Lucile Xi started a new outdoor clothing company in Year 1. The business experienced the following events during its first year of operation. Assume the new company uses the perpetual inventory system. 1. Acquired $90,000 cash from the issue of common stock. 2. Purchased clothing merchandise for $30,000 cash. 3. Sold clothing costing $20,000 for $45,000 cash. Record this transaction as two separate events (3a and 3b). Required: Use a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. More specifically, record the amounts of the events into the model. Also, in the Statement of Cash Flows column, classify the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA) The first transaction is shown as an example. Note: Enter any decreases to account balances and cash outflows with a minus sign. Leave cells blank if no input is needed. Balance Sheet Income Statement Event Number Assets Liabilities Accounts Blockholders' Equity Common Cash Inventory Payable Stock Retained Earnings Revenue Expenses Net Income Statement of Cash Flows 90,000 90,000+ 90,000 FA 2 3a • 36 Total NC Net change in cash NC
Q: Delso Company purchased the following on January 1, 20x1: ⚫ Office equipment at a cost of $47,000…
A: Solution:-The question given is a detailed accounting problem that involves calculating depreciation…
Q: Question 2 The Teala Company uses standard costing in its manufacturing plant for auto parts.…
A: The objective of this question is to calculate the production-volume variance, variable overhead…
Q: The following data relate to labor cost for production of 3,300 cellular telephones: Actual: 2,210…
A: The objective of the question is to calculate the direct labor rate variance, direct labor time…
Q: Delta Company produces a single product. The cost of producing and selling a single unit of this…
A: Analyzing specific orders requires relevant cost analysis since it helps companies evaluate…
Q: The audited financial statements for New Life Manufacturing for year-end December 31, 2022, show an…
A: A corporation tax is a levy that the government applies to a business's profits. A nation's source…
Q: Current Attempt in Progress Crane Company's master budget reflects budgeted sales information for…
A: SALES BUDGETThe sales budget details a company's sales expectations in both units and dollars for…
Q: Morganton Company makes one product and provided the following information to help prepare its…
A: Product costs refer to the total cost that a company incurs for manufacturing the goods which is…
Q: At December 31, 2020 Sunland Corporation reported a deferred tax liability of $210000 which was…
A: When there is taxable temporary difference arise between the income as per accounts and income as…
Q: Clark Industries has a defined benefit pension plan that specifies annual, year-end retirement…
A: Solution:-To complete the calculations for Stanley Mills’ pension plan, we’ll continue from where…
Q: A manufacturing company that produces a single product has provided the following data concerning…
A: Absorption costing is a method of costing in which product cost is calculated by adding direct…
Q: Vaughn Company uses a periodic inventory system. For April, when the company sold 540 units, the…
A: Lets understand the basics.Ending inventory and cost of goods sold can be calculated using,(1)…
Q: Parker Plastic, Inc., manufactures plastic mats to use with rolling office chairs. Its standard cost…
A: DIRECT MATERIAL PRICE VARIANCE Direct Materials Price Variance is the difference between the actual…
Q: Current Attempt in Progress The following stockholders' equity accounts, arranged alphabetically,…
A: The ownership stake that shareholders have in a corporation is shown in the balance sheet's…
Q: 3. Presented below are two independent situations. cbetunos insys aniwollot at SOS 00012561 CL28 to…
A: InvestmentsThe amount of money put into something that gives profits and benefits to the company is…
Q: YTD Pay for November 15 199,581 Social Security Tax for November 30 Pay Date Medicare Tax for…
A: FICA taxes:FICA = Federal insurance contribution actFICA is a payroll tax on the wage earner's…
Q: On January 1, 2024, Trusty Delivery Service purchased a truck at a cost of $62,000. Before placing…
A: It seems like you've provided some fragmented text. Could you please provide more context or clarify…
Q: When does the capital of a company increases? A. Drawings Decrease B. Liabilities Decrease C.…
A: The capital of a company increases when the company's assets increase or its liabilities decrease.…
Q: Wally is employed as an executive with Pay More Incorporated. To entice Wally to work for Pay More,…
A: a. Wally used the funds as a down payment on a speedboat and repaid the $25,000 loan (including $250…
Q: Dawson Toys, Limited, produces a toy called the Maze. The company has recently created a standard…
A: Variances for July1a. Materials price variance $2,370Favorable1a. Materials quantity variance$2,744…
Q: General Journal Debit 1,000,000 Credit 1,000,000 Loss-litigation Liability-litigation Late in 2024,…
A: Contingent Liabilities:A contingent liability is a liability whose possibility is to occur in…
