Principles of Accounting
12th Edition
ISBN: 9781133626985
Author: Belverd E. Needles, Marian Powers, Susan V. Crosson
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Videos
Question
Chapter 2, Problem 1C
To determine
Write the owners a short business memorandum in good form.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Ali is the manager of a well reputed organization. He is assigned to auction some assets of the firm. Instead of organizing an auction Ali compiles a list of items and puts an advertisement on the paper stating that anyone who is willing to purchase the said articles for Rs. 1 Lac can contact him directly by 15th April 2021 through email only.
Ahmed saw the advertisement and emailed Ali on 12th April asking for pictures of the items or if it was possible for him to view the items. Ali provided the pictures. Ahmed then emailed Ali that he is willing to purchase the said articles for Rs. 90 thousand and wrote that if Ali did not reply he will assume that Ali has accepted the offer.
On 14th April at 3 pm, Saad emailed Ali and said the following, “I will purchase the listed articles.”
On 14th April at 4:30 pm, Khan called Ali and brokered a deal to purchase the articles.
Answer the following questions.
Ali sold the articles to Khan. Is it a valid sale
Flounder Manufacturing has old equipment that cost $48,500. The equipment has accumulated depreciation of $28,100. Flounder has
decided to sell the equipment. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is
entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)
(a) What entry would Flounder make to record the sale of the equipment for $31,000 cash?
(b)
What entry would Flounder make to record the sale of the equipment for $15,000 cash?
Account Titles and Explanation
I
(a) 1
(b)
Debit
Credit
11
George Moss, owner of Moss Interiors, is negotiating for the purchase of Oriole Galleries. The following balance sheet of Oriole is
given in an abbreviated form as follows.
Cash
Land
Assets
Buildings (net)
Equipment (net)
Copyrights (net)
Total assets
1.
2.
$115,000
71,000
201,500
176,000
31,000
$594,500
Moss and Oriole agree that:
Oriole Gallaries
Balance Sheet
As of December 31, 2025
Liabilities and Stockholders' Equity
Accounts payable
Notes payable (long-term)
Total liabilities
Common stock
Retained earnings
Total liabilities and stockholders' equity
Land is undervalued by $28,000.
Equipment is overvalued by $4,000.
$212,400
24,800
$49,800
307,500
357,300
237,200
$594,500
Oriole agrees to sell the gallery to Moss for $381,000.
Prepare the entry to record the purchase of Oriole Galleries on Moss's books. (Credit account titles are automatically indented when
amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for…
Chapter 2 Solutions
Principles of Accounting
Ch. 2 - A company incurs a cost for a part that is needed...Ch. 2 - Prob. 2DQCh. 2 - Prob. 3DQCh. 2 - Prob. 4DQCh. 2 - How are assets and expenses related, and why are...Ch. 2 - Prob. 6DQCh. 2 - Prob. 7DQCh. 2 - Prob. 8DQCh. 2 - Tell whether each of the following accounts is an...Ch. 2 - Prob. 2SE
Ch. 2 - Prob. 3SECh. 2 - Prob. 4SECh. 2 - Prob. 5SECh. 2 - Prob. 6SECh. 2 - Prob. 7SECh. 2 - Prepare a general journal form like the one in...Ch. 2 - Prepare three ledger account forms like the one in...Ch. 2 - Prob. 10SECh. 2 - Prob. 11SECh. 2 - Prob. 12SECh. 2 - Which of the following events would be recognized...Ch. 2 - You are given the following list of accounts with...Ch. 2 - The following ledger accounts are for Afocentric...Ch. 2 - Prob. 4EACh. 2 - The accounts that follow are applicable to Harolds...Ch. 2 - Prob. 6EACh. 2 - Prob. 7EACh. 2 - Prob. 8EACh. 2 - After recording the transactions in E6A, prepare a...Ch. 2 - The list that follows presents Shah Companys...Ch. 2 - Which of the following errors would cause a trial...Ch. 2 - Prob. 12EACh. 2 - Record the transactions in E6A in the general...Ch. 2 - Prob. 14EACh. 2 - Prob. 15EACh. 2 - Prob. 16EACh. 2 - Highland Design Company creates radio and...Ch. 2 - The following accounts are applicable to Georges...Ch. 2 - Jennifer Lopez opened a school for administrative...Ch. 2 - Sid Patel bid for and won a concession to rent...Ch. 2 - Nordtown Company is a marketing firm. The companys...Ch. 2 - Prob. 6APCh. 2 - The following accounts are applicable to Raymonds...Ch. 2 - Prob. 8APCh. 2 - David Roberts began an upholstery cleaning...Ch. 2 - Prob. 10APCh. 2 - Prob. 1CCh. 2 - Prob. 2CCh. 2 - Prob. 3CCh. 2 - Prob. 4CCh. 2 - Prob. 5CCh. 2 - Prob. 6CCh. 2 - Prob. 7C
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
- Capstone Consulting Services acquired land 5 years ago for $200,000. Capstone recently signed an agreement to sell the land for $375,000. In accordance with the sales agreement, the buyer transferred $375,000 to Capstone’s bank account on February 20. How would elements of the accounting equation be affected by the sale? Briefly describe the nature of the information provided by each of the following financial statements: the income statement, the statement of stockholders’ equity, the balance sheet, and the statement of cash flows. In your descriptions, indicate whether each of the financial statements covers a period of time or is for a specific date. (a) How does the payment of dividends of $15,000 affect the three elements of the accounting equation? (b) Is net income affected by the payment of dividends? Explain.arrow_forward1. Byrde Company purchased a truck. The seller asked for $14,200, but Byrde paid only $13,200 after negotiation. The owner of Byrde Company believes he got a great deal and the truck is really worth $18,200. What amount does Byrde record on its financial statements for the truck? 