Journalize the given transactions.

Question

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Answer 1

Question

Chapter 3, Problem 13E

1.

To determine

Journalize the given transactions.

1.

Expert Solution

Explanation of Solution

Journalize the given transactions:

Date	Account Title and Explanation	Debit ($)	Credit ($)
a	Cash (+A)	$9,500
a	Consulting fees revenue (+R) (+SE)		$9,500
	(To record the fees earned)

b	Cash (+A)	$1,200
	Common stock (+SE)		$10
	Additional paid-in capital (+SE)		$1,190
	(To record the purchase of building)

c	Office equipment (+A)	$640
	Cash (-A)		$160
	Short-term notes payable (+L)		$480
	(To record the purchase of equipment on account)

d	Cash (+A)	$890
d	Unearned revenue (+L)		$890
	(To record the unearned revenue)

e	Supplies (+A)	$470
e	Accounts payable (-L)		$470
	(To record the purchase of supplies on account)

f	Utilities expense (+E) (-SE)	$1,800
f	Cash (-A)		$1,800
	(To record the utilities expense)

g	Accounts receivable (+A)	$1,620
g	Consulting fees revenue (+R) (+SE)		$1,620
	(To record the fees earned)

h	Cash (+A)	$2,980
h	Accounts receivable (-A)		$2,980
	(To record the cash receivable from customer)

i	Salaries expense (+E) (-SE)	$6,210
i	Cash (-A)		$5,300
	Salaries payable (+L)		$910
	(To record the payment of cash for accounts payable)

j	Short term investments (+A)	$1,230
j	Prepaid expenses (+A)	$800
	Cash (-A)		$2,030
	(To record the cash receivable from customer)

k	Cash (+A)	$10
k	Interest revenue (+R) (-SE)		$10
	(To record the interest revenue)

Table (1)

2

To determine

Prepare the T- account and enter the transaction into their respective accounts for calculating the ending balance.

2

Expert Solution

Explanation of Solution

Prepare the T-accounts:

FINANCIAL ACCOUNTING, Chapter 3, Problem 13E , additional homework tip 1

Figure (1)

FINANCIAL ACCOUNTING, Chapter 3, Problem 13E , additional homework tip 2

Figure (2)

FINANCIAL ACCOUNTING, Chapter 3, Problem 13E , additional homework tip 3

Figure (3)

FINANCIAL ACCOUNTING, Chapter 3, Problem 13E , additional homework tip 4

Figure (4)

Thus, the T-accounts are prepared and the ending balances are calculated.

3.

To determine

Ascertain the amount for the given equations at the end of the January.

3.

Expert Solution

Explanation of Solution

For the equation $Revenues−Expenses=Net income$ :

$Revenue−Expenses=Net income$11,130−$8,010=$3,120$

For the equation $Assets=Liabilities+Stockholders' equity$ :

$Assets=Liabilities+Stockholders' equity$18,870=$5,930+$12,940$

Working note (1):

Calculate the revenues:

$Revenues=Consulting fees revenue+Interest revenue=$11,120+$10=$11,130$

Working note (2):

Calculate the expenses:

$Expenses=Salaries expenses+Utilities expenses=$6,210+$1,800=$8,010$

Working note (3):

Calculate the net income:

Particulars	Amount($)	Amount ($)
Revenues	(1) 11,130
Less: Expenses	(2) 8,010
Net income		$3,120

Table (2)

4.

To determine

Calculate the net income under cash basis of accounting and explain the reason in which manner the net income differs from accrual basis of accounting.

4.

Expert Solution

Explanation of Solution

Calculate the net income under cash basis accounting:

Particulars	Amount ($)	Amount ($)
Cash receipts	(4) 14,580
Less: Cash payments	(5) 9,290
Net income		$5,290

Table (3)

Net income of Incorporation C under cash basis of accounting is $5,290.

