Financial Accounting-w/cd-package
3rd Edition
ISBN: 9780131060876
Author: REIMERS
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Question
Chapter 1, Problem 42EB
To determine
Determine the amount that would be reported as expense on income statement, and loan payment to principal in statement of
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Question 1.
From the following transactions, classify Debit and Credit and record Journal Entries. prepare the given ledger accounting in T format. The transactions for the month of March 2020 are given hereunder.
Mar 1. Meeza started a business investing RO 12,500. Out of which she deposited RO 5,000 in the bank account the same day.
Mar 2. She purchased tools and equipment for RO 4,750. She paid 60% of the amount by cheque. Remaining amount (RO 1900) recorded in ‘Other liabilities account’ to be paid next 30 days.
Mar 6. She produced 600 units of product for RO 20,000 on credit and sold all of them on credit to Mr. John for RO 24,000.
Mar 9. Purchased Raw-Material for RO 6,200 on 15 days credit for Aesha.
Mar 11 She paid off the outstanding amount on tools and equipment account purchased on 2nd March through Bank account.
Mar 13. Mr. John paid RO 15,000 by Cheque.
Mar 16. Paid the supplier of Raw material (March 9) by cheque no 132613, RO 5,325. Reminder as a cash discount and…
1. Borrows $8,500 of cash from the bank by signing a formal agreement to repay the loan in 2 years.
2. Buys $6,800 of new equipment on account.
3. Pays off $4,800 of accounts payable.
4. Pays off $2,400 of notes payable.
Required:
a. Show the effect of these transactions on the basic accounting equation.
b. Prepare the journal entries that would be used to record the transactions.
Complete this question by entering your answers in the tabs below.
Required A Required B
Show the effect of these transactions on the basic accounting equation. (Enter any decreases to account balances with a minus sign.)
Transaction Analysis
Liabilities
1. Cash
2. Equipment
3.
Assets
Accounts Pavable
35,261
31
3,200 = Accounts Payable
6,800 - Accounts Payable
II
3,200 +
(6,800) +
tv
Stockholders' Equity
Next >
=
CALONG
X
Help
Sav
C
For each of the following activities, identify the effect on each component of the income statement and balance sheet. (Enter ell
amounts as positive values. If the effect is both Increase and decrease, enter the amount. Do not enter 0.)
1. $14,000 of services were provided to clients on credit today.
2. $5,000 cash was collected for services performed on credit last month.
3. $25,000 cash was borrowed from the bank.
4. $500 of advertising was done in the local newspaper today on account.
5. $500 was pald regarding the advertising in (4) above.
6. The owner invested an additional $10,000 cash into the business.
7. The owner withdrew $5,000 of cash from the business.
8. The owner took $200 worth of office supples home for personal use.
9. A new computer was purchased for $2,000 cash.
10. A one-year Insurance policy costing $12,000 was purchased today.
11. Purchased $45 of fuel for the van; pald cash.
12. Collected $900 from a client for work performed today.
es
Income Statement
Balance…
Chapter 1 Solutions
Financial Accounting-w/cd-package
Ch. 1 - 1. What is the main purpose of a business? 2....Ch. 1 - Prob. 2YTCh. 1 - 1. What are the two sources of financing for a...Ch. 1 - 1. What are revenues and expenses? 2. What are the...Ch. 1 - 1. What are the two parts of shareholders equity?...Ch. 1 - Prob. 6YTCh. 1 - Prob. 7YTCh. 1 - Prob. 1QCh. 1 - Prob. 2QCh. 1 - Prob. 3Q
Ch. 1 - Prob. 4QCh. 1 - What are the advantages of the corporate form of...Ch. 1 - What are the disadvantages of the corporate form...Ch. 1 - Prob. 7QCh. 1 - Prob. 8QCh. 1 - What are the basic financial statements? Describe...Ch. 1 - What makes the income statement different from the...Ch. 1 - Prob. 11QCh. 1 - What type of activities relate to what the firm is...Ch. 1 - Prob. 2MCQCh. 1 - Prob. 3MCQCh. 1 - Prob. 4MCQCh. 1 - Prob. 5MCQCh. 1 - Online Pharmacy Company borrowed 5,000 cash from...Ch. 1 - Prob. 7MCQCh. 1 - During its first year of business, West Company...Ch. 1 - Interest is the cost of a. purchasing inventory....Ch. 1 - Prob. 10MCQCh. 1 - Classify business transactions. (LO 2). For each...Ch. 1 - Identify balance sheet items. (LO 4). Classify the...Ch. 1 - Calculate owners equity. (LO 4). Doughnut Company...Ch. 1 - Prob. 4SEACh. 1 - Prob. 5SEACh. 1 - Calculate owners equity. (LO 4). Pasta Enterprises...Ch. 1 - Super Shop had a retained earnings balance of...Ch. 1 - Prob. 8SEBCh. 