Financial Accounting, Student Value Edition (4th Edition)
4th Edition
ISBN: 9780134114811
Author: Robert Kemp, Jeffrey Waybright
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Textbook Question
Chapter 1, Problem 19AE
Transaction analysis (Learning Objective 5) 15-20 min.
Shavon Loreal opened a medical practice titled Shavon Loreal M.D., Inc. During August, the first month of operations, the business experienced the following events:
Aug 2 | Loreal bought $60,000 of common stock in the business by opening a bank account in the name of Shavon Loreal M D., Inc. |
6 | The business paid $45,000 cash for land with the intention of building an office building on the land. |
11 | Tue business purchased medical supplies for $700 on account. |
15 | The business officially opened for business. |
17 | The business treated patients and earned service revenue of $10,000, receiving cash. |
19 | The business paid office rent $1,400. |
22 | The business sold supplies to another doctor for $300 cash, the cost of those supplies. |
25 | The business received a $175 utility hill in the mall. The bill will be paid in 30 days |
30 | The business paid $100 on account related to the August 11 purchase. |
Requirement
- 1. Analyze the effects of these events on the
accounting equation of the medical practice of Shavon Loreal M.D., Inc. Use headings for Cash, Medical Supplies, Land, Accounts Payable, Common Stock, Service Revenue, Rent Expense, and Utility Expense.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
What I Can Do
Activity 9-4
As a senior high school in your school, you were required to undergo Work
Immersion in a bank. You were assigned in accounting department and your
immediate superior instructed you to conduct an audit to the following
transactions:
1. The bank acquired Furniture and Fixtures last February 1, 2020 for
P125,000. The said asset has a salvage value of P20,000 after its estimated
useful life of 10 years.
2. The payment for one-year rent of P96,000 dated January 1, 2020 was
debited to Prepaid Rent.
3. The Notes Receivable of P200,000 dated February 29, 2020 with 15%
interest is collectible after six months.
Prepare the adjusting journal entries as of June 30, 2020 (with computation in
good form)
Assessment
Test I: True or False
Write TRUE if the statement is corect and FALSE if the statement is incorrect.
1. All adjusting entries require to analyze the source document before they
recorded.
2. Prepaid expense is an expense account with a debit normal balance.
17
While completing undergraduate school work in information systems, Dallin Bourne and Michael Banks decided to start a
technology support company called eSys Answers. During year 1, they bought the following assets and incurred the
following start-up fees:
Purchase Date
October 30, Year 1
October 30, Year 1
October 30, Year 1
October 30, Year 1
Basis
$16,200
10,000
5,400
19,160
Year 1 Asseta
Computers (5-year)
office equipment (7-year)
Furniture (7-year)
Start-up costa
In April of year 2, they decided to purchase a customer list from a company providing virtually the same services, started
by fellow Information systems students preparing to graduate. The customer list cost $12,160, and the sale was completed
on April 30. During their summer break, Dailin and Michael passed on internship opportunities in an attempt to really grow
their business into something they could do full time after graduation. In the summer, they purchased a small van (for
transportation, not considered a luxury…
The Sir Arthur Lewis Community College has recently invited all accounting students in from
the Principles of cost and management accounting (ACC115) class to participate in a business
degree scholarship with an emphasis in accounting. The award for the highest score is a full
scholarship for a degree in Business Administration.
The following information for Good Times Inc. has been provided to assess the proficiency of all
participants in accounting:
Estimates for the period January to June 2021
Purchases ($) Operating
expenses ($)
35,000
20,000
Month
Sales ($)
January
February
March
350,000
200,000
100,000
250,000
300,000
360,000
210,000
120,000
60,000
150,000
180,000
10,000
25,000
30,000
36,000
April
May
June
216,000
Relevant data for the Good Times Inc. operations:
a. Payment for purchases is made as follows 80% in the month of purchase and the balance in
the following the following month. Payments made in the month of purchase are entitled to a
10% discount.
b. Sales are made on…
Chapter 1 Solutions
Financial Accounting, Student Value Edition (4th Edition)
Ch. 1 - The text states that accounting is the "language...Ch. 1 - Would you describe accounting as primarily a...Ch. 1 - Prob. 3DQCh. 1 - What are some reasons why accounting has adopted...Ch. 1 - What are some of the uses of financial statements?Ch. 1 - Prob. 6DQCh. 1 - Prob. 7DQCh. 1 - How is the accounting equation affected by each of...Ch. 1 - In what order should the financial statements be...Ch. 1 - Which financial statement would be most useful to...