Working note (4):

Calculate the cash receipts:

$Cash receipts=(Consulting fees revenue)+(Common stock issued)+(Consulting fees revenue)+(Accounts receivable)+(Interest revenue)=$9,500+$1,200+$890+$2,980+$10=$14,580$

Working note (5):

Calculate the cash payments:

$Cash payments=(Short-term notes payable)+(Utilities expenses)+(Salaries expenses)+(Purchase of short-term invenstment)=$160+$1,800+$5,300+$2,030=$19,760$

According to the cash basis of accounting, the net income is $5,290 which higher than the accrual basis of accounting.
The recording of the expenses and revenues differ from the accrual basis of accounting.
Hence, the net income is different for the accrual basis of accounting and cash basis of accounting.

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Answer 2

Question

Chapter 3, Problem 13E

1.

To determine

Journalize the given transactions.

1.

Expert Solution

Explanation of Solution

Journalize the given transactions:

Date	Account Title and Explanation	Debit ($)	Credit ($)
a	Cash (+A)	$9,500
a	Consulting fees revenue (+R) (+SE)		$9,500
	(To record the fees earned)

b	Cash (+A)	$1,200
	Common stock (+SE)		$10
	Additional paid-in capital (+SE)		$1,190
	(To record the purchase of building)

c	Office equipment (+A)	$640
	Cash (-A)		$160
	Short-term notes payable (+L)		$480
	(To record the purchase of equipment on account)

d	Cash (+A)	$890
d	Unearned revenue (+L)		$890
	(To record the unearned revenue)

e	Supplies (+A)	$470
e	Accounts payable (-L)		$470
	(To record the purchase of supplies on account)

f	Utilities expense (+E) (-SE)	$1,800
f	Cash (-A)		$1,800
	(To record the utilities expense)

g	Accounts receivable (+A)	$1,620
g	Consulting fees revenue (+R) (+SE)		$1,620
	(To record the fees earned)

h	Cash (+A)	$2,980
h	Accounts receivable (-A)		$2,980
	(To record the cash receivable from customer)

i	Salaries expense (+E) (-SE)	$6,210
i	Cash (-A)		$5,300
	Salaries payable (+L)		$910
	(To record the payment of cash for accounts payable)

j	Short term investments (+A)	$1,230
j	Prepaid expenses (+A)	$800
	Cash (-A)		$2,030
	(To record the cash receivable from customer)

k	Cash (+A)	$10
k	Interest revenue (+R) (-SE)		$10
	(To record the interest revenue)

Table (1)

2

To determine

Prepare the T- account and enter the transaction into their respective accounts for calculating the ending balance.

2

Expert Solution

Explanation of Solution

Prepare the T-accounts:

FINANCIAL ACCOUNTING, Chapter 3, Problem 13E , additional homework tip 1

Figure (1)

FINANCIAL ACCOUNTING, Chapter 3, Problem 13E , additional homework tip 2

Figure (2)

FINANCIAL ACCOUNTING, Chapter 3, Problem 13E , additional homework tip 3

Figure (3)

FINANCIAL ACCOUNTING, Chapter 3, Problem 13E , additional homework tip 4

Figure (4)

Thus, the T-accounts are prepared and the ending balances are calculated.

3.

To determine

Ascertain the amount for the given equations at the end of the January.

3.

Expert Solution

Explanation of Solution

For the equation $Revenues−Expenses=Net income$ :

$Revenue−Expenses=Net income$11,130−$8,010=$3,120$

For the equation $Assets=Liabilities+Stockholders' equity$ :

$Assets=Liabilities+Stockholders' equity$18,870=$5,930+$12,940$

Working note (1):

Calculate the revenues:

$Revenues=Consulting fees revenue+Interest revenue=$11,120+$10=$11,130$

Working note (2):

Calculate the expenses:

$Expenses=Salaries expenses+Utilities expenses=$6,210+$1,800=$8,010$

Working note (3):

Calculate the net income:

Particulars	Amount($)	Amount ($)
Revenues	(1) 11,130
Less: Expenses	(2) 8,010
Net income		$3,120

Table (2)

4.

To determine

Calculate the net income under cash basis of accounting and explain the reason in which manner the net income differs from accrual basis of accounting.

4.

