1. The following are selected transactions of BSAIS Company, an accounting firm: June 1 Andy Alarcon invested P200,000 cash to establish the business of which P150,000 was deposited to its UnionBank current account. June 2 He also invested a computer acquired a few months ago at a cost of P55,000 but there is still an outstanding liability of P25,000 due to ACER Electronic Equipment. This liability is to be assumed by the business. June 5 He also invested furniture and fixtures which were acquired a year ago for P20,000 but with a current market value of P10,000. Dec. 8 Withdrew a piece of furniture which was invested last June 5 and listed in the books as P2,500. It has an accumulated depreciation of P250. Required: Prepare the entries to record the above transactions.

1. The following are selected transactions of BSAIS Company, an accounting firm: June 1 Andy Alarcon invested P200,000 cash to establish the business of which P150,000 was deposited to its UnionBank current account. June 2 He also invested a computer acquired a few months ago at a cost of P55,000 but there is still an outstanding liability of P25,000 due to ACER Electronic Equipment. This liability is to be assumed by the business. June 5 He also invested furniture and fixtures which were acquired a year ago for P20,000 but with a current market value of P10,000. Dec. 8 Withdrew a piece of furniture which was invested last June 5 and listed in the books as P2,500. It has an accumulated depreciation of P250. Required: Prepare the entries to record the above transactions.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter3: Analyzing And Recording Transactions

Section: Chapter Questions

Problem 16EA: Discuss how each of the following transactions for Watson, International, will affect assets,...

