Fundamental Accounting Principles
24th Edition
ISBN: 9781259916960
Author: Wild, John J., Shaw, Ken W.
Publisher: Mcgraw-hill Education,
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Textbook Question
Chapter 1, Problem 4BPSB
Problem 1-4B Preparing a statement of owner's equity P2
Use the information in Problem 1-3B to prepare a year-end statement of owner's equity for Audi Company. Hint: The owner invested $200 cash during the year.
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Question 2
Alex is currently considering to invest his money in one of the companies between Company A and Company B. The summarized final accounts of the companies for their last completed financial year are as follows:
Refer to the pic attached.
Based on the pic,
Required:
Calculate the following ratios for Company A and Company B. State clearly the formulae used for each ratio:
Gross Profit Margin
Net Profit Margin
Inventory Turnover Period (days)
Receivables Collection Period (days)
Payables Payment Period (days)
Current Ratio
Quick Ratio
b. Comment on each of the ratios calculated in part (a) above.
Mastery Problem: Investments
The Wellington Company
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.
Journal
Date
Description
Debit
Credit
Jan. 17
Investments-Red Rock Co. Stock
39,600
Cash
39,600
Feb. 5
Investments-Sunset Village Bonds
36,000
Interest Receivable
310
Cash
36,310
Feb. 23
Investments-Mays and Co. Stock
27,000
Cash
27,000
Mar. 31
Cash
360
Interest Receivable
310
Interest Revenue
50
Apr. 6
Investment in Minions Corp. Stock
180,000
Cash
180,000
Apr. 30
Cash
750
Dividend Revenue
750
Jul. 1
Cash
19,630
Loss…
Question No 2Assume 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 useBased on your own 10 transactions, prepare:1. Accounting Equation2. Journal3. Ledger4. Trail Balance5. Financial statement
Chapter 1 Solutions
Fundamental Accounting Principles
Ch. 1 - Prob. 1DQCh. 1 - Technology is increasingly used to process...Ch. 1 - Prob. 3DQCh. 1 - What are at least three questions business owners...Ch. 1 - Prob. 5DQCh. 1 - Describe the internal role of accounting for...Ch. 1 - Identify three type of services typically offered...Ch. 1 - Prob. 8DQCh. 1 - Why is accounting described as a service activity?Ch. 1 - What are some accounting-related professions?
Ch. 1 - Prob. 11DQCh. 1 - Prob. 12DQCh. 1 - Prob. 13DQCh. 1 - A business reports its own office stationary on...Ch. 1 - Why is the revenue recognition principle needed?...Ch. 1 - Prob. 16DQCh. 1 - Prob. 17DQCh. 1 - What events or transactions change equity?Ch. 1 - Prob. 19DQCh. 1 - What do accountants mean by the term revenue?Ch. 1 - 21. Define net income and explain its...Ch. 1 - Identify the four basics financial statements of a...Ch. 1 - Prob. 23DQCh. 1 - 24. Give two examples of expenses a business might...Ch. 1 - Prob. 25DQCh. 1 - Prob. 26DQCh. 1 - Prob. 27DQCh. 1 - Prob. 28DQCh. 1 - Prob. 29DQCh. 1 - Prob. 30DQCh. 1 - B Explain why investing (assets) and financing...Ch. 1 - Prob. 32DQCh. 1 - Prob. 33DQCh. 1 - Prob. 1QSCh. 1 - Prob. 2QSCh. 1 - Prob. 3QSCh. 1 - Prob. 4QSCh. 1 - Prob. 5QSCh. 1 - Prob. 6QSCh. 1 - This icon highlights assignments that enhance...Ch. 1 - Prob. 8QSCh. 1 - Prob. 9QSCh. 1 - Prob. 10QSCh. 1 - Prob. 11QSCh. 1 - Identifying items with financial statements P2...Ch. 1 - P2
Classify each of the following items as...Ch. 1 - P2