Expert Solution

Explanation of Solution

Calculate the net income under cash basis accounting:

Particulars	Amount ($)	Amount ($)
Cash receipts	(4) 14,580
Less: Cash payments	(5) 9,290
Net income		$5,290

Table (3)

Net income of Incorporation C under cash basis of accounting is $5,290.

Working note (4):

Calculate the cash receipts:

$Cash receipts=(Consulting fees revenue)+(Common stock issued)+(Consulting fees revenue)+(Accounts receivable)+(Interest revenue)=$9,500+$1,200+$890+$2,980+$10=$14,580$

Working note (5):

Calculate the cash payments:

$Cash payments=(Short-term notes payable)+(Utilities expenses)+(Salaries expenses)+(Purchase of short-term invenstment)=$160+$1,800+$5,300+$2,030=$19,760$

According to the cash basis of accounting, the net income is $5,290 which higher than the accrual basis of accounting.
The recording of the expenses and revenues differ from the accrual basis of accounting.
Hence, the net income is different for the accrual basis of accounting and cash basis of accounting.

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Answer 3

Question

Chapter 3, Problem 13E

1.

To determine

Journalize the given transactions.

1.

Expert Solution

Explanation of Solution

Journalize the given transactions:

Date	Account Title and Explanation	Debit ($)	Credit ($)
a	Cash (+A)	$9,500
a	Consulting fees revenue (+R) (+SE)		$9,500
	(To record the fees earned)

b	Cash (+A)	$1,200
	Common stock (+SE)		$10
	Additional paid-in capital (+SE)		$1,190
	(To record the purchase of building)

c	Office equipment (+A)	$640
	Cash (-A)		$160
	Short-term notes payable (+L)		$480
	(To record the purchase of equipment on account)

d	Cash (+A)	$890
d	Unearned revenue (+L)		$890
	(To record the unearned revenue)

e	Supplies (+A)	$470
e	Accounts payable (-L)		$470
	(To record the purchase of supplies on account)

f	Utilities expense (+E) (-SE)	$1,800
f	Cash (-A)		$1,800
	(To record the utilities expense)

g	Accounts receivable (+A)	$1,620
g	Consulting fees revenue (+R) (+SE)		$1,620
	(To record the fees earned)

h	Cash (+A)	$2,980
h	Accounts receivable (-A)		$2,980
	(To record the cash receivable from customer)

i	Salaries expense (+E) (-SE)	$6,210
i	Cash (-A)		$5,300
	Salaries payable (+L)		$910
	(To record the payment of cash for accounts payable)

j	Short term investments (+A)	$1,230
j	Prepaid expenses (+A)	$800
	Cash (-A)		$2,030
	(To record the cash receivable from customer)

k	Cash (+A)	$10
k	Interest revenue (+R) (-SE)		$10
	(To record the interest revenue)

Table (1)

2

To determine

Prepare the T- account and enter the transaction into their respective accounts for calculating the ending balance.

2

Expert Solution

Explanation of Solution

Prepare the T-accounts:

FINANCIAL ACCOUNTING, Chapter 3, Problem 13E , additional homework tip 1

Figure (1)

FINANCIAL ACCOUNTING, Chapter 3, Problem 13E , additional homework tip 2

Figure (2)

FINANCIAL ACCOUNTING, Chapter 3, Problem 13E , additional homework tip 3

Figure (3)

FINANCIAL ACCOUNTING, Chapter 3, Problem 13E , additional homework tip 4

Figure (4)

Thus, the T-accounts are prepared and the ending balances are calculated.

3.

To determine

Ascertain the amount for the given equations at the end of the January.

3.

Expert Solution

Explanation of Solution

For the equation $Revenues−Expenses=Net income$ :

$Revenue−Expenses=Net income$11,130−$8,010=$3,120$

For the equation $Assets=Liabilities+Stockholders' equity$ :

$Assets=Liabilities+Stockholders' equity$18,870=$5,930+$12,940$

Working note (1):

Calculate the revenues:

$Revenues=Consulting fees revenue+Interest revenue=$11,120+$10=$11,130$

Working note (2):

Calculate the expenses:

$Expenses=Salaries expenses+Utilities expenses=$6,210+$1,800=$8,010$

Working note (3):

Calculate the net income:

Particulars	Amount($)	Amount ($)
Revenues	(1) 11,130
Less: Expenses	(2) 8,010
Net income		$3,120

Table (2)

4.

