Fundamentals Of Financial Accounting
6th Edition
ISBN: 9781260159516
Author: PHILLIPS
Publisher: MCG
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Chapter 2, Problem 7ME
To determine
To analyze: Whether the given event is a recordable transaction or not.
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Falcon Incorporated has the following transactions with Wildcat Corporation.
Transactions
Falcon’s Related Account
1. Falcon purchases common stock of Wildcat.
2. Falcon borrows from Wildcat by signing a note.
3. Falcon provides services to Wildcat.
4. Falcon pays interest to Wildcat on borrowing.
Investment
Notes payable
Service revenue
Interest expense
Required:1. For each transaction, indicate whether Falcon would report the related account in the balance sheet or income statement.2. For accounts in the balance sheet, indicate whether it would be classified as an asset, liability, or stockholders’ equity. For accounts in the income statement, indicate whether it would be classified as a revenue or an expense.3. Indicate whether each transaction is classified as operating, investing, or financing activity.
Question 1. Prepare the 2019 company’s financial statements for presentation to the bank and to help address the first issue concerning Allan.
Question 1.
From the following transactions, classify Debit and Credit and record Journal Entries. prepare the given ledger accounting in T format. The transactions for the month of March 2020 are given hereunder.
Mar 1. Meeza started a business investing RO 12,500. Out of which she deposited RO 5,000 in the bank account the same day.
Mar 2. She purchased tools and equipment for RO 4,750. She paid 60% of the amount by cheque. Remaining amount (RO 1900) recorded in ‘Other liabilities account’ to be paid next 30 days.
Mar 6. She produced 600 units of product for RO 20,000 on credit and sold all of them on credit to Mr. John for RO 24,000.
Mar 9. Purchased Raw-Material for RO 6,200 on 15 days credit for Aesha.
Mar 11 She paid off the outstanding amount on tools and equipment account purchased on 2nd March through Bank account.
Mar 13. Mr. John paid RO 15,000 by Cheque.
Mar 16. Paid the supplier of Raw material (March 9) by cheque no 132613, RO 5,325. Reminder as a cash discount and…
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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- You work as a freelance accounting professional and have be recently engaged by the auditors of Life-Positive Inc. for assignment. In examining the company's records, you have extract the following information: Life-Positive's Account 2021 ($) 2022 ($) Balances Accounts Payable 24,600.00 21,250.00 Accounts receivable 15,700.00 12,340.00 Cash 23,450.00 28,600.00 Cost of goods sold 19,700.00 23,000.00 Depreciation 3,090.00 4,590.00 Dividends 5,800.00 10,800.00 Interest 2,340.00 2,890.00 Inventory 7,050.00 8,640.00 Long-term debt 28,000.00 30,000.00 Net fixed assets 41,500.00 48,000.00 Other expenses 2,400.00 2,800.00 Sales 58,000.00 62,500.00 Short-term Notes Payable 2,890.00 2,340.00 Shares outstanding 85,000.00 90,000.00 The tax rate is 32%arrow_forwardEntity A enters into the following transactions. You are required to show the impact of the transactions below on the accounting equation.1. In an attempt to assist the business, the owner of Entity A deposited R100 000 into the entity’s bank account. A quarter of the amount is payable to the owner and the rest is not.2. A client of Entity A who currently owes the company R23 000, purchased bricks to the value of R45 000 and paid R35 000 to reduce his outstanding balance. Entity A purchased the bricks for R18 000.3. Entity A purchased 1 000 bags of cement from K Ltd on credit. K Ltd normally sells a bag for R45. Entity A received a 10% discount for the 1 000 bags.4. Entity A returned 150 bags of cement, as they were defective. On the same day, the outstanding balance was settled through an online payment. This transaction did not affect the discount offered to Entity A.arrow_forwardYou work as a freelance accounting professional and have been recently engaged by the auditors of Life-Positive Inc. for an assignment. In examining the company’s records, you have extracted the following information: Life-Positive’s Account Balances 2021 ($) 2022 ($) Accounts Payable 24,600.00 21,250.00 Accounts receivable 15,700.00 12,340.00 Cash 23,450.00 28,600.00 Cost of goods sold 19,700.00 23,000.00 Depreciation 3,090.00 4,590.00 Dividends 5,800.00 10,800.00 Interest 2,340.00 2,890.00 Inventory 7,050.00 8,640.00 Long-term debt 28,000.00 30,000.00 Net fixed assets 41,500.00 48,000.00 Other expenses 2,400.00 2,800.00 Sales 58,000.00 62,500.00 Short-term Notes Payable 2,890.00 2,340.00 Shares outstanding 85,000.00 90,000.00 Note: The tax rate is 32% Required: 1. Prepare a balance sheet for 2021 and 2022 for the company, clearly showing information about…arrow_forward
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