Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN: 9781305654174
Author: Gary A. Porter, Curtis L. Norton
Publisher: Cengage Learning
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Chapter 3, Problem 3.13MCP
Neveranerror Inc. was organized on June 2 by a group of accountants to provide accounting and tax services to small businesses. The following transactions occurred during the first month of business:
June 2: Received contributions of $10,000 from each of the three owners of the business in exchange for shares of stock.
June 5: Purchased a computer system for $12,000. The agreement with the vendor requires a down payment of $2,500 with the balance due in 60 days.
June 8: Signed a two-year promissory note at the bank and received cash of $20,000.
June 15: Billed $12,350 to clients for the first half of June. Clients are billed twice a month for services performed during the month, and the bills are payable within ten days.
June 17: Paid a $900 bill from the local newspaper for advertising for the month of June.
June 23: Received the amounts billed to clients for services performed during the first half of the month.
June 28: Received and paid gas, electric, and water bills. The total amount is $2,700.
June 29: Received the landlord’s bill for $2,200 for rent on the office space that Neveranerror leases. The bill is payable by the 10th of the following month.
June 30: Paid salaries and wages for June. The total amount is $5,670.
June 30: Billed $18,400 to clients for the second half of June.
June 30: Declared and paid dividends in the amount of $6,000.
Required
- Prepare journal entries on the books of Neveranerror Inc. to record the transactions entered into during the month. Ignore
depreciation expense and interest expense. - Prepare a trial balance at June 30.
- Prepare the following financial statements:
- Income statement for the month of June
- Statement of
retained earnings for the month of June - Classified balance sheet at June 30
- Assume that you have just graduated from college and have been approached to join this company as an accountant. From your reading of the financial statements for the first month, would you consider joining the company? Explain your answer. Limit your answer to financial considerations only.
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Chapter 3 Solutions
Financial Accounting: The Impact on Decision Makers
Ch. 3 - Read each definition below and write the number of...Ch. 3 - Types of Events For each of the following events,...Ch. 3 - Prob. 3.2ECh. 3 - The Effect of Transactions on the Accounting...Ch. 3 - Types of Transactions There are three elements to...Ch. 3 - Balance Sheet Accounts and Their Use Choose from...Ch. 3 - Normal Account Balances Each account has a normal...Ch. 3 - Prob. 3.7ECh. 3 - Prob. 3.8ECh. 3 - Trial Balance The following list of accounts was...
Ch. 3 - Journal Entries Recorded Directly in T Accounts...Ch. 3 - Prob. 3.11MCECh. 3 - Determining an Ending Account Balance Jessies...Ch. 3 - Reconstructing a Beginning Account Balance During...Ch. 3 - Journal Entries Prepare the journal entry to...Ch. 3 - Journal Entries Following is a list of...Ch. 3 - Journal Entries for Vail Resorts Refer to the...Ch. 3 - Prob. 3.17MCECh. 3 - Prob. 3.1PCh. 3 - Transaction Analysis and Financial Statements Just...Ch. 3 - Transaction Analysis and Financial Statements...Ch. 3 - Transactions Reconstructed from Financial...Ch. 3 - Prob. 3.5MCPCh. 3 - Prob. 3.6MCPCh. 3 - Transaction Analysis and Journal Entries Recorded...Ch. 3 - Prob. 3.8MCPCh. 3 - Journal Entries Atkins Advertising Agency began...Ch. 3 - Prob. 3.10MCPCh. 3 - The Detection of Errors in a Trial Balance and...Ch. 3 - Journal Entries, Trial Balance, and Financial...Ch. 3 - Journal Entries, Trial Balance, and Financial...Ch. 3 - Prob. 3.1APCh. 3 - Prob. 3.2APCh. 3 - Prob. 3.3APCh. 3 - Transactions Reconstructed from Financial...Ch. 3 - Prob. 3.5AMCPCh. 3 - Accounts Used to Record Transactions A list of...Ch. 3 - Prob. 3.7AMCPCh. 3 - Trial Balance and Financial Statements Refer to...Ch. 3 - Journal Entries Castle Consulting Agency began...Ch. 3 - Prob. 3.10AMCPCh. 3 - Entries Prepared from a Trial Balance and Proof of...Ch. 3 - Journal Entries Overnight Delivery Inc. is...Ch. 3 - Journal Entries and a Balance Sheet Krittersbegone...Ch. 3 - Prob. 3.1DCCh. 3 - Prob. 3.2DCCh. 3 - Prob. 3.3DCCh. 3 - Prob. 3.4DCCh. 3 - Prob. 3.5DCCh. 3 - Prob. 3.6DCCh. 3 - Prob. 3.7DC
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