+1 QS 1-11 (Algo) Identifying effects of transactions using accounting equation-Assets and Liabilities LO P1 The following transactions were completed by the company a. The owner invested $16,400 cash in the company b. The company purchased supplies for $850 cash. c. The owner invested $10,700 of equipment in the company in exchange for more common stock. d. The company purchased $270 of additional supplies on credit. e. The company purchased land for $9,700 cash. Required: Enter the impact of each transaction on individual items of the accounting equation. (Enter decreases to account balances with a minus sign.) Transactions Number Balance after a and b |C Balance after c d Balance after d Balance after e Cash * . + + Assets Supplies Equipment * + . . + + . . + . Land # ... E W W Liabilities Accounts Payable + . + * + + * Common Stock Equity Dividends + + + • + + Revenue Expenses

+1 QS 1-11 (Algo) Identifying effects of transactions using accounting equation-Assets and Liabilities LO P1 The following transactions were completed by the company a. The owner invested $16,400 cash in the company b. The company purchased supplies for $850 cash. c. The owner invested $10,700 of equipment in the company in exchange for more common stock. d. The company purchased $270 of additional supplies on credit. e. The company purchased land for $9,700 cash. Required: Enter the impact of each transaction on individual items of the accounting equation. (Enter decreases to account balances with a minus sign.) Transactions Number Balance after a and b |C Balance after c d Balance after d Balance after e Cash * . + + Assets Supplies Equipment * + . . + + . . + . Land # ... E W W Liabilities Accounts Payable + . + * + + * Common Stock Equity Dividends + + + • + + Revenue Expenses

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Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter3: Accrual Accounting

Section: Chapter Questions

Problem 28BE: Brief Exercise 3-28 Accrual- and Cash-Basis Accounting The following are several transactions for...

