Financial Accounting
9th Edition
ISBN: 9781259222139
Author: Robert Libby, Patricia Libby, Frank Hodge Ch
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 2, Problem 2.3ME
Identifying Events as Accounting Transactions
LO2-2 For each of the following events, which ones result in an exchange transaction for Dittman Company (Y for yes and N for no)?
______ (1) Six investors in Dittman Company sold their stock to another investor.
______ (2) The founding owner, Megan Dittman, purchased additional stock in another company.
______ (3) The company borrowed $2,500,000 from a local bank.
______ (4) Dittman Company purchased a machine that it paid for by signing a note payable.
______ (5) The company lent $300,000 to a supplier.
______ (6) Dittman Company ordered supplies from Staples to be delivered next week.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Fill in the dollar changes caused in the Investment account and Dividend Revenue or Investment Revenue account by each of the following transactions, assuming George Company unes
(a) the fair value method and (b) the equity method for accounting for its investments in Tiffany Company
(a) Fair Value Method.
Transaction
(b) Equity Method
Investment Dividend Investment Investment
Account
Revenue
Account
Revenue
1. At the beginning of Year 1. George bought 40% of Tiffany's common stock at its book value. Total book value of all Tiffany's
common stock was $1,000,000 on this date.
2. During Year 1, Tiffany reported $50,000 of net income and paid $50,000 of dividends.
3. During Year 2, Tiffany reported $100,000 of net income and paid $20,000 of dividends.
4. During Year 3, Tiffany reported a net loss of $15,000 and paid $5,000 of dividends.
5. Indicate the Year 3 ending balance in the Investment account, and cumulative totals for Years 1, 2, and 3 for dividend revenue and
investment revenue.…
[The following information applles to the questions displayed below.]
On October 1, Ebony Ernst organized Ernst Consulting; on October 3, the owner contributed $84,580 in assets In
exchange for Its common stock to launch the business. On October 31, the company's records show the following Items
and amounts. Retalned earnings, October 1 as $0.
$ 9,390
16,020
3,83e
45,98e
18,55e
9,e6e
84,580
Cash dividends
Consulting revenue
Rent expense
Salaries expense
Telephone expense
Miscellaneous expenses
$ 2,650
16,e20
4,190
7,570
830
Cash
Accounts receivable
office supplies
Land
office equipment
Accounts payable
Common stock
650
Exercise 1-15 Preparing an income statement LO P2
Using the above Information prepare an October Income statement for the business.
ERNST CONSULTING
Income Statement
For Month Ended October 31
Revenues
Consulting revenue
Expenses
Rent expense
Salaries expense
Telephone expense
Miscellaneous expenses
Net income
EA16. Discuss how each of the following transactions for Watson, International, will affect assets, liabilities, and stockholders’ equity, and prove the company’s accounts will still be in balance.
A. An investor invests an additional $25,000 into a company receiving stock in exchange.B. Services are performed for customers for a total of $4,500. Sixty percent was paid in cash, and the remaining customers asked to be billed.C. An electric bill was received for $35. Payment is due in thirty days. D. Part-time workers earned $750 and were paid.E. The electric bill in “C” is paid.Your answer: (Answer B, C, D, and E by referring to the answer example for A)A. (as an example, the answer for A. is shown below)Cash will increase $25,000, so total assets will increase $25,000.Common stock will increase $25,000, increasing total stockholders’ equity $25,000.There is an equal increase on each side of the equation.There is an equal decrease on each side of the equation.
