During 2022, its first year of operations as a delivery service, Novak Corp, entered into the following transactions. 1. Issued shares of common stock to investors in exchange for $122,000 in cash. 2. Borrowed $48,000 by issuing bonds. 3. Purchased delivery trucks for $52,000 cash. 4. Received $16,000 from customers for services performed. 5. Purchased supplies for $4,700 on account. 6. Paid rent of $5,800. 7. Performed services on account for $11,800. 8. Paid salaries of $26,700. 9. Paid a dividend of $11,500 to shareholders. Using the following tabular analysis, show the effect of each transaction on the accounting equation. Put explanations for changes to Stockholders' Equity in the far right column. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced, see Illustration 3-4 for example)

During 2022, its first year of operations as a delivery service, Novak Corp, entered into the following transactions. 1. Issued shares of common stock to investors in exchange for $122,000 in cash. 2. Borrowed $48,000 by issuing bonds. 3. Purchased delivery trucks for $52,000 cash. 4. Received $16,000 from customers for services performed. 5. Purchased supplies for $4,700 on account. 6. Paid rent of $5,800. 7. Performed services on account for $11,800. 8. Paid salaries of $26,700. 9. Paid a dividend of $11,500 to shareholders. Using the following tabular analysis, show the effect of each transaction on the accounting equation. Put explanations for changes to Stockholders' Equity in the far right column. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced, see Illustration 3-4 for example)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

On October 31, 2021, Bundle Company engaged in the following transactions: (1) Obtained a P500,000, six-month loan from City Bank, discounted at 12%. The company pledged P500,000 of accounts receivable as security for the loan. What is the total cash received from the financing of receivables?
Question (I got $44,000... correct?): Riley Company began operations on August 1, 2026 and entered into the following transactions during 2026: 1. On August 1, Riley Company sold common stock to owners in the amount of $60,000 and borrowed $48,000 from a local bank on a 10-month, 10% note payable. 2. On August 14, Riley Company purchased inventory for $42,000 cash. 3. On September 1, Riley Company purchased a 3-year insurance policy for $27,000 cash. 4. On September 19, Riley Company purchased land for $30,000 cash. 5. On October 28, Riley Company sold two-thirds of the inventory that was purchased on August 14 to a customer for $62,000 cash. 6. On December 3, Riley Company sold the land that was purchased on September 19 for $19,000 cash. 7. On December 31, Riley recorded all necessary adjusting entries. Calculate the amount of total expenses reported in Riley Company's 2026 income statement after all of the above transactions have been recorded and posted.
The following transactions apply to Hooper Co. for 2018, its first year of operations: Issued $60,000 of common stock for cash. Provided $90,000 of services on account. Collected $78,000 cash from accounts receivable. Loaned $20,000 to Mosby Co. on November 30, 2018. The note had a one-year term to maturity and a 6 percent interest rate. Paid $26,000 of salaries expense for the year. Paid a $2,000 dividend to the stockholders. Recorded the accrued interest on December 31, 2018 (see item 4). Estimated that 1 percent of service revenue will be uncollectible Prepare the income statement, balance sheet, and statement of cash flows for 2018.
Freeman, Inc. began operations on January 1, 2020. During 2020, the company engaged in the following cash transactions: 1) issued stock for $74,000 2) borrowed $42.000 from its bank 3) provided consulting services for $72,000 4) paid back $32,000 of the bank loan 5) paid rent expense for $17,500 6) purchased equipment costing $29,000 7) paid $4,700 dividends to stockholders 3) paid employees' salaries, $38,000 What is Freeman's net cash flow from investing activities? Multiple Choice Outflow of $55,700 Inflow of $45,000 Outflow of $29,000
Skysong, Inc. had the following transactions involving current assets and current liabilities during February 2019. Feb. 3 Collected accounts receivable of $18,900. 7 Purchased equipment for $36,800 cash. 11 Paid $3,500 for a 1-year insurance policy. 14 Paid accounts payable of $12,400. 18 Declared cash dividends, $8,500. Additional information:As of February 1, 2019, current assets were $135,000 and current liabilities were $35,400.Compute the current ratio as of the beginning of the month and after each transaction. (Round all answers to 2 decimal places, e.g. 1.83 : 1.) Current ratio as of February 1, 2019 enter current ratio :1 Feb. 3 enter the current ratio as of February 3 :1 Feb. 7 enter the current ratio as of February 7 :1 Feb. 11 enter the current ratio as of February 11 :1 Feb. 14 enter the current ratio as of February 14 :1 Feb. 18 enter the current ratio as of February 18 :1
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.
