Pearson eText for Financial Accounting -- Instant Access (Pearson+)
5th Edition
ISBN: 9780137525423
Author: Robert Kemp, Jeffrey Waybright
Publisher: PEARSON+
expand_more
expand_more
format_list_bulleted
Concept explainers
Textbook Question
Chapter 1, Problem 12SE
Transaction analysis (Learning Objective 5) 5-10 min.
Action Powersports, Inc., a corporation, sells and services personal watercraft. The business experienced the following events. State whether each event (a) increased, (b) decreased, or (c) had no effect on the total assets of the business, and identify the asset(s) involved in each transaction.
- 1. Sold additional stock to stockholders
- 2. Paid cash to purchase land as a building site
- 3. Paid cash on accounts payable
- 4. Purchased machinery and equipment; signed a 2-year note payable
- 5. Performed service for a customer on account
- 6. Paid cash to the stockholders as a distribution of earnings
- 7. Received cash from a customer on account
- 8. Sold land for a price equal to the cost of the land; received cash
- 9. Borrowed money from the bank
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
(Learning Objective 3: Analyze the impact of business transactions on accounts)The following selected events were experienced by either Smith Eldercare Services, Inc., acorporation, or Tony Smith, its major stockholder. State whether each event (1) increased,(2) decreased, or (3) had no effect on the total assets of the business. Identify any specific assetaffected.a. Paid $400 cash on accounts payable.b. Made a cash purchase of land for a building site for the business, $89,000.c. Sold land and received cash of $69,000 (the land was carried on the company’s books at$69,000).d. Received $15,400 cash from customers on account.e. Purchased medical equipment and signed a $90,000 promissory note in payment.f. Purchased a flat-screen TV for Smith’s home.g. Paid Smith a cash dividend of $4,000.h. Purchased office supplies on account for $1,200.i. Borrowed $62,000 from the bank for use in the business.j. Received $12,000 cash and issued stock to a stockholder.
(Learning Objective 3: Analyze the impact of business transactions on accounts)Fourth Investments, Inc., began by issuing common stock for cash of $200,000. The companyimmediately purchased computer equipment on account for $56,000.1. Set up the following T-accounts of Fourth Investments, Inc.: Cash, Computer Equipment,Accounts Payable, and Common Stock.2. Record the first two transactions of the business directly in the T-accounts without using ajournal.3. Show that total debits equal total credits.
(Learning Objective 4: Journalize and post transactions) Orman Consulting performed services for a client who could not pay immediately. Orman expected to collect the$4,600 the following month. A month later, Orman received $2,100 cash from the client.1. Record the two transactions on the books of Orman Consulting. Include an explanation foreach transaction.2. Post to these T-accounts: Cash, Accounts Receivable, and Service Revenue. Compute eachaccount balance and denote it as Bal.
Chapter 1 Solutions
Pearson eText for Financial Accounting -- Instant Access (Pearson+)
Ch. 1 - The text states that accounting is the "language...Ch. 1 - Would you describe accounting as primarily a...Ch. 1 - Prob. 3DQCh. 1 - What are some reasons why accounting has adopted...Ch. 1 - What are some of the uses of financial statements?Ch. 1 - Prob. 6DQCh. 1 - Prob. 7DQCh. 1 - How is the accounting equation affected by each of...Ch. 1 - In what order should the financial statements be...Ch. 1 - Which financial statement would be most useful to...
Ch. 1 - Prob. 1SCCh. 1 - Prob. 2SCCh. 1 - Which accounting principle specifically states...Ch. 1 - Wave Rider is famous for custom skateboards. At...Ch. 1 - Assume that Wave Rider sold skateboards to a...Ch. 1 - Assume that Wave Rider sold skateboards to another...Ch. 1 - Assume that Wave Rider paid expenses totaling...Ch. 1 - Consider the overall effects of the transactions...Ch. 1 - The balance sheet reports a. a businesss financial...Ch. 1 - The income statement reports a. a business's...Ch. 1 - Prob. 11SCCh. 1 - Prob. 12SCCh. 1 - Accounting principles (Learning Objective 4) 5-10...Ch. 1 - Accounting principles (Learning Objective 4) 5-10...Ch. 1 - Prob. 3SECh. 1 - Basic accounting equation (Learning Objective 5)...Ch. 1 - Prob. 5SECh. 1 - Prob. 6SECh. 1 - Prob. 7SECh. 1 - Entering transactions in the accounting equation...Ch. 1 - Prob. 9SECh. 1 - Prob. 10SECh. 1 - Entering transactions in the accounting equation...Ch. 1 - Transaction analysis (Learning Objective 5) 5-10...Ch. 1 - Transaction analysis (Learning Objective 5) 5-10...Ch. 1 - Prob. 14SECh. 1 - Basic accounting equation (Learning Objective 5)...Ch. 1 - Basic accounting equation (Learning Objective 5)...Ch. 1 - Prob. 17AECh. 1 - Using the accounting equation to determine net...Ch. 1 - Transaction analysis (Learning Objective 5) 15-20...Ch. 1 - Types of business organizations and balance sheet...Ch. 1 - Types of accounts and income statement preparation...Ch. 1 - Using the accounting equation to determine net...Ch. 1 - Basic accounting equation (Learning Objective 5)...Ch. 1 - Prob. 24BECh. 1 - Prob. 25BECh. 1 - Prob. 26BECh. 1 - Transaction analysis (Learning Objective 5) 15-20...Ch. 1 - Prob. 28BECh. 1 - Prob. 29BECh. 1 - Prob. 30BECh. 1 - Transaction analysis and the calculation of net...Ch. 1 - Prob. 32APCh. 1 - A Preparing the income statement, statement of...Ch. 1 - Preparing the income statement and balance sheet;...Ch. 1 - Prob. 35APCh. 1 - Transaction analysis and the calculation of net...Ch. 1 - Prob. 37BPCh. 1 - Prob. 38BPCh. 1 - Preparing the income statement and balance sheet;...Ch. 1 - Prob. 40BPCh. 1 - Prob. 1CECh. 1 - This problem is the first problem in a sequence...Ch. 1 - Prob. 1CFSAPCh. 