To determine

Calculate the net income under cash basis of accounting and explain the reason in which manner the net income differs from accrual basis of accounting.

4.

Expert Solution

Explanation of Solution

Calculate the net income under cash basis accounting:

Particulars	Amount ($)	Amount ($)
Cash receipts	(4) 14,580
Less: Cash payments	(5) 9,290
Net income		$5,290

Table (3)

Net income of Incorporation C under cash basis of accounting is $5,290.

Working note (4):

Calculate the cash receipts:

$Cash receipts=(Consulting fees revenue)+(Common stock issued)+(Consulting fees revenue)+(Accounts receivable)+(Interest revenue)=$9,500+$1,200+$890+$2,980+$10=$14,580$

Working note (5):

Calculate the cash payments:

$Cash payments=(Short-term notes payable)+(Utilities expenses)+(Salaries expenses)+(Purchase of short-term invenstment)=$160+$1,800+$5,300+$2,030=$19,760$

According to the cash basis of accounting, the net income is $5,290 which higher than the accrual basis of accounting.
The recording of the expenses and revenues differ from the accrual basis of accounting.
Hence, the net income is different for the accrual basis of accounting and cash basis of accounting.

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Answer 4

Question

Chapter 3, Problem 13E

1.

To determine

Journalize the given transactions.

1.

Expert Solution

Explanation of Solution

Journalize the given transactions:

Date	Account Title and Explanation	Debit ($)	Credit ($)
a	Cash (+A)	$9,500
a	Consulting fees revenue (+R) (+SE)		$9,500
	(To record the fees earned)

b	Cash (+A)	$1,200
	Common stock (+SE)		$10
	Additional paid-in capital (+SE)		$1,190
	(To record the purchase of building)

c	Office equipment (+A)	$640
	Cash (-A)		$160
	Short-term notes payable (+L)		$480
	(To record the purchase of equipment on account)

d	Cash (+A)	$890
d	Unearned revenue (+L)		$890
	(To record the unearned revenue)

e	Supplies (+A)	$470
e	Accounts payable (-L)		$470
	(To record the purchase of supplies on account)

f	Utilities expense (+E) (-SE)	$1,800
f	Cash (-A)		$1,800
	(To record the utilities expense)

g	Accounts receivable (+A)	$1,620
g	Consulting fees revenue (+R) (+SE)		$1,620
	(To record the fees earned)

h	Cash (+A)	$2,980
h	Accounts receivable (-A)		$2,980
	(To record the cash receivable from customer)

i	Salaries expense (+E) (-SE)	$6,210
i	Cash (-A)		$5,300
	Salaries payable (+L)		$910
	(To record the payment of cash for accounts payable)

j	Short term investments (+A)	$1,230
j	Prepaid expenses (+A)	$800
	Cash (-A)		$2,030
	(To record the cash receivable from customer)

k	Cash (+A)	$10
k	Interest revenue (+R) (-SE)		$10
	(To record the interest revenue)

Table (1)

2

To determine

Prepare the T- account and enter the transaction into their respective accounts for calculating the ending balance.

2

Expert Solution

Explanation of Solution

Prepare the T-accounts:

FINANCIAL ACCOUNTING, Chapter 3, Problem 13E , additional homework tip 1

Figure (1)

FINANCIAL ACCOUNTING, Chapter 3, Problem 13E , additional homework tip 2

Figure (2)

FINANCIAL ACCOUNTING, Chapter 3, Problem 13E , additional homework tip 3

Figure (3)

FINANCIAL ACCOUNTING, Chapter 3, Problem 13E , additional homework tip 4

Figure (4)

Thus, the T-accounts are prepared and the ending balances are calculated.

3.

