Financial Accounting: Information for Decisions
9th Edition
ISBN: 9781260158809
Author: Wild, John
Publisher: MCGRAW-HILL HIGHER EDUCATION
expand_more
expand_more
format_list_bulleted
Question
Chapter 2, Problem 2SP
1.
Summary Introduction
Introduction: Expenses means the
1.
Expert Solution
Answer to Problem 2SP
All the journal entries required are maintained and the ledger of the accounts is maintained with trial balance.
Explanation of Solution
| Date | Particulars | Debit ($) | Credit($) |
| Oct 1. | Cash | 45,000 | |
| Office Equipment | 8,000 | ||
| Computer Equipment | 20,000 | ||
| Common stock | 73,000 | ||
| (Being cash and equipment invested by owner in stock) | |||
| Oct 2 | Prepaid Rent | 3,300 | |
| Cash | 3,300 | ||
| (Being 4 months advance paid) | |||
| Oct 3 | Computer Supplies | 1,420 | |
| Accounts Payable | 1,420 | ||
| (Being supply purchased on credit) | |||
| Oct 5 | Prepaid Insurance | 2,220 | |
| Cash | 2,220 | ||
| (Being 12 month premium paid in advance) | |||
| Oct 6 | 4,800 | ||
| Computer Service Provider | 4,800 | ||
| (Being customer billed for services) | |||
| Oct 8 | Account Payable | 1,420 | |
| Cash | 1,420 | ||
| (Being balance paid due on account payable) | |||
| Oct 12 | Accounts Receivable | 1,400 | |
| Computer Services Revenue | 1,400 | ||
| (Being customer billed for services) | |||
| Oct 15 | Cash | 4,800 | |
| Accounts Receivables | 4,800 | ||
| (Being account receivables collected) | |||
| Oct 17 | Repairs Expense- Computer | 805 | |
| Cash | 805 | ||
| (Being payment made for Computer repairs) | |||
| Oct 20 | Advertising Expenses | 1,728 | |
| Cash | 1,728 | ||
| (Being advertising expenses paid off) | |||
| Oct 22 | Cash | 1,400 | |
| Account Receivables | 1,400 | ||
| (Being Account receivable collected) | |||
| Oct 28 | Accounts Receivables | 5,208 | |
| Computer Services revenue | 5,208 | ||
| (Being customer billed for services) | |||
| Oct 31 | Wages expenses | 875 | |
| Cash | 875 | ||
| (Being Employee paid for part time work) | |||
| Oct 31 | Dividends | 3,600 | |
| Cash | 3,600 | ||
| (Being dividend paid off) | |||
| Nov 1 | Mileage Expenses | 320 | |
| Cash | 320 | ||
| (Being Mileage expenses reimbursed) | |||
| Nov 2 | Cash | 4,633 | |
| Computer Service Revenue | 4,633 | ||
| (Being cash collected from customer) | |||
| Nov 5 | Computer Supplies | 1,125 | |
| Cash | 1,125 | ||
| (Being computer supplies purchased) | |||
| Nov 8 | Accounts Receivables | 5,668 | |
| Computer Service Revenue | 5,668 | ||
| (Being customer billed for services) | |||
| Nov18 | Cash | 2,208 | |
| Accounts receivable | 2,208 | ||
| (Being Accounts receivable collected) | |||
| Nov 22 | Miscellaneous Expenses | 250 | |
| Cash | 250 | ||
| (Being donation recorded) | |||
| Nov 24 | Accounts Receivables | 3,950 | |
| Computer Service Revenue | 3,950 | ||
| (Being customer billed for services) | |||
| Nov 28 | Mileage Expenses | 384 | |
| Cash | 384 | ||
| (Being Mileage expenses reimbursed) | |||
| Nov 30 | Wages expenses | 1,750 | |
| Cash | 1,750 | ||
| (Being Employee paid for part time work) | |||
| Nov 30 | Dividends | 2,000 | |
| Cash | 2,000 | ||
| (Being dividend paid off) | |||
2.
