Intermediate Accounting
3rd Edition
ISBN: 9780136912644
Author: Elizabeth A. Gordon; Jana S. Raedy; Alexander J. Sannella
Publisher: Pearson Education (US)
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Textbook Question
Chapter 4, Problem 4.10E
Transaction Analysis:
Hartman Housewares Company began the current year with the following account balances:
Cash | $70,000 |
25,000 | |
Supplies | 5,000 |
Accounts Payable | 28,000 |
Common Stock | 32,000 |
40,000 |
The following transactions were completed during the current year.
- a. Bought office equipment with cash, $10,000.
- b. Bought supplies on credit from a vendor, $5,000.
- c. Sold goods for cash $12,000 (ignore the inventory and cost of goods sold entries of this transaction).
- d. Bought raw materials from a supplier on account, $2,000.
- e. Sold goods to customers on account. $6,000 (ignore the inventory and cost of goods sold entries of this transaction).
- f. Purchased raw materials by issuing a note payable, $3,000.
- g. Paid cash toward note payable balance, $500.
- h. Received cash from customer to apply to credit account balance, $3,000.
- i. Paid for accounting and legal fees in cash $400.
- j. Paid salaries in cash, $1,000.
Required:
- a. Show the effect of each transaction on assets, liabilities, and equity using the
accounting equation. - b. Prepare journal entries Omit explanations.
- c.
Post each transaction to t-accounts. - d. Determine the ending balances for each account.
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Chapter 4 Solutions
Intermediate Accounting
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