Chapter 2 Solutions
Financial Accounting
Ch. 2 - Prob. 1QCh. 2 - Define the following: a. Asset b. Current asset c....Ch. 2 - Explain what the following accounting terms mean:...Ch. 2 - Why are accounting assumptions necessary?Ch. 2 - For accounting purposes, what is an account?...Ch. 2 - What is the fundamental accounting model?Ch. 2 - Prob. 7QCh. 2 - Explain what debit and credit mean.Ch. 2 - Prob. 9QCh. 2 - Prob. 10Q
Ch. 2 - Prob. 11QCh. 2 - Prob. 12QCh. 2 - How is the current ratio computed and interpreted?Ch. 2 - Prob. 14QCh. 2 - Prob. 1MCQCh. 2 - Which of the following is not an asset? a....Ch. 2 - Total liabilities on a balance sheet at the end of...Ch. 2 - The dual effects concept can best be described as...Ch. 2 - The T-account is a tool commonly used for...Ch. 2 - Prob. 6MCQCh. 2 - The Cash T-account has a beginning balance of...Ch. 2 - Prob. 8MCQCh. 2 - At the end of a recent year, The Gap, Inc.,...Ch. 2 - Prob. 10MCQCh. 2 - Matching Definitions with Terms Match each...Ch. 2 - Matching Definitions with Terms Match each...Ch. 2 - Identifying Events as Accounting Transactions...Ch. 2 - Classifying Accounts on a Balance Sheet The...Ch. 2 - Determining Financial Statement Effects of Several...Ch. 2 - Prob. 2.6MECh. 2 - Prob. 2.7MECh. 2 - Prob. 2.8MECh. 2 - Prob. 2.9MECh. 2 - Prob. 2.10MECh. 2 - Prob. 2.11MECh. 2 - Computing and Interpreting the Current Ratio...Ch. 2 - Identifying Transactions as Investing or Financing...Ch. 2 - Matching Definitions with Terms Match each...Ch. 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 - Determining Financial Statement Effects of Several...Ch. 2 - Recording Investing and Financing Activities Refer...Ch. 2 - Prob. 2.7ECh. 2 - Recording Investing and Financing Activities...Ch. 2 - Analyzing the Effects of Transactions In...Ch. 2 - Analyzing the Effects of Transactions In...Ch. 2 - Prob. 2.11ECh. 2 - Inferring Investing and Financing Transactions and...Ch. 2 - Recording Journal Entries Nathanson Corporation...Ch. 2 - Prob. 2.14ECh. 2 - Analyzing the Effects of Transactions Using...Ch. 2 - Prob. 2.16ECh. 2 - Prob. 2.17ECh. 2 - Prob. 2.18ECh. 2 - Inferring Typical Investing and Financing...Ch. 2 - Prob. 2.20ECh. 2 - Identifying the Investing and Financing Activities...Ch. 2 - Prob. 2.22ECh. 2 - Identifying Accounts on a Classified Balance Sheet...Ch. 2 - Determining Financial Statement Effects of Various...Ch. 2 - Prob. 2.3PCh. 2 - Prob. 2.4PCh. 2 - Prob. 2.5PCh. 2 - Prob. 2.6PCh. 2 - Prob. 2.1APCh. 2 - Determining Financial Statement Effects of Various...Ch. 2 - Recording Transactions in T-Accounts, Preparing...Ch. 2 - Prob. 2.4APCh. 2 - Accounting for the Establishment of a New Business...Ch. 2 - Prob. 2.1CPCh. 2 - Prob. 2.2CPCh. 2 - Prob. 2.3CPCh. 2 - Prob. 2.4CPCh. 2 - Prob. 2.5CPCh. 2 - Prob. 2.6CPCh. 2 - Prob. 2.7CPCh. 2 - Prob. 2.8CP
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
- [The following information applies to the questions displayed below.] On October 1, Ebony Ernst organized Ernst Consulting: on October 3, the owner contributed $84,580 in assets in exchange for its common stock to launch the business. On October 31, the company's records show the following items and amounts. Retained eamings, October 1 as $0. $ 9,390 16,020 3,830 45,980 18,55e 9, 860 84,580 Cash dividends Cash Accounts receivable Office supplies Land Office equipment Accounts payable Common stock $ 2,650 Consulting revenue Rent expense Salaries expense Telephone expense Miscellaneous expenses 16,020 4, 190 7,570 830 650 Exercise 1-15 Preparing an Income statement LO P2 Using the above information prepare an October income statement for the business. ERN ST CON SULTING Income Statementarrow_forward[The following information applies to the questions displayed below.] On October 1, Ebony Ernst organized Ernst Consulting; on October 3, the owner contributed $84,580 in assets in exchange for its common stock to launch the business. On October 31, the company's records show the following items and amounts. Retained eamings, October 1 as $0. $ 9,390 16,020 3,830 45,980 18,550 9,060 84,580 Cash dividends Consulting revenue Rent expense Salaries expense Telephone expense Miscellaneous expenses $ 2,650 16,820 4,190 7,570 830 650 Cash Accounts receivable Office supplies Land office equipment Accounts payable Common stock Exercise 1-17 Preparlng a balance sheet LO P2 Using the above information prepare an October 31 balance sheet for Ernst Consulting. ERNST CONSULTING Balance Sheet 2$arrow_forwardRequired information [The following information applies to the questions displayed below.] On December 1, Jasmin Ernst organized Ernst Consulting. On December 3, the owner contributed $85,160 in assets in exchange for its common stock to launch the business. On December 31, the company's records show the following items and amounts. Cash Accounts receivable office supplies Office equipment Land Accounts payable Common stock ERNST CONSULTING Statement of Retained Earning Retained earnings, December 1 Add: Net income Using the above information prepare a December statement of retained earnings for Ernst Consulting. Hint: Retained Earnings on December 1 was $0. Less: Dividends $ $ 7,520 Cash dividends 17,950 4,310 19,190 46,000 9,600 85,160 $ Consulting revenue Rent expense Salaries expense Telephone expense Miscellaneous expenses $ 3,190 17,950 4,720 8,220 900 710 3,450 3,450 6,900 3,190 3,710arrow_forward