Summary Introduction
Introduction: Expenses means the cash outflow from the organization and it is shown on the debit side of the company’s account. As expenses arise when any service or good is purchased, they do not cause a regular outflow of cash. Considering income and revenues refers to the credit balance in the company’s account. Assets of the company always have debit balance as it is owned by the company.
To calculate: Journal entries, trial balance and general ledgers of the accounts.
2.
Expert Solution
Answer to Problem 2SP
All the journal entries required are maintained and the ledger of the accounts is maintained with trial balance.
Explanation of Solution
General Ledger Accounts
| Date | Debit($) | Credit($) | Balance($) |
| Oct 1 | 4500 | 45,000 | |
| Oct 2 | 3,300 | 41,700 | |
| Oct 5 | 2,220 | 39,480 | |
| Oct 8 | 1,420 | 38,060 | |
| Oct 15 | 4,800 | 42,860 | |
| Oct 17 | 805 | 42,055 | |
| Oct 20 | 1,728 | 40,327 | |
| Oct 22 | 1,400 | 41,727 | |
| Oct 31 | 875 | 40,852 | |
| Oct 31 | 3,600 | 37,252 | |
| Nov 1 | 320 | 36,932 | |
| Nov 2 | 4,633 | 41,565 | |
| Nov 5 | 1,125 | 40,440 | |
| Nov 18 | 2,208 | 42,648 | |
| Nov 22 | 250 | 42,398 | |
| Nov 28 | 384 | 42,014 | |
| Nov 30 | 1,750 | 40,264 | |
| Nov 30 | 2,000 | 38,264 |
Account Receivable
| Date | Debit ($) | Credit($) | Balance($) |
| Oct 6 | 4,800 | 4,800 | |
| Oct 12 | 1,400 | 6,200 | |
| Oct 15 | 4,800 | 1,400 | |
| Oct 22 | 1,400 | 0 | |
| Oct 28 | 5,208 | 5,208 | |
| Nov 8 | 5,668 | 10,876 | |
| Nov 18 | 2,208 | 8,668 | |
| Nov 28 | 3,950 | 12,618 |
Computer Supplies
| Date | Debit ($) | Credit($) | Balance($) |
| Oct 3 | 1,420 | 1,420 | |
| Nov 5 | 1,125 | 2,545 |
Prepaid Insurance
| Date | Debit ($) | Credit($) | Balance($) |
| Oct 3 | 2,220 | 2,220 |
Prepaid Rent
| Date | Debit ($) | Credit($) | Balance($) |
| Oct 2 | 3,330 | 3,330 |
Office Equipment
| Date | Debit ($) | Credit($) | Balance($) |
| Oct 1 | 8,000 | 8,000 |
Computer Equipment
| Date | Debit ($) | Credit($) | Balance($) |
| Oct 1 | 20,000 | 20,000 |
Account payable
| Date | Debit ($) | Credit($) | Balance($) |
| Oct 3 | 1,420 | 1,420 | |
| Oct 8 | 1,420 | 0 |
Common Stock
| Date | Debit ($) | Credit($) | Balance($) |
| Oct 1 | 73,000 | 73,000 |
Dividends
| Date | Debit ($) | Credit($) | Balance($) |
| Oct 31 | 3,600 | 3,600 | |
| Nov 30 | 2,000 | 5,600 |
Computer Service Revenue
| Date | Debit ($) | Credit($) | Balance($) |
| Oct 6 | 4,800 | 4,800 | |
| Oct 12 | 1,400 | 6,200 | |
| Oct 28 | 5,208 | 11,408 | |
| Nov 2 | 4,633 | 16,041 | |
| Nov 28 | 5,668 | 21,709 | |
| Nov 24 | 3,950 | 25,659 |
Wages Expense
| Date | Debit ($) | Credit($) | Balance($) |
| Oct 31 | 875 | 875 | |
| Nov 30 | 1,750 | 2,625 |
Advertising Expenses
| Date | Debit ($) | Credit($) | Balance($) |
| Oct 30 | 1,728 | 1,728 |
Mileage Expenses
| Date | Debit ($) | Credit($) | Balance($) |
| Nov 1 | 320 | 320 | |
| Nov 28 | 384 | 704 |
Miscellaneous Expenses
| Date | Debit ($) | Credit($) | Balance($) |
| Nov 22 | 250 | 250 |
Repair expenses-Computer
| Date | Debit ($) | Credit($) | Balance($) |
| Oct 17 | 805 | 805 |
3.