Q: The following note was contained in a recent Visions Motor Company annual report: NOTE 8.…
A: It is the stock held for sale to customers. The inventory comprises of raw materials, work in…
Q: Denjar
A: The objective of the question is to calculate the markup percentage for Cullumber Corporation's…
Q: Crane Limited reported the following items in shareholders' equity on December 31, 2024: Share…
A: Cumulative preference shares give the shareholder a right to dividends that may have been arrears or…
Q: ces ! Required information [The following information applies to the questions displayed below.] You…
A: FIFO method is one of the methods of inventory valuation in which it is assumed that old purchases…
Q: Profitability ratios. Reading material see chapter 3 and Profitability measures chapter 11. The…
A: The objective of the question is to calculate various financial ratios using the given financial…
Q: Activity: 1. A certain part is being welded by hand. It takes 5 minutes to weld one part. A jig is…
A: This situation looks at two separate practical problems that businesses in a range of fields face.…
Q: Case D Tompkins Company reports the following Inventory record for November. Date November 1…
A: FIFO method is one of the methods of inventory valuation in which it is assumed that old purchases…
Q: a. Young Company budgets sales of $1,050,000, fixed costs of $80,300, and variable costs of…
A: Contribution Margin: Contribution Margin means the margin of profit expected by the business. It is…
Q: Tempe Corporation is a calendar-year corporation. At the beginning of 2022, its election to be taxed…
A: The built-in gains tax for an S corporation is determined by calculating and reporting it on Form…
Q: hrd.2
A: The objective of the question is to calculate the markup percentage for Cullumber Corporation's…
Q: Scholastic Furniture, Incorporated, manufactures a variety of desks, chairs, tables, and shelf units…
A: Production Budget is the budget that calculates the total units of finished inventory required to be…
Q: Nature of uncollectible accounts The XYZ Corporation owns and operates hotels and casinos including…
A: The net accounts receivables are calculated as gross accounts receivables less allowance for…
Q: On January 1, year 1, Dave received 1,000 shares of restricted stock from his employer, RRK…
A: Answer:- Employees who get restricted stock as part of their executive salary are given…
Q: Records at the Far Actual total direct labor cost Actual direct labor-hours worked Standard direct…
A: Direct labor variance is the difference between standard direct labor cost for actual production and…
Q: Required information [The following information applies to the questions displayed below.]…
A: Depreciation is considered an expense charge on the value of the asset. It can be calculated by…
Q: Alvarado Company produced 3,100 units that require nine standard pounds per unit at a $11.50…
A: Standard direct materialThe amount of material estimated to be used in the production for a…
Q: Assume that a company provided the following cost formulas for three of its expenses (where qrefers…
A: The spending variance measures the difference between the actual amount spent on an expense and the…
Q: Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3…
A: The objective of the question is to calculate the write-offs of uncollectible accounts for 20x3, the…
Q: Peter is starting up his own business and purchases computer equipment costing $9,000 whic he will…
A: Let's understand the basics.Depreciation is a reduction in value of asst due to wear and tear,…
Q: Santa Fe Retailing purchased merchandise "as is" (with no returns) from Mesa Wholesalers with credit…
A: Sales transactions are the sale of inventory to the customers. This could be in cash or on account.…
Q: The Donut Stop acquired equipment for $17,000. The company uses straight-line depreciation and…
A: Straight-line depreciation evenly spreads the cost of an asset over its expected useful life,…
Q: Almendarez Corporation is considering the purchase of a machine that would cost $100,000 and would…
A: Capital Budgeting is a method used by entities to evaluate the projects they intend to invest in.…
Q: Required: (1) Prepare job order cost sheets to post beginning inventory data. (2) Journalize the…
A: Cost accounting system:The cost accounting system refers to the method that will be used by the…
Q: was pu lue of $20,000 at the end of it's useful life. What is the depreciation expense that should…
A: The depreciation expense is charged on the fixed assets as a reduction in the value of the fixed…
Q: Consider the following transactions for DeTrees Company for the month shown in chronological order:…
A: FIFO means "First In, First Out" and is an asset-management and valuation method in which assets…
Q: Wildhorse Company's inventory of $1,188,700 at December 31, 2025, was based on a physical count of…
A: Lets understand the basics.Goods can be shipped to customer using various modes. i.e. On FOB…
Q: Use the following information for Ingersoll, Incorporated. Assume the tax rate is 23 percent. 2020…
A: The balance sheet offers a snapshot of a company's financial position at a specific point in time by…
