LooseLeaf for College Accounting: A Contemporary Approach

4th Edition

ISBN: 9781259995057

Author: M. David Haddock Jr. Professor, John Ellis Price, Michael Farina

Publisher: McGraw-Hill Education

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Textbook Question

Chapter 2, Problem 2CTP

Richard Harris opened a gym and fitness studio called Body Builders Fitness Center at the beginning of November of the current year. It is now the end of December, and Harris is trying to determine whether he made a profit during his first two months of operations. You offer to help him and ask to see his accounting records. He shows you a shoe box and tells you that every piece of paper pertaining to the business is in that box.

As you go through the material in the shoe box, you discover the following:

a. A receipt from Galloway Properties for $9,000 for November’s rent on the exercise studio.
b. Bank deposit slips totaling $7,500 for money collected from customers who attended exercise classes.
c. An invoice for $40,000 for exercise equipment. The first payment is not due until December 31.
d. A bill for $2,100 from the maintenance service that cleans the studio. Harris has not yet paid this bill.
e. A December 19 parking ticket for $75. Harris says he was in a hurry that morning to get to the Fitness Center on time and forgot to put money in the parking meter.
f. A handwritten list of customers and fees for the classes they have taken. As the customers attend the classes, Harris writes their names and the amount of each customer’s fee on the list. As customers pay. Harris crosses their names off the list. Fees not crossed off the list amount to $3,200.
g. A credit card receipt for $600 for printing flyers advertising the grand opening of the studio. For convenience. Harris used his personal credit card.
h. A credit card receipt for $700 for four warm-up suits Harris bought to wear at the studio. He also put this purchase on his personal credit card.

Use the concepts you have learned in this chapter to help Harris.

1. Prepare an income statement for the first two months of operation of Body Builders Fitness Center.
2. How would you evaluate the results of the first two months of operation?
3. What advice would you give Harris concerning his system of accounting?

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Chapter 2, Problem 1CTP

Chapter 2, Problem 1MF

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Chapter 2 Solutions

LooseLeaf for College Accounting: A Contemporary Approach

Ch. 2 - What is a business transaction?Ch. 2 - Prob. 1.2SRQ Ch. 2 - Prob. 1.3SRQ Ch. 2 - Prob. 1.4SRE Ch. 2 - Prob. 1.5SRE Ch. 2 - Prob. 1.6SRA Ch. 2 - Prob. 2.1SRQ Ch. 2 - Prob. 2.2SRQ Ch. 2 - What information is included in the financial...Ch. 2 - Prob. 2.4SRE

Ch. 2 - Prob. 2.5SRE Ch. 2 - Prob. 2.6SRA Ch. 2 - Prob. 1CSR Ch. 2 - Prob. 2CSR Ch. 2 - Prob. 3CSR Ch. 2 - Prob. 4CSR Ch. 2 - Prob. 5CSR Ch. 2 - Prob. 1DQ Ch. 2 - Prob. 2DQ Ch. 2 - Prob. 3DQ Ch. 2 - Prob. 4DQ Ch. 2 - Describe the effects of each of the following...Ch. 2 - What is the fundamental accounting equation?Ch. 2 - Prob. 7DQ Ch. 2 - Prob. 8DQ Ch. 2 - Prob. 9DQ Ch. 2 - Prob. 10DQ Ch. 2 - Prob. 11DQ Ch. 2 - Prob. 12DQ Ch. 2 - Prob. 1E Ch. 2 - Prob. 2E Ch. 2 - Prob. 3E Ch. 2 - Prob. 4E Ch. 2 - Prob. 5E Ch. 2 - Computing net income or net loss. The Computer...Ch. 2 - Prob. 7E Ch. 2 - Prob. 8E Ch. 2 - Prob. 9E Ch. 2 - Preparing a statement of owners equity and a...Ch. 2 - Analyzing the effects of transactions on the...Ch. 2 - Prob. 2PA Ch. 2 - Prob. 3PA Ch. 2 - The following equation shows the transactions of...Ch. 2 - Prob. 1PB Ch. 2 - Prob. 2PB Ch. 2 - Prob. 3PB Ch. 2 - Prob. 4PB Ch. 2 - The following account balances are for William...Ch. 2 - Richard Harris opened a gym and fitness studio...Ch. 2 - Prob. 1MF Ch. 2 - Prob. 2MF Ch. 2 - Prob. 3MF Ch. 2 - How does an accounting system help managers...Ch. 2 - Prob. 1ED

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Solution Summary: The author explains how to prepare an income statement for BB Fitness Center for two months ended December 31 from the given transaction.

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Chapter 2 Solutions