Financial Accounting
9th Edition
ISBN: 9781259222139
Author: Robert Libby, Patricia Libby, Frank Hodge Ch
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 2, Problem 2.2E
Identifying Account Titles
The following are independent situations.
- a. A new company is formed and sells 100 shares of SI par value stock for $12 per share to investors.
- b. A company purchases for $18,000 cash a new delivery truck that has a list, or sticker, price of $21,000.
- c. A women's clothing retailer orders 30 new display stands for $300 each for future delivery.
- d. A company orders and receives 10 personal computers for office use for which it signs a note promising to pay $25,000 within three months.
- e. A construction company signs a contract to build a new $500,000 warehouse for a corporate customer. At the signing, the corporation writes a check for $50,000 to the construction company as the initial payment for the construction (receiving construction in progress). Answer from the standpoint of the corporation (not the construction company).
- f. A publishing firm purchases for $40,000 cash the copyright (an intangible asset) to a manuscript for an introductory accounting text.
- g. A manufacturing firm declares a $100,000 cash dividend to be distributed to stockholders next period.
- h. A company purchases a piece of land for $50,000 cash. An appraiser for the buyer values the land at $52,500.
- i. A manufacturing company acquires the patent (an intangible asset) on a new digital satellite system for television reception, paying $500,000 cash and signing a $400,000 note payable due in one year.
- j. A local company is a sole proprietorship (one owner): its owner buys a car for $10,000 for personal use. Answer from the local company's point of view.
- k. A company purchases 100 shares of Apple Inc. common stock as an investment for $5,000 cash.
- l. A company borrows $1,000 from a local bank and signs a six-month note for the loan.
- m. A company pays $1,500 principal on its note payable (ignore interest).
Required:
1. Indicate the appropriate account titles, if any, affected in each of the preceding events. Consider what is received and what is given.
2. At what amount would you record the truck in (b)? The land in (h)? What measurement principle are you applying?
3. For (c), what accounting concept did you apply? For (j), what accounting concept did you apply?
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Assume that a relatively new company you and you group members are involved with has presented you with the following transactions for 2021 from the books of the business. This company operates one bank account to reflect all cash and cheque transactions.
1 Aug Started business with $150, 000 in the bank
3 Aug Bought supplies on credit from Right Way Manufacturers
24 Boxes Air Filter $720.00 per box
96 Bottles fuel injector cleaner $200.00 per bottle
48 Boxes Spark Plug $300.00 per box
36 Boxes Brake Shoe $580.00 per box
24 Boxes Disc Pads $400.oo per box
5 Aug Provided services for cash less 10% discount…
The following were selected from among the transactions completed by Caldemeyer Co. during the current year. Caldemeyer sells and installs home and business security systems.
Jan. 3
Feb. 10
13
Mar. 12
14
Apr. 3
May 11
13
July 12
Aug. 1
Oct. 5
15
Loaned $18,000 cash to Trina Gelhaus, receiving a 90-day, 8% note.
Sold merchandise on account to Bradford & Co., $24,000. The cost of the goods sold was $14,400.
Sold merchandise on account to Dry Creek Co., $60,000. The cost of goods sold was $54,000.
Accepted a 60-day, 7% note for $24,000 from Bradford & Co. on account.
Accepted a 60-day, 9% note for $60,000 from Dry Creek Co. on account.
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.)
Received from Bradford & Co. the amount due on the note of March 12.
Dry Creek Co. dishonored its note dated March 14.
Received from Dry Creek Co. the amount owed on the…
Chapter 2 Solutions
Financial Accounting
Ch. 2 - Prob. 1QCh. 2 - Define the following: a. Asset b. Current asset c....Ch. 2 - Explain what the following accounting terms mean:...Ch. 2 - Why are accounting assumptions necessary?Ch. 2 - For accounting purposes, what is an account?...Ch. 2 - What is the fundamental accounting model?Ch. 2 - Prob. 7QCh. 2 - Explain what debit and credit mean.Ch. 2 - Prob. 9QCh. 2 - Prob. 10Q
Ch. 2 - Prob. 11QCh. 2 - Prob. 12QCh. 2 - How is the current ratio computed and interpreted?Ch. 2 - Prob. 14QCh. 2 - Prob. 1MCQCh. 2 - Which of the following is not an asset? a....Ch. 2 - Total liabilities on a balance sheet at the end of...Ch. 2 - The dual effects concept can best be described as...Ch. 2 - The T-account is a tool commonly used for...Ch. 2 - Prob. 6MCQCh. 2 - The Cash T-account has a beginning balance of...Ch. 2 - Prob. 8MCQCh. 2 - At the end of a recent year, The Gap, Inc.,...Ch. 2 - Prob. 10MCQCh. 2 - Matching Definitions with Terms Match each...Ch. 2 - Matching Definitions with Terms Match each...Ch. 2 - Identifying Events as Accounting Transactions...Ch. 2 - Classifying Accounts on a Balance Sheet The...Ch. 2 - Determining Financial Statement Effects of Several...Ch. 2 - Prob. 2.6MECh. 2 - Prob. 2.7MECh. 2 - Prob. 2.8MECh. 2 - Prob. 2.9MECh. 2 - Prob. 2.10MECh. 2 - Prob. 2.11MECh. 2 - Computing and Interpreting the Current Ratio...Ch. 2 - Identifying Transactions as Investing or Financing...Ch. 2 - Matching Definitions with Terms Match each...Ch. 2 - Identifying Account Titles The following are...Ch. 2 - Classifying Accounts and Their Usual Balances As...Ch. 2 - Determining Financial Statement Effects of Several...Ch. 2 - Determining Financial Statement Effects of Several...Ch. 2 - Recording Investing and Financing Activities Refer...Ch. 2 - Prob. 2.7ECh. 2 - Recording Investing and Financing Activities...Ch. 2 - Analyzing the Effects of Transactions In...Ch. 2 - Analyzing the Effects of Transactions In...Ch. 2 - Prob. 2.11ECh. 2 - Inferring Investing and Financing Transactions and...Ch. 2 - Recording Journal Entries Nathanson Corporation...Ch. 2 - Prob. 2.14ECh. 2 - Analyzing the Effects of Transactions Using...Ch. 2 - Prob. 2.16ECh. 2 - Prob. 2.17ECh. 2 - Prob. 2.18ECh. 2 - Inferring Typical Investing and Financing...Ch. 2 - Prob. 2.20ECh. 2 - Identifying the Investing and Financing Activities...Ch. 2 - Prob. 2.22ECh. 2 - Identifying Accounts on a Classified Balance Sheet...Ch. 2 - Determining Financial Statement Effects of Various...Ch. 2 - Prob. 2.3PCh. 2 - Prob. 2.4PCh. 2 - Prob. 2.5PCh. 2 - Prob. 2.6PCh. 2 - Prob. 2.1APCh. 2 - Determining Financial Statement Effects of Various...Ch. 2 - Recording Transactions in T-Accounts, Preparing...Ch. 2 - Prob. 2.4APCh. 2 - Accounting for the Establishment of a New Business...Ch. 2 - Prob. 2.1CPCh. 2 - Prob. 2.2CPCh. 2 - Prob. 2.3CPCh. 2 - Prob. 2.4CPCh. 2 - Prob. 2.5CPCh. 2 - Prob. 2.6CPCh. 2 - Prob. 2.7CPCh. 2 - Prob. 2.8CP
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