The following events apply to Gulf Seafood for the Year 1 fiscal year: 1. The company started when it acquired $17,000 cash by issuing common stock. 2. Purchased a new cooktop that cost $15,400 cash. 3. Earned $21,800 in cash revenue. 4. Paid $11,700 cash for salaries expense. 5. Adjusted the records to reflect the use of the cooktop. Purchased on January 1, Year 1, the cooktop has an expected useful life of four years and an estimated salvage value of $2,600. Use straight-line depreciation. The adjusting entry was made as of December 31, Year 1. Required a. Record the above transactions in a horizontal statements model. b. What amount of depreciation expense would Gulf Seafood report on the Year 1 income statement? c. What amount of accumulated depreciation would Gulf Seafood report on the December 31, Year 2, balance sheet? d. Would the cash flow from operating activities be affected by depreciation in Year 1?
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- Statsen Company, which prepares financial reports at the end of the calendar year, established a branch on July 1, 2020. The following transactions occurred during the formation of the branch and its first six months of operations, ending December 31, 2020. 1. The Home Office sent $35,000 cash to the branch to begin operations. 2. The Home Office shipped inventory to the branch. Intercompany billings totaled $75,000, which was the Home Office's cost. 3. The branch acquired merchandise display equipment which cost $15,000 on July 1, 2020. (Assume that branch fixed assets are carried on the home office books). 4. The branch purchased inventory costing $53,750 from outside vendors on account. 5. The branch had credit sales of $106,250 and cash sales of $43,750. Requirements: 1. Prepare journal entries in the books of the home office and in the books of the branch office for the above transactionThe following transactions occurred during 2021 for the Beehive Honey Corporation: Feb. 1 Borrowed $12,000 from a bank and signed a note. Principal and interest at 10% will be paid on January 31, 2022. Apr. 1 Paid $3,600 to an insurance company for a two-year fire insurance policy. July 17 Purchased supplies costing $2,800 on account. The company records supplies purchased in an asset account. At the year-end on December 31, 2021, supplies costing $1,250 remained on hand. Nov. 1 A customer borrowed $6,000 and signed a note requiring the customer to pay principal and 8% interest on April 30, 2022. Required:1. Record each transaction in general journal form.2. Prepare any necessary adjusting entries at the year-end on December 31, 2021. No adjusting entries were recorded during the year for any item.Jack Hammer Company completed the following transactions. The annual accounting period ends December 31. April 30 Received $672,000 from Commerce Bank after signing a 12-month, 9.00 percent, promissory note. June 6 Purchased merchandise on account at a cost of $81,000. (Assume a perpetual inventory system.) July 15 Paid for the June 6 purchase. August 31 Signed a contract to provide security service to a small apartment complex starting in September, and collected six months' fees in advance, amounting to $27,000. December 31 Determined salary and wages of $46,000 were earned but not yet paid as of December 31 (ignore payroll taxes). December 31 Adjusted the accounts at year-end, relating to interest. December 31 Adjusted the accounts at year-end, relating to security service. Required: 1. For each listed transaction and related adjusting entry, indicate the accounts, amounts, and effects on the accounting equation. 2. For each item, indicate whether the debt-to-assets ratio is…
- Jack Hammer Company completed the following transactions. The annual accounting period ends December 31. Apr. 30 Received $600,000 from Commerce Bank after signing a 12-month, 6 percent, promissory note. June 6 Purchased merchandise on account at a cost of $75,000. (Assume a perpetual inventory system.) July 15 Paid for the June 6 purchase. Aug. 31 Signed a contract to provide security service to a small apartment complex starting in September, and collected six months’ fees in advance, amounting to $24,000. Dec. 31 Determined salary and wages of $40,000 were earned but not yet paid as of December 31 (ignore payroll taxes). Dec. 31 Adjusted the accounts at year-end, relating to interest. Dec. 31 Adjusted the accounts at year-end, relating to security service. Required: For each listed transaction and related adjusting entry, indicate the accounts, amounts, and effects on the accounting equation. For each item, indicate whether the debt-to-assets ratio is increased or decreased or there…Lowell Company sells swimming pool supplies and equipment. The majority of Lowell's customers are small, family-owned businesses. Assume that Lowell Corporation completed the following transactions during the current year. Lowell's fiscal year ends on December 31. September 15 October 1 October 5 October 15 December 12 December 31 Required: Paid a supplier $129,500 for inventory previously purchased on credit. Borrowed $904,500 from Mass Bank for general use; signed an 11-month, 5% annual interest-bearing note for the money. Received a $42,250 customer deposit from Jim Scanlon for services to be performed in the future. Performed $19,800 of the services paid for by Mr. Scanlon. Received electric bill for $12,450. Lowell plans to pay the bill in early January. Determined wages of $52,900 earned but not yet paid on December 31 (disregard payroll taxes). 1.&2. Prepare journal entries for each of these transactions.Jack Hammer Company completed the following transactions. The annual accounting period ends December 31. Apr. 30 Received $465,000 from Commerce Bank after signing a 12-month, 7 percent, promissory note. June 6 Purchased merchandise on account at a cost of $66,000. (Assume a perpetual inventory system.) July 15 Paid for the June 6 purchase. Aug. 31 Signed a contract to provide security service to a small apartment complex starting in September, and collected six months' fees in advance amounting to $18,600. Dec. 31 Determined salary and wages of $31,000 were earned but not yet paid as of December 31 (ignore payroll taxes). Dec. 31 Adjusted the accounts at year-end, relating to interest. Dec. 31 Adjusted the accounts at year-end, relating to security service. Required: 1. & 2. Make journal entries for each of the transactions through August 31 and adjusting entries required on December 31. 3. Show how all of the liabilities arising from these items are reported on the balance sheet…