Summary Introduction
Introduction: Expenses means the cash outflow from the organization and it is shown on the debit side of the company’s account. As expenses arise when any service or good is purchased, they do not cause a regular outflow of cash. Considering income and revenues refers to the credit balance in the company’s account. Assets of the company always have debit balance as it is owned by the company. To calculate: Journal entries, trial balance and general ledgers of the accounts.
3.
Expert Solution
Answer to Problem 2SP
All the journal entries required are maintained and the ledger of the accounts is maintained with trial balance.
Explanation of Solution
Trial Balance (As on November 30)
| Particulars | Debit | Credit |
| Cash | $38,264 | |
| Supplies | $2,545 | |
| Equipment | $8,000 | |
| Account Receivable | $12,618 | |
| Rent in Advance | $3,300 | |
| Prepaid Insurance | $2,220 | |
| Computer equipment | $20,000 | |
| Accounts payable | 0 | |
| Common Stock | $73,000 | |
| Dividend Paid | $5,600 | |
| Wage Expenses | $2,625 | |
| Advertisement | $1,728 | |
| Mileage expenses | $704 | |
| Miscellaeous Expenses | $250 | |
| Repair | $805 | |
| Service revenue | $25,659 | |
| Total | $98,659 | $98,659 |
Want to see more full solutions like this?
Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
GJ started operating his new salon business (Sir George Salon) during 2017. He provides services for corporate accounts with 60-day payment term. He submits the following data in 2018:
Supplies inventory, 1/1/2018
50,000
Supplies inventory, 12/31/2018
80,000
Revenues
3,000,000
Accounts receivable, Jan. 1, 2018
500,000
Accounts receivable, Dec. 31, 2018
700,000
Purchase of supplies from VAT registered entities (net)
100,000
Purchase of supplies from non-VAT registered entities
50,000
Determine the following:
What is the applicable business tax for the taxpayer?
How much is the correct business tax due?
Assume the taxpayer is non-VAT registered, how much is the VAT payable for the year?
Assume the taxpayer is VAT registered, how much is the VAT payable for the year?
Statsen Company, which prepares financial reports at the end of the calendar year, established a branch on July 1, 2020. The following transactions occurred during the formation of the branch and its first six months of operations, ending December 31, 2020.
1. The Home Office sent $35,000 cash to the branch to begin operations.
2. The Home Office shipped inventory to the branch. Intercompany billings totaled $75,000, which was the Home Office's cost.
3. The branch acquired merchandise display equipment which cost $15,000 on July 1, 2020. (Assume that branch fixed assets are carried on the home office books).
4. The branch purchased inventory costing $53,750 from outside vendors on account.
5. The branch had credit sales of $106,250 and cash sales of $43,750.
Requirements:
1. Prepare journal entries in the books of the home office and in the books of the branch office for the above transaction
The first project for the semester will involve the following items to turn in:
1) Journal entries for financial transactions I will provide you.
2) An adjusted trial balance.
3) An Income statement.
1) On December 1 of 2019 Harold Hammer deposited $ 15,100 in a bank account in the name of Huaning Corporation in exchange for shares of common stock in the corporation.
2) On December 1 of 2019 Huaning Corporation purchased supplies on account for $ 226 .
3) On December 4 of 2019 Huaning Corporation received cash of $ 384 for product sold to the customer.
