None At the beginning of the month, a company purchased a new truckfor $135,000, paying $63,000 cash and agreeing to pay the balanceover 12 months through a no-interest financing offer provided bythe car dealer. The entry to record the purchase of the truck isrecorded at month-end.What would the effect of this transaction on the company's currentmonth-end accounting equation?A. No effect on Assets; $135,000 decrease in Liabilities; $135,000increase in Stockholders' Equity.B. $66,000 increase in Assets; $66,000 increase in Liabilities; Noeffect on Stockholders' Equity.C. $135,000 increase in Assets; No effect on Liabilities; $135,000increase in Stockholders' Equity.D. No effect on Assets; $72,000 increase in Liabilities; $72,000decrease in Stockholders' Equity.

Step 1: Define Balance SheetA balance sheet is a financial statement that depicts the position of a…

Answered: At the beginning of the month, a…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Acme Inc. recognized the following transactions during their first year of business
Your examination of Sullivan Company’s records provides the following information for the December 31, year－end adjustments: 1. Bad debts are to be recorded at 2% of sales. Sales made on credit totaled $25,000 for the year. 2. Salaries at year-end that have accumulated but have not been paid total $1,400. 3. Annual straight-line depreciation for the company’s equipment is based on a cost of $30,000, an estimated life of 8 years, and an estimated residual value of $2,000. 4. Prepaid insurance in the amount of $800 has expired. 5. Interest that has been earned but not collected totals $500. 6. The company has satisfied performance obligations entitling it to rent…
Indigo Corporation had record sales in 2023. It began 2023 with an Accounts Receivable balance of $613,500 and an Allowance for Expected Credit Losses of $40,400. Indigo recognized credit sales during the year of $8,020,000 and made monthly adjusting entries equal to 0.5% of each month's credit sales to recognize the loss on impairment. Also during the year, the company wrote off $42,400 of accounts that were deemed to be uncollectible, although one customer whose $4,800 account had been written off surprised management by paying the amount in full in late September. Including this surprise receipt, $7,882,200 in cash was collected on account in 2023. To assess the reasonableness of the allowance for expected credit losses, the controller prepared the following aged listing of the receivables at December 31, 2023: Days Account Outstanding Less than 16 days Between 16 and 30 days Between 31 and 45 days Between 46 and 60 days Between 61 and 75 days Over 75 days (b) Amount $378,500…
Festivus Company has working capital of $140,680 on December 30. On December 31 it has the following transactions: 1) An account payable for $10,000 is paid off 2) An account receivable of $1,000 is written off (Festivus does not use the direct write-off method) 3) $16,600 more inventory is purchased on account. Assume a 365 day year. Sales for the period amounted to $1,700,000 and the average mark up is 25%. Required 1: What is the working capital on December 31st after all transactions took place? $[ Required 2: The working capital turnover for the period ended on December 31st is: Required 3: If Account Payable balance on December 30th is $10,000 what is the Accounts Payable Turnover? Use ending balance of AP instead of the average. Required 4: If Account Payable balance on December 30th is $10,000 what is the Days Accounts Payable are outstanding? Use ending balance of AP instead of the average. Required 5: Festivus' Gross profit percentage is (report it as multiplied by 100 to…
The following transactions were completed by Daws Company during the current fiscal year ended December 31: Jan. 29 Received 35% of the $18,100 balance owed by Kovar Co., a bankrupt business, and wrote off the remainder as uncollectible. Apr. 18 Reinstated the account of Spencer Clark, which had been written off in the preceding year as uncollectible. Journalized the receipt of $7,300 cash in full payment of Clark's account. Aug. 9 Wrote off the $6,350 balance owed by Iron Horse Co., which has no assets. Nov. 7 Reinstated the account of Vinyl Co., which had been written off in the preceding year as uncollectible. Journalized the receipt of $3,865 cash in full payment of the account. Dec. 31 Wrote off the following accounts as uncollectible (one entry): Beth Connelly Inc., $7,105; DeVine Co., $5,435; Moser Distributors, $9390; Oceanic Optics, $1,075. Dec. 31 Based on an analysis of the $1,796,000 of accounts receivable, it was estimated that $35,920 will be uncollectible. Journalized…
The following transactions were completed by Daws Company during the current fiscal year ended December 31: Jan. 29 Received 40% of the $18,200 balance owed by Kovar Co., a bankrupt business, and wrote off the remainder as uncollectible. Apr. 18 Reinstated the account of Spencer Clark, which had been written off in the preceding year as uncollectible. Journalized the receipt of $7,400 cash in full payment of Clark’s account. Aug. 9 Wrote off the $6,465 balance owed by Iron Horse Co., which has no assets. Nov. 7 Reinstated the account of Vinyl Co., which had been written off in the preceding year as uncollectible. Journalized the receipt of $3,830 cash in full payment of the account. Dec. 31 Wrote off the following accounts as uncollectible (one entry): Beth Connelly Inc., $7,190; DeVine Co., $5,510; Moser Distributors, $9,410; Oceanic Optics, $1,205. Dec. 31 Based on an analysis of the $1,820,500 of accounts receivable, it was estimated that $36,410 will be…
1. Husain Corporation has the following account it trial balance at the end of year: Accounting Receivables $ 230,000, Inventories $ 342,000, Allowances for doubtful debts $ 11,000, Long -term notes payable $ 56,000, Prepaid Rent $ 13,000, Unearned fee $ 5,000, Cash $ 46,000, Trading Securities $ 32,000. Prepare current assets section of the balance sheet.
On January 1, 2021, the general ledger of TNT Fireworks includes the following account balances: During January 2021, the following transactions occur:January 1 Purchase equipment for $19,500. The company estimates a residual value of $1,500 and a five-year service life. January 4 Pay cash on accounts payable, $9,500. January 8 Purchase additional inventory on account, $82,900. January 15 Receive cash on accounts receivable, $22,000 January 19 Pay cash for salaries, $29,800. January 28 Pay cash for January utilities, $16,500. January 30 Firework sales for January total $220,000. All of these sales are on account. The cost of the units sold is $115,000. Required: 1. Record each of the transactions listed above. 2. Record adjusting entries on January 31. a. Depreciation on the equipment for the month of January is calculated using the straightline method. b. At the end of January, $3,000 of accounts receivable are past due, and the company estimates that 50% of these accounts will…
The following transactions were completed by Daws Company during the current fiscal year ended December 31:Jan. 29. Received 35% of the $9,000 balance owed by Kovar Co., a bankrupt business, and wrote off the remainder as uncollectible.Apr. 18. Reinstated the account of Spencer Clark, which had been written off in the preceding year as uncollectible. Journalized the receipt of $4,000 cash in full payment of Clark’s account.Aug. 9. Wrote off the $11,850 balance owed by Iron Horse Co., which has no assets.Nov. 7. Reinstated the account of Vinyl Co., which had been written off in the preceding year as uncollectible. Journalized the receipt of $7,000 cash in full payment of the account.Dec. 31. Wrote off the following accounts as uncollectible (one entry): Beth Connelly Inc., $12,100; DeVine Co., $8,110; Moser Distributors, $21,950; Oceanic Optics, $10,000.31. Based on an analysis of the $1,450,000 of accounts receivable, it was estimated that $60,000 will be uncollectible. Journalized the…

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