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Transaction Analysis and Financial Statements Expert Consulting Services Inc. was organized on March 1 by two former college roommates. The corporation provides computer consulting services to small businesses. The following transactions occurred during the first month of operations: March 2: Received contributions of $20,000 from each of the two principal owners of the new business in exchange for shares of stock. March 7: Signed a two-year promissory note at the bank and received cash of $15,000. Interest, along with the $15,000, will be repaid at the end of the two years. March 12: Purchased $700 in miscellaneous supplies on account. The company has 30 days to pay for the supplies. March 19: Billed a client $4,000 for services rendered by Expert in helping to install a new computer system. The client is to pay 25% of the bill upon its receipt and the remaining balance within 30 days. March 20: Paid $1,300 bill from the local newspaper for advertising for the month of March. March 22: Received 25% of the amount billed to the client on March 19. March 26: Received cash of $2,800 for services provided in assisting a client in selecting software for its computer. March 29: Purchased a computer system for $8,000 in cash. March 30: Paid $3,300 of salaries and wages for March. March 31: Received and paid $1,400 in gas, electric, and water bills. Required Prepare a table to summarize the preceding transactions as they affect the accounting equation. Use the format in Exhibit 3-1. Identify each transaction with the date. Prepare an income statement for the month of March. Prepare a classified balance sheet at March 31. From reading the balance sheet you prepared in part (3), what events would you expect to take place in April? Explain your answer.
Brief Exercise 1-24 The Accounting Equation Financial information for three independent cases is as follows: The liabilities of Dent Company are $82,000, and its stockholders' equity is $120,000. What is the amount of Dents total assets? The total assets of Wayne Inc. are $55,000, and its stockholders' equity is $22,500. What is the amount of Waynes total liabilities? Gordon Companys total assets increased by $60,000 during the year, and its liabilities decreased by $35,000. Did Gordons stockholders' equity increase or decrease? By how much? Required: Determine the missing amount for each case.
Analyzing Transactions. Using the analytical framework, indicate the effect of the following related transactions of a firm. a. January 1: Issued 10,000 shares of common stock for 50,000. b. January 1: Acquired a building costing 35,000, paying 5,000 in cash and borrowing the remainder from a bank. c. During the year: Acquired inventory costing 40,000 on account from various suppliers. d. During the year: Sold inventory costing 30,000 for 65,000 on account. e. During the year: Paid employees 15,000 as compensation for services rendered during the year. f. During the year: Collected 45,000 from customers related to sales on account. g. During the year: Paid merchandise suppliers 28,000 related to purchases on account. h. December 31: Recognized depreciation on the building of 7,000 for financial reporting. Depreciation expense for income tax purposes was 10,000. i. December 31: Recognized compensation for services rendered during the last week in December but not paid by year-end of 4,000. j. December 31: Recognized and paid interest on the bank loan in Part b of 2,400 for the year. k. Recognized income taxes on the net effect of the preceding transactions at an income tax rate of 40%. Assume that the firm pays cash immediately for any taxes currently due to the government.
Net income and dividends The income statement of a corporation for the month of February indicates a net income of $32,000. During the same period, $40,000 in cash dividends were paid. Would it be correct to say that the business Incurred a net loss of $8000 during the month? Discuss.
Journal Entries Castle Consulting Agency began business in February. The transactions entered into by Castle during its first month of operations are as follows: Acquired articles of incorporation from the state and issued 10,000 shares of capital stock in exchange for $150,000 in cash. Paid monthly rent of $400. Signed a five-year promissory note for $100,000 at the bank. Purchased software to be used on future jobs. The software costs $950 and is expected to be used on five to eight jobs over the next two years. Billed customers $12,500 for work performed during the month. Paid office personnel $3,000 for the month of February. Received a utility bill of $100. The total amount is due in 30 days. Required Prepare in journal form, the entry to record each transaction.
Journal Entries Atkins Advertising Agency began business on January 2. The transactions entered into by Atkins during its first month of operations are as follows: Acquired its articles of incorporation from the state and issued 100,000 shares of capital stock in exchange for $200,000 in cash. Purchased an office building for $150,000 in cash. The building is valued at $110,000, and the remainder of the value is assigned to the land. Signed a three-year promissory note at the bank for $125,000. Purchased office equipment at a cost of $50,000, paying $10,000 down and agreeing to pay the remainder in ten days. Paid wages and salaries of $13,000 for the first half of the month. Office employees are paid twice a month. Paid the balance due on the office equipment. Sold $24,000 of advertising during the first month. Customers have until the 15th of the following month to pay their bills. Paid wages and salaries of $15,000 for the second half of the month. Recorded $3,500 in commissions earned by the salespeople during the month. They will be paid on the fifth of the following month. Required Prepare in journal form the entry to record each transaction.
A business has the following transactions: A. The business is started by receiving cash from an investor in exchange for common stock $10,000. B. Rent of $1,250 is paid for the first month. C. Office supplies are purchased for $375. D. Services worth $3,450 are performed. Cash is received for half. E. Customers pay $1,250 for services to be performed next month. F. $6,000 is paid for a one year insurance policy. G. We receive 25% of the money owed by customers in D. H. A customer has placed an order for $475 of services to be done this coming week. How much total revenue does the company have?
Discuss how each of the following transactions for Watson, International, will affect assets, liabilities, and stockholders equity, and prove the companys accounts will still be in balance. A. An investor invests an additional $25,000 into a company receiving stock in exchange. B. Services are performed for customers for a total of $4,500. Sixty percent was paid in cash, and the remaining customers asked to be billed. C. An electric bill was received for $35. Payment is due in thirty days. D. Part-time workers earned $750 and were paid. E. The electric bill in C is paid.
1. The following are selected transactions of BSAIS Company, an accounting firm:June 1 Andy Alarcon invested P200,000 cash to establish the business of which P150,000 was deposited to its UnionBank current account. June 2 He also invested a computer acquired a few months ago at a cost of P55,000 but there is still an outstanding liability of P25,000 due to ACER Electronic Equipment. This liability is to be assumed by the business.June 5 He also invested furniture and fixtures which were acquired a year ago for P20,000 but with a current market value of P10,000. Dec. 8 Withdrew a piece of furniture which was invested last June 5 and listed in the books as P2,500. It has an accumulated depreciation of P250.Required: Prepare the entries to record the above transactions. 2. Lileth Adriano, who plans to go abroad, is selling her mini-donut business. Her friend, Benita Solido is interested to buy it but can only afford to pay P350,000. The following are the assets of Adriano’s business:…
Ma3. For each one, select: a. operational activities b. Investment activities c. Financial activities d. Operational part, investment part e. Financing part, operational part ____1. Costs incurred to settle a long-term debt ____2.Balance of some zero-coupon bonds, five years from its maturity date ____3.Compensation received from an insurance company for the destruction of a warehouse and the inventory that was stored there ____4.Money received as a result of canceling a life insurance policy in which the company was the beneficiary. ____5.Premiums paid for a life insurance policy in which the company was beneficiary. ____6. Dividend received from an investment in common stock accounted for with the equity method.
EA16. Discuss how each of the following transactions for Watson, International, will affect assets, liabilities, and stockholders’ equity, and prove the company’s accounts will still be in balance. A. An investor invests an additional $25,000 into a company receiving stock in exchange.B. Services are performed for customers for a total of $4,500. Sixty percent was paid in cash, and the remaining customers asked to be billed.C. An electric bill was received for $35. Payment is due in thirty days. D. Part-time workers earned $750 and were paid.E. The electric bill in “C” is paid.Your answer: (Answer B, C, D, and E by referring to the answer example for A)A. (as an example, the answer for A. is shown below)Cash will increase $25,000, so total assets will increase $25,000.Common stock will increase $25,000, increasing total stockholders’ equity $25,000.There is an equal increase on each side of the equation.There is an equal decrease on each side of the equation.