Accounting: What the Numbers Mean
11th Edition
ISBN: 9781259535314
Author: David Marshall, Wayne William McManus, Daniel Viele
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 5, Problem 5.24E
Exercise 5.24
LO 7, 8, 10
Transaction analysis-various accounts Prepare an answer sheet with the column headings shown here. For each of the following transactions or adjustments, indicate the effect of the transaction or adjustment on the appropriate balance sheet category and on net income by entering for each account affected the account name and amount and indicating whether page 173 it is an addition (+) or a subtraction (-). Transaction a has been done as an illustration. Net income is not affected by every transaction. In some cases only one column may be affected because all of the specific accounts affected by the transaction are included in that category.
| Current Assets | Current Liabilities |
|
| a. Accrued interest income of $30 on a note receivable. | Interest | Interest |
| Receivable | Income | |
| + 30 | + 30 |
- Paid $11,200 in cash as an advance rent payment for a short-term lease that covers the next four months.
- Recorded an adjustment at the end of the first month (in b) to show the amount of rent “used” in the month.
- Inventory was acquired on account and recorded for $3,620. Perpetual inventory is maintained.
- It was later determined that the amount of inventory acquired on account (in d) was erroneously recorded. The actual amount purchased was only $3,260. No payments have been made. Record the correction of this error.
- Purchased 12 units of inventory at a cost of $160 each and then 8 more units of the same inventory item at $176 each. Perpetual inventory is maintained.
- Sold 15 of the items purchased (in f) for $240 each and received the entire amount in cash. Record the sales transaction and the cost of goods sold using the LIFO cost flow assumption. Perpetual inventory is maintained.
- Assume the same facts (in g) except that the company uses the FIFO cost flow assumption. Record only the cost of goods sold.
- Assume the same facts (in g) except that the company uses the weighted-average cost flow assumption. Record only the cost of goods sold.
- Explain why the sales transaction in h and i would be recorded in exactly' the same way' it was in g.
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Students have asked these similar questions
Use the following to answer questions 16 - 19
For each transaction indicate whether it should:
A. increase,
B. decrease, or
C. no effect.
Credit sales
transaction cycle
Assets
Liabilities Stockholders' equity Revenues Expenses
16. Provide services on account
17. Estimate uncollectible accounts
18. Write off accounts as uncollectible
19. Collect on account previously written off
Which type of credit account is balanced in the last two columns of a
worksheet?
O A. Expense
B. Revenue
C. Accounts payable
D. Accounts receivable
topic: double-entry accounting
indicate how to increase each of the accounts below (credit or debit)
cash-
accounts payable-
supplies-
accounts receivable-
Chapter 5 Solutions
Accounting: What the Numbers Mean
Ch. 5 - Prob. 5.1MECh. 5 - Prob. 5.2MECh. 5 - Mini-Exercise 5.3 LO 5 Accounts receivable, bad...Ch. 5 - Mini-Exercise 5.4 LO 5 Bad debts...Ch. 5 - Mini-Exercise 5.5 LO 7, 8 Cost flow...Ch. 5 - Mini-Exercise 5.6 LO 7, 8 Cost flow...Ch. 5 - Prob. 5.7ECh. 5 - Prob. 5.8ECh. 5 - Prob. 5.9ECh. 5 - Prob. 5.10E
Ch. 5 - Exercise 5.11 LO 5 Bad debts analysis-Allowance,...Ch. 5 - Exercise 5.12 LO 5 Bad debts analysis-Allowance...Ch. 5 - Exercise 5.13 LO 5 Cash discounts-ROI Annual...Ch. 5 - Prob. 5.14ECh. 5 - Exercise 5.15 LO 6 Notes receivable-interest...Ch. 5 - Exercise 5.16 LO 6 Notes receivable-interest...Ch. 5 - Exercise 5.17 LO 7, 8 LIFO versus FIFO-matching...Ch. 5 - Prob. 5.18ECh. 5 - Prob. 5.19ECh. 5 - Prob. 5.20ECh. 5 - Exercise 5.21 LO 5, 6, 8 Transaction...Ch. 5 - Exercise 5.22 LO 5. 8, 10 Transaction...Ch. 5 - Exercise 5.23 LO 5, 6, 7 Transaction...Ch. 5 - Exercise 5.24 LO 7, 8, 10 Transaction...Ch. 5 - Prob. 5.25PCh. 5 - Prob. 5.26PCh. 5 - Problem 5.27 LO 5 Bad debts analysis-Allowance...Ch. 5 - Problem 5.28 LO 5 Bad debts analysis-Allowance...Ch. 5 - Problem 5.29 LO 5 Analysis of accounts receivable...Ch. 5 - Problem 5.30 LO 5 Analysis of accounts receivable...Ch. 5 - Problem 5.31 LO 7, 8 Cost flow assumptions-FIFO...Ch. 5 - Problem 5.32 LO 7, 8 Cost flow assumptions-FIFO,...Ch. 5 - Prob. 5.33PCh. 5 - Prob. 5.34PCh. 5 - Problem 5.35 LO 7 Effects of inventory errors If...Ch. 5 - Prob. 5.36PCh. 5 - Case 5.37 LO 5, 7, 8 Focus company-accounts...Ch. 5 - Case 5.38
LO 5, 7
Comparative analysis of current...
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