Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN: 9781305654174
Author: Gary A. Porter, Curtis L. Norton
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 3, Problem 3.9MCP
Atkins Advertising Agency began business on January 2. The transactions entered into by Atkins during its first month of operations are as follows:
- Acquired its articles of incorporation from the state and issued 100,000 shares of capital stock in exchange for $200,000 in cash.
- Purchased an office building for $150,000 in cash. The building is valued at $110,000, and the remainder of the value is assigned to the land.
- Signed a three-year promissory note at the bank for $125,000.
- Purchased office equipment at a cost of $50,000, paying $10,000 down and agreeing to pay the remainder in ten days.
- Paid wages and salaries of $13,000 for the first half of the month. Office employees are paid twice a month.
- Paid the balance due on the office equipment.
- Sold $24,000 of advertising during the first month. Customers have until the 15th of the following month to pay their bills.
- Paid wages and salaries of $15,000 for the second half of the month.
- Recorded $3,500 in commissions earned by the salespeople during the month. They will be paid on the fifth of the following month.
Required
Prepare in journal form the entry to record each transaction.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
Prepare the journal entry for the following transaction.
Apr. 15 Last year, Titan Corporation's board of directors appropriated $150,000 for the purchase of a new storage facility over a three-
year period. This year's appropriation for $50,000 was made on this date.
If an amount box does not require an entry, leave it blank.
POST.
DATE
DESCRIPTION
DEBIT CREDIT
REF.
1 Apr. 15
2
During the current year, Cartwright Corporation’s accountant recorded numerous transactions in an account entitled Intangible Assets, as follows:
Jan. 2
Paid incorporation fees.
$17,500
11
Paid legal fees for the organization of the company.
7,500
25
Paid for large-scale advertising campaign for the year.
15,000
Apr. 1
Acquired land for $15,000 and a building for $20,000 to house the R&D activities. The building has a 20-year life.
35,000
May 15
Purchased materials exclusively for use in R&D activities. Of these materials, 20% are left at the end of the year and will be used in the same project next year. (They have no alternative use.)
15,000
June 30
Paid expenses related to obtaining a patent.
10,000
Dec. 11
Purchased an experimental machine from an inventor. The machine is expected to be used for a particular R&D activity for 2 years, after which it will have no residual value.
12,000
31
Paid salaries of employees involved in R&D.
30,000…
Transactions for the first 3-month period of calendar year 2021 for Sta Cruz Branch of XYZ Company.
Home Office put up a branch with initial investment of cash 400,000; and equipment 180,000, and furniture & fixtures, 100,000, both to be booked in the branch.
Home office purchased equipment for use by the branch and to be carried in the Home Office books. Acquisition cost is 80,000.
Branch purchased 160,000 worth of merchandise for 50% cash and balance on account. Delivery charge of 3,000 paid by the branch.
Home Office ordered office table and chairs worth 20,000 to be carried in branch books. The branch paid cash for the items upon delivery directly to the branch. Delivery charge of 800 was also paid by the branch.
Branch purchased computers and printers worth 110,000 for use of the branch and to be booked in the Home Office.
Home Office transferred merchandise worth 320,000. Home Office paid for the freight of 5,000 to be taken up in branch books.