4) On December 5 of 2019 Huaning Corporation paid the vendor for the December 1st purchase of supplies. 5) On December 6 of 2019 Huaning Corporation purchases supplies on account for $ 469 .6) On December 8 of 2019 Huaning Corporation sells product for $ 445 on account to a customer.7) On December 9 of 2019 Huaning Corporation sells product for $ 462 on account to a customer.
8) On December 10 of 2019 Huaning Corporation paid, in…
Chapter 2 Solutions
Financial Accounting: Information for Decisions
Ch. 2 - Provide the names of two (a) asset accounts, (b)...Ch. 2 - What is the difference between a note payable and...Ch. 2 - Prob. 3DQCh. 2 - Prob. 4DQCh. 2 - Prob. 5DQCh. 2 - Should a transaction be recorded first in a...Ch. 2 - Prob. 7DQCh. 2 - Why does the recordkeeper prepare a trial balance?Ch. 2 - Prob. 9DQCh. 2 - Prob. 10DQ
Ch. 2 - Prob. 11DQCh. 2 - Prob. 12DQCh. 2 - Prob. 13DQCh. 2 - Prob. 14DQCh. 2 - Prob. 15DQCh. 2 - Review the Apple balance sheet in Appendix A....Ch. 2 - Prob. 17DQCh. 2 - Prob. 18DQCh. 2 - Identify the items from the following list that...Ch. 2 - Prob. 2QSCh. 2 - Prob. 3QSCh. 2 - Prob. 4QSCh. 2 - Prob. 5QSCh. 2 - Prob. 6QSCh. 2 - Prob. 7QSCh. 2 - Prob. 8QSCh. 2 - Prob. 9QSCh. 2 - Prob. 10QSCh. 2 - Prob. 11QSCh. 2 - In a recent year’s financial statements, Home...Ch. 2 - Prob. 13QSCh. 2 - Prob. 1ECh. 2 - Prob. 2ECh. 2 - Enter the number for the item that best completes...Ch. 2 - Prob. 4ECh. 2 - Prob. 5ECh. 2 - Prob. 6ECh. 2 - Prob. 7ECh. 2 - Prob. 8ECh. 2 - Prob. 9ECh. 2 - Prob. 10ECh. 2 - Prepare general journal entries for the following...Ch. 2 - Prob. 12ECh. 2 - Assume the following Taccounts reflect Belle Co.’s...Ch. 2 - Prob. 14ECh. 2 - A corporation had the following assets and...Ch. 2 - Prob. 16ECh. 2 - Use the information in Exercise 216 to prepare an...Ch. 2 - Prob. 18ECh. 2 - Compute the missing amount for each of the...Ch. 2 - Prob. 20ECh. 2 - You are told the column totals in a trial balance...Ch. 2 - a. Calculate the debt ratio and the return on...Ch. 2 - Prob. 23ECh. 2 - Prob. 24ECh. 2 - Prob. 1PSACh. 2 - Prob. 2PSACh. 2 - Prob. 3PSACh. 2 - Prob. 4PSACh. 2 - Prob. 5PSACh. 2 - Prob. 6PSACh. 2 - Prob. 1PSBCh. 2 - Prob. 2PSBCh. 2 - Prob. 3PSBCh. 2 - Nuncio Consulting complete the following...Ch. 2 - Prob. 5PSBCh. 2 - Prob. 6PSBCh. 2 - Prob. 2SPCh. 2 - Prob. 1GLPCh. 2 - Prob. 2GLPCh. 2 - Prob. 3GLPCh. 2 - Prob. 4GLPCh. 2 - Prob. 5GLPCh. 2 - Prob. 6GLPCh. 2 - Prob. 7GLPCh. 2 - Using transactions from the following assignments,...Ch. 2 - Prob. 1FSACh. 2 - Prob. 2FSACh. 2 - Prob. 3FSACh. 2 - Assume that you are a cashier and your manager...Ch. 2 - Prob. 2BTNCh. 2 - Access EDGAR online (SEC.gov) and locate the 2016...Ch. 2 - Prob. 5BTNCh. 2 - Prob. 6BTN
Knowledge Booster
Similar questions
- Blue Company, an architectural firm, has a bookkeeper who maintains a cash receipts and disbursements journal. At the end of the year (2019), the company hires you to convert the cash receipts and disbursements into accrual basis revenues and expenses. The total cash receipts are summarized as follows. The accounts receivable from customers at the end of the year are 120,000. You note that the accounts receivable at the beginning of the year were 190,000. The cash sales included 30,000 of prepayments for services to be provided over the period January 1, 2019, through December 31, 2021. a. Compute the companys accrual basis gross income for 2019. b. Would you recommend that Blue use the cash method or the accrual method? Why? c. The company does not maintain an allowance for uncollectible accounts. Would you recommend that such an allowance be established for tax purposes? Explain.arrow_forwardPrepare journal entries to record the following transactions for the month of November: A. on first day of