To determine

Ascertain the amount for the given equations at the end of the January.

3.

Expert Solution

Explanation of Solution

For the equation $Revenues−Expenses=Net income$ :

$Revenue−Expenses=Net income$11,130−$8,010=$3,120$

For the equation $Assets=Liabilities+Stockholders' equity$ :

$Assets=Liabilities+Stockholders' equity$18,870=$5,930+$12,940$

Working note (1):

Calculate the revenues:

$Revenues=Consulting fees revenue+Interest revenue=$11,120+$10=$11,130$

Working note (2):

Calculate the expenses:

$Expenses=Salaries expenses+Utilities expenses=$6,210+$1,800=$8,010$

Working note (3):

Calculate the net income:

Particulars	Amount($)	Amount ($)
Revenues	(1) 11,130
Less: Expenses	(2) 8,010
Net income		$3,120

Table (2)

4.

To determine

Calculate the net income under cash basis of accounting and explain the reason in which manner the net income differs from accrual basis of accounting.

4.

Expert Solution

Explanation of Solution

Calculate the net income under cash basis accounting:

Particulars	Amount ($)	Amount ($)
Cash receipts	(4) 14,580
Less: Cash payments	(5) 9,290
Net income		$5,290

Table (3)

Net income of Incorporation C under cash basis of accounting is $5,290.

Working note (4):

Calculate the cash receipts:

$Cash receipts=(Consulting fees revenue)+(Common stock issued)+(Consulting fees revenue)+(Accounts receivable)+(Interest revenue)=$9,500+$1,200+$890+$2,980+$10=$14,580$

Working note (5):

Calculate the cash payments:

$Cash payments=(Short-term notes payable)+(Utilities expenses)+(Salaries expenses)+(Purchase of short-term invenstment)=$160+$1,800+$5,300+$2,030=$19,760$

According to the cash basis of accounting, the net income is $5,290 which higher than the accrual basis of accounting.
The recording of the expenses and revenues differ from the accrual basis of accounting.
Hence, the net income is different for the accrual basis of accounting and cash basis of accounting.

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Answer 5

Chapter 3, Problem 13E

1.

To determine

Journalize the given transactions.

1.

Expert Solution

Explanation of Solution

Journalize the given transactions:

Date	Account Title and Explanation	Debit ($)	Credit ($)
a	Cash (+A)	$9,500
a	Consulting fees revenue (+R) (+SE)		$9,500
	(To record the fees earned)

b	Cash (+A)	$1,200
	Common stock (+SE)		$10
	Additional paid-in capital (+SE)		$1,190
	(To record the purchase of building)

c	Office equipment (+A)	$640
	Cash (-A)		$160
	Short-term notes payable (+L)		$480
	(To record the purchase of equipment on account)

d	Cash (+A)	$890
d	Unearned revenue (+L)		$890
	(To record the unearned revenue)

e	Supplies (+A)	$470
e	Accounts payable (-L)		$470
	(To record the purchase of supplies on account)

f	Utilities expense (+E) (-SE)	$1,800
f	Cash (-A)		$1,800
	(To record the utilities expense)

g	Accounts receivable (+A)	$1,620
g	Consulting fees revenue (+R) (+SE)		$1,620
	(To record the fees earned)

h	Cash (+A)	$2,980
h	Accounts receivable (-A)		$2,980
	(To record the cash receivable from customer)

i	Salaries expense (+E) (-SE)	$6,210
i	Cash (-A)		$5,300
	Salaries payable (+L)		$910
	(To record the payment of cash for accounts payable)

j	Short term investments (+A)	$1,230
j	Prepaid expenses (+A)	$800
	Cash (-A)		$2,030
	(To record the cash receivable from customer)

k	Cash (+A)	$10
k	Interest revenue (+R) (-SE)		$10
	(To record the interest revenue)

Table (1)

2

To determine

Prepare the T- account and enter the transaction into their respective accounts for calculating the ending balance.

