Fundamental Accounting Principles -Hardcover
Fundamental Accounting Principles -Hardcover
22nd Edition
ISBN: 9780077862275
Author: John J Wild, Ken Shaw Accounting Professor, Barbara Chiappetta Fundamental Accounting Principles
Publisher: McGraw-Hill Education
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Chapter 2, Problem 9QS
To determine

Concept Introduction:

Income statement:

Income statement shows the financial performance of a business for a specified period of time. It depicts how the revenues are transformed into net income. Net income or loss is arrived at by deducting expenses from the income of the business.

Statement of owners’ equity:

It is a part of the financial statements that shows the changes in equity or ownership interest of the business. It reports the transactions that increased/decreased the capital of the business.

Balance sheet:

The balance sheet is the final stage in the preparation of financial statements. It shows the true state of affairs of the business. It is the detailed depiction of how the funds introduced into the business are developed as revenue generating assets.

To determine: The appearance of the listed items in the final accounts

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Problem No. 2 The trial balance of Cleint Lumanao Nacho Supplies on February 10, 2025, before accepting Shila Tajonera as partner is shown as follows: Account Title Debit Credit Ato Cash reening smuo P 100,000 Accounts Receivable 250,000 Allowance for Uncollectible Accounts P 20,000 o Merchandise Inventory Equipment Accumulated Depreciation Accounts Payable Notes Payable 120,000 275,000 55,000 50,000 82,000 538,000 Lumanao, Capital Total P 745,000 P 745,000 Tajonera offered to invest cash to get a capital credit equal to one-half of Lumanao's capital after giving effect to the adjustments below. Lumanao accepted the offer. Valuation of some of the assets and liabilities of Lumanao, as agreed by the partners, are the following: • The merchandise is to be valued at P93,000. The accounts receivable is estimated to be 90% collectible. • The equipment is to be valued at P200,000. The partners also agreed that the name of the partnership will be Nacho Business. Required: 1. In the books of…
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Fundamental Accounting Principles -Hardcover

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