Financial Accounting: Information for Decisions
8th Edition
ISBN: 9781259533006
Author: John J Wild
Publisher: McGraw-Hill Education
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Chapter 2, Problem 4PSA
1.
Summary Introduction
Introduction:
To prepare: The general
1.
Expert Solution
Explanation of Solution
| September | Particular | PR | Dr. | Cr. |
| a. | Cash | 101 | 60,000 | |
| Office Equipment | 163 | 25,000 | ||
| To capital | 301 | 85,000 | ||
| (Owner’s investment) | ||||
| b. | Land | 172 | 40000 | |
| Building | 170 | 16000 | ||
| Cash | 101 | 30000 | ||
| Notes payable | 250 | 170000 | ||
| (To record the purchase of land building with cash and notes payable) | ||||
| c. | Office supplies | 108 | 2000 | |
| To account payable | 201 | 2000 | ||
| (Purchased office equipment and office supplies) | ||||
| d. | Automobile | 164 | 16,500 | |
| Capital | 301 | 16,500 | ||
| (to record the owner’s investment | ||||
| e. | Office equipment | 163 | 5600 | |
| Account payable | 201 | 5600 | ||
| (to record the purchased office equipment on credit) | ||||
| f. | Salaries expense | 601 | 1800 | |
| To cash | 101 | 1800 | ||
| (to record the cash paid for salary) | ||||
| g | Cash | 101 | 8000 | |
| Fees earned | 402 | 8000 | ||
| h. | Utilities expense | 602 | 635 | |
| To Cash | 101 | 635 | ||
| (Paid cash for utilities) | ||||
| i. | Account payable | 201 | 2000 | |
| Cash | 101 | 2000 | ||
| (to record the cash paid that was due) | ||||
| j. | Office equipment | 163 | 20300 | |
| Cash | 101 | 20300 | ||
| (to record the purchase of office equipment by paying cash) | ||||
| K | 106 | 6250 | ||
| Fees earn | 406 | 6250 | ||
| (to record the service provided on credit) | ||||
| l. | Salaries expenses | 601 | 1800 | |
| Cash | 101 | 1800 | ||
| m. | Cash | 101 | 4000 | |
| Account receivable | 106 | 4000 | ||
| N | Withdrawals | 302 | 2800 | |
| Cash | 101 | 2800 | ||
| (being cash withdrawals ) | ||||
2.
Summary Introduction
Introduction: Cash Flow Analysis is a technique used by the company to know the overall worth of the company as well as its subsidiary or branches. Cash flow analysis helps in analyzing the company’s cash outflow and inflow through different activities like financing activities, investing activities, operating activities. This analysis shows how the company generates money or revenue for its working.
To prepare: Ledger for the following transactions.
2.
Expert Solution
Answer to Problem 4PSA
Balance of cash ledger is $12665, account receivable $2250, office supplies $2000, office equipment $50900, salary $3600
Explanation of Solution
| Cash Account No.101 | ||||
| Date | PR | Debit | Credit | Balance |
| a. | G1 | 60000 | 60000 | |
| b. | G1 | 30000 | 30000 | |
| f. | G1 | 1800 | 28200 | |
| g. | G1 | 8000 | 36200 | |
| h. | G1 | 635 | 35565 | |
| i. | G1 | 2000 | 33565 | |
| j. | G1 | 2030 | 13265 | |
| l. | G1 | 1800 | 11465 | |
| m. | 4000 | 15465 | ||
| n. | 2800 | 12665 | ||
| Account receivable | Account no.106 | |||
| Date | PR | Debit | Credit | Balance |
| k. | G1 | 6250 | 6250 | |
| M | G1 | 4000 | 2250 | |
| Office supplies | Account no. 108 | |||
| Date | PR | Debit | Credit | Balance |
| c. | G1 | 2000 | 2000 |
| Office equipment | Account no. 163 | |||
| Date | PR | Debit | Credit | Balance |
| a. | G1 | 25000 | 25000 | |
| e. | G1 | 5600 | 30600 | |
| j. | G1 | 20300 | 50900 |
| Automobile | Account no. 164 | |||
| Date | PR | Debit | Credit | Balance |
| d. | G1 | 16500 | 16500 | |
| Building | Account no. 170 | |||
| Date | PR | Debit | Credit | Balance |
| b. | G1 | 160,000 | 160,000 | |
| Land | Account no. 172 | |||
| Date | PR | Debit | Credit | Balance |
| b. | G1 | 40000 | 40000 | |
| Account payable | Account no. 201 | |||
| Date | PR | Debit | Credit | Balance |
| c. | G1 | 2000 | 2000 | |
| e. | 5600 | 7600 | ||
| I | 2000 | 5600 |
| Note payable | Account no. 250 | |||
| Date | PR | Debit | Credit | Balance |
| b. | G1 | 170000 | 170000 |
| Capital | Account no. 301 | |||
| Date | PR | Debit | Credit | Balance |
| a. | G1 | 85000 | 85000 | |
| d. | G1 | 16500 | 101500 | |
| G1 | ||||
| Withdrawals | Account no. 302 | |||
| Date | PR | Debit | Credit | Balance |
| n. | G1 | 2800 | 2800 |
| Fees earn | Account no. 402 | |||
| Date | PR | Debit | Credit | Balance |
| g. | G1 | 8000 | 8000 | |
| k. | G1 | 6250 | 14250 |
| Utilities Expense | Account no. 602 | |||
| Date | PR | Debit | Credit | Balance |
| h. | G1 | 635 | 635 |
| Salaries | Account no. 601 | |||
| Date | PR | Debit | Credit | Balance |
| f. | G1 | 1800 | 1800 | |
| l. | G1 | 1800 | 3600 |
3.
Summary Introduction
Introduction: Cash Flow Analysis is a technique used by the company to know the overall worth of the company as well as its subsidiary or branches. Cash flow analysis helps in analyzing the company’s cash outflow and inflow through different activities like financing activities, investing activities, operating activities. This analysis shows how the company generates money or revenue for its working.
To prepare: Trail balance.
3.
Expert Solution
Answer to Problem 4PSA
Total of trail balance is $291,350
Explanation of Solution
| Trail balance | ||
| Particular | Dr. | Cr. |
| Cash | 12665 | |
| Account receivable | 2250 | |
| Office supplies | 2000 | |
| Land | 40,000 | |
| Automobile | 16,500 | |
| Office equipment | 50,900 | |
| Account payable | 5600 | |
| Note Payable | 170,000 | |
| Capital | 101,500 | |
| Withdrawals | 2800 | |
| Fees earn | 14,250 | |
| Utilities | 635 | |
| Salaries expense | 3600 | |
| Total | 291,350 | 291350 |
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Mark Jacobs established Jacobs Services in August by contributing $30,000 cash from his personal savings to the business in exchange for 100% of the common stock. Jacobs Services had the following transactions in September.
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Mark Jacobs established Jacobs Services in August by contributing $30,000 cash from his personal savings to the business in exchange for 100% of the common stock. Jacobs Services had the following transactions in September.
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Grady Service Company Inc. was organized by Chris Grady and five other investors. The following events occurred during the year:
a.
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b.
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c.
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g.
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Required:
1.
Prepare journal entries for each transaction. (If no entry is required for a transaction/event, select "No journal…
Chapter 2 Solutions
Financial Accounting: Information for Decisions
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