2

Expert Solution

Explanation of Solution

Prepare the T-accounts:

FINANCIAL ACCOUNTING, Chapter 3, Problem 13E , additional homework tip 1

Figure (1)

FINANCIAL ACCOUNTING, Chapter 3, Problem 13E , additional homework tip 2

Figure (2)

FINANCIAL ACCOUNTING, Chapter 3, Problem 13E , additional homework tip 3

Figure (3)

FINANCIAL ACCOUNTING, Chapter 3, Problem 13E , additional homework tip 4

Figure (4)

Thus, the T-accounts are prepared and the ending balances are calculated.

3.

To determine

Ascertain the amount for the given equations at the end of the January.

3.

Expert Solution

Explanation of Solution

For the equation $Revenues−Expenses=Net income$ :

$Revenue−Expenses=Net income$11,130−$8,010=$3,120$

For the equation $Assets=Liabilities+Stockholders' equity$ :

$Assets=Liabilities+Stockholders' equity$18,870=$5,930+$12,940$

Working note (1):

Calculate the revenues:

$Revenues=Consulting fees revenue+Interest revenue=$11,120+$10=$11,130$

Working note (2):

Calculate the expenses:

$Expenses=Salaries expenses+Utilities expenses=$6,210+$1,800=$8,010$

Working note (3):

Calculate the net income:

Particulars	Amount($)	Amount ($)
Revenues	(1) 11,130
Less: Expenses	(2) 8,010
Net income		$3,120

Table (2)

4.

To determine

Calculate the net income under cash basis of accounting and explain the reason in which manner the net income differs from accrual basis of accounting.

4.

Expert Solution

Explanation of Solution

Calculate the net income under cash basis accounting:

Particulars	Amount ($)	Amount ($)
Cash receipts	(4) 14,580
Less: Cash payments	(5) 9,290
Net income		$5,290

Table (3)

Net income of Incorporation C under cash basis of accounting is $5,290.

Working note (4):

Calculate the cash receipts:

$Cash receipts=(Consulting fees revenue)+(Common stock issued)+(Consulting fees revenue)+(Accounts receivable)+(Interest revenue)=$9,500+$1,200+$890+$2,980+$10=$14,580$

Working note (5):

Calculate the cash payments:

$Cash payments=(Short-term notes payable)+(Utilities expenses)+(Salaries expenses)+(Purchase of short-term invenstment)=$160+$1,800+$5,300+$2,030=$19,760$

According to the cash basis of accounting, the net income is $5,290 which higher than the accrual basis of accounting.
The recording of the expenses and revenues differ from the accrual basis of accounting.
Hence, the net income is different for the accrual basis of accounting and cash basis of accounting.

Answer 6

Chapter 3, Problem 13E

1.

To determine

Journalize the given transactions.

1.

Expert Solution

Explanation of Solution

Journalize the given transactions:

Date	Account Title and Explanation	Debit ($)	Credit ($)
a	Cash (+A)	$9,500
a	Consulting fees revenue (+R) (+SE)		$9,500
	(To record the fees earned)

b	Cash (+A)	$1,200
	Common stock (+SE)		$10
	Additional paid-in capital (+SE)		$1,190
	(To record the purchase of building)

c	Office equipment (+A)	$640
	Cash (-A)		$160
	Short-term notes payable (+L)		$480
	(To record the purchase of equipment on account)

d	Cash (+A)	$890
d	Unearned revenue (+L)		$890
	(To record the unearned revenue)

e	Supplies (+A)	$470
e	Accounts payable (-L)		$470
	(To record the purchase of supplies on account)

f	Utilities expense (+E) (-SE)	$1,800
f	Cash (-A)		$1,800
	(To record the utilities expense)

g	Accounts receivable (+A)	$1,620
g	Consulting fees revenue (+R) (+SE)		$1,620
	(To record the fees earned)

h	Cash (+A)	$2,980
h	Accounts receivable (-A)		$2,980
	(To record the cash receivable from customer)

i	Salaries expense (+E) (-SE)	$6,210
i	Cash (-A)		$5,300
	Salaries payable (+L)		$910
	(To record the payment of cash for accounts payable)

j	Short term investments (+A)	$1,230
j	Prepaid expenses (+A)	$800
	Cash (-A)		$2,030
	(To record the cash receivable from customer)

k	Cash (+A)	$10
k	Interest revenue (+R) (-SE)		$10
	(To record the interest revenue)

Table (1)

Answer 7

Chapter 3, Problem 13E

1.