Q: 2019 March 1) Q.2. Prepare two columns Cash Book of Guru Dakshina Brothers. (Narrations not…
A: The objective of the question is to prepare a two-column cash book for Guru Dakshina Brothers based…
Q: In the government-wide financial statements, the assets acquired under a capital lease would be…
A: In governmental fund financial statements, the assets acquired under a capital lease are reported at…
Q: On January 1, year 1, Dave received 1,000 shares of restricted stock from his employer, RRK…
A: Employees who get restricted stock as part of their executive salary are given non-transferable…
Step by step
Solved in 3 steps
- Transaction Analysis Pollys Cards $ Gifts Shop had the following transactions during the year: Pollys purchased inventory on account from a supplier for $8,000. Assume that Pollys uses a periodic inventory system. On May 1, land was purchased for $44,500. A 20% down payment was made, and an 18-month, 8% note was signed for the remainder. Pollys returned $450 worth of inventory purchased in (a), which was found broken when the inventory was received. Pollys paid the balance due on the purchase of inventory. On June 1, Polly signed a one-year, $15,000 note to First State Bank and received $13,800. Pollys sold 200 gift certificates for $25 each for cash. Sales of gift certificates are recorded as a liability. At year-end, 35% of the gift certificates had been redeemed. Sales for the year were $120,000, of which 90% were for cash. State sales tax of 6% applied to all sales must be remitted to the state by January 31. Required Record all necessary journal entries relating to these transactions. Assume that Pollys accounting year ends on December 31. Prepare any necessary adjusting journal entries. What is the total of the current liabilities at the end of the year?On October 1, 2019, Jay Pryor established an interior decorating business, Pioneer Designs. During the month, Jay completed the following transactions related to the business: Oct. 1. Jay transferred cash from a personal bank account to an account to be used for the business, 18,000. 4.Paid rent for period of October 4 to end of month, 3,000. 10.Purchased a used truck for 23,750, paying 3,750 cash and giving a note payable for the remainder. 13.Purchased equipment on account, 10,500. 14.Purchased supplies for cash, 2,100. 15.Paid annual premiums on property and casualty insurance, 3,600. 15.Received cash for job completed, 8,950. Enter the following transactions on Page 2 of the two-column journal: 21.Paid creditor a portion of the amount owed for equipment purchased on October 13, 2,000. 24.Recorded jobs completed on account and sent invoices to customers, 14,150. 26.Received an invoice for truck expenses, to be paid in November, 700. 27.Paid utilities expense, 2,240. 27.Paid miscellaneous expenses, 1,100. Oct. 29. Received cash from customers on account, 7,600. 30.Paid wages of employees, 4,800. 31.Withdrew cash for personal use, 3,500. Instructions 1. Journalize each transaction in a two-column journal beginning on Page 1, referring to the following chart of accounts in selecting the accounts to be debited and credited. (Do not insert the account numbers in the journal at this time.) Journal entry explanations may be omitted. 2. Post the journal to a ledger of four-column accounts, inserting appropriate posting references as each item is posted. Extend the balances to the appropriate balance columns after each transaction is posted. 3. Prepare an unadjusted trial balance for Pioneer Designs as of October 31, 2019. 4. Determine the excess of revenues over expenses for October. 5. Can you think of any reason why the amount determined in (4) might not be the net income for October?During February of this year, H. Rose established Rose Shoe Hospital. The following asset, liability, and owners equity accounts are included in the chart of accounts: The following transactions occurred during the month of February: a. Rose deposited 25,000 cash in a bank account in the name of the business. b. Bought shop equipment for cash, 1,525, Ck. No. 1000. c. Bought advertising on account from Milland Company, 325. d. Bought store shelving on account from Inger Hardware, 750. e. Bought office equipment from Sharas Office Supply, 625, paying 225 in cash and placing the balance on account, Ck. No. 1001. f. Paid on account to Inger Hardware, 750, Ck. No. 1002. g. Rose invested his personal leather working tools with a fair market value of 800 in the business h. Sold services for the month of February for cash, 250. PART 1: The Accounting Cycle for a Service Business: Analyzing Business Transactions Required 1. Write the account classifications (Assets, Liabilities, Capital, Drawing, Revenue, Expense) in the fundamental accounting equation, as well as the plus and minus signs and Debit and Credit. 2. Write the account names on the T accounts under the classifications, place the plus and minus signs for each T account, and label the debit and credit sides of the T accounts. 3. Record the amounts in the proper positions in the T accounts. Write the letter next to each entry to identify the transaction. 4. Foot and balance the accounts.
