Debi (RM) Credit (RM) Sales 265,900 Purchases 154,870 Rent 4,200 Lighting and heating expenses 530 Salaries and wages 51,400 Insurance 2,100 Buildings 85,000 Fixtures 1,100 Account receivable 31,300 Sundry expenses 412 Account payable 15,910 Cash at bank 14,590 Drawings 30,000

Debi (RM) Credit (RM) Sales 265,900 Purchases 154,870 Rent 4,200 Lighting and heating expenses 530 Salaries and wages 51,400 Insurance 2,100 Buildings 85,000 Fixtures 1,100 Account receivable 31,300 Sundry expenses 412 Account payable 15,910 Cash at bank 14,590 Drawings 30,000

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter5: Sales And Receivables

Section: Chapter Questions

Problem 50BE: Accounts Receivable Balance XYZ Corp sells widgets to consumers for $20 each. Its beginning accounts...

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FINANCIAL RATIOS Use the work sheet and financial statements prepared in Problem 15-8B. All sales are credit sales. The Accounts Receivable balance on January 1 was 38,200. REQUIRED Prepare the following financial ratios: (a)Working capital (b)Current ratio (c)Quick ratio (d)Return on owners equity (e)Accounts receivable turnover and the average number of days required to collect receivables (f)Inventory turnover and the average number of days required to sell inventory
To demonstrate the difference between cash account activity and accrual basis profits (net income), note the amount each transaction affects cash and the amount each transaction affects net income. A. issued stock for cash $20,000 B. purchased supplies inventory on account $1,800 C. paid employee salaries; assume it was current days expenses $950 D. paid note payment to bank (principal only) $1,200 E. collected balance on accounts receivable $4,750
Analyzing the Accounts The controller for Summit Sales Inc. provides the following information on transactions that occurred during the year: a. Purchased supplies on credit, $18,600 b. Paid $14,800 cash toward the purchase in Transaction a c. Provided services to customers on credit1 $46,925 d. Collected $39,650 cash from accounts receivable e. Recorded depreciation expense, $8,175 f. Employee salaries accrued, $15,650 g. Paid $15,650 cash to employees for salaries earned h. Accrued interest expense on long-term debt, $1,950 i. Paid a total of $25,000 on long-term debt, which includes $1.950 interest from Transaction h j. Paid $2,220 cash for l years insurance coverage in advance k. Recognized insurance expense, $1,340, that was paid in a previous period l. Sold equipment with a book value of $7,500 for $7,500 cash m. Declared cash dividend, $12,000 n. Paid cash dividend declared in Transaction m o. Purchased new equipment for $28,300 cash. p. Issued common stock for $60,000 cash q. Used $10,700 of supplies to produce revenues Summit Sales uses the indirect method to prepare its statement of cash flows. Required: 1. Construct a table similar to the one shown at the top of the next page. Analyze each transaction and indicate its effect on the fundamental accounting equation. If the transaction increases a financial statement element, write the amount of the increase preceded by a plus sign (+) in the appropriate column. If the transaction decreases a financial statement element, write the amount of the decrease preceded by a minus sign (-) in the appropriate column. 2. Indicate whether each transaction results in a cash inflow or a cash outflow in the Effect on Cash Flows column. If the transaction has no effect on cash flow, then indicate this by placing none in the Effect on Cash Flows column. 3. For each transaction that affected cash flows, indicate whether the cash flow would be classified as a cash flow from operating activities, cash flow from investing activities, or cash flow from financing activities. If there is no effect on cash flows, indicate this as a non-cash activity.
FINANCIAL RATIOS Use the work sheet and financial statements prepared in Problem 15-8A. All sales are credit sales. The Accounts Receivable balance on January 1,20--, was 3,800. REQUIRED Prepare the following financial ratios: (a) Working capital (b) Current ratio (c) Quick ratio (d) Return on owners equity (e) Accounts receivable turnover and average number of days required to collect receivables (f) Inventory turnover and average number of days required to sell inventory