Classify each of the following items as assets...Ch. 1 - Preparing an income statement P2...Ch. 1 - Prob. 16QSCh. 1 - Prob. 17QSCh. 1 - Prob. 1ECh. 1 - Exercise 1-2 Identifying accounting users and uses...Ch. 1 - Prob. 3ECh. 1 - Prob. 4ECh. 1 - Prob. 5ECh. 1 - Prob. 6ECh. 1 - Prob. 7ECh. 1 - Prob. 8ECh. 1 - Prob. 9ECh. 1 - Prob. 10ECh. 1 - Prob. 11ECh. 1 - Prob. 12ECh. 1 - Prob. 13ECh. 1 - Exercise 1-14 Analyzing return on assets A2 Swiss...Ch. 1 - Prob. 15ECh. 1 - Prob. 16ECh. 1 - Exercise 117 Preparing 117 P2 Use the information...Ch. 1 - Prob. 18ECh. 1 - Prob. 19ECh. 1 - Prob. 20ECh. 1 - Prob. 21ECh. 1 - Exercise 1-22 Preparing an income statement for a...Ch. 1 - Exercise 1-23 Using the accounting equation A1...Ch. 1 - Problem 1-1A Identifying effects of transactions...Ch. 1 - Prob. 2APSACh. 1 - Problem 1-3A Preparing an income statement P2 As...Ch. 1 - Problem 1-4A Preparing a statement of owner's...Ch. 1 - Problem 1-5A Preparing a balance sheet P2 Use the...Ch. 1 - Problem 1-6A Preparing a statement of cash flows...Ch. 1 - Prob. 7APSACh. 1 - Prob. 8APSACh. 1 - Prob. 9APSACh. 1 - Prob. 10APSACh. 1 - Prob. 11APSACh. 1 - Prob. 12APSACh. 1 - Prob. 13APSACh. 1 - Prob. 14APSACh. 1 - Problem 1-1B Identifying effects of transactions...Ch. 1 - Prob. 2BPSBCh. 1 - Prob. 3BPSBCh. 1 - Problem 1-4B Preparing a statement of owner's...Ch. 1 - Prob. 5BPSBCh. 1 - Prob. 6BPSBCh. 1 - Prob. 7BPSBCh. 1 - Prob. 8BPSBCh. 1 - Prob. 9BPSBCh. 1 - Prob. 10BPSBCh. 1 - Prob. 11BPSBCh. 1 - Problem 112BA Identifying risk and return A3 All...Ch. 1 - Prob. 13BPSBCh. 1 - Prob. 14BPSBCh. 1 - On October 1. 2019, Santana Rev launched a...Ch. 1 - Prob. 1AACh. 1 - Prob. 2AACh. 1 - Prob. 3AACh. 1 - Prob. 1BTNCh. 1 - Prob. 2BTNCh. 1 - Visit the EDGAR database at SEC.gov. Access the...Ch. 1 - Prob. 4BTNCh. 1 - Prob. 5BTNCh. 1 - Prob. 6BTN
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- Question 2 Alex is currently considering to invest his money in one of the companies between Company A and Company B. The summarized final accounts of the companies for their last completed financial year are as follows: Refer to the pic attached. Based on the pic, Part (a) Gross Profit Margin Net Profit Margin Inventory Turnover Period (days) Receivables Collection Period (days) Payables Payment Period (days) Current Ratio Quick Ratio Required: b. Comment on each of the ratios calculated in part (a) above.arrow_forwardQUESTION 11 What are the total current assets? Family's Assets and Liabilities Checking account Savings account Credit card account Utility bill Home Mortgage (30 years) Car Car loan (60 months) Student loan (7 years) Household items Retirement account Other assets Ⓒ$55,000. $31,000. $21,500. $16,000. $3,000 $13,000 $5,500 $500 $320,000 $210,000 $25,000 $18,000 $25.000 $15,000 $64.000 $39,000arrow_forwardComprehensive Exercise 7. N.A. James, a public accountant, decided to begin a business of his own on October 1, 20-. At that time, he invested in the business a bank balance of $5000 and an automobile worth $18 000. The accounts required are in your Workbook. A. Work out the changes for the above transaction. Remember to include the opening capital. Record these in the T-accounts provided in your Workbook. B. For each of the transactions listed below, work out the changes for the transaction and record these changes in the T-accounts. N.A. JAMES CHART OF ACCOUNTS 101 110 A/R- Jenkins and Co. 120 Office Supplies 125 Office Equipment Bank 302 N.A. James, Drawings 401 Fees Earned 505 Advertising Expense 510 Car Expense 515 Donations Expense 520 Miscellaneous Expense 525 Rent Expense 130 Automobile 201 A/P- Office Equippers 210 Bank Loan 301 N.A. James, Capital TRANSACTIONS 1. Purchased $300 of office supplies for cash. Issued a cheque in pay- ment. (For now, when office supplies are…arrow_forward
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