- ces Required information [The following information applies to the questions displayed below.] On October 1, Ebony Ernst organized Ernst Consulting; on October 3, the owner contributed $84,780 in assets in exchange for its common stock to launch the business. On October 31, the company's records show the following items and amounts. Retained earnings, October 1 as $0. Cash Accounts receivable Office supplies Land Office equipment Accounts payable Common stock $ 8,990 16,540 3,930 45,980 18,660 9,170 84,780 Cash dividends Consulting revenue Rent expense Salaries expense Telephone expense Miscellaneous expenses ERNST CONSULTING Statement of Retained Earnings Using the above information prepare an October statement of retained earnings for Ernst Consulting. $ 2,830 16,540 4,300 7,740 850 670 Sarrow_forwardAssume that the total assets, liabilities, Equity of the firm are OMR 40000, OMR 10000 and OMR 30000 respectively.The company sold OMR 3000 furniture for its customer and received notes receivables for OMR 4500. What is the effect of the above transaction on different elements of financial position of the company? a. Assets of the company increase by OMR 1500 and capital of the company increase by OMR 1500 b. Assets of the company decrease by OMR 3000 and capital of the company decrease by OMR 3000 c. Assets of the company increase by OMR 4500 and capital of the company increase by OMR 4500 d. None of the given optionsarrow_forwardHelp mearrow_forward
- Required information E2-9 (Algo) Analyzing the Effects of Transactions in T-Accounts LO2-4 [The following information applies to the questions displayed below.] Griffin Service Company, Incorporated, was organized by Bennett Griffin and five other investors (that is, six in total). The following activities occurred during the year: a. Received $80,000 cash from the six investors; each investor was issued 9,400 shares of common stock with a par value of $0.10 per share. b. Signed a five-year lease for $165,000 for the right to use a building each year. c. Purchased equipment for use in the business at a cost of $28,000; one-fourth was paid in cash and the company signed a note for the balance (due in six months). d. Signed an agreement with a cleaning service to pay $220 per week for cleaning the corporate offices next year. e. Received an additional contribution from investors who provided $4,000 in cash and land valued at $25,000 in exchange for 2,000 shares of stock in the company.…arrow_forwardCheck my work For each of the Items listed below, identify the approprlate financial statement element. Item Element 1 Obligation to trasfer cash or other resouices as a resut of a past transaction 2 Dividends pad try a corporaton to ts shamholders a nfow of an anset tom providing a good or service 4 The financial positon ofa company Aset 5 Increase in equity dunng a penod trom nonowner transachons 6 increase in equity from perpheral or incidental transaction Assets, liobilities and equity Comprehensive income 7. Sak of an sset uned in the operations of a businens for ess than the assets book value B The owners msidual anterest n the asets of a company An dom owneod by the company tepresenting probable future bonets 10 Revenues plus gains less expenses and osses Distribution to owners 11 n owner's contribution of cash to a corporation in eKchange for ownershp shares of stock 12 Outfow of an asset related to the production of revenuearrow_forwardPrepare the Statement of Changes in Owner's Equity for B. Maranan's Services using the following data: Service Revenues Expenses withdrawals B. Maranan, Capital, 01/01/21 Additional investments P428,235 332,432 75,000 656,000 232,500arrow_forward
- Based on the description I need to know if each example is a Proprietorship, Partnership, or Corporation.1) Bronson company presents a statement of Retained Earnings in its financial statements at year end.2) Jean Johnson’s home health care business does not have liability in its financial statement at year end3) Grand Canyon Company’s Retained Earnings balance is 5 million4) Crown Candy Company presents a statement of owner’s capital in its annual financial statement5) Statement of capital containing two capital accounts6) Par Value7) Stockholders Equity8) Partners’ capital, December 319) Statement of capital containing one capital account10) Retained Earnings11) Jones, Drawings12) Additional Paid in Capitalarrow_forwardMuster 2021 Company carried out the following four transactions during the year ended March 31, 2021. Which of the following are related party transactions according to IAS 24 Related Party Disclosures? I. Transferred goods from inventory to a shareholder owning 40% of the company's ordinary shares II. Sold a company car to the wife of the managing director III. Sold an asset to Muster 2021 Company, a sales agent IV. Took out a P1,000,000 bank loanarrow_forwardHello, I do not understand the logic in the following journal entry (advanced accounting). (Parent is 20% owner and investee company earned $200K; equity method necessary). The investment in investee debit entry is increasing the investment account to reflect investee's earnings, but isn't the Equity in investee company credit entry also increasing the equity in investee account? Investment in investee company $40,000 (debit) Equity in investee company ___________ $40,000 (credit)arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning
Survey of Accounting (Accounting I)AccountingISBN:9781305961883Author:Carl WarrenPublisher:Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning
Survey of Accounting (Accounting I)
Accounting
ISBN:9781305961883
Author:Carl Warren
Publisher:Cengage Learning
ACCOUNTING BASICS: Debits and Credits Explained; Author: Accounting Stuff;https://www.youtube.com/watch?v=VhwZ9t2b3Zk;License: Standard Youtube License