the month, issued common stock for cash, $20,000 B. on third day of month, purchased equipment for cash, $10,500 C. on tenth day of month, received cash for accounting services, $14,250 D. on fifteenth day of month, paid miscellaneous expenses, $3,200 E. on last day of month, paid employee salaries, $8,600arrow_forwardThe following transactions occurred during 2021 for the Beehive Honey Corporation: Feb. 1 Borrowed $12,000 from a bank and signed a note. Principal and interest at 10% will be paid on January 31, 2022. Apr. 1 Paid $3,600 to an insurance company for a two-year fire insurance policy. July 17 Purchased supplies costing $2,800 on account. The company records supplies purchased in an asset account. At the year-end on December 31, 2021, supplies costing $1,250 remained on hand. Nov. 1 A customer borrowed $6,000 and signed a note requiring the customer to pay principal and 8% interest on April 30, 2022. Required:1. Record each transaction in general journal form.2. Prepare any necessary adjusting entries at the year-end on December 31, 2021. No adjusting entries were recorded during the year for any item.arrow_forward
- Carlos Young started an engineering firm called Young Engineering. He began operations in March 2020 and completed seven transactions, including his initial investment of $17,000 cash. After these transactions, the ledger included the following accounts with their normal balances: $ 26,660 Cash Office Supplies Prepaid Insurance Office Equipment Accounts Payable Carlos Young, Capital Carlos Young, Withdrawals Engineering Revenue Rent Expense 660 3, 200 16,500 16,500 17,000 3,740 24,000 6,740 Required: Prepare a trial balance for the business. YOUNG ENGINEERING Trial Balance March 31, 2020 Debit Creditarrow_forward19 Dec. Borrowed $28,000 from the bank for personal use. The loan carried an interest rate of 6% a year and the first payment was due on 19 January. Williamson signed a note payable to the bank in the name of the business. How would this be journaled, put on an income statment, balance sheet, and cash flow statment for december 31st?arrow_forwardNelson Daganta formed the Liceo Signages on October 1, 2020. He deposited 250,000 in GE Money Bank under the name of the new business entity. During the month of October 2020, the following transactions occured.arrow_forward
- Flood Relief Inc. prepares monthly financial statements and therefore adjusts its accounts at the end of every month. The following information is available for June 2016: a. Flood received a $10,000, 4%, two-year note receivable from a customer for services rendered. The principal and interest are due on June 1, 2018. Flood expects to be able to collect the note and interest in full at that time. b. Office supplies totaling $5,600 were purchased during the month. The asset account Supplies is debited whenever a purchase is made. A count in the storeroom on June 30, 2016, indicates that supplies on hand amount to $507. The supplies on hand at the beginning of the month total $475. c. The company purchased machines last year for $170,000. The machines are expected to be used for four years and have an estimated salvage value of $2,000. d. On June 1, the company paid $4,650 for rent for June, July, and August. The asset Prepaid Rent was debited; it did not have a balance on…arrow_forwardThe following transactions occurred during 2024 for the Beehive Honey Corporation: February 1 Borrowed $12,000 from a bank and signed a note. Principal and interest at 10% will be paid on January 31, 2025. April 1 Paid $3,600 to an insurance company for a two-year fire insurance policy. July 17 Purchased supplies costing $2,800 on account. At the year-end on December 31, 2024, supplies costing $1,250 remained on hand. November 1 A