Ch. 1 - Prob. 1SCCh. 1 - Prob. 2SCCh. 1 - Which accounting principle specifically states...Ch. 1 - Wave Rider is famous for custom skateboards. At...Ch. 1 - Assume that Wave Rider sold skateboards to a...Ch. 1 - Assume that Wave Rider sold skateboards to another...Ch. 1 - Assume that Wave Rider paid expenses totaling...Ch. 1 - Consider the overall effects of the transactions...Ch. 1 - Prob. 9SCCh. 1 - Prob. 10SCCh. 1 - Prob. 11SCCh. 1 - Prob. 12SCCh. 1 - Accounting principles (Learning Objective 4) 5-10...Ch. 1 - Accounting principles (Learning Objective 4) 5-10...Ch. 1 - Prob. 3SECh. 1 - Basic accounting equation (Learning Objective 5)...Ch. 1 - Prob. 5SECh. 1 - Prob. 6SECh. 1 - Prob. 7SECh. 1 - Entering transactions in the accounting equation...Ch. 1 - Prob. 9SECh. 1 - Prob. 10SECh. 1 - Entering transactions in the accounting equation...Ch. 1 - Prob. 12SECh. 1 - Transaction analysis (Learning Objective 5) 5-10...Ch. 1 - Prob. 14SECh. 1 - Basic accounting equation (Learning Objective 5)...Ch. 1 - Prob. 16AECh. 1 - Prob. 17AECh. 1 - Prob. 18AECh. 1 - Transaction analysis (Learning Objective 5) 15-20...Ch. 1 - Prob. 20AECh. 1 - Prob. 21AECh. 1 - Prob. 22AECh. 1 - Basic accounting equation (Learning Objective 5)...Ch. 1 - Prob. 24BECh. 1 - Prob. 25BECh. 1 - Prob. 26BECh. 1 - Transaction analysis (Learning Objective 5) 15-20...Ch. 1 - Prob. 28BECh. 1 - Prob. 29BECh. 1 - Prob. 30BECh. 1 - Transaction analysis and the calculation of net...Ch. 1 - Prob. 32APCh. 1 - Prob. 33APCh. 1 - Prob. 34APCh. 1 - Prob. 35APCh. 1 - Transaction analysis and the calculation of net...Ch. 1 - Prob. 37BPCh. 1 - Prob. 38BPCh. 1 - Prob. 39BPCh. 1 - Prob. 40BPCh. 1 - Prob. 1CECh. 1 - Prob. 1CPCh. 1 - Prob. 1CFSAPCh. 1 - Prob. 1EIACh. 1 - Prob. 2EIACh. 1 - Prob. 1FACh. 1 - Prob. 1IACh. 1 - Prob. 1SBACh. 1 - Prob. 1WC
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
- While completing undergraduate school work in information systems, Dallin Bourne and Michael Banks decided to start a technology support company called eSys Answers. During year 1, they bought the following assets and incurred the following start-up fees: Year 1 Assets Purchase Date Basis Computers (5-year) October 30, Year 1 $ 15,100 Office equipment (7-year) October 30, Year 1 10,000 Furniture (7-year) October 30, Year 1 3,200 Start-up costs October 30, Year 1 17,180 In April of year 2, they decided to purchase a customer list from a company providing virtually the same services, started by fellow information systems students preparing to graduate. The customer list cost $10,180, and the sale was completed on April 30. During their summer break, Dallin and Michael passed on internship opportunities in an attempt to really grow their business into something they could do full time after graduation. In the summer, they purchased a small van (for transportation, not…arrow_forwardT Account entries for Simple Construction:Bob Simple graduated from the BCIT Construction Management Program and decided to start his own construction company. We will record various entries that might be made in a T account sheet in order to account for his second year of operations. At the end of the first year, his income statement and balance sheet havethe following values:Balance Sheet Entries for Last Year:Cash: 365,000Accounts Receivable: $17,000Materials Inventory: $2000Equipment: $15,000Accumulated Amortization: $500Accounts Payable: $22,000Bank Loan –Long Term: $10,000Dividend Payable: $35,000Interest Payable: $500Wages Payable: $5,000Common Stock: $250,000Retained Earnings: $76,000Income statement Final Entries for Last Year:Revenue: $145,000Materials Expense: $20,000Wages Expense: $10,000Amortization Expense: $500Rental Expense: $2,500Interest Expense: $1000Net Income: $111,000 Question 1a.Enter the relevant amounts in the T sheet to start the current year, and designate…arrow_forwardEVALUATION (100%) Make a video of yourself while answering /discussing in detail the following question. Upload this video clip to a designated folder in Google classroom: Lesson 6: On July 1, 2021, Emilia Clarke opened a small paint shop called "Emilia Clarke Paint Shop." The following were the transactions during the month: Date Transactions 1 3 Invested P100,000 cash in the business Obtained a P30, 000 loan from a bank. Purchased equipment for P20,000 cash. 5 7 10 Purchased goods for P20,000 cash. (Use perpetual inventory system) Sold goods for P10,000 cash. The cost of the goods sold was of P7,000. Withdrew cash P5,000 15 25 Paid utilities expense amounting to P3,000 Paid P5,000 salaries. 31 Requirements: a. Record the transactions in the journal. b. Post the transaction in the ledger. c. Prepare the unadjusted trial balance on July 31, 2021arrow_forward