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Transactions Interstate Delivery Service is owned and operated by Katie Wyer. The following selected transactions were completed by Interstate Delivery during May: 1. Received cash in exchange for common stock, 18,000. 2. Paid advertising expense, 4,850. 3. Purchased supplies on account, 2,100. 4. Billed customers for delivery services on account, 14,700. 5. Received cash from customers on account. 8,200. Indicate the effect of each transaction on the following accounting equation elements: Assets, Liabilities, Common Stock, Dividends, Revenue, and Expense. To illustrate, the answer to (1) follows: (1) Asset (Cash) increases by 18,000: Common Stock increases by 18,000.
Exercise 2-39 Transaction Analysis OBJECTIVE e The following events occurred for Parker Company. Performed consulting services for a client in exchange for $3,200 cash. Performed consulting services for a client on amount. $1,700. Paid $30,000 cash for land. Purchased office supplies on accounts $900. Paid a $2,500 cash dividend to stockholders. Paid $550 on account for supplies purchased in Transaction d. Paid $800 cash for the current months rent. Collected $1,500 from client in Transaction b. Stockholders invested $20,000 cash in the business. Required: 1. Analyze the effect of each transaction on the accounting equation. For example, if salaries of $500 were paid. the answer would be Decrease in stockholders equity (expense) $500 and decrease in assets (cash) $500. 2. CONCEPTUAL CONNECTION For Event 6, what accounting principle did you use to determine the amount to be recorded for supplies?
Effects of transactions on Accounting equation On Time Delivery Service had the following selected transactions during November: 1. Received cash from issuance of common stock, $75,000. 2. Paid rent for November, $5000. 3. Paid advertising expense, $3,000. 4. Received cash for providing delivery services, $34,500. 5. Borrowed $10,000 from Second National Bank to finance its operations. 6. Purchased a delivery van for cash, $25,000. 7. Paid interest on note from Second National Bank, $75. 8. Paid salaries and wages for November, $10,000. 9. Paid dividends, $2,000. Indicate the effect of each transaction on the accounting equation by listing the numbers identifying the transactions, (1) through (9), in a vertical column, and inserting at the right of each number the appropriate letter from he following list: a. Increase in an asset, decrease in another asset. h. Increase in an asset, increase in a liability. c. Increase in an asset, increase in stockholders’ equity. d. Decrease in an asset, decrease in a liability. e. Decrease in an asset, decrease in stockholders equity.
Transactions Interstate Delivery Service is owned and operated by Katie Wyer. The following selected transactions were completed by Interstate Delivery Service during May: 1. Received cash in exchange for common stock, 18,000. 2. Paid advertising expense, 4,850. 3. Purchased supplies on account, 2,100. 4. Billed customers for delivery services on account, 14,700. 5. Received cash from customers on account, 8,200. Indicate the effect of each transaction on the following accounting equation elements: Assets, Liabilities, Common Stock, Dividends, Revenue, and Expense. To illustrate, the answer to (1) follows: (1) Asset (Cash) increases by 18,000: Common Stock increases by 18,000.
Cornerstone Exercise 2-22 Transaction Analysis The Mendholm Company entered into the following transactions: Performed services on account, 521,500. Collected $9,500 from client related to services performed in Item a. Find $500 dividend to stockholders. Paid salaries of $4,000 for the current month. (Continued) Required: Show the effect of each transaction using the following model:
P2-3 Financial statements The following amounts were taken from the accounting records of Padget Home Services, Inc.. as of December 31, 20Y7. Padget Home Services began its operations on January 1, 20Y7. Instructions Prepare an income statement for the year ending December 31. 2017. Prepare a statement of stockholdessrs equity for the year ending December 31, 2017. Prepare a balance sheet as of December 31, 2017. Prepare a statement of cash flows for the year ending December 31, 2017.
Brief Exercise 3-28 Accrual- and Cash-Basis Accounting The following are several transactions for Halpin Advertising Company. Purchased $1,000 of supplies. 0Sold $5,000 of advertising services, on account, to customers. Used $250 of supplies. Collected $3,000 from customers in payment of their accounts. Purchased equipment for $10,000 cash. Recorded $500 depreciation on the equipment for the current period. Required: Identify the effect, if any, that each of the above transactions would have on net income under cash-basis accounting and accrual-basis accounting.
Transactions; financial statements DLite Dry Cleaners is owned and operated by Joel Palk. A building and equipment are currently being rented, pending expansion to new facilities. The actual work of dry cleaning is done by another company at wholesale rates. The assets, liabilities, and common stock of the business on July 1, 2018, are as follows: Cash, 45,000; Accounts Receivable, 93,000; Supplies, 7,000; Land, 75,000; Accounts Payable, 40,000; Common Stock, 60,000. Business transactions during July are summarized as follows: A. Joel Palk invested additional cash in exchange for common stock with a deposit of 35,000 in the business bank account. B. Paid 50,000 for the purchase of land adjacent to land currently owned by D'Lite Dry Cleaners as a future building site. C. Received cash from customers for dry cleaning revenue, 32,125. D. Paid rent for the month, 6,000. E. Purchased supplies on account, 2,500. F. Paid creditors on account, 22,800. G. Charged customers for dry cleaning revenue on account, 84,750. H. Received monthly invoice for dry cleaning expense for July (to be paid on August 10), 29,500. I. Paid the following: wages expense, 7,500; truck expense, 2,500; utilities expense, 1,300; miscellaneous expense, 2,700. J. Received cash from customers on account 88,000. K. Determined that the cost of supplies on hand was 5,900; therefore, the cost of supplies used during the month was 3,600. L. Paid dividends, 12,000. Instructions 1.Determine the amount of retained earnings as of July 1, 2018. 2.State the assets, liabilities, and stockholders equity as of July 1 in equation form similar to that shown in this chapter. In tabular form below the equation, indicate increases and decreases resulting from each transaction and the new balances after each transaction. 3.Prepare an income statement for July, a retained earnings statement for July, and a balance sheet as of July 31. 4.(Optional) Prepare a statement of cash flows for July.
Exercise 2-43 Transaction Analysis Goal Systems, a business consulting firm, engaged in the following transactions: Issued common stock for $75,000 cash. Borrowed $35,000 from a bank. Purchased equipment for $12,000 cash. Prepaid rent on office space for 6 months in the amount of $7.800. Performed consulting services in exchange for $6,300 cash. Perfumed consulting services on credit in the amount of $18,750. Incurred and paid wage expense of $9,500. Collected $10,200 of the receivable arising from Transaction f. Purchased supplies for $1,800 on credit. Used $1,200 of the supplies purchased in Transaction i. Paid for all of the supplies purchased in Transaction i. Required: For each transaction described above. indicate the effects on assets, liabilities, and stockholders equity using the format below.
Financial statements We-Sell Realty, organized as a corporation on August 1, 2018, is owned and operated by Omar Farah, the sole stockholder. How many errors can you find in the following statements for We-Sell Realty, prepared after its first month of operations? We-Sell Realty Income Statement August 31, 2018 Sales commissions 140,000 Expenses: Office salaries expense 87,000 Rent expense 18,000 Automobile expense 7,500 Miscellaneous expense 2,200 Supplies expense 1,150 Total expenses 115,850 Net income 25,000 Omar Farah Retained Earnings Statement August 31, 2017 Retained earnings, August 1,2018 0 Dividends (10,000) (10,000) Issued additional common stock August 1,2018 15,000 5,000 Net income 25,000 Retained earnings, August 31, 2018 30,000 Balance Sheet For the Month Ended August 31, 2018 Cash Assets 8,900 Accounts payable 22,350 Total assets 31,250 Liabilities Accounts receivable 38,600 Supplies 4,000 Stockholders Equity Retained earnings 30,000 Total liabilities and stockholders equity 72,600
Financial statements Padget Home Services began its operations on January 1, 20Y7 (see Problem 2-3). After its second year of operations. the following amounts were taken from the accounting records of Padget Home Services, Inc., as of December 31, 20Y8. Instrustions Prepare a statement of stockholders’ equity for the year ending December 31, 20Y8. (Nole: The retained earnings at January 1, 20Y8. was $1 20.000.)