Directions: Read the given transaction below. Analyze, which of the amountscited above do you think will be included in the business' financial reports? Whyand what are reasons for including them?Mr. Susano, a business owner of a Travel Agency invested 100 Million for additionaltwenty Electric Jeepneys worth P2,000,000.00 which the owner only paid half and availthe Auto Loan from Suzuki Motors worth P 1,000.000.00. He acquired a 1 hectare lotworth 15 Million for his automobiles, construct a small office spaces for his staff andinstalled solar panels and paid 10 Million for the construction company including the laborand solar panel. Secured all the Permit and Licenses worth P69,000.00.During the first month of operation, he then paid the Salaries and Wages of his threeoffice staffs and twenty-five drivers worth P80,000. Paid Insurance for his employeesworth 29,000. The business consumed water worth P28,000.For one month, the business generated P1,000,000.00 revenue. lolil

Financial reports are the financial statements which a company prepares at the end of the financial…

Answered: Directions: Read the given transaction…

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter18: Accounting Periods And Methods

Section: Chapter Questions

Problem 45P: What accounting method (cash or accrual) would you recommend for the following businesses? a. A gift...

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What accounting method (cash or accrual) would you recommend for the following businesses? a. A gift shop with average annual gross receipts of 900,000. b. An accounting partnership with average annual gross receipts of 12 million. c. A drywall subcontractor who works on residences and has annual gross receipts of 3 million. d. An incorporated insurance agency with average annual gross receipts of 28 million. e. A sole proprietor operating a retail clothing store with average annual gross receipts of 12 million. f. A sole proprietor operating a widget manufacturing plant with average annual gross receipts of 27 million.
Determine the following amounts: a. The amount of the liabilities of a business that has 60,800 in assets and in which the owner has 34,500 equity. b. The equity of the owner of a tour bus that cost 57,000 and on which is owed 21,800 on an installment loan payable to the bank. c. The amount of the assets of a business that has 11,780 in liabilities and in which the owner has 28,500 equity.
R. Nelson invests his personal computer, with a fair market value of 2,500, in the business. How would this transaction be recorded? a. A debit to R. Nelson, Capital, 2,500. b. A credit to Cash, 2,500. c. A credit to Professional Fees, 2,500 d. A debit to Computer, 2,500.
Stillwater Designs is a private company and outsources production of its Kicker speaker lines. Suppose that Stillwater Designs provided you the following transactions: a. Sold a warehouse for 750,000. b. Reported a profit of 100,000. c. Retired long-term bonds. d. Paid cash dividends of 350,000. e. Obtained a mortgage for a new building from a local bank. f. Purchased a new robotic system. g. Issued a long-term note payable. h. Purchased a 40% interest in a company. i. Reported a loss for the year. j. Negotiated a long-term loan. Required: Classify each of these transactions as an operating activity, an investing activity, or a financing activity. Also, indicate whether the activity is a source of cash or a use of cash.
The owner of Total Care Trading received the amount loaned personally from a bank amounting to P1,500,000 and invested P400,000 of it into the business. How much is the increase in the total assets of the business? (show ur solution/explanation)
The owner of FN Trading received the amount loaned personally from a bank amounting to P4,500,000 and invested P800,000 of it into the business. How much is the increase in the total liabilities of the business?
Direction: Read the following case study and answer the question: During the period, the business acquires an equipment costing P150,000 in cash. The owner of the business is questioning why you as his accountant, did not include the P150,000 equipment as one of the items of operating expense in the income statement which resulted in a higher income tax of the business?
Lanni Products is a start-up computer software development firm. It currently owns computer equipment worth $31,000 and has cash on hand of $18,000 contributed by Lanni’s owners. For each of the following transactions, identify the real and/or financial assets that trade hands. Choose one option for following blank: A. real asset. B. financial asset. C. real liability. D. Finanical liability. The bank loan is a Financial liability for Lanni, and a Financial asset for the bank. The cash Lanni receives is a Financial asset . 1. The new financial asset destroyed or created is Lanni's promissory note to repay the loan. Lanni uses the cash from the bank plus $18,000 of its own funds to finance the development of new financial planning software. Lanni transfers financial asset (cash) to the software developers. In return, Lanni receives the completed software package, which is a real asset. Lanni exchanges the real asset (the software) for a Financial asset, which is 1,400 shares of…
Write your explanation here on how to get your answer: The business was put up from a cash of ₱200,000, the initial capital of the owner. Then, ₱40,000 of the cash was used to purchase an equipment to be used in business. The purchase of equipment resulted in a liability of ₱20,000. How much are the total assets of the business? *
Read the instructions below and see the attached balance sheet of moon and star cooperation to support your answer. Moon Corporation and Star Corporation are in the same line of business and both were recently organized, so it may be assumed that the recorded costs for assets are close to current market values. The balance sheets for the two companies are as follows at July 31, 2011: Instructions a. Assume that you are a banker and that each company has applied to you for a 90-day loan of $12,000. Which would you consider to be the more favorable prospect? Explain your answer fully. b. Assume that you are an investor considering purchasing all the capital stock of one or both of the companies. For which business would you be willing to pay the higher price? Do you see any indication of a financial crisis that you might face shortly after buying either company? Explain your answer fully. (For either decision, additional information would be useful, but you are to reach your decision on…
Mark Waugh starts business. Before any sales, he has purchased fixtures $12,000, motor vehicle $30,000 and stock of goods $21,000. Although he has paid in full for the fixtures and motor vehicle, he still owes $8,400 for some of the stock. His brother Steve has lent him $18,000. Mark, after the above, has $16,800 in the business bank account and $600 cash in hand. Calculate Mark’s capital?
Lanni Products is a start-up computer software development firm. It currently owns computer equipment worth $31,000 and has cash on hand of $18,000 contributed by Lanni’s owners. For each of the following transactions, identify the real and/or financial assets that trade hands. Choose one option for following blank: A. real asset. B. financial asset. C. real liability. D. Finanical liability. 1. Lanni takes out a bank loan. It receives $48,000 in cash and signs a note promising to pay back the loan over 3 years. The bank loan is a (select an option) for Lanni, and a (select an option) for the bank. The cash Lanni receives is a (select an option). 2. Lanni uses the cash from the bank plus $18,000 of its own funds to finance the development of new financial planning software. Lanni transfers (select an option) (cash) to the software developers. In return, Lanni receives the completed software package, which is a (select an option). 3. Lanni sells the software product to Microsoft,…

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