2. Snell Company performs and completes services for a client in May and bills the client $4,200. In June, the client makes a partial payment of $1,900 cash for the services. In July, the remaining $2,300 cash is paid. Determine the monthly revenue recorded in May, June, and July for this service.arrow_forwardAhlers Clocks is a retailer of wall, mantle, and grandfather clocks and is located in the EmpireMall in Sioux Falls, South Dakota. Assume that a grandfather clock was sold for $10,000 cash plus4 percent sales tax. The clock had originally cost Ahlers $6,000. Show the accounting equationeffects and prepare the journal entries related to this transaction. Assume Ahlers uses a perpetualinventory system, as explained in Chapter 6arrow_forward
- You opened a novelty store called "The Awesome Shop" on January 1, 2019. The following were the transactions during the year. 1. Provided P100,000 cash as an initial investment 2. Obtained a P50,000 loan. 3. Acquired furniture and fixtures for P80,000 cash 4. Acquired inventory on account for P60,000 (use perpetual inventory system) 5. Sold goods on a cash basis for P200,000.The cost of sales is P20,000 6. Sold goods on account for P300,000. The cost of sales is P30,000 7. Paid supplies to expense for P20,000 cash. 8. Paid rent expense of P180,000 9. Paid utility expense of P40,000 10. Collected P240,000 accounts receivable. 11. Paid P30,000 accounts payable…arrow_forwardA company sells an office desk. You are provided with the following information: The original cost of the desk was $3,000. The desk is sold for $1,000. . . The value of the desk is $1,500. The opening UCC balance in Class 8 is $18,000 A new desk is purchased for $2,000. What amount is recorded as a disposition in Class 8? • O O a. $3,000 O b. $1,000 O c. $1,500 O d. d. $18,000 $2,000arrow_forwardProvide a good illustration of how businesses should adhere to accounting principles and assumptions, as discussed on slide 16 of Chapter 1. Use this example as a guide for your answer. According to the cost accounting principle, if a firm purchases land for SR400,000 but an outside appraiser values it at SR600,000, the land should still be recorded in the books at SR400,000.arrow_forward
- When Lowes Home Improvements sells a new $223 air compressor to a customer, the sale is subject to an additional 6% sales tax. When Lowes records the transaction, what amount is recorded into the revenue account? Fill in the blank with your calculated number. DO NOT include commas, $ signs, period, decimal points, etc., just enter the raw number. Webcourses will add commas to your answer automatically. For example, if you calculated the answer to be $24,123, you would only input: 24123 ASUS f5 f6 f7 f8 团 f9 f10 f11 %24 4 5 7 8 T. Y G H. J K. B 因 6 151 F. 图 Rarrow_forwardOrion Flour Mills purchased a new machine and made the following expenditures: Purchase price Sales tax $74,000 5,950 Shipment of machine Insurance on the machine for the first year Installation of machine 990 690 1,980 The machine, including sales tax, was purchased on account, with payment due in 30 days. The other expenditures listed above were paid in cash. Required: Record the above expenditures for the new machine. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet re to search ASUSarrow_forwardAlpha company is a trading company that purchases and sales fruits and vegetables. During the year 2020, the company shows the following transactions and events: 10) The driver of the company has access to the inventory, he delivers the merchandise, receives the cash and has access to the company books. Required: For each case, identify the anomaly and propose the correct accounting treatment/answer:arrow_forward
- Do not copy from bartleby. Otherwisw i will give you dislike When DeSoto Water Works purchased equipment at the end of 2020 at a cost of $64,000, the company debited Buildings and credited Cash $64,000. The error was discovered in 2021. Prepare the journal entry DeSoto will use to correct the error. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 Record entry to correct error. Note: Enter debits before credits. Event General Journal Debit Credit 1 Record entry Clear entry View general journalarrow_forwardeBay sells used products collected from different suppliers. Assume a customer purchases a used bicycle through eBay for $300. eBay agrees to pay the supplier $200 for the bicycle. The bicycle will be shipped to the customer by the original bicycle owner. Assume eBay promised to pay $200 to the supplier regardless of whether the bicycle is sold, but the bicycle will continue to be shipped directly from the supplier to the customer. How much revenue would eBay recognize at the time of the sale? Why?arrow_forwardDo not copy from bartleby Land is purchased by making a cash down payment of $40,000 and signing a note payable for the balance of $130,000. The journal entry to record this transaction in the accounting records of the purchaser includes:a)A credit to Land for $40,000.b)A debit to Cash for $40,000.c)A debit to Land for $170,000.d)A debit to Note Payable for $130,000.arrow_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,
Ethical Decision Making in Management; Author: GreggU;https://www.youtube.com/watch?v=6UrBO-cL27Q;License: Standard Youtube License