Fundamentals of Financial Accounting
5th Edition
ISBN: 9780078025914
Author: Fred Phillips Associate Professor, Robert Libby, Patricia Libby
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 2, Problem 2.10E
Analyzing
Rawlco Communications operates 15 radio stations. The following events occurred during September.
- a. Placed an order for office supplies costing $2,000. Supplier intends to deliver later in the month.
- b. Purchased equipment that cost $30,000; paid $10.000 cash and signed a promissory note to pay $20,000 in one month.
- c. Negotiated and signed a one-year bank loan, and then deposited $5,000 cash in the company’s checking account.
- d. Hired a new finance manager on the last day of the month.
- e. Received an investment of $10,000 cash from the company’s owners in exchange for issuing common shares.
- 1. f Supplies [ordered in (a)] were received, along with a bill for $2,000.
Required:
- 1. Indicate the specific account, amount, and direction of effects for each transaction on the radio station’s accounting equation. If an event is not considered a transaction, explain why.
- 2. Prepare journal entries to record each transaction.
- 3. Rawlco began the month with $220,000 in total assets. What total assets would be reported on the balance sheet after events (a)-(f)?
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On December 1, Williams Company borrowed $50,000 cash from Second National Bank by signing a 90-day, 5% note payable.
a. Prepare Williams' journal entry to record the issuance of the note payable.
b. Prepare Williams' journal entry to record the accrued interest due at December 31.
C. Prepare Williams' journal entry to record the payment of the note on March 1 of the next year.
Essay
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Prepare the journal entries for the following transactions:
May 1
Sold $150,000 of goods to Georgia Co. on account.
May 30
Collected $30,000 from Georgia Co.
June 1
Accepted a $120,000, one-year, 10% note from Georgia Co. for the amount remaining on the account.
July 30
After 60 days, discounted the note from Georgia Co. at First National Bank at a 12% interest rate.
Required:
Prepare the journal entries for the transactions listed. Assume a 360 day year.
The following were selected from among the transactions completed by Caldemeyer Co. during the current year. Caldemeyer Co. sells and installs home and business security systems
Jan. 3. Loaned $18,000 cash to Trina Gelhaus, receiving a 90-day, 8% note.
Feb. 10. Sold merchandise on account to Bradford & Co., $24,000. The cost of the mer-chandise sold was $14,400.
13. Sold merchandise on account to Dry Creek Co., $60,000. The cost of merchan-dise sold was $54,000.
Mar. 12. Accepted a 60-day, 7% note for $24,000 from Bradford & Co. on account.
14. Accepted a 60-day, 9% note for $60,000 from Dry Creek Co. on account.
Apr. 3. Received the interest due from Trina Gelhaus and a new 120-day, 9% note as a renewal of the loan of January 3. (Record both the debit and the credit to the notes receivable account.
May 11. Received from Bradford & Co. the amount due on the note of March 12.
13. Dry Creek Co. dishonored its note dated March 14.
July 12. Received from Dry Creek Co. the…
Chapter 2 Solutions
Fundamentals of Financial Accounting
Ch. 2 - Define the following: a. Asset b. Current asset c....Ch. 2 - Define a transaction anti give an example of each...Ch. 2 - For accounting purposes, what is an account?...Ch. 2 - What is the basic accounting equation?Ch. 2 - Prob. 5QCh. 2 - Prob. 6QCh. 2 - Prob. 7QCh. 2 - What is a journal entry? What is the typical...Ch. 2 - What is a T-account? What is its purpose?Ch. 2 - Prob. 10Q
Ch. 2 - Prob. 11QCh. 2 - Which of the following is not an asset account? a....Ch. 2 - Which of the following statements describe...Ch. 2 - Total assets on a balance sheet prepared on any...Ch. 2 - The duality of effects can best be described as...Ch. 2 - The T-account is used to summarize which of the...Ch. 2 - Prob. 6MCCh. 2 - A company was recently formed with 50,000 cash...Ch. 2 - Which of the following statements would be...Ch. 2 - Prob. 9MCCh. 2 - Prob. 10MCCh. 2 - Prob. 2.1MECh. 2 - Prob. 2.2MECh. 2 - Matching Terms with Definitions Match each term...Ch. 2 - Prob. 2.4MECh. 2 - Prob. 2.5MECh. 2 - Prob. 2.6MECh. 2 - Prob. 2.7MECh. 2 - Identifying Events as Accounting Transactions Half...Ch. 2 - Determining Financial Statement Effects of Several...Ch. 2 - Preparing Journal Entries For each of the...Ch. 2 - Posting to T-Accounts For each of the transactions...Ch. 2 - Reporting a Classified Balance Sheet Given the...Ch. 2 - Prob. 2.13MECh. 2 - Prob. 2.14MECh. 2 - Identifying Transactions and Preparing Journal...Ch. 2 - Prob. 2.16MECh. 2 - Prob. 2.17MECh. 2 - Prob. 2.18MECh. 2 - Prob. 2.19MECh. 2 - Prob. 2.20MECh. 2 - Prob. 2.21MECh. 2 - Prob. 2.22MECh. 2 - Prob. 2.23MECh. 2 - Prob. 2.24MECh. 2 - Prob. 2.25MECh. 2 - Prob. 2.1ECh. 2 - Prob. 2.2ECh. 2 - Classifying Accounts and Their Usual Balances As...Ch. 2 - Determining Financial Statement Effects of Several...Ch. 2 - Prob. 2.5ECh. 2 - Recording Journal Entries Refer to E2-4. Required:...Ch. 2 - Prob. 2.7ECh. 2 - Analyzing the Effects of Transactions in...Ch. 2 - Inferring Investing and Financing Transactions and...Ch. 2 - Analyzing Accounting Equation Effects, Recording...Ch. 2 - Recording Journal Entries and Preparing a...Ch. 2 - Analyzing the Effects of Transactions Using...Ch. 2 - Explaining the Effects of Transactions on Balance...Ch. 2 - Prob. 2.14ECh. 2 - Prob. 2.15ECh. 2 - Determining Financial Statement Effects of Various...Ch. 2 - Recording Transactions (in a Journal and...Ch. 2 - Recording Transactions (in a Journal and...Ch. 2 - Determining Financial Statement Effects of Various...Ch. 2 - Recording Transactions (in a Journal and...Ch. 2 - Recording Transactions (in a Journal and...Ch. 2 - Determining Financial Statement Effects of Various...Ch. 2 - Prob. 2.2PBCh. 2 - Prob. 2.3PBCh. 2 - Prob. 2.1SDCCh. 2 - Prob. 2.2SDCCh. 2 - Prob. 2.4SDCCh. 2 - Prob. 2.5SDCCh. 2 - Accounting for the Establishment of a Business...
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