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 3, Problem 3.4PB
Analyzing, Journalizing, and Interpreting Business Activities
The following items present a sample of business activities involving Dry Cleaner Corporation (DCC) for the year ended December 31. DCC provides cleaning services for individual customers and for employees of several large companies in the city.
| Dec 1: | DCC’s owner paid $10,000 cash to acquire 200 of DCC’s common shares. | |
| Dec 7: | DCC ordered cleaning supplies at a total cost of $2,000. The supplies are expected to be received in early January. | |
| Dec 17: | Customers paid $200 cash to DCC to obtain DCC gift cards that they could use to obtain future cleaning services at no additional cost. | |
| Dec 21: | DCC ran advertising in the local newspaper today at a total cost of $500. DCC is not required to pay for the advertising until January 21. | |
| Dec 22: | DCC paid $1,000 to the landlord for January rent. | |
| Dec 23: | DCC’s owner sold 20 of his own DSS common shares to a private investor, at a selling price of $1,200. | |
| Dec 28: | DCC paid in full for the advertising run in the local newspaper on December 21. | |
| on December 21. | ||
| Dec 29: | The cleaning supplies ordered on December 7 were received today. DCC does not have to pay for these supplies until January | |
| 29. | ||
| Dec 31: | Today. DCC completed cleaning services for several large companies at a total price of $2,000. The companies are expected to pay for the services by January 31. |
Required:
- 1. Indicate the
accounting equation effects of each item, using a table similar to the one shown for Demonstration Case B on page 116. Reference each item by date. - 2. Prepare journal entries to record each item. Reference each item by date. If a
journal entry is not required, explain. - 3. Identify at least two adjustments that DCC will be required to make before it can prepare a final income statement for December.
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rowne Cleaning provides cleaning services for Amber Inc., a business with four buildings. Crowne assigned different cleaning charges for each building based on the amount of square feet to be cleaned. The charges for the four buildings are $108,000, $102,600, $122,400, and $82,800. Amber secured this amount by signing a note bearing 8% interest on June 1.
Required:
Question Content Area
1. Prepare the journal entry to record the sale on June 1. If an amount box does not require an entry, leave it blank.
2. Determine how much interest Crowne will receive if the note is repaid on December 1.
3. prepare Crowne’s journal entry to record the cash received to pay off the note and interest on December 1. If an amount box does not require an entry, leave it blank.
DO NOT GIVE SOLUTION IN IMAGE
Lowell Company sells swimming pool supplies and equipment. The majority of Lowell's customers are small, family-owned businesses.
Assume that Lowell Corporation completed the following transactions during the current year. Lowell's fiscal year ends on December
31.
September 15
October 1
October 5
October 15
December 12
December 31
Required:
Paid a supplier $129,500 for inventory previously purchased on credit.
Borrowed $904,500 from Mass Bank for general use; signed an 11-month, 5% annual interest-bearing note for
the money.
Received a $42,250 customer deposit from Jim Scanlon for services to be performed in the future.
Performed $19,800 of the services paid for by Mr. Scanlon.
Received electric bill for $12,450. Lowell plans to pay the bill in early January.
Determined wages of $52,900 earned but not yet paid on December 31 (disregard payroll taxes).
1.&2. Prepare journal entries for each of these transactions.
Prepare the following journal entry, all transactions that occurred in January:
The Corporation purchased a Delivery Van for customer deliveries. The Delivery Van cost $21,400.
A down payment of cash in the amount of $5,000 was paid to the Car Dealership, and a promissory note was signed for the remaining amount owed.
Chapter 3 Solutions
Fundamentals of Financial Accounting
Ch. 3 - Prob. 1QCh. 3 - When accounting was developed in the 14th and 15th...Ch. 3 - Define accrual basis accounting and contrast it...Ch. 3 - Prob. 4QCh. 3 - Prob. 5QCh. 3 - Prob. 6QCh. 3 - Explain the expense recognition principle...Ch. 3 - Explain why stockholders equity is increased by...Ch. 3 - Explain why revenues are recorded as credits and...Ch. 3 - Complete the following table by entering either...