- 1. A newly founded business performed in their first days of operations, the six transactions that you can find below. The business was founded on the 20th of July, by a young entrepreneur, Mr Grey, who wanted to provide typing, copying, and printing services to the university students in his home city: a) 20/07/2019: In exchange for his investment of $200,000 cash, the business issued to Mr Grey 1,000 shares of capital stock. b) 21/07/2019: Purchased a small building and land for $450,000, paying $165,000 cash and signing a note payable for the balance. The building $210,000 and the land was considered to be worth $240,000. c) 22/07/2019: Purchased office equipment for $30,000 from Office Furniture Co. Paid $17,000 cash and agreed to pay the balance within 60 days. d) 26/7/2019: Purchased from Auto Ltd. a motorcycle on credit for $3,400 to be used for making deliveries to customers. Mr Grey agreed to make payment to Auto Ltd. within 10 days. e) 27/7/2019 Signed a note payable due in…arrow_forwardRoben Cruse opened the Campus Laundromat on September 1, 2020. During the first month ofoperations, the following transactions occurred. Sept.1 Roben invested $20,000 cash in the business.2 The company paid $1,000 cash for store rent for September.3 Purchased washers and dryers for $25,000, paying $10,000 in cash and signing a $15,000, 6-month,12% note payable.4 Paid $1,200 for a one-year accident insurance policy.10 Received a bill from the Daily News for online advertising of the opening of the laundromat $200.20 Roben withdrew $700 cash for personal use.30 The company determined that cash receipts for laundry services for the month were $6,200. Instructionsa. Journalize the September transactions.b. Open ledger accounts and post the September transactions.c. Prepare a trial balance at September 30, 2020.arrow_forward[The following information applies to the questions displayed below.] While completing undergraduate school work in information systems, Dallin Bourne and Michael Banks decided to start a technology support company called eSys Answers. During year 1, they bought the following assets and incurred the following start-up fees: Year 1 Assets Purchase Date Basis Computers (5-year) October 30, Year 1 $ 16,400 Office equipment (7-year) October 30, Year 1 10,000 Furniture (7-year) October 30, Year 1 5,800 Start-up costs October 30, Year 1 19,520 In April of year 2, they decided to purchase a customer list from a company providing virtually the same services, started by fellow information systems students preparing to graduate. The customer list cost $12,520, and the sale was completed on April 30. During their summer break, Dallin and Michael passed on internship opportunities in an attempt to really grow their business into something they could do full time after graduation.…arrow_forward
- Make a Ledger in this problem Assume that on December 2, 2020. Mr. David Started DB Accounting Firm in Tagbina with the following assets as initial investments: PARTICULARS Cash 15,000 Computers 40,000 Furniture 50,000 Supplies 10,000 December 02 The business was registered with DTI, BIR, and Mayor’s permit spending P300, P500, and P1,200, respectively. 05 Acquired printer amounting to P10,000 for cash 15 Received electricity bill used by the business, P600. 15 Acquired computer chairs and tables on account, P10,000 payable within five days 20 Issued 3 months promissory note amounting to 10,000 to settle the obligation for acquiring computer chairs 21 Mr. David withdrew P1,000 for personal use. 23 Used supplies amounting to 8,000 26 Collected P50,000 for audit service to client 28 Billed P80,000 to the client for tax consultancy performed. 