1 - Prob. 9SEBCh. 1 - Breck Company shows 80,000 worth of assets on its...Ch. 1 - Prob. 11SEBCh. 1 - For each of the following, calculate the missing...Ch. 1 - Prob. 13SEBCh. 1 - M Company had a retained earnings balance of 4,200...Ch. 1 - Prob. 15EACh. 1 - Analyze business transactions using the accounting...Ch. 1 - Prob. 17EACh. 1 - Prob. 18EACh. 1 - Enter each transaction below into the accounting...Ch. 1 - Prob. 20EACh. 1 - For each of the transactions given, tell whether...Ch. 1 - Prob. 22EACh. 1 - Enter each transaction into the accounting...Ch. 1 - Prob. 24EACh. 1 - Relationship between income statement and balance...Ch. 1 - Bob started a pool cleaning business on the first...Ch. 1 - Prob. 27EACh. 1 - Retained earnings and cash. (LO 4). Checkmate...Ch. 1 - Prob. 29EACh. 1 - Prob. 30EBCh. 1 - Prob. 31EBCh. 1 - Prob. 32EBCh. 1 - Prob. 33EBCh. 1 - Prob. 34EBCh. 1 - Classify business transactions. (LO 2). For each...Ch. 1 - Prob. 36EBCh. 1 - Prob. 37EBCh. 1 - Enter each transaction into the accounting...Ch. 1 - Prob. 39EBCh. 1 - Prob. 40EBCh. 1 - Frank Frock started a consulting business on the...Ch. 1 - Prob. 42EBCh. 1 - Prob. 43EBCh. 1 - Prob. 44EBCh. 1 - Prob. 45PACh. 1 - Prob. 46PACh. 1 - Prob. 47PACh. 1 - Analyze business transactions and the effect on...Ch. 1 - Prob. 49PACh. 1 - Analyze business transactions and prepare the...Ch. 1 - Prob. 51PACh. 1 - Prob. 52PBCh. 1 - Analyze business transactions using the accounting...Ch. 1 - Prob. 54PBCh. 1 - Prob. 55PBCh. 1 - Prob. 56PBCh. 1 - Prob. 57PBCh. 1 - Prob. 58PBCh. 1 - Prob. 1FSACh. 1 - Prob. 2FSACh. 1 - Prob. 3FSACh. 1 - What is the Walt Disney Companys key objective? Go...
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
- The following transactions occurred during a recent year: a. Paid wages of $1,450 for the current period (example). b. Borrowed $7,250 cash from local bank using a short-term note. c. Purchased $2,900 of equipment on credit. d. Earned $580 of sales revenue; collected cash. e. Received $1,160 of utilities services, on credit. f. Earned $2,450 of service revenue, on credit. g. Paid $435 cash on account to a supplier. h. Incurred $100 of travel expenses; paid cash. i. Earned $580 of service revenue; collected half in cash, with balance on credit. j. Collected $160 cash from customers on account. k. Incurred $420 of advertising costs; paid half in cash, with balance on credit. Required: 1. For each of the transactions, complete the following table, indicating the account, amount, and direction of the effect (+ for increase and - for decrease) of each transaction under the accrual basis. Include revenues and expenses as subcategories of stockholders' equity, as shown for the first…arrow_forwardWhich of the following transactions is an example of an operating cash flow? (Mark all that apply.) 1.Paying vendors for purchases you have received from them 2.Paying your monthly interest payment to the bank 3.Paying your income taxes to the government 4.Paying dividends to your shareholders 5.Paying employees for time they have worked. Need typed answer only.Please give answer within 45 minutesarrow_forwardOXia Company completes a local bank's loan application and applies for a six-month loan. 1. To evaluate whether Xia qualifies for the loan, the local bank will use the A) balance sheet to evaluate Xia Company's liquidity. B) balance sheet to evaluate Xia Company's return on assets. C) income statement to evaluate Xia Company's profitability. Dstatement of cash flows to evaluate Xia Company's solvency.arrow_forward
- Yeung prepares monthly financial statements for her client, Wrecker Auto Repair. Now, though, she must summarize the data in the accounting ledgers to determine if the figures are correct and balanced. Yeung will prepare a statement of cash flows in order to complete this step of the cycle. true or falsearrow_forwardAssume that you are going to start a Business after graduation. Describe 10 transactions that the business might undertake by using your own idea with the following assumptions: Started business with cash Goods purchase for cash Goods purchased on credit Any asset purchased and paid cash Any asset purchase on credit Sold goods for cash Sold goods on credit Paid any bill Paid salary to staff Cash withdraw from business for personal use Based on your own 10 transactions, prepare: 1. Financial statementarrow_forwardAssume that you are going to start a Business after graduation. Describe 10 transactions that the. business might undertake by using your own idea with the following assumptions: Started business with cash Goods purchase for cash Goods purchased on credit Any asset purchased and paid cash Any asset purchase on credit Sold goods for cash Sold goods on credit Paid any bill Paid salary to staff Cash withdraw from business for personal use Basedarrow_forward
