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 2.5ME
Determining Financial Statement Effects of Several Transactions
For each of the following transactions of Dennen. Inc., for the month of January, indicate the accounts, the amounts, and the direction of the effects on the
- a. (Sample) Borrowed $30,000 from a local bank.
- b. Let $10,000 to an affiliate: accepted a note due in one year.
- c. Sold to investors 100 additional shares of stock with a par value of $0.10 per share and a market price of $5 per share: received cash.
- d. Purchased $15,000 of equipment, paying $5,000 cash and signing a note for the rest due in one year.
- e. Declared and paid $2,000 in dividends to stockholders.
| Assets = Liabilities + Stockholders’ Equity | ||
| a. Sample: Cash +30,000 | Notes Payable | +30,000 |
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Assume that Denis Savard Inc. has the following accounts at the end of the current year.
1.   Common Stock.
2.   Discount on Bonds Payable.
3.   Treasury Stock (at cost).
4.   Notes Payable (short-term).
5.   Raw Materials.
6.   Preferred Stock Investments (long-term).
7.   Unearned Rent Revenue.
8.   Work in Process.
9.   Copyrights.
10.   Buildings.
11.   Notes Receivable (short-term).
12.   Cash.
13.   Salaries and Wages Payable.
14.   Accumulated Depreciation—Buildings.
15.   Restricted Cash for Plant Expansion.
16.   Land Held for Future Plant Site.
17.   Allowance for Doubtful Accounts.
18.   Retained Earnings.
19.   Paid-in Capital in Excess of Par—Common Stock.
20.   Unearned Subscriptions Revenue.
21.   Receivables—Officers (due in one year).
22.   Inventory (finished goods).
23.   Accounts Receivable.
24.   Bonds Payable (due in 4 years).
25.   Noncontrolling Interest.
Instructions
Prepare a classified balance sheet in good form. (No monetary amounts…
Solomon Company's income statement information follows:
Net sales
Income before interest and taxes
Net income after taxes
Interest expense
Stockholders' equity, December 31 (Year 1: $197,000)
Common stock, December 31
The average number of shares outstanding was 7,700 for Year 3 and 7,000 for Year 2.
Required
Compute the following ratios for Solomon for Year 3 and Year 2.
a. Number of times interest was earned.
Note: Round your answer to 2 decimal places.
a. Times interest earned
b. Earnings per share
c. Price-earnings ratio
d. Return on average equity
e. Net margin
Year 3
b. Earnings per share based on the average number of shares outstanding.
Note: Round your answer to 2 decimal places.
c. Price-earnings ratio (market prices: Year 3, $64 per share; Year 2, $73 per share).
Note: Round your answer to 2 decimal places.
d. Return on average equity.
Note: Round your percentage answer to 2 decimal places (for example, 0.2345 should be entered as 23.45).
e. Net margin.
Note: Round your…
Selected information taken from the financial statements of Wiley Company for two successibe years follows. You are to compute the percentage change from year 1 to year 2 whenever possible. Round all calculations to the nearest whole percentage.
                             Year 2                   Year 1
a. Accounts Receivable
$126,000
$160,000
b. Marketable Securities
-0-
  250,000
c. Retained Earnings
80,000
(80,000)
d. Notes RecievableÂ
120,000
 -0-
e. Notes Payable
890,000
800,000
f. Â Cash
84,000
80,000
e. Sales
970,000
910,000
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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