Survey Of Accounting
5th Edition
ISBN: 9781259631122
Author: Edmonds, Thomas P.
Publisher: Mcgraw-hill Education,
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Textbook Question
Chapter B, Problem 4E
One complete accounting cycle
The following events apply to Paradise Vacation’s first year of operations:
- 1. Acquired $20,000 cash from the issue of common stock on January 1, 2018.
- 2. Purchased $800 of supplies on account.
- 3. Paid $4,200 cash in advance for a one-year lease on office space.
- 4. Earned $28,000 of revenue on account.
- 5. Incurred $12,500 of other operating expenses on account.
- 6. Collected $24,000 cash from
accounts receivable . - 7. Paid $9,000 cash on accounts payable.
- 8. Paid a $3,000 cash dividend to the stockholders.
Information for
Adjusting Entries - 9. There was $150 of supplies on hand at the end of the accounting period.
- 10. The lease on the office space covered a one-year period beginning November 1.
- 11. There was $3,600 of accrued salaries at the end of the period.
Required
- a. Record these transactions in general journal form.
- b.
Post the transaction data from the journal to ledger T-accounts. - c. Prepare a
trial balance . - d. Prepare an income statement, statement of changes in stockholders’ equity, a
balance sheet , and a statement ofcash flows.
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Denna Company's working capltal accounts at the beginning of the year follow
Cash
Marketable securities
Accounts receivable, net
Inventory
Prepaid expenses
Accounts payable
Notes due within one year
Accrued liabilities
$ 85,eee
$ 25,600
S 386,000
$ 499, 000
S 18, See
$ 227,000
$ 130,eee
$ 73,500
During the year, Denna Company completed the following transactions:
x. Paid a cash dividend previously declared, $45,000.
a. Issued additional shares of common stock for cash. $230,000.
b Sold inventory costing $82.000 for $115,000, on account
c. Wrote off uncollectible accounts in the amount of $16,000, reducing the accounts recelvabie balance accordingly
d. Declared a cash dividend, $45.000.
e Paid accounts payable, $124,000.
f Borrowed cash on a short-term note with the bank, $82,500
g. Sold inventory costing $19,500 for $13,000 cash.
h. Purchased Inventory on account. $61.250.
1. Pald off all short-term notes due, $212,500.
J. Purchased equipment for cash, $87,000.
k. Sold marketable…
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Well Company paid Being Company for merchandise with a $4,500, 90-day, 10% note dated December 11. What is the financial statement effect to Being Company at the end of the accounting period on December 31?
Select one:
a.
BALANCE SHEET
INCOME STATEMENT
ASSETS
=
LIABILITIES
+
STOCKHOLDER'SEQUITY
REVENUE
-
EXPENSE
Cash
InterestReceivable
Retained Earnings
InterestIncome
A)
+25
+25
+25
b.
BALANCE SHEET
INCOME STATEMENT
ASSETS
=
LIABILITIES
+
STOCKHOLDER'SEQUITY
REVENUE
-
EXPENSE
Cash
NotesReceivable
NotesPayable
Retained Earnings
InterestIncome
InterestExpense
B)
+25
-25
c.
BALANCE SHEET
INCOME STATEMENT
ASSETS
=
LIABILITIES
+
STOCKHOLDER'SEQUITY
REVENUE
-
EXPENSE
Cash
NotesReceivable
NotesPayable
Retained Earnings
InterestIncome
InterestExpense
C)
-25
-25
-25
d.
BALANCE SHEET
INCOME STATEMENT
ASSETS
=
LIABILITIES
+
STOCKHOLDER'SEQUITY…
Chapter B Solutions
Survey Of Accounting
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