- The following transactions occurred during a recent year: a. Paid wages of $1,000 for the current period (example). b. Borrowed $5,000 cash from local bank using a short-term note. c. Purchased $2,000 of equipment on credit. d. Earned $400 of sales revenue; collected cash. e. Received $800 of utilities services, on credit. f. Earned $1,700 of service revenue, on credit. g. Paid $300 cash on account to a supplier. h. Incurred $70 of travel expenses; paid cash. i. Earned $400 of service revenue; collected half in cash, with balance on credit. j. Collected $100 cash from customers on account. k. Incurred $300 of advertising costs; paid half in cash, with balance on credit. Required: 1. For each of the transactions, complete the following table, indicating the account, amount, and direc and for decrease) of each transaction under the accrual basis. Include revenues and expenses as equity, as shown for the first transaction, which is provided as an example. 2. Determine the company's…arrow_forwardANALYSIS. For each transaction indicate whether the assets, liabilities, or owner's equi increased (I), decreased (D) or Did not Change (NE). Owner's Transaction Assets Liabilities Equity 57-59. Purchase of supplies on credit 50-62. Paid utility expense 53-65. Received a loan granted by bank 56-68. Withdraws cash from the business 59-71. Paid salaries and wages 72-74. Received cash from customers as sales 75-77. Received promissory note from rental business 78-80. Paid advertising expense 31-83. Paid cash to creditors 34-86. Billed customer for video rentalarrow_forwardJournalize the following: 1. On the books & records of Company A: On May 2nd, Company A received $100 of interest income from the bank earned in April. If the books are on an accrual basis, record the entry in April and in May when cash was received April May 2. On the books & records of Company A: In January, Company A purchased Investment in XYZ for $100. Payment was made in cash. In March, Company A sold Investment in XYZ for $150. Payment was received in cash. 3. On the books & records of Company A: On April 1st, Company A paid $1,200 for insurance expense that covers the year 4/1/17-3/31/18. Record 4/1/17 entry for payment of $1,200 Record 4/30/17 journal entry 4. There are 2 parallel funds, Fund A and Fund B. Together, the funds will make an investment of $100k, with a 65/35 split. The investment will be paid in cash, however, Fund B does not currently have any cash so Fund…arrow_forward
- Suppose your company sells services for $325 cash this month. Your company also pays $100 insalaries and wages, which includes $15 that was payable at the end of the previous month and $85 forsalaries and wages of this month.Required:1. Show the journal entries to record these transactions.2. Calculate the amount that should be reported as net cash flow from operating activities.3. Calculate the amount that should be reported as net income.4. Show how the indirect method would convert net income (requirement 3) to net cash flowfrom operating activities (requirement 2).5. What general rule about converting net income to operating cash flows is revealed by youranswer to requirement 4?arrow_forwardAssume that you are going to start a Business after graduation. Describe 10 transactions that the business might undertake by using your own idea with the following assumptions: Started business with cash Goods purchase for cash Goods purchased on credit Any asset purchased and paid cash Any asset purchase on credit Sold goods for cash Sold goods on credit Paid any bill Paid salary to staff Cash withdraw from business for personal use Based on your own 10 transactions, prepare: 1. Ledgerarrow_forwardAnalyze each of the following transactions and show the effect on the accounting equation. Provide services to customers on account for $50,000. Purchase equipment by signing a note with the bank for $35,000. Repay $10,000 of the note in 2 above. Pay utilities of $5,000 for the current month. Jul 22, 2023, 3:35 PMarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,
College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,
The accounting cycle; Author: Alanis Business academy;https://www.youtube.com/watch?v=XTspj8CtzPk;License: Standard YouTube License, CC-BY