To demonstrate the difference between cash account activity and accrual basis profits (net income), note the amount each transaction affects cash and the amount each transaction affects net income. A. paid balance due for accounts payable $6,900 B. charged clients for legal services provided $5,200 C. purchased supplies on account $1,750 D. collected legal service fees from clients for current month $3,700 E. issued stock in exchange for a note payable $10,000
On January 24, 20Y8, Niche Consulting collected $5,700 it had hilled its clients for services rendered on December 31, 20Y7. How would you record the January 24 transaction, using the accrual basis? A. Increase Cash, $5,700; decrease Fees Earned, $5,700 B. Increase Accounts Receivable, $5,700; increase Fees Earned, $5,700 C. Increase Cash, $5,700; decrease Accounts Receivable, $5,700 D. Increase Cash, $5,700; increase Fees Earned, $5,700
Accounts Receivable Balance XYZ Corp sells widgets to consumers for $20 each. Its beginning accounts receivable balance was $24,975, and it sold 12,376 widgets throughout the year. The total cash collections for the year amounted to $217,750. Required: Calculate the ending accounts receivable balance.
FINANCIAL RATIOS Based on the financial statements foe Jackson Enterprises (income statement, statement of owners equity, and balance sheet) shown on pages 598599, prepare the following financial ratios. All sales are credit sales. The Accounts Receivable balance on January 1, 20--, was 21,600. 1. Working capital 2. Current ratio 3. Quick ratio 4. Return on owners equity 5. Accounts receivable turnover and average number of days required to collect receivables 6. Inventory turnover and average number of days required to sell inventory
Lucky House Ltd Trial Balance As at 30 September 2020 Account Debit(£) Credit(£)Cash at Bank 5,850Capital Account 15,000Machine 8,100Raw Materials 2,655Stationery 250Accounts Payable 6,545Rent 950Business Insurance 38Prepayments 1,362Sales Income 17,550Cost of Goods Sold 11,345Accounts Receivable 4,500Drawings 4,000Telephone 45Depreciation 135Accumulated Depreciation 135 Total 39,230 39,230 Prepare a statement of cash flow ?
Lucky House Ltd Trial Balance As at 30 September 2020 Account Debit(£) Credit(£)Cash at Bank 5,850Capital Account 15,000Machine 8,100Raw Materials 2,655Stationery 250Accounts Payable 6,545Rent 950Business Insurance 38Prepayments 1,362Sales Income 17,550Cost of Goods Sold 11,345Accounts Receivable 4,500Drawings 4,000Telephone 45Depreciation 135Accumulated Depreciation 135 Total 39,230 39,230 Prepare a Statement of Profit & Loss and Statement of…
Cajegas Trucking ServicesTrial BalanceJune 30, 2021Debit CreditCash in Bank P 1,020,000Petty Cash Fund 1,000Accounts Receivable 120,000Est. Uncollectible Account P 1,200Unused Supplies 15,000Prepaid Insurance 8,500Prepaid Rent 30,000Delivery Truck 1,500,000Acc. Depreciation – Delivery Truck 250,000Accounts Payable 130,000P. Cagejas, Capital 1,818,500P. Cagejas, Drawings 50,000Trucking Income 935,000Taxes and Licences 10,000Repairs and Maintenance 27,000Retainer Fees 25,000Salaries and Wages 320,000Utilities Expense 8,200Total P 3,134,700 P 3,134,700Additional Information1. Provision for Uncollectible Account should be at 2% of the outstanding receivable account.2. Supplies actually on hand, P5,000.3. Of the Prepaid Insurance, P6,200 has actually expired.4. P18,000 of the Prepaid Rental has expired.5. Depreciation Expense for the period is P105,000.Required:a. An 8-column worksheetb. Balance Sheetc. Income Statementd. Statement of Changes in Owner’s Equity
UNADJUSTED TRIAL BALANCE Account Debit Credit Cash $68,900 Accounts receivable 116,300 Interest receivable 1,300 Supplies inventory 138,600 Prepaid insurance 8,700 Notes receivable 50,000 Property and equipment 277,800 Accumulated depreciation $64,500 Accounts payable 104,100 Accrued liabilities 21,600 Deferred revenue 9,200 Notes payable 87,400 Contributed capital 216,100 Retained earnings 143,500 Sales revenue 40,500 Interest revenue 21,900 Cost of service expense 26,400 Supplies expense 0 Depreciation expense 0 Wages expense 3,000 Rent expense 17,800 Insurance expense 0 Totals $708,800 $708,800 The following data are available to determine adjusting entries: A) $4,350 of prepaid insurance expired during the period. B) The company estimates…