Ch. 3 - Complete the following table by entering either...Ch. 3 - Prob. 12QCh. 3 - Prob. 13QCh. 3 - What is the difference between Accounts Receivable...Ch. 3 - What is the difference between Accounts Payable...Ch. 3 - For each of the following situations, indicate...Ch. 3 - Prob. 17QCh. 3 - Which of the following items is not a specific...Ch. 3 - Prob. 2MCCh. 3 - Prob. 3MCCh. 3 - Prob. 4MCCh. 3 - If a company incorrectly records a payment as an...Ch. 3 - Prob. 6MCCh. 3 - Prob. 7MCCh. 3 - Prob. 8MCCh. 3 - Webby Corporation reported the following amounts...Ch. 3 - Prob. 10MCCh. 3 - Prob. 3.1MECh. 3 - Identifying Accrual Basis Revenues The following...Ch. 3 - Identifying Accrual Basis Expenses The following...Ch. 3 - Recording Accrual Basis Revenues For each of the...Ch. 3 - Recording Accrual Basis Expenses For each of the...Ch. 3 - Prob. 3.6MECh. 3 - Prob. 3.7MECh. 3 - Prob. 3.8MECh. 3 - Prob. 3.9MECh. 3 - Identifying Accrual Basis Expenses The following...Ch. 3 - Prob. 3.11MECh. 3 - Recording Accrual Basis Expenses For each of the...Ch. 3 - Prob. 3.13MECh. 3 - Preparing Accrual Basis Journal Entries for...Ch. 3 - Preparing Accrual Basis Journal Entries for...Ch. 3 - Prob. 3.16MECh. 3 - Determining the Accounting Equation Effects of...Ch. 3 - Prob. 3.18MECh. 3 - Preparing an Income Statement and Calculating Net...Ch. 3 - Preparing Financial Statements from a Trial...Ch. 3 - Preparing an Income Statement and Calculating Net...Ch. 3 - Prob. 3.22MECh. 3 - Calculating and Interpreting Net Profit Margin...Ch. 3 - Prob. 3.1ECh. 3 - Matching Definitions with Terms Match each...Ch. 3 - Identifying Accrual Basis Revenues According to...Ch. 3 - Identifying Accrual Basis Revenues According to...Ch. 3 - Identifying Accrual Basis Expenses Under accrual...Ch. 3 - Identifying Accrual Basis Expenses Under accrual...Ch. 3 - Determining Accounting Equation Effects and Net...Ch. 3 - Determining Accounting Equation Effects and Net...Ch. 3 - Recording Journal Entries and Determining Net...Ch. 3 - Prob. 3.10ECh. 3 - Recording Journal Entries and Determining Net...Ch. 3 - Recording and Posting Accrual Basis Journal...Ch. 3 - Prob. 3.13ECh. 3 - Analyzing Transactions from the Perspectives of...Ch. 3 - Prob. 3.15ECh. 3 - Determining Accounting Equation Effects of Several...Ch. 3 - Preparing Journal Entries For each of the...Ch. 3 - Prob. 3.18ECh. 3 - Creating an Unadjusted Trial Balance Based on the...Ch. 3 - Inferring Transactions, Creating Financial...Ch. 3 - Determining the Effects of Various Transactions EZ...Ch. 3 - COACHED PROBLEMS Recording Nonquantitative Journal...Ch. 3 - Prob. 3.2CPCh. 3 - Prob. 3.3CPCh. 3 - Prob. 3.4CPCh. 3 - Prob. 3.1PACh. 3 - Recording Journal Entries Diana Mark is the...Ch. 3 - Analyzing the Effects of Transactions Using...Ch. 3 - Prob. 3.4PACh. 3 - Prob. 3.1PBCh. 3 - Prob. 3.2PBCh. 3 - Analyzing the Effects of Transactions Using...Ch. 3 - Analyzing, Journalizing, and Interpreting Business...Ch. 3 - Prob. 3.1COPCh. 3 - SKIL_S DEVELOPMENT CASES Finding Financial...Ch. 3 - Prob. 3.2SDCCh. 3 - Prob. 3.4SDCCh. 3 - Ethical Decision Making: A Mini-Case Mike Lynch is...Ch. 3 - Accounting for Business Operations Starting in...
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