Branch total sales to date on…
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
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
- Journal Entries Following is a list of transactions entered into during the first month of operations of Gardener Corporation, a new landscape service. Prepare in journal form the entry to record each transaction. April 1: Articles of incorporation are filed with the state, and 100,000 shares of common stock are issued for $100,000 in cash. April 4: A six-month promissory note is signed at the bank. Interest at 9% per annum will be repaid in six months along with the principal amount of the loan of $50,000. April 8: Land and a storage shed are acquired for a lump sum of $80,000. On the basis of an appraisal, 25% of the value is assigned to the land and the remainder to the building. April 10: Mowing equipment is purchased from a supplier at a total cost of $25,000. A down payment of $10,000 is made, with the remainder due by the end of the month. April 18: Customers are billed for services provided during the first half of the month. The total amount billed of $5,500 is due within ten days. April 27: The remaining balance due on the mowing equipment is paid to the supplier. April 28: The total amount of $5,500 due from customers is received. April 30: Customers are billed for services provided during the second half of the month. The total amount billed is $9,850. April 30: Salaries and wages of $4,650 for the month of April are paid.arrow_forwardJournal Entries, Trial Balance, and Financial Statements Blue Jay Delivery Service is incorporated on January 2 and enters into the following transactions during its first month of operations: January 2: Filed articles of incorporation with the state and issued 100,000 shares of capital stock. Cash of $100,000 is received from the new owners for the shares. January 3: Purchased a warehouse and land for $80,000 in cash. An appraiser values the land at $20,000 and the warehouse at $60,000. January 4: Signed a three-year promissory note at Third State Bank in the amount of $50,000. January 6: Purchased five new delivery trucks for a total of $45,000 in cash. January 31: Performed services on account that amounted to $15,900 during the month. Cash amounting to $7,490 was received from customers on account during the month. January 31: Established an open account at a local service station at the beginning of the month. Purchases of gas and oil during January amounted to $3,230. Blue Jay has until the 10th of the following month to pay its bill. Required Prepare journal entries on the books of Blue Jay to record the transactions entered into during the month. Prepare a trial balance at January 31. Prepare an income statement for the month of January. Prepare a classified balance sheet at January 31. Assume that you are considering buying stock in this company. Beginning with the transaction to record the purchase of the property on January 3, list any additional information you would like to have about each of the transactions during the remainder of the month.arrow_forwardTransactions for the first 3-month period of calendar year 2021 for Sta Cruz Branch of XYZ Company. 1. Home Office put up a branch with initial investment of cash 400,000; and equipment 180,000, and furniture & fixtures, 100,000, both to be booked in the branch. 2. Home office purchased equipment for use by the branch and to be carried in the Home Office books. Acquisition cost is 80,000. 3. Branch purchased 160,000 worth of merchandise for 50% cash and balance on account. Delivery charge of 3,000 paid by the branch. 4. Home Office ordered office table and chairs worth 20,000 to be carried in branch books. The branch paid cash for the items upon delivery directly to the branch. Delivery charge of 800 was also paid by the branch. 5. Branch purchased computers and printers worth 110,000 for use of the branch and to be booked in the Home Office. 6. Home Office transferred merchandise worth 320,000. Home Office paid for the freight of 5,000 to be taken up in branch books. 7. Branch total…arrow_forward
- Felicia Company acquired 21,000 of the 60,000 shares of outstanding common stock of NuecesCorporation as a long-term investment. The annual accounting period for both companies endsDecember 31. The following transactions occurred during the year:Jan. 10 Purchased 21,000 shares of Nueces common stock at $12 per share.Dec. 31 Nueces Corporation reported net income of $90,000.Dec. 31 Nueces Corporation declared and paid a cash dividend of $0.60 per share.Dec. 31 Determined the fair value of Nueces stock to be $11 per share.Required:1. What accounting method should the company use? Why?2. Give the journal entries for each of these transactions. If no entry is required, explain why.3. Show how the long-term investment and the related revenue should be reported on the financial statements of Felicia Company.arrow_forwardDuring the year, Cartwright Corporation’s accountant recorded numerous transactions in an account entitled Intangible Assets, as follows: Jan. 2 Paid incorporation fees. $17,500 11 Paid legal fees for the organization of the company. 7,500 25 Paid for large-scale advertising campaign for the year. 15,000 Apr. 1 Acquired land for $15,000 and a building for $20,000 to house the R&D activities. The building has a 20-year life and no residual value. 35,000 May 15 Purchased materials exclusively for use in R&D activities. Of these materials, 20% are left at the end of the year and will be used in the same project next year. (They have no alternative use.) 15,000 June 30 Paid expenses related to obtaining a patent. 