To determine

Journalize the given transactions.

Answer 8

1.

Expert Solution

Explanation of Solution

Journalize the given transactions:

Date	Account Title and Explanation	Debit ($)	Credit ($)
a	Cash (+A)	$9,500
a	Consulting fees revenue (+R) (+SE)		$9,500
	(To record the fees earned)

b	Cash (+A)	$1,200
	Common stock (+SE)		$10
	Additional paid-in capital (+SE)		$1,190
	(To record the purchase of building)

c	Office equipment (+A)	$640
	Cash (-A)		$160
	Short-term notes payable (+L)		$480
	(To record the purchase of equipment on account)

d	Cash (+A)	$890
d	Unearned revenue (+L)		$890
	(To record the unearned revenue)

e	Supplies (+A)	$470
e	Accounts payable (-L)		$470
	(To record the purchase of supplies on account)

f	Utilities expense (+E) (-SE)	$1,800
f	Cash (-A)		$1,800
	(To record the utilities expense)

g	Accounts receivable (+A)	$1,620
g	Consulting fees revenue (+R) (+SE)		$1,620
	(To record the fees earned)

h	Cash (+A)	$2,980
h	Accounts receivable (-A)		$2,980
	(To record the cash receivable from customer)

i	Salaries expense (+E) (-SE)	$6,210
i	Cash (-A)		$5,300
	Salaries payable (+L)		$910
	(To record the payment of cash for accounts payable)

j	Short term investments (+A)	$1,230
j	Prepaid expenses (+A)	$800
	Cash (-A)		$2,030
	(To record the cash receivable from customer)

k	Cash (+A)	$10
k	Interest revenue (+R) (-SE)		$10
	(To record the interest revenue)

Table (1)

Answer 9

1.

Expert Solution

Answer 10

1.

Expert Solution

Answer 11

Expert Solution

Answer 12

2

To determine

Prepare the T- account and enter the transaction into their respective accounts for calculating the ending balance.

2

Expert Solution

Explanation of Solution

Prepare the T-accounts:

FINANCIAL ACCOUNTING, Chapter 3, Problem 13E , additional homework tip 1

Figure (1)

FINANCIAL ACCOUNTING, Chapter 3, Problem 13E , additional homework tip 2

Figure (2)

FINANCIAL ACCOUNTING, Chapter 3, Problem 13E , additional homework tip 3

Figure (3)

FINANCIAL ACCOUNTING, Chapter 3, Problem 13E , additional homework tip 4

Figure (4)

Thus, the T-accounts are prepared and the ending balances are calculated.

Answer 13

2

To determine

Prepare the T- account and enter the transaction into their respective accounts for calculating the ending balance.

Answer 14

2

Expert Solution

Explanation of Solution

Prepare the T-accounts:

FINANCIAL ACCOUNTING, Chapter 3, Problem 13E , additional homework tip 1

Figure (1)

FINANCIAL ACCOUNTING, Chapter 3, Problem 13E , additional homework tip 2

Figure (2)

FINANCIAL ACCOUNTING, Chapter 3, Problem 13E , additional homework tip 3

Figure (3)

FINANCIAL ACCOUNTING, Chapter 3, Problem 13E , additional homework tip 4

Figure (4)

Thus, the T-accounts are prepared and the ending balances are calculated.

Answer 15

2

Expert Solution

Answer 16

2

Expert Solution

Answer 17

Expert Solution

Answer 18

3.

To determine

Ascertain the amount for the given equations at the end of the January.

3.