1 - Prob. 1EIACh. 1 - Prob. 2EIACh. 1 - Prob. 1FACh. 1 - Industry Analysis Purpose: To help you understand...Ch. 1 - Prob. 1SBACh. 1 - Prob. 1WC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Learning Objectives 4, 5: Journalize and post transactions; construct and use atrial balance) Olivia Matthews, Certified Public Accountant, operates as a professional corporation (P.C.). The business completed these transactions during the first part of May 2018:May Received $12,000 cash from Matthews, and issued common stock to her.Paid monthly oce rent, $500.Paid cash for a desktop computer, $1,800, with the computer expected toremain in service for five years.Purchased oce furniture on account, $6,000, with the furniture projectedto last for five years.Purchased supplies on account, $900.Performed tax services for a client and received cash for the full amountof $600.Received bill and paid utility expenses, $750.Performed consulting services for a client on account, $3,100.2234591218Requirements1. Journalize the transactions for Olivia Matthews, Certified Public Accountant. Explanationsare not required.2. Post to the T-accounts. Key all items by date and determine the ending balance…arrow_forward(Learning Objective 1: Identify the current liabilities associated with operating activities)Identify the current liability associated with each of the following operating activities:1. Perform work on a warranty claim2. Pay income taxes3. Purchase supplies4. Pay payroll taxes5. Borrow money for operations using a short-term note6. Process cash received in advance from customers7. Purchase inventory8. Pay employee salariesarrow_forwardFinancial Statements Activity Title: Learning Target: Demonstrate an understanding in preparing financial statement. Differentiate income statement from balance sheet. Prepare income statements and balance sheet. 1. Acer Computer Services is owned by Pepito Manoloto. Prepare the Balance Sheet of the business. The following are provided as of December 31, 2017. Cash Php 40,000.00 Service Vehicle Accounts Payable 50,000.00 66,350.00 Furniture & fixtures 25, 200,⁰⁰ 28,500,00 Office Equipment Accounts Receivable Notes Payable 45,000,00 10,000.00 2. Looking Glass Photography is owned by Cymon Ken. Prepare the Income Statement of the business based on the following data provided as of December 31, 2017. Advertising Expense Php 5,000.00 Miscellaneous Expenses Rent Expense 999.00 17,525.00 Salaries Expense 20, 200,00 Supplies Expense 25,300.00 Utilities Expense 4,500.00 Service Income 95, 850.00⁰arrow_forward
- Assume Smart Touch Learning sells a van for $3,000 with a cost of $17,000 and up-to-date accumulated depreciation of $15,000. The journal entry to record the disposal of the van would include (check all that apply) A. A credit to Vehicles for $17,000 OB. A debit to Cash for $3,000 C. A debit to Gain on Disposal for $1,000 D. A credit to Gain on Disposal for $1,000arrow_forward(Learning Objective 4: Journalize transactions) Journalize the following transactions. Include dates and a brief explanation for each journal entry.July 1: Issued common stock for $13,000July 5: Performed services on account for $8,000July 9: Purchased office supplies on account for $600July 10: Performed services for cash of $3,100July 12: Received payment in full for services performed on account from July 5July 24: Paid in full for office supplies purchased on July 9July 25: Received and paid monthly electric bill of $450July 30: Signed a note payable to purchase office furniture for $2,500July 31: Paid monthly payroll of $3,100arrow_forward(Learning Objective 3: Analyze the impact of business transactions on accounts)Set up the following T-accounts: Cash, Accounts Receivable, Office Supplies, Office Furniture,Accounts Payable, Common Stock, Dividends, Service Revenue, Salary Expense, and RentExpense. Record the following transactions directly in the T-accounts without using a journal.Use the letters to identify the transactions. Determine the ending balance in each account.a. Michael Dover opened a law firm by investing $23,500 cash and office furniture with afair value of $8,600. Organized as a professional corporation, the business issued common stock to Dover.b. Paid monthly rent of $1,100.c. Purchased office supplies on account, $800.d. Paid employee salaries of $2,800.e. Paid $200 of the account payable created in transaction c.f. Performed legal service on account, $10,700.g. Declared and paid dividends of $2,900.arrow_forward