10,000 Dec. 11 Purchased an experimental machine from an inventor. The machine is expected to be used for a particular R&D activity for 2 years, after which it will have no residual value. 12,000…arrow_forwardDuring the year, Cartwright Corporation’s accountant recorded numerous transactions in an account entitled Intangible Assets, as follows: Jan. 2 Paid incorporation fees. $17,500 11 Paid legal fees for the organization of the company. 7,500 25 Paid for large-scale advertising campaign for the year. 15,000 Apr. 1 Acquired land for $15,000 and a building for $20,000 to house the R&D activities. The building has a 20-year life. 35,000 May 15 Purchased materials exclusively for use in R&D activities. Of these materials, 20% are left at the end of the year and will be used in the same project next year. (They have no alternative use.) 15,000 June 30 Paid expenses related to obtaining a patent. 10,000 Dec. 11 Purchased an experimental machine from an inventor. The machine is expected to be used for multiple projects over a course of 10 years, after which it will have a residual value of $1,000. 12,000 31 Paid…arrow_forward
- 2. January 1, John Smith formed a corporation. Record the following transactions that took place during the year ended December 31, 1990 on the attached sheet. The corporation records transactions on an accrual basis. Record contribution of $25,000 cash for Capital Stock. Leased a building at a cost of $10,000 per year on 1/1/90. Purchased inventory for resale at a cost of $20,000 payable June 15, 1991. Sold one-fourth of the inventory for $5,000 cash and $5,000 on account. Collected $2,500 on account. Paid salaries as follows: Gross Pay $954 158 Federal withholding FICA withholding Net Pay 46 $750 Paid taxes withheld and company's share of FIICA ($46) to the government. Transaction for the Year Credits Debits Cash Accounts Receivable Inventory Accounts Payable Accrued Payroll Taxes Capital Stock Retained Earning (Net Income) Sales Cost of Sales Salaries Payroll Taxes Lease Expense Income Taxes Total Transactionsarrow_forwardPrepare general journal entries for the following transactions, identifying each transaction by letter: (a) Gnu Company issued 5,000 shares of 1 par common stock to the Prendergas law firm as partial payment of fees incurred to incorporate the business. Gnu was short of cash, so Prendergas agreed to accept 10,000 cash and the shares of common stock in full settlement of its bill for 55,000. (b) Gnu issued 50,000 shares of 1 par common stock in exchange for a parcel of land for building a shopping plaza. (The list price for the land was 400,000; a similar parcel in the same area sold last week for 380,000. During the past month, the price at which Gnus common stock has traded on the open market has ranged from 5 to 12 per share. Two trades occurred yesterday at 7 and 10 per share.) (c) Gnu purchased 10,000 shares of 1 par value common treasury stock for 70,000. (This is the only treasury stock that Gnu holds.) (d) Gnu sold 4,000 shares of common treasury stock for 32,000. (e) Gnu sold 5,000 shares of common treasury stock for 30,000.arrow_forwardBata Corporation a calendar year c Corporation was formed and began operaions on Apill1, 2022. The following expenses were incurred during the first year (April 1 through December 31) Expenses of temporary directions and of organizational meetings $27000 Fee paid to the state of incorporation 1,000 Accounting services incident to organization 15,500 Legal services for drawing the corporate charter and bylaws 10,500 Expenses incident to the printing and sale of stock certificates 6,000 Assuming a § 248 election, what is the Baba's immediate expense under organizational expenditures for 2022?arrow_forward
- Freitas Corporation was organized early in 2024. The following expenditures were made during the first few months of the year: Attorneys’ fees in connection with the organization of the corporation $ 12,200 State filing fees and other incorporation costs 3,200 Purchase of a patent 20,100 Legal and other fees for transfer of the patent 2,200 Purchase of equipment 30,100 Preopening salaries and employee training 40,100 Total $ 107,900 Required: Prepare a summary journal entry to record the $107,900 in cash expenditures. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.arrow_forwardPrepare the journal entry for the following transaction. Apr. 15 Last year, Titan Corporation's board of directors appropriated $150,000 for the purchase of a new storage facility over a three-year period. This year's appropriation for $50,000 was made on this date. arrow_forwardOn January 1 of the current year, a company began construction of an office building to be used as its corporate headquarters. The building was completed early in the following year Construction expenditures for the current year, which were incurred evenly throughout the year, totaled $6,900,000. The company had the following debt obligations which were outstanding during all of the current year Construction loan, 10% Long-term note, 9% Long-term note, 6% 4 $1,725,000 2,300,000 4,600,000 Required: Calculate the amount of interest capitalized in the current year for the building using the specific interest method. terest capitalizedarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning
College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning
College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,
7.2 Ch 7: Notes Payable and Interest, Revenue recognition explained; Author: Accounting Prof - making it easy, The finance storyteller;https://www.youtube.com/watch?v=wMC3wCdPnRg;License: Standard YouTube License, CC-BY