- John Neff owns and operates Waikiki Surf Shop. A year-end trial balance is provided on page 563. Year-end adjustment data for the Waikiki Surf Shop are shown below. (a and b)A physical count shows merchandise inventory costing 45,000 on hand as of December 31, 20--. Neff uses the periodic inventory system. (c)Supplies remaining at the end of the year, 600. (d)Unexpired insurance on December 31, 900. (e)Depreciation expense on the building for 20--, 6,000. (f)Depreciation expense on the store equipment for 20--, 4,500. (g)Wages earned but not paid as of December 31, 675. (h)Unearned boat rental revenue as of December 31, 3,000. REQUIRED 1. Prepare a year-end work sheet. 2. Journalize the adjusting entries.The trial balance of Hadden Company as of December 31, the end of its current fiscal year, is as follows: Here are the data for the adjustments. ab.Merchandise Inventory at December 31, 64,742.80. c.Store supplies inventory (on hand), 420.20. d.Insurance expired, 738. e.Salaries accrued, 684.50. f.Depreciation of store equipment, 3,620. Required Complete the work sheet after entering the account names and balances onto the work sheet.The following transactions were completed by Hammond Auto Supply during January, which is the first month of this fiscal year. Terms of sale are 2/10, n/30. The balances of the accounts as of January 1 have been recorded in the general ledger in your Working Papers or in CengageNow. Hammond Auto Supply does not track cash sales by customer. Jan. 2Issued Ck. No. 6981 to JSS Management Company for monthly rent, 775. 2J. Hammond, the owner, invested an additional 3,500 in the business. 4Bought merchandise on account from Valencia and Company, invoice no. A691, 2,930; terms 2/10, n/30; dated January 2. 4Received check from Vega Appliance for 980 in payment of 1,000 invoice less discount. 4Sold merchandise on account to L. Paul, invoice no. 6483, 850. 6Received check from Petty, Inc., 637, in payment of 650 invoice less discount. 7Issued Ck. No. 6982, 588, to Fischer and Son, in payment of invoice no. C1272 for 600 less discount. 7Bought supplies on account from Doyle Office Supply, invoice no. 1906B, 108; terms net 30 days. 7Sold merchandise on account to Ellison and Clay, invoice no. 6484, 787. 9Issued credit memo no. 43 to L. Paul, 54, for merchandise returned. 11Cash sales for January 1 through January 10, 4,863.20. 11Issued Ck. No. 6983, 2,871.40, to Valencia and Company, in payment of 2,930 invoice less discount. 14Sold merchandise on account to Vega Appliance, invoice no. 6485, 2,050. Jan. 18Bought merchandise on account from Costa Products, invoice no. 7281D, 4,854; terms 2/10, n/60; dated January 16; FOB shipping point, freight prepaid and added to the invoice, 147 (total 5,001). 21Issued Ck. No. 6984, 194, to M. Miller for miscellaneous expenses not recorded previously. 21Cash sales for January 11 through January 20, 4,591. 23Issued Ck. No. 6985 to Forbes Freight, 96, for freight charges on merchandise purchased on January 4. 23Received credit memo no. 163, 376, from Costa Products for merchandise returned. 29Sold merchandise on account to Bruce Supply, invoice no. 6486, 1,835. 31Cash sales for January 21 through January 31, 4,428. 31Issued Ck. No. 6986, 53, to M. Miller for miscellaneous expenses not recorded previously. 31Recorded payroll entry from the payroll register: total salaries, 6,200; employees federal income tax withheld, 872; FICA Social Security tax withheld, 384.40, FICA Medicare tax withheld, 89.90. 31Recorded the payroll taxes: Social Security tax, 384.40, FICA Medicare tax, 89.90; state unemployment tax, 334.80; federal unemployment tax, 37.20. 31Issued Ck. No. 6987, 4,853.70, for salaries for the month. 31J. Hammond, the owner, withdrew 1,000 for personal use, Ck. No. 6988. Required 1. Record the transactions for January using a sales journal, page 73; a purchases journal, page 56; a cash receipts journal, page 38; a cash payments journal, page 45; and a general journal, page 100. Assume the periodic inventory method is used. 2. Post daily all entries involving customer accounts to the accounts receivable ledger. 