Survey Of Accounting
5th Edition
ISBN: 9781259631122
Author: Edmonds, Thomas P.
Publisher: Mcgraw-hill Education,
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Chapter 5, Problem 26P
The following transactions apply to Hooper Co. for 2018, its first year of operations:
- 1. Issued $60,000 of common stock for cash.
- 2. Provided $90,000 of services on account.
- 3. Collected $78,000 cash from
accounts receivable . - 4. Loaned $20,000 to Mosby Co. on November 30, 2018. The note had a one-year term to maturity and a 6 percent interest rate.
- 5. Paid $26,000 of salaries expense for the year.
- 6. Paid a $2,000 dividend to the stockholders.
- 7. Recorded the accrued interest on December 31, 2018 (see item 4).
- 8. Estimated that 1 percent of service revenue will be uncollectible.
Required
- a. Show the effects of these transactions in a horizontal statements model like the one shown as follows.
- b. Prepare the income statement,
balance sheet , and statement ofcash flows for 2018.
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The following transactions apply to Hooper Co. for 2018, its first year of operations:
Issued $60,000 of common stock for cash.
Provided $90,000 of services on account.
Collected $78,000 cash from accounts receivable.
Loaned $20,000 to Mosby Co. on November 30, 2018. The note had a one-year term to maturity and a 6 percent interest rate.
Paid $26,000 of salaries expense for the year.
Paid a $2,000 dividend to the stockholders.
Recorded the accrued interest on December 31, 2018 (see item 4).
Estimated that 1 percent of service revenue will be uncollectible
Prepare the income statement, balance sheet, and statement of cash flows for 2018.
Sombrero Inc. provided the following information on December 31, 2021:
.P 6,500,000
Accounts payable....
Bank note payable-10%.
Bank note payable-11%.
Mortgage note payable-10%.
Bonds payable...
The P 3,000,000, 10% note was issued March 1, 2021 payable on demand. Interest is
payable every 6 months.
The one-year P 5,000,000, 11% note was issued on January 15, 2021. On December 31,
2021, the entity negotiated a written agreement with the bank to replace the note with a
2-year P 5,000,000, 10% note to be issued on January 15, 2022.
The 10% mortgage note was issued on October 1, 2018 with a term of 10 years. Term of
the note give the holder the right to demand immediate payment if the entity fails to
make a monthly interest payment within 10 days from the date the payment is due. On
December 31, 2021 the entity is three months behind in making the required interest
3,000,000
5,000,000
2,000,000
4,000,000
payment.
Thhe bonds payable are 10-year 8% bonds, issued on June 30, 2012. Interest…
During 2024, Lane Co. borrowed cash from Greenberg Company by issuing notes payable as follows:
1. July 1, 2024, issued an eight-month, 4% note for $75,000. Interest and principal are payable at maturity.
2. November 1, 2024, issued a three-month, 5% note for $42,000. Interest is payable monthly on the first day of the month. Principal is payable at maturity.
Lane has a December 31 fiscal year end and prepares adjusting entries on an annual basis.
A) Prepare all necessary journal entries for Lane Co. to record the notes.
B) Prepare the necessary interest payment transactions for Lane in 2024 and 2025. Prepare separate adjusting entries for each note. (Don't understand this part, please explain steps for the $ used and dates.)
Date
Account Titles and Explanation
Debit
Credit
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-
-
-
-
-
-
(To accrue interest on note issued July 1, 2024.)
-
-
-
-
-
(To accrue interest on note issued Nov. 1, 2024.)
-
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-…
Chapter 5 Solutions
Survey Of Accounting
Ch. 5 - 1. What is the difference between accounts...Ch. 5 - Prob. 2QCh. 5 - 3. What type of account is the Allowance for...Ch. 5 - 4. What are two ways in which estimating...Ch. 5 - 5. When using the allowance method, why is...Ch. 5 - 6. What is the most common format for reporting...Ch. 5 - 7. Why is it necessary to mate an entry to...Ch. 5 - 8. What are some factors considered in estimating...Ch. 5 - Prob. 9QCh. 5 - Prob. 10Q
Ch. 5 - Prob. 11QCh. 5 - Prob. 12QCh. 5 - Prob. 13QCh. 5 - 14. What is an advantage of using the percent of...Ch. 5 - 15. What is aging of accounts receivable?Ch. 5 - Prob. 16QCh. 5 - Prob. 17QCh. 5 - Prob. 18QCh. 5 - 21. What is accrued interest?Ch. 5 - How does the accrual of interest revenue or...Ch. 5 - Prob. 21QCh. 5 - Prob. 22QCh. 5 - Prob. 23QCh. 5 - Prob. 24QCh. 5 - Prob. 25QCh. 5 - 26. What types of costs do businesses avoid when...Ch. 5 - 1. Name and describe the four cost flow methods...Ch. 5 - 2. What are some advantages and disadvantages of...Ch. 5 - Prob. 29QCh. 5 - Prob. 30QCh. 5 - 5. In an inflationary period, which inventory cost...Ch. 5 - 6. In an inflationary period, which inventory cost...Ch. 5 - 7. What is the difference between the flow of...Ch. 5 - Prob. 34QCh. 5 - Prob. 35QCh. 5 - Prob. 36QCh. 5 - Prob. 37QCh. 5 - Prob. 38QCh. 5 - Prob. 39QCh. 5 - Prob. 1ECh. 5 - Exercise 7-1A Analysis of financial statement...Ch. 5 - Prob. 3ECh. 5 - Effect of recognizing uncollectible accounts...Ch. 5 - Analyzing financial statement effects of...Ch. 5 - Effect of recovering a receivable previously...Ch. 5 - Prob. 7ECh. 5 - Prob. 8ECh. 5 - Prob. 9ECh. 5 - Roth Service Co. experienced the following...Ch. 5 - Prob. 11ECh. 5 - On May 1, 2018, Benzs Sandwich Shop loaned 10,000...Ch. 5 - Prob. 13ECh. 5 - Prob. 14ECh. 5 - Luna Company accepted credit cards in payment for...Ch. 5 - Prob. 16ECh. 5 - Prob. 17ECh. 5 - Prob. 18ECh. 5 - Prob. 19ECh. 5 - The Shirt Shop had the following transactions for...Ch. 5 - Prob. 21ECh. 5 - Accounting for uncollectible accountstwo cycles...Ch. 5 - Prob. 23PCh. 5 - Prob. 24PCh. 5 - Sage Inc. experienced the following transactions...Ch. 5 - The following transactions apply to Hooper Co. for...Ch. 5 - Prob. 27PCh. 5 - Prob. 28PCh. 5 - Prob. 29PCh. 5 - Prob. 30PCh. 5 - The following trial balance was prepared for Tile,...Ch. 5 - Prob. 32PCh. 5 - Prob. 33PCh. 5 - Prob. 1ATCCh. 5 - Prob. 3ATCCh. 5 - Prob. 4ATCCh. 5 - Alonzo Saunders owns a small training services...
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