On June 30, 2019, Franz Inc. borrowed P1,800,000 for one year from the bank with an interest of 12%. As security for the loan, Franz pledged its accounts receivable amounting to P2,500,000 to the bank. The bank charged the company 8.46% of the accounts receivable pledged as service charge deducted from the amount borrowed. How much was the cash received by the company and the interest expense recognized for the year ended December 31, 2019? a. P 1,800,000; 211,500 b. P 1,548,000; 306,000 c. P 1,588,500; P 319,500 d. P 1,584,000; P 306,000 e. P 1,588,500; P 324,000 f. P 1,584,000; P 216,000
The following transactions occurred for the Microchip Company. 1. On October 1, 2021, Microchip lent $98,000 to another company. A note was signed with principal and 9% interest to be paid on September 30, 2022. 2. On November 1, 2021, the company paid its landlord $11,700 representing rent for the months of November through January. Prepaid rent was debited. 3. On August 1, 2021, collected $17,700 in advance rent from another company that is renting a portion of Microchip's factory. The $17,700 represents one year's rent and the entire amount was credited to deferred rent revenue. 4. Depreciation on office equipment is $6,400 for the year. 5. Vacation pay for the year that had been earned by employees but not paid to them or recorded is $9,900. The company records vacation pay as salaries expense. 6. Microchip began the year with $3,900 in its asset account, supplies. During the year, $8,400 in supplies were purchased and debited to supplies. At year-end, supplies costing $4,200…
1. On June 30, 2019, Franz Inc. borrowed P1,800,000 for one year from the bank with an interest of 12%. As security for the loan, Franz pledged its accounts receivable amounting to P2,500,000 to the bank. The bank charged the company 8.46% of the accounts receivable pledged as service charge deducted from the amount borrowed. How much was the cash received by the company and the interest expense recognized for the year ended December 31, 2019? A. P 1,800,000; 211,500 B. P 1,548,000; 306,000 C. P 1,588,500; P 319,500 D. P 1,584,000; P 306,000 E. P 1,588,500; P 324,000 F. P 1,584,000; P 216,000 G. None of the choices
Cone Corporation is in the process of preparing its December 31, 2024, balance sheet. There are some questions as to the proper classification of the following items: a. $68,000 in cash restricted in a savings account to pay debt. The debt matures in 2028. b. Prepaid rent of $42,000, covering the period January 1, 2025, through December 31, 2026. c. Notes payable of $236,000. The notes are payable in annual installments of $38,000 each, with the first installment payable on March 1, 2025. d. Accrued interest payable of $30,000 related to the notes payable is due June 30, 2025. e. Investment in equity securities of other corporations, $116,000. Cone intends to sell one-half of the securities in 2025. Required: Prepare the asset and liability sections of a classified balance sheet to show how each of the above items should be reported. X Answer is not complete. CONE CORPORATION Balance Sheet (Partial) At December 31, 2024 Current assets: Prepaid rent Investment in equity securities…
The following summarized transactions occurred in December 2020 in Syco Co. Dec 1 Purchased plant and equipment for $515 in cash. 2 Borrowed $758 from a bank, signing a note payable. 5 Provided $37,522 in service to customers, with $27,250 on account and the rest received in cash. 9 Paid $4,300 cash on accounts payable. 14 Purchased $30,449 inventory on account. 18 Paid salaries, $3,500. 22 Received $37,410 on account paid by customers. 26 Purchased and used fuel of $750 in delivery vehicles during the year (paid for in cash). 31 Incurred $68 in utility usage during the year; paid $55 in cash and owed the rest on account. Required: Prepare journal entries for those transactions.