customer borrowed $6,000 and signed a note requiring the customer to pay principal and 8% interest on April 30, 2025. Required: Record each transaction in general journal form. Prepare any necessary adjusting entries at the year-end on December 31, 2024. No adjusting entries were recorded during the year for any item.arrow_forwardPrepare the general journal entries for the following transactions. Mr. Laban Deyro opened his laundry business in Iloilo City on January 2, 2016. The following transactions occurred during the month of January 2016: DATE TRANSACTIONS 1/2/16 Invested PHP500,000 to his business. The trade name 1/3/16 Hired Allan and Allie who will manage his business 1/4/16 Collections from various customers for the day- PHP3,000 1/5/16 of the business was "MR. LABANDERO" Purchase store supplies from Labada Store - PHP10,000 1/7/16 Collections from various customers for the day - PHP8,000 1/8/16 MR. LABANDERO entered into an exclusive contract with Sikat Hotel where the business will do all the laundry of the hotel. 1/9/16 Sikat Hotel availed the services of MR. LABANDERO amounting to PHP15,000. Payment will be made on January 20, 2016. 1/10/16 Collections from various customers for the day- PHP12,000 1/12/16 Purchase a washing machine amounting to PHP50,000 1/15/16 Collections from various customers…arrow_forward
- Sammi started her business on 1 January 2021 called Trendy. You are required to prepare the GENERAL JOURNAL for the following transactions of Trendy for the first month of operations. Jan 01Sammi invested RM50, 000 cash into the business.Jan 02Trendy purchased used motor vehicle for RM20,000.Jan 08Trendy paid rent for RM4, 000.Jan 08Trendy completed work for a client and immediately received RM15, 000.Jan 12Sammi signed a RM50,000 small business loans with CIMB Bank under Trendy’s name.Jan 15Ideal Homes renovated and installed fixtures and fittings at a cost of RM3, 000. Trendy will pay the bill at a later date.Jan 15Trendy paid RM1, 000 cash for advertisement in a local magazine.Jan 28Trendy completed work for another client on credit and invoiced the client RM5, 000. The client is allowed to settle the bill within 30 days.Jan 30Trendy paid Ideal Homes that installed the fixtures and fittings earlier.Jan 30Trendy paid RM150 for usage of electricity for the month.arrow_forwardAn office supply company that sells and services commercial office copiers was founded in 2020. Record the following transactions from the month of September 2024. Regular entries: Sept. 1 Purchased a new delivery truck for $88,800, paying $36,400 cash and financing the balance using a note payable at 9% per annum. The note payable is due in 12 months, and interest on the note must be paid on the first day of every month, beginning on October 1, 2024. The truck has a useful life of six years and a residual value of $8,880. Sept 1 Paid $2,664 for an insurance policy on the new truck for the period September 1, 2024, to August 31, 2025. Sept 5 Purchased inventory on credit at a cost of $14,430. Sept 12 A local University, one of the company’s largest customers, signed a photocopy service contract. The contract runs from October 1, 2024, to September 30, 2025, and will mean that the company services all of the university’s photocopiers. InIn accordance with the contract terms, the…arrow_forwardMaria Cruz formed the Kiddies Jade on October 1, 2020. She deposited 250,000 in BDO bank under the name of the new business entity. During October 2020, the following transactions occurred: Required: Do its Journal Entryarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Individual Income Taxes
Accounting
ISBN:9780357109731
Author:Hoffman
Publisher:CENGAGE LEARNING - CONSIGNMENT
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning