Financial and Managerial Accounting (Looseleaf) (Custom Package)
Financial and Managerial Accounting (Looseleaf) (Custom Package)
6th Edition
ISBN: 9781259754883
Author: Wild
Publisher: MCG
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Chapter 1, Problem 9PSA

1.

To determine

To prepare:

The table showing accounts given related to assets, liabilities, and equity.

1.

Expert Solution
Check Mark

Explanation of Solution

Show the classification of the accounts under assets, liabilities, and equity as follow:

Financial and Managerial Accounting (Looseleaf) (Custom Package), Chapter 1, Problem 9PSA , additional homework tip  1

Table (1)

Hence, Cash, Accounts receivable, Office Supplies, Office Equipment, and Electrical Equipment accounts will come under assets, Accounts Payable account will be treated as liability and the Common Stock, Dividends, Revenue and Expenses accounts will come under equity.

2.

To determine

To identify:

The effect of transactions on the accounting equation.

2.

Expert Solution
Check Mark

Explanation of Solution

Financial and Managerial Accounting (Looseleaf) (Custom Package), Chapter 1, Problem 9PSA , additional homework tip  2

Table (2)

Hence, the cash balance is $59,180, accounts receivables is $900, office supplies is $1,150, office equipment is $2,530, electrical equipment is$13,000, accounts payable is $8,550, common stock is $65,000, dividend is $950, revenue is $7,100 and expenses is $2,940.

3.

To determine

To prepare:

The income statement, statement of retained earnings, statement of cash flows and balance sheet for the month of December 31,20XX.

3.

Expert Solution
Check Mark

Explanation of Solution

Prepare income statement.

S Company
Income Statement
For the month ended December 31, 20XX
Particulars Amount
($)
Amount
($)
Revenue:    
Service Revenue 7,100  
Total Revenue   7,100
Expenses:    
Rent Expenses 1000  
Salary Expenses 1,400  
Utilities Expenses 540  
Total Expense   2,940
Net income   4,160

Table (3)

Hence, net income of .S Company as on December 31, 20XX is $4,160.

Prepare statement of retained earnings.

S Company
Retained Earnings Statement
For the Month Ended December 31, 20XX
Particulars Amount
($)
Opening balance of retained earnings 0
Net income 4,160
Total 4,160
Dividends (950)
Ending balance of retained earnings 3,210

Table (4)

Hence, the retained earnings of S Company as on December 31, 20XX are $3,210.

Prepare the cash flow statement.

S Company
Statement of Cash Flows
Month Ended December 31, 20XX
Particulars Amount
($)
Amount
($)
Cash flow from operating activities    
Receipts:    
Collections from customers   6,200
Payments:    
Supplies (800)  
Rent Expenses (1,000)  
Salary Expenses (1,400)  
Utilities (540) (3,740)
Net cash from operating activities   2,460
Cash flow from investing activities    
Purchase of office equipment (2,530)  
Purchase of electric equipment (4,800)  
Net cash from investing activities   (7,330)
Cash flow from financing activities    
Issued common stock 65,000  
Less: Payment of cash dividends (950)  
Net cash from financing activities   64,050
Net increase in cash   59,180
Cash balance, December 1,20XX   0
Cash balance, December 31,20XX   59,180

Table (5)

Hence, the cash balance of the S Company as on December 31, 20XX is $59,180.

Prepare balance sheet.

S Company
Balance sheet
As on December 31, 20XX
Particulars Amount
($)
Amount
($)
Assets    
Cash   59,180
Accounts Receivables   900
Office Supplies   1,150
Office Equipment   2,530
Electric Equipment   13,000
Total Assets   76,760
Liabilities and Stockholder’s Equity    
Liabilities    
Accounts Payable   8,550
Stockholder’s Equity    
Common Stock 65,000  
Retained earnings 3,210  
Total stockholders’ equity   68,210
Total Liabilities and Stockholder’s equity   76,760

Table (6)

Hence, the total of the balance sheet of the S Company as on December 31, 20XX is of $76,760.

4.

To determine

To identify:

The changes in (a) total assets, (b) total liabilities, and (c) total equity.

4.

Expert Solution
Check Mark

Explanation of Solution

If the owner of the company invests $49,000 cash instead of $65,000 for common stock and borrows $16,000 from the bank, then the effect on assets, liabilities and equity is,

• On assets- There is no change in assets, as in both the cases cash balance increases.

• On liabilities- There is an increase of $16,000 in accounts payable account and liability of S electric will increase.

• On equity- The common stock is decreased by $16,000 and common stock is the part of equity so equity decreases by $16,000.

Hence, the liability will increase by $16,000 and common stock will decrease by $16,000.

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Chapter 1 Solutions

Financial and Managerial Accounting (Looseleaf) (Custom Package)

Ch. 1 - Describe the internal role of accounting for...Ch. 1 - 7. Identify three types of services typically...Ch. 1 - Prob. 8DQCh. 1 - Prob. 9DQCh. 1 - 10. What are some accounting-related professions? Ch. 1 - Prob. 11DQCh. 1 - Prob. 12DQCh. 1 - Prob. 13DQCh. 1 - Prob. 14DQCh. 1 - Prob. 15DQCh. 1 - Prob. 16DQCh. 1 - Prob. 17DQCh. 1 - Prob. 18DQCh. 1 - Prob. 19DQCh. 1 - Prob. 20DQCh. 1 - Prob. 21DQCh. 1 - Prob. 22DQCh. 1 - Prob. 23DQCh. 1 - Prob. 24DQCh. 1 - Prob. 25DQCh. 1 - Prob. 26DQCh. 1 - Prob. 27DQCh. 1 - Define and explain return on assets.Ch. 1 - Prob. 29DQCh. 1 - Prob. 30DQCh. 1 - Prob. 31DQCh. 1 - Prob. 32DQCh. 1 - Prob. 33DQCh. 1 - Prob. 34DQCh. 1 - Prob. 35DQCh. 1 - Prob. 1QSCh. 1 - Prob. 2QSCh. 1 - Prob. 3QSCh. 1 - Prob. 4QSCh. 1 - Prob. 5QSCh. 1 - Prob. 6QSCh. 1 - Applying the accounting equation A1 Total assets...Ch. 1 - Applying the accounting equation A1 Use the...Ch. 1 - Prob. 9QSCh. 1 - Identifying effects of transactions using...Ch. 1 - Identifying effects of transactions using...Ch. 1 - Prob. 12QSCh. 1 - Prob. 13QSCh. 1 - Prob. 14QSCh. 1 - Prob. 15QSCh. 1 - Prob. 16QSCh. 1 - Prob. 17QSCh. 1 - Prob. 1ECh. 1 - Prob. 2ECh. 1 - Prob. 3ECh. 1 - Prob. 4ECh. 1 - Prob. 5ECh. 1 - Prob. 6ECh. 1 - Prob. 7ECh. 1 - Exercise 1-8 Using the accounting equation A1...Ch. 1 - Exercise 1-9 Using the accounting equation...Ch. 1 - Prob. 10ECh. 1 - Prob. 11ECh. 1 - Prob. 12ECh. 1 - Exercise 1-13 Identifying effects of transactions...Ch. 1 - Prob. 14ECh. 1 - Prob. 15ECh. 1 - Prob. 16ECh. 1 - Exercise 1-17 preparing a balance sheet P2 Use the...Ch. 1 - Prob. 18ECh. 1 - Prob. 19ECh. 1 - Prob. 20ECh. 1 - Prob. 21ECh. 1 - Prob. 1PSACh. 1 - Prob. 2PSACh. 1 - Prob. 3PSACh. 1 - Prob. 4PSACh. 1 - Prob. 5PSACh. 1 - Prob. 6PSACh. 1 - Prob. 7PSACh. 1 - Prob. 8PSACh. 1 - Prob. 9PSACh. 1 - Prob. 10PSACh. 1 - Prob. 11PSACh. 1 - Prob. 12PSACh. 1 - Prob. 13PSACh. 1 - Prob. 14PSACh. 1 - Prob. 1PSBCh. 1 - Prob. 2PSBCh. 1 - Prob. 3PSBCh. 1 - Prob. 4PSBCh. 1 - Prob. 5PSBCh. 1 - Prob. 6PSBCh. 1 - Prob. 7PSBCh. 1 - Prob. 8PSBCh. 1 - Prob. 9PSBCh. 1 - Prob. 10PSBCh. 1 - Prob. 11PSBCh. 1 - Prob. 12PSBCh. 1 - Prob. 13PSBCh. 1 - Prob. 14PSBCh. 1 - Prob. 1SPCh. 1 - Prob. 1BTNCh. 1 - Prob. 2BTNCh. 1 - Prob. 3BTNCh. 1 - Prob. 4BTNCh. 1 - Prob. 5BTNCh. 1 - Prob. 6BTNCh. 1 - Prob. 7BTNCh. 1 - Prob. 8BTNCh. 1 - Prob. 9BTN
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