29 Transportation expense incurred and paid, P2,000 30 Provided 10% allowance for depreciation for the use of office equipment and…arrow_forwardMr. Y opens an apartment-locator business near a Green University campus. The corporation will be named Campus Apartment Locators, Inc. During the first month of operations, July 2022, the business completes the following transactions: a. Mr. Y invests 350,000. The business receives 350,000 cash and issues common stock to Mr. Y. b. Purchases 3500 of office supplies on account. c. Pays cash of 30,000 to acquire a lot next to the campus. Mr. Y intends to use the land as a future building site for the business office. d. Locates apartments for clients and receives cash of 10,900. e. Pays 1000 on the account payable he created in transaction b. f. Pays 20,000 of personal funds for a vacation. g. Pays cash expenses for office rent, 4000, and utilities, 1000. h. Returns office supplies of 2500 from transaction b. i. Declares and pays a cash dividend of 10,200. Requirements: 1. Analyze the preceding transactions in terms of their effects on the accounting equation of Campus Apartment…arrow_forwardBob Sample opened the Campus Laundromat on September 1, 2022. During the first month of operations, the following transactions occurred. Sept 1 Bob invested $20,000 cash in the business. Sept 2 The company paid $1,000 cash for store rent for September. Sept 3 Purchased washers and dryers for $25,000, paying $10,000 in cash and signing a $15,000, 6-month, 12% note payable. Sept 10 Received a bill from the Daily News for online advertising of the opening of the laundromat $200.…arrow_forward
- . (Learning Objective 5: Make closing entries and calculate net income) The adjustedtrial balance of Amana Corporation at December 31 shows that sales revenue for the year was$513,000 and other revenue was $37,000. Cost of goods sold for that same period was $256,000,while other expenses totaled $185,000. The corporation declared and paid dividends of $12,000during the year. The balance of retained earnings before closing entries was $457,000.1. Prepare the closing entries for revenues, expenses, and dividends for the year.2. What was net income for the year?3. What is the ending balance of retained earnings after the closing entries are posted?arrow_forwardMANAGEMENT DEPARTMENT, FACULTY PROBLEM On January 1 of the current year, Juan David opened the “ J.D Men's Wear Shop", and during the month, the following transactions were completed: Jan. 1 Juan David invested cash P 80,000 in the business. He bought two sewing machines amounting P 30,000 each from Patio Merchandising, the he gave P15,000 down and the balance is payable within 60 days. Paid a three month rental of the shop, P30,000. This was charged to 1 1 prepaid Rent account. 1 Paid a one year insurance policy, P 5,700. Bought sewing tools P 5,900 and sewing supplies P 2,700 from Jomar Trading on credit. Received P 1,200 from customer for a short delivered. Billed to Maricris Acosta, P 5,000 for two-pair of pants and polo barong 7 delivered. 10 Purchased clothing materials from Baclaran Market and paid P 15,000 cash. 13 Received P 12,500 from various customers for pants and barong made and delivered. 14 Gave Patio Merchandising P 15,000 and issued a 60-day, 6% note for the balance.…arrow_forwardNatalie opened Natalie Washing co. on July 1, 2022. During July, the following transactions were completed. July 1 Owner invests $12,000 cash to start the business. July 3 Purchased used truck for $8,000, paying $2,000 cash and signing a 1-year, 10% note for the remainder. July 5 Purchased clening supplies for $900 on account. July10 Paid $1800 cash on a 1-year insurnace policy effective July 1 July 12 Billed customers $3700 fore cleaning services performed. July 15 Paid $500 on amount owed on cleaning supplies. July 16 Received $2500 for serviced to be performed evenly from July 16 through September 15. July 22 Paid $2000 for employee salaries. July 29 July 30 July 31 Collected $1600 cash from customers billed on July 12. Paid $290 for maintenance of the truck during month. Owner withdrew $600 from the business for personal expenses. Requirements: 1) Make a tabular analysis of the transactions on accounting equation. Use the following column headings: cash, Supplies, accounts…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
The accounting cycle; Author: Alanis Business academy;https://www.youtube.com/watch?v=XTspj8CtzPk;License: Standard YouTube License, CC-BY