Fundamentals Of Financial Accounting
6th Edition
ISBN: 9781259864230
Author: PHILLIPS, Fred, Libby, Robert, Patricia A.
Publisher: Mcgraw-hill Education,
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Textbook Question
Chapter 2, Problem 4E
Determining Financial Statement Effects of Several Transactions
The following events occurred for Favata Company:
- a. Received $10,000 cash from owners and issued stock to them.
- b. Borrowed $7,000 cash from a bank and signed a note due later this year.
- c. Bought and received $800 of equipment on account.
- d. Purchased land for $12.000; paid $1.000 in cash and signed a long-term note for $11.000.
- e. Purchased $3.000 of equipment, paid $1.000 in cash and charged the rest on account.
Required:
For each of the events (a) through (e), perform transaction analysis and indicate the account, amount, and direction of the effect (+ for increase and − for decrease) on the
Event Assets = Liabilities +Stockholders’ Equity
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Journal entries?
A. Paid $22,000 cash on bonds payable.
B. Collected $12,600 cash for a note receivable.
C. Declared a dividend to shareholders for S16,000, to be paid in the future.
D. Paid S26,500 to suppliers for purchases on account.
Debit and Credit Effect on Transactions
Jefferson Framers engaged in the following transactions:
a. Purchased land for $65,000 cash.
b. Purchased equipment for $26,400 in exchange for a 1-year, 8% note payable.
c. Purchased office supplies on credit for $1,200 from Office Depot.
d. Paid $20,000 principal plus $700 interest on a note payable.
e. Paid an account payable in the amount of $3,550.
f. Provided $61,300 of services on credit.
g. Provided $12,800 of services for cash.
h. Collected $26,910 of accounts receivable.
1. Paid $12,760 of wages in cash.
j. Issued common stock for $45,000 cash.
Required:
Select the correct information for each transaction. Enter the debits before the credits. Transaction a is entered as an example.
Transaction
Account
Increase/Decrease
Amount
Increase
$65,000
Decrease
$65,000
a.
Land
Cash
Debit/Credit
Debit
Credit
Journalize the following:
1. On the books & records of Company A:
On May 2nd, Company A received $100 of interest income from the bank earned in April. If the books are on an accrual basis, record the entry in April and in May when cash was received
April May
2. On the books & records of Company A:
In January, Company A purchased Investment in XYZ for $100. Payment was made in cash.
In March, Company A sold Investment in XYZ for $150. Payment was received in cash.
3. On the books & records of Company A:
On April 1st, Company A paid $1,200 for insurance expense that covers the year 4/1/17-3/31/18.
Record 4/1/17 entry for payment of $1,200
Record 4/30/17 journal entry
4. There are 2 parallel funds, Fund A and Fund B. Together, the funds will make an investment of $100k, with a 65/35 split. The investment will be paid in cash, however, Fund B does not currently have any cash so Fund…
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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