- A company has a fiscal year-end of Dec. 31: (1) On Oct. 1, $12,000 was paid for a one-year fire insurance policy;(2) On June 30 the company advanced its cheif financial officer $10,000; principle and interest at 6% on the note are due in on eyear(3) Equipment costing $60,000 was purchases at the beginning of the year for cash. Depreciation on the equipment is $12,000 per year.If the adjusting entries were not recorded, would net income be higher or lower and by how much?Crane-on Ltd. sells rock-climbing products and operates an indoor climbing facility for climbing enthusiasts. On July 1, 2021, Crane-on received a three-month $22,000 bank loan from City Credit Union due on September 30, 2021, and bearing interest at 3%. Interest is payable at maturity. The company records adjusting entries annually at its year end, December 31. During the next four months, Crane-on incurred the following: Sept. 1 Purchased inventory on account for $17,000 from Black Diamond, terms n/30. The company uses a perpetual inventory system. 30 Repaid the $22,000 bank loan payable to City Credit Union (see opening balance), as well as any interest owed. Oct. 1 Issued a six-month, 4%, $17,000 note payable to Black Diamond in exchange for the account payable (see September 1 transaction). Interest is payable on the first of each month. 2 Borrowed $20,000 cash from Montpelier Bank for 12 months at 3% to finance the building of a new climbing area for advanced climbers. Interest…The following information was drawn from the accounting records of Chapin Company. 1. On January 1, Year 1, Chapin paid $56,000 cash to purchase a truck. The truck had a five-year useful life and a $6,000 salvage value. 2. As of December 31, Year 1, Chapin Company had a $68,000 balance in its Accounts Receivable account and a zero balance in its Allowance for Doubtful Accounts account. Sales on account for Year 1 amounted to $320,000. Chapin estimates that 5 percent of credit sales will be uncollectible. Required a. Record the year-end adjusting entry for depreciation expense on the truck in T-accounts. b. Determine the book value of the truck that will appear on the December 31, Year 1, balance sheet. c. Record the year-end adjusting entry of uncollectible accounts expense. d. Determine the net realizable value of receivables that will appear on the December 31, Year 1, balance sheet. Complete this question by entering your answers in the tabs below. Required A Required B Required C…
- The following transactions apply to Ozark Sales for Year 1: The business was started when the company received $48,000 from the issue of common stock. Purchased equipment inventory of $175,500 on account. Sold equipment for $193,500 cash (not including sales tax). Sales tax of 8 percent is collected when the merchandise is sold. The merchandise had a cost of $118,500. Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 4 percent of sales. Paid the sales tax to the state agency on $143,500 of the sales. On September 1, Year 1, borrowed $20,000 from the local bank. The note had a 5 percent interest rate and matured on March 1, Year 2. Paid $5,500 for warranty repairs during the year. Paid operating expenses of $54,000 for the year. Paid $124,400 of accounts payable. Recorded accrued interest on the note issued in transaction no. 6. Required Prepare the income statement, balance sheet, and statement of cash flows for…The following transactions apply to Ozark Sales for Year 1: The business was started when the company received $48,000 from the issue of common stock. Purchased equipment inventory of $175,500 on account. Sold equipment for $193,500 cash (not including sales tax). Sales tax of 8 percent is collected when the merchandise is sold. The merchandise had a cost of $118,500. Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 4 percent of sales. Paid the sales tax to the state agency on $143,500 of the sales. On September 1, Year 1, borrowed $20,000 from the local bank. The note had a 5 percent interest rate and matured on March 1, Year 2. Paid $5,500 for warranty repairs during the year. Paid operating expenses of $54,000 for the year. Paid $124,400 of accounts payable. Recorded accrued interest on the note issued in transaction no. 6. Required Record the given transactions in a horizontal statements model. Prepare the…The following transactions apply to Ozark Sales for Year 1: The business was started when the company received $48,000 from the issue of common stock. Purchased equipment inventory of $176,000 on account. Sold equipment for $199,500 cash (not including sales tax). Sales tax of 7 percent is collected when the merchandise is sold. The merchandise had a cost of $124,500. Provided a six-month warranty on the equipment sold. Based on industry estimates, the warranty claims would amount to 4 percent of sales. Paid the sales tax to the state agency on $149,500 of the sales. On September 1, Year 1, borrowed $21,500 from the local bank. The note had a 5 percent interest rate and matured on March 1, Year 2. Paid $5,500 for warranty repairs during the year. Paid operating expenses of $55,500 for the year. Paid $124,000 of accounts payable. Recorded accrued interest on the note issued in transaction no. 6. b-1. Prepare the income statement for Year 1. Note: Round your answers to the nearest…