- P3-58A. (Learning Objective 1: Explain how accrual accounting differs from cash-basisaccounting) Berkley Consulting had the following selected transactions in July:July 1 Prepaid insurance for July through September, $3,900.4 Purchased office furniture for cash, $3,000.5 Performed services and received cash, $1,800.8 Paid advertising expense, $300.11 Performed service on account, $3,100.19 Purchased computer on account, $1,600.24 Collected for July 11 service.26 Paid account payable from July 19.29 Paid salary expense, $1,100.31 Adjusted for July insurance expense (see July 1).31 Earned revenue of $400 that was collected in advance back31 Recorded July depreciation expense on all fixed assets, $408.in June.Requirements1. Show how each transaction would be handled (in terms of recognizing revenues andexpenses) using the cash basis and the accrual basis.2. Calculate July income (loss) before tax under each accounting method.3. Indicate which measure of net income or net loss is…arrow_forward(Learning Objective 3: Analyze the impact of business transactions on accounts)Set up the following T-accounts: Cash, Accounts Receivable, Office Supplies, Office Furniture,Accounts Payable, Common Stock, Dividends, Service Revenue, Salary Expense, and RentExpense. Record the following transactions directly in the T-accounts without using a journal.Use the letters to identify the transactions. Determine the ending balance in each account.a. Brian Durham opened a law firm by investing $25,500 cash and office furniture with afair value of $9,400. Organized as a professional corporation, the business issued common stock to Durham.b. Paid monthly rent of $1,500.c. Purchased office supplies on account, $700.d. Paid employees’ salaries of $2,900.e. Paid $250 of the account payable created in transaction c.f. Performed legal service on account, $11,000.g. Declared and paid dividends of $2,000.arrow_forwardP1-70B. (Learning Objectives 2, 3, 4: Apply underlying accounting concepts; evaluatebusiness operations; construct a balance sheet) Hudson Alvarez is a realtor. He organizedhis business as a corporation on June 16, 2019. The business received $75,000 from Alvarezand issued common stock. Consider these facts as of June 30, 2019.a. Alvarez has $17,000 in his personal bank account and $44,000 in the business bankaccount.b. Alvarez owes $6,500 on a personal charge account with a local department store.c. Alvarez acquired business furniture for $17,600 on June 24. Of this amount, the business owes $9,000 on accounts payable at June 30.d. Office supplies on hand at the real estate office total $4,000.e. Alvarez’s business owes $102,000 on a note payable for some land acquired for a totalprice of $162,000.f. Alvarez’s business spent $16,000 for a Realty Experience franchise, which entitles himto represent himself as an agent. Realty Experience is a national affiliation of independent real…arrow_forward
- P3-66B. (Learning Objective 1: Explain how accrual accounting differs from cash-basisaccounting) Westchester Consulting had the following selected transactions in May:May 1 Prepaid insurance for May through July, $2,250.4 Purchased office furniture for cash, $4,000.5 Performed services and received cash, $1,000.8 Paid advertising expense, $300.11 Performed service on account, $3,500.19 Purchased computer on account, $2,000.24 Collected for May 11 service.26 Paid account payable from May 19.29 Paid salary expense, $1,000.31 Adjusted for May insurance expense (see May 1).31 Earned revenue of $1,000 that was collected in advance back31 Recorded May depreciation expense on all fixed assets, $108.in April.Requirements1. Show how each transaction would be handled (in terms of recognizing revenues andexpenses) using the cash basis and the accrual basis.2. Calculate May income (loss) before tax under each accounting method.3. Indicate which measure of net income or net loss is preferable. Use…arrow_forward(Learning Objective 3: Analyze the impact of business transactions on accounts)Ford’s Catering began with cash of $8,000. Ford then bought supplies for $2,500 on account.Separately, Ford paid $7,200 for equipment. Answer these questions.a. How much in total assets does Ford have?b. How much in liabilities does Ford owe?arrow_forwardS3-4. (Learning Objective 2: Apply the revenue and expense recognition principles) A largeauto manufacturer sells large fleets of vehicles to auto rental companies, such as Budget andHertz. Suppose Budget is negotiating with the auto manufacturer to purchase 1,000 vehicles.Write a short paragraph to explain to the auto manufacturer when the company should, andshould not, record this sales revenue and the related expense for cost of goods sold. Mention theaccounting principles that provide the basis for your explanation.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education
The ACCOUNTING EQUATION For BEGINNERS; Author: Accounting Stuff;https://www.youtube.com/watch?v=56xscQ4viWE;License: Standard Youtube License