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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Textbook Question
Chapter 3, Problem 3.7MCP
Transaction Analysis and
Four brothers organized Beverly Entertainment Enterprises on October 1. The following transactions occurred during the first month of operations:
October 1: Received contributions of $10,000 from each of the four principal owners of the new business in exchange for shares of stock.
October 2: Purchased the Ace Theater for $125,000. The seller agreed to accept a down payment of $12,500 and a seven-year promissory note for the balance. The Ace property consists of land valued at $35,000, and a building valued at $90,000.
October 3: Purchased new seats for the theater at a cost of $5,000, paying $2,500 down and agreeing to pay the remainder in 60 days.
October 12: Purchased candy, popcorn, cups, and napkins for $3,700 on an open account. The company has 30 days to pay for the concession supplies.
October 13: Sold tickets for the opening-night movie for cash of $1,800 and took in $2,400 at the concession stand.
October 17: Rented out the theater to a local community group for $1,500. The community group is to pay one-half of the bill within five working days and has 30 days to pay the remainder.
October 23: Received 50% of the amount billed to the community group.
October 24: Sold movie tickets for cash of $2,000 and took in $2,800 at the concession stand.
October 26: The four brothers, acting on behalf of Beverly Entertainment, paid a dividend of $750 on the shares of stock owned by each of them, or $3,000 in total.
October 27: Paid $500 for utilities.
October 30: Paid wages and salaries of $2,400 total to the ushers, projectionist, concession stand workers, and maintenance crew.
October 31: Sold movie tickets for cash of $1,800 and took in $2,500 at the concession stand.
Required
- Prepare a table to summarize the preceding transactions as they affect the
accounting equation. Use the format in Exhibit 3-1. Identify each transaction with a date. - Record each transaction directly in T accounts using the dates preceding the transactions to identify them in the accounts. Each account involved in the problem needs a separate T account.
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during the fiscal year ended december 31, duckworth corporation engaged in the following transactions involving notes payable: sept. 16. purchased office equipment from earthtime equipment. the invoice amount was $24,000, and earthtime agreed to accept, as full payment, on 12%, three-month note for the invoice amount. nov. 1. borrowed $100,000 from sandra duckworth, a major corporate stockholder. the corporation issued duckworth a $100,000, 15%, 120-day note payable. dec. 1. purchased merchandise inventory in the amount of $5,000 from teller corporation. teller accepted a 90-day, 14% note as a full settlement of the purchase. duckworth corporation uses a perpetual inventory system. dec. 16. the $24,000 note payable to earthtime equipment matured today. duckworth paid the accrued interest on this note and issued a new 30-day, 16% note payable in the amount of $24,000 to replace the note that matured. instructions: a. prepare journal entries (in general journal form) to record the above…
During the fiscal year ended December 31, Duckworth Corporation engaged in the
following transactions involving notes payable:
Sept. 16. Purchased office equipment from Earthtime Equipment. The invoice amount
was $24,000, and Earthtime agreed to accept, as full payment, on 12%, three-month
note for the invoice amount.
Nov. 1. Borrowed $100,000 from Sandra Duckworth, a major corporate stockholder.
The corporation issued Duckworth a $100,000, 15%, 120-day note payable.
Dec. 1. Purchased merchandise inventory in the amount of $5,000 from Teller
Corporation. Teller accepted a 90-day, 14% note as a full settlement of the purchase.
Duckworth Corporation uses a perpetual inventory system.
Dec. 16. The $24,000 note payable to Earthtime Equipment matured today. Duckworth
paid the accrued interest on this note and issued a new 30-day, 16% note payable in
the amount of $24,000 to replace the note that matured.
During the year ended December 31, SC engaged in the following transactions involving notes payable.
Aug. 6 Borrowed $12,000 from MGB, signing a 45-day, 12 percent note payable
Sept. 16 Purchased office equipment from Seawald Equipment. The invoice amount was $18,000, and Seawald agreed to accept, as full payment, a 10 percent, 3 months note for the invoice amount.
Sept. 20 Paid MGB the note plus accrued interest.
Nov. 1 Borrowed $250,000 from Mike Swanson, a major corporate stockholder. The corporation issued Swanson a $250,000, 15 percent, 90 day note payable.
Dec. 1 Purchased merchandise inventory in the amount of $5,0000 from Gathman Corporation. Gathman accepted a 90-day, 14 percent note as full settlement of the purchase. Swanson corporation uses perpetual inventory system.
Dec. 16 The $18,000 note payable to replace the note that matured.
Prepare journal entries (in general journal form) to record these transactions. Use a 360-day year in making the interest calculation
Prepare…
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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