credits LO22...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Adjusting entries; solving for unknowns LO24,...Ch. 2 - Adjusting entries LO25 The Mazzanti Wholesale...Ch. 2 - Financial statements and closing entries LO26,...Ch. 2 - Closing entries LO27 American Chip Corporations...Ch. 2 - Prob. 2.14ECh. 2 - Cash versus accrual accounting; adjusting entries ...Ch. 2 - External transactions and adjusting entries LO22,...Ch. 2 - Accrual accounting income determination LO24,...Ch. 2 - Cash versus accrual accounting LO28 Stanley and...Ch. 2 - Prob. 2.19ECh. 2 - Worksheet Appendix 2A The December 31, 2018,...Ch. 2 - Reversing entries Appendix 2B The employees of...Ch. 2 - Reversing entries Appendix 2B Refer to E 29 and...Ch. 2 - Reversing entries Appendix 2B Refer to E 29 and...Ch. 2 - Special journals Appendix 2C The White Companys...Ch. 2 - Prob. 2.25ECh. 2 - Accounting cycle through unadjusted trial balance ...Ch. 2 - Accounting cycle through unadjusted trial balance ...Ch. 2 - Adjusting entries LO25 Pastina Company sells...Ch. 2 - Accounting cycle; adjusting entries through...Ch. 2 - Adjusting entries LO25 Howarth Companys fiscal...Ch. 2 - Accounting cycle LO22 through LO27 The general...Ch. 2 - Adjusting entries and income effects LO22, LO25...Ch. 2 - Adjusting entries LO25 Excalibur Corporation...Ch. 2 - Accounting cycle; unadjusted trial balance through...Ch. 2 - Prob. 2.10PCh. 2 - Prob. 2.11PCh. 2 - Cash versus accrual accounting LO28 Zambrano...Ch. 2 - Worksheet Appendix 2A Using the information from...Ch. 2 - Judgment Case 21 Cash versus accrual accounting;...Ch. 2 - Prob. 2.2BYPCh. 2 - Communication Case 23 Adjusting entries LO24 I...Ch. 2 - Continuing Cases Target Case LO24, LO28 Target...
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