3. Post daily all entries involving creditor accounts to the accounts payable ledger. 4. Post daily those entries involving the Other Accounts columns and the general journal to the general ledger. Write the owners name in the Capital and Drawing accounts. 5. Add the columns of the special journals and prove the equality of the debit and credit totals. 6. Post the appropriate totals of the special journals to the general ledger. 7. Prepare a trial balance. 8. Prepare a schedule of accounts receivable and a schedule of accounts payable. Do the totals equal the balances of the related controlling accounts?
- The following transactions were completed by Hammond Auto Supply during January, which is the first month of this fiscal year. Terms of sale are 2/10, n/30. The balances of the accounts as of January 1 have been recorded in the general ledger in your Working Papers or in CengageNow. Hammond Auto Supply does not track cash sales by customer. Jan. 2Issued Ck. No. 6981 to JSS Management Company for monthly rent, 775. 2J. Hammond, the owner, invested an additional 3,500 in the business. 4Bought merchandise on account from Valencia and Company, invoice no. A691, 2,930; terms 2/10, n/30; dated January 2. 4Received check from Vega Appliance for 980 in payment of 1,000 invoice less discount. 4Sold merchandise on account to L. Paul, invoice no. 6483, 850. 6Received check from Petty, Inc., 637, in payment of 650 invoice less discount. 7Issued Ck. No. 6982, 588, to Fischer and Son, in payment of invoice no. C1272 for 600 less discount. 7Bought supplies on account from Doyle Office Supply, invoice no. 1906B, 108; terms net 30 days. 7Sold merchandise on account to Ellison and Clay, invoice no. 6484, 787. 9Issued credit memo no. 43 to L. Paul, 54, for merchandise returned. 11Cash sales for January 1 through January 10, 4,863.20. 11Issued Ck. No. 6983, 2,871.40, to Valencia and Company, in payment of 2,930 invoice less discount. 14Sold merchandise on account to Vega Appliance, invoice no. 6485, 2,050. Jan. 18Bought merchandise on account from Costa Products, invoice no. 7281D, 4,854; terms 2/10, n/60; dated January 16; FOB shipping point, freight prepaid and added to the invoice, 147 (total 5,001). 21Issued Ck. No. 6984, 194, to M. Miller for miscellaneous expenses not recorded previously. 21Cash sales for January 11 through January 20, 4,591. 23Issued Ck. No. 6985 to Forbes Freight, 96, for freight charges on merchandise purchased on January 4. 23Received credit memo no. 163, 376, from Costa Products for merchandise returned. 29Sold merchandise on account to Bruce Supply, invoice no. 6486, 1,835. 31Cash sales for January 21 through January 31, 4,428. 31Issued Ck. No. 6986, 53, to M. Miller for miscellaneous expenses not recorded previously. 31Recorded payroll entry from the payroll register: total salaries, 6,200; employees federal income tax withheld, 872; FICA Social Security tax withheld, 384.40, FICA Medicare tax withheld, 89.90. 31Recorded the payroll taxes: Social Security tax, 384.40, FICA Medicare tax, 89.90; state unemployment tax, 334.80; federal unemployment tax, 37.20. 31Issued Ck. No. 6987, 4,853.70, for salaries for the month. 31J. Hammond, the owner, withdrew 1,000 for personal use, Ck. No. 6988. Required 1. Record the transactions in the general journal for January. If you are using Working Papers, start with page 1 in the journal. Assume the periodic inventory method is used. The chart of accounts is as follows: 2. Post daily all entries involving customer accounts to the accounts receivable ledger. 3. Post daily all entries involving creditor accounts to the accounts payable ledger. 4. Post daily the general journal entries to the general ledger. Write the owners name in the Capital and Drawing accounts. 5. Prepare a trial balance. 