Expert Solution

Explanation of Solution

For the equation $Revenues−Expenses=Net income$ :

$Revenue−Expenses=Net income$11,130−$8,010=$3,120$

For the equation $Assets=Liabilities+Stockholders' equity$ :

$Assets=Liabilities+Stockholders' equity$18,870=$5,930+$12,940$

Working note (1):

Calculate the revenues:

$Revenues=Consulting fees revenue+Interest revenue=$11,120+$10=$11,130$

Working note (2):

Calculate the expenses:

$Expenses=Salaries expenses+Utilities expenses=$6,210+$1,800=$8,010$

Working note (3):

Calculate the net income:

Particulars	Amount($)	Amount ($)
Revenues	(1) 11,130
Less: Expenses	(2) 8,010
Net income		$3,120

Table (2)

Answer 19

3.

To determine

Ascertain the amount for the given equations at the end of the January.

Answer 20

3.

Expert Solution

Explanation of Solution

For the equation $Revenues−Expenses=Net income$ :

$Revenue−Expenses=Net income$11,130−$8,010=$3,120$

For the equation $Assets=Liabilities+Stockholders' equity$ :

$Assets=Liabilities+Stockholders' equity$18,870=$5,930+$12,940$

Working note (1):

Calculate the revenues:

$Revenues=Consulting fees revenue+Interest revenue=$11,120+$10=$11,130$

Working note (2):

Calculate the expenses:

$Expenses=Salaries expenses+Utilities expenses=$6,210+$1,800=$8,010$

Working note (3):

Calculate the net income:

Particulars	Amount($)	Amount ($)
Revenues	(1) 11,130
Less: Expenses	(2) 8,010
Net income		$3,120

Table (2)

Answer 21

3.

Expert Solution

Answer 22

3.

Expert Solution

Answer 23

Expert Solution

Answer 24

4.

To determine

Calculate the net income under cash basis of accounting and explain the reason in which manner the net income differs from accrual basis of accounting.

4.

Expert Solution

Explanation of Solution

Calculate the net income under cash basis accounting:

Particulars	Amount ($)	Amount ($)
Cash receipts	(4) 14,580
Less: Cash payments	(5) 9,290
Net income		$5,290

Table (3)

Net income of Incorporation C under cash basis of accounting is $5,290.

Working note (4):

Calculate the cash receipts:

$Cash receipts=(Consulting fees revenue)+(Common stock issued)+(Consulting fees revenue)+(Accounts receivable)+(Interest revenue)=$9,500+$1,200+$890+$2,980+$10=$14,580$

Working note (5):

Calculate the cash payments:

$Cash payments=(Short-term notes payable)+(Utilities expenses)+(Salaries expenses)+(Purchase of short-term invenstment)=$160+$1,800+$5,300+$2,030=$19,760$

According to the cash basis of accounting, the net income is $5,290 which higher than the accrual basis of accounting.
The recording of the expenses and revenues differ from the accrual basis of accounting.
Hence, the net income is different for the accrual basis of accounting and cash basis of accounting.

Answer 25

4.

To determine

Calculate the net income under cash basis of accounting and explain the reason in which manner the net income differs from accrual basis of accounting.

Answer 26

4.

Expert Solution

Explanation of Solution

Calculate the net income under cash basis accounting:

Particulars	Amount ($)	Amount ($)
Cash receipts	(4) 14,580
Less: Cash payments	(5) 9,290
Net income		$5,290

Table (3)

Net income of Incorporation C under cash basis of accounting is $5,290.

Working note (4):

Calculate the cash receipts:

$Cash receipts=(Consulting fees revenue)+(Common stock issued)+(Consulting fees revenue)+(Accounts receivable)+(Interest revenue)=$9,500+$1,200+$890+$2,980+$10=$14,580$

Working note (5):

Calculate the cash payments:

$Cash payments=(Short-term notes payable)+(Utilities expenses)+(Salaries expenses)+(Purchase of short-term invenstment)=$160+$1,800+$5,300+$2,030=$19,760$

According to the cash basis of accounting, the net income is $5,290 which higher than the accrual basis of accounting.
The recording of the expenses and revenues differ from the accrual basis of accounting.
Hence, the net income is different for the accrual basis of accounting and cash basis of accounting.