Using Financial Accounting Information
10th Edition
ISBN: 9781337276337
Author: Porter, Gary A.
Publisher: Cengage Learning,
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Question
Chapter 1, Problem 1.1E
To determine
Concept Introduction:
Business activities can be categorized into three types; operating, investing, and financing. Operating activities include day to day business operation activities. Investing activities includes purchase or sale of assets of the business. Financing activities include the capital transactions like issuance of shares and repayment of debt, etc.
To indicate:The type of the activity for each of the given transactions.
Expert Solution & Answer
Explanation of Solution
The type of the activity for each of the given transactions is explained as follows:
| # of Activity | Type | |
| 1 | F | Issuance of shares is a financing activity. |
| 2 | I | Purchase of cars is an investing activity. |
| 3 | O | Payment of rent is an operating activity. |
| 4 | F | Taking loan from bank is a financing activity. |
| 5 | O | Receiving cash from customer is an operating activity. |
| 6 | O | Payment of wages is an operating activity. |
| 7 | I | Purchase of fuel tank is an investing activity. |
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Students have asked these similar questions
Journalize the following business transactions in general journal form. Identify each transaction by number. You may omit explanations of the transactions.
Feb. 1 Shareholders invest Php40,000 in cash in starting a real estate office operating as a corporation.
Feb. 5 Purchased Php500 of supplies on credit.
Feb. 10 Purchased equipment for Php25,000, paying Php3,500 in cash and signed a 30-day, Php21,500, note payable.
Feb. 15 Real estate commissions billed to clients amount to Php4,000.
Feb. 20 Paid Php700 in cash for the current month's rent.
Feb. 25 Paid Php250 cash on account for office supplies purchased in transaction 2.
Feb. 28 Received a bill for Php800 for advertising for the current month
You are working for The Wellington Company on temporary assignment while one of the accountants is on family leave. You have been asked to review the company’s investment journal entries and provide necessary information to the accountant preparing the financial statements.
PAGE 8
JOURNAL
DATE
DESCRIPTION
POST. REF.
DEBIT
CREDIT
1
Jan. 17
Investment-Red Rock Co. Stock
40,700.00
2
Cash
40,700.00
3
Feb. 5
Investment-Sunset Village Bonds
37,000.00
4
Interest Receivable
320.00
5
Cash
37,320.00
6
23
Investment-Mays and Co. Stock
27,750.00
7
Cash
27,750.00
8
Mar. 31
Cash
370.00
9
Interest Receivable
320.00
10
Interest Revenue
50.00
11
Apr. 6
Investment in Minions Corp. Stock
185,000.00
12
Cash
185,000.00
13
30
Cash
750.00
14…
Bennett Griffin and Chula Garza organized Cole Valley Book Store as a corporation; each contributed $71,600 cash to
start the business and received 5,800 shares of common stock. The store completed its first year of operations on
December 31, current year. On that date, the following financial items for the year were determined: December 31,
current year, cash on hand and in the bank, $70,150; December 31, current year, amounts due from customers from
sales of books, $41,000; unused portion of store and office equipment, $78,000; December 31, current year, amounts
owed to publishers for books purchased, $13,800; one-year note payable to a local bank for $3,200. No dividends
were declared or paid to the stockholders during the year.
Required:
1. Complete the following balance sheet as of the end of the current year. Some information has been given
below.
2. What was the amount of net income for the year? (Hint: Use the retained earnings equation [Beginning Retained
Earnings + Net Income…
Chapter 1 Solutions
Using Financial Accounting Information
Ch. 1 - Prob. 1.1ECh. 1 - Prob. 1.2ECh. 1 - Prob. 1.3ECh. 1 - Prob. 1.4.1ECh. 1 - Prob. 1.4.2ECh. 1 - Prob. 1.4.3ECh. 1 - Prob. 1.4.4ECh. 1 - Prob. 1.5.1ECh. 1 - Prob. 1.5.2ECh. 1 - Prob. 1.5.3E
Ch. 1 - Changes in Owners’ Equity The following amounts...Ch. 1 - Prob. 1.6.2ECh. 1 - Prob. 1.6.3ECh. 1 - Prob. 1.7ECh. 1 - Prob. 1.8ECh. 1 - Prob. 1.9ECh. 1 - Prob. 1.10.1ECh. 1 - Prob. 1.10.2ECh. 1 - Prob. 1.10.3ECh. 1 - Prob. 1.10.4ECh. 1 - Prob. 1.10.5ECh. 1 - Prob. 1.10.6ECh. 1 - Prob. 1.11ECh. 1 - Prob. 1.12ECh. 1 - Prob. 1.13ECh. 1 - Prob. 1.14ECh. 1 - Prob. 1.15MCECh. 1 - Prob. 1.16MCECh. 1 - Prob. 1.1PCh. 1 - Prob. 1.2PCh. 1 - Prob. 1.3PCh. 1 - Prob. 1.4.1PCh. 1 - Prob. 1.4.2PCh. 1 - Prob. 1.5.1PCh. 1 - Prob. 1.5.2PCh. 1 - Prob. 1.5.3PCh. 1 - Prob. 1.5.4PCh. 1 - Prob. 1.6.1PCh. 1 - Prob. 1.6.2PCh. 1 - Income Statement and Balance Sheet Green Bay...Ch. 1 - Prob. 1.7.1PCh. 1 - Prob. 1.7.2PCh. 1 - Prob. 1.7.3PCh. 1 - Prob. 1.7.4PCh. 1 - Prob. 1.8.1PCh. 1 - Prob. 1.8.2PCh. 1 - Prob. 1.9PCh. 1 - Prob. 1.10MCPCh. 1 - Prob. 1.1AAPCh. 1 - Prob. 1.2AAPCh. 1 - Prob. 1.3AAPCh. 1 - Prob. 1.4AAPCh. 1 - Prob. 1.5AAPCh. 1 - Prob. 1.5.1AAPCh. 1 - Prob. 1.5.2AAPCh. 1 - Prob. 1.5.3AAPCh. 1 - Prob. 1.5.4AAPCh. 1 - Prob. 1.6.1AAPCh. 1 - Prob. 1.6.2AAPCh. 1 - Prob. 1.6.3AAPCh. 1 - Prob. 1.7.1AAPCh. 1 - Prob. 1.7.2AAPCh. 1 - Prob. 1.7.3AAPCh. 1 - Prob. 1.7.4AAPCh. 1 - Prob. 1.8.1AAPCh. 1 - Prob. 1.8.2AAPCh. 1 - Prob. 1.9AAPCh. 1 - Prob. 1.10AAMCP
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