6. Prepare a schedule of accounts receivable and a schedule of accounts payable. Do the totals equal the balances of the related controlling accounts?Domingo Company started its business on January 1, 2019. The following transactions occurred during the month of May. Prepare the journal entries in the journal on Page 1. A. The owners invested $10,000 from their personal account to the business account. B. Paid rent $500 with check #101. C. Initiated a petty cash fund $500 with check #102. D. Received $1,000 cash for services rendered. E. Purchased office supplies for $158 with check #103. F. Purchased computer equipment $2,500, paid $1,350 with check #104, and will pay the remainder in 30 days. G. Received $800 cash for services rendered. H. Paid wages $600, check #105. I. Petty cash reimbursement: office supplies $256, maintenance expense $108, postage expense $77, miscellaneous expense $55. Cash on hand $11. Check #106. J. Increased petty cash by $30, check #107.Dan Watson started a small merchandising business in Year 1. The business experienced the following events during its first year of operation. Assume that Watson uses the perpetual inventory system. Acquired $35,000 cash from the issue of common stock. Purchased inventory for $28,000 cash. Sold inventory costing $17,500 for $30,500 cash. Required: Record the events in a horizontal financial statements model. Prepare an income statement for Year 1 (use the multistep format). What is the amount of total assets at the end of the period?
- Donald Reagan started a new business in November of the current year. The following are the business transactions completed by The DR Consulting Company during the month of November. Note: the company uses a perpetual, FIFO cost flow system for inventory. Using the following transactions, record journal entries for The DR Consulting Company. If no journal entry is needed input "No Journal Entry Needed". November 1 Donald Reagan invested $116,000 cash along with office equipment valued at $26,100 in exchange for 10,500 shares of common stock of a new company named The DR Consulting Company. The common stock has a $1 par value/share. November 2 The company purchased a 6-month insurance policy by paying the insurance company $720 cash. November 3 The company purchased land valued at $46,000 and a building valued at $162,300. The purchase is paid with $30,800 cash and a long-term note payable for $177,500. November 5 The company purchased $3,600 of office supplies on credit with terms…Presented below are a number of business transactions that occurred during the current year for Gonzales, Inc. Instructions In each of the situations, discuss the appropriateness of the journal entries in terms of generally accepted accounting principles. a. The president of Gonzales, Inc. used his expense account to purchase a new Tahoe solely for personal use. The following journal entry was made. Miscellaneous Expense 29,000 Cash 29,000 b. Merchandise inventory that cost $620,000 is reported on the balance sheet at $690,000, the expected selling price less estimated selling costs. The following entry was made to record this increase in value. Inventory 70,000 Sales Revenue 70,000 c. The company is being sued for $500,000 by a customer who claims damages for personal injury apparently caused by a defective product. Company attorneys feel extremely confident that the company will have no liability for damages resulting…A sale trader operates his business from a warehouse ,which has been damage by a fire ,which occurred at the end of the financial year. After the fire ,the remaining inventory that is undamaged amount to Gh 2,000(Cost). The accountant establishes the following information : (a). Inventory at the beginning of the year was Gh 16,000 (b). Purchases during the year were Gh115,000 (c). Sales during the year were GH 140,000 (d).The trader sells his goods at a mark-up of 25% of cost . How much was the gross profit ?