Drawings of £13,000 are paid to the owner of a sole trader business through the business’s bank account. Which ledger accounts are to be debited and credited, respectively? a) Debit Capital A/c & Bank A/c b) Debit Drawings A/c & Credit Bank A/c c) Debit Bank A/c & Credit Drawings A

Drawings of £13,000 are paid to the owner of a sole trader business through the business’s bank account. Which ledger accounts are to be debited and credited, respectively? a) Debit Capital A/c & Bank A/c b) Debit Drawings A/c & Credit Bank A/c c) Debit Bank A/c & Credit Drawings A

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Description: Drawings of £13,000 are paid to the owner of a sole trader business through the business’s bank account. Which ledger accounts are to be debited and credited, respectively?a) Debit Capital A/c & Bank A/cb) Debit Drawings A/c & Credit Bank A/cc) De

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter3: Analyzing And Recording Transactions

Section: Chapter Questions

Problem 18EB: Krespy Corp. has a cash balance of $7,500 before the following transactions occur: A. received...

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Krespy Corp. has a cash balance of $7,500 before the following transactions occur: A. received customer payments of $965 B. supplies purchased on account $435 C. services worth $850 performed, 25% is paid in cash the rest will be billed D. corporation pays $275 for an ad in the newspaper E. bill is received for electricity used $235. F. dividends of $2,500 are distributed What is the balance in cash after these transactions are journalized and posted?
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.
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
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.
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.
For each of the following transactions, state which special journal (Sales Journal, Cash Receipts Journal, Cash Disbursements Journal, Purchases Journal, or General Journal) and which subsidiary ledger (Accounts Receivable, Accounts Payable, neither) would be used in recording the transaction. A. Sold inventory for cash B. Issued common stock for cash C. Received and paid utility bill D. Bought office equipment on account E. Accrued interest on a loan at the end of the accounting period F. Paid a loan payment G. Bought inventory on account H. Paid employees I. Sold inventory on account J. Paid monthly insurance bill
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
Indicate the accounts to be debited and credited in each of the following transactions. Montle Pty Ltd started business with P300,000 at the bank Bought office furniture paying by cheque P30,000. Obtained a bank loan from the bank for P120,000. Purchased goods on credit from YM Ltd for P30,000 Sold goods on credit to AT ltd for P15,000
The company takes out a $1,000,000 loan from the bank. For each element of the fundamental accounting equation (A, L, E), indicate whether that element increases, decreases, or ultimately remains unchanged.
Mr. Chen lends P500,000 cash to the entity. At the same, the entity uses part of the money to repay the amount owed to a creditor and holds the remaining amount of P400,000 in the bank account. The journal entry to record the transaction should be: a.Debit:Cash....................P500,000Cash in Bank....... 400,000 Credit:Accounts Payable - Mr. Chein........... P900,000 b.Debit:Accounts Payable………. P100,000Cash in Bank……………… 400,000 Credit:Loans Payable-Mr. Chein……… P500,000 c.Debit:Cash…………………………… P100,000Cash in Bank……………… 400,000 Credit:Loans Payable-Mr. Chein………. P500,000 d.Debit:Cash…………………………. P400,000Accounts Payable…….. 100,000 Credit:Cash in Bank……………………….. P500,000
Among the transactions of Beeler, Inc., were the following:a. Made payments on accounts payable to merchandise suppliers.b. Paid the principal amount of a note payable to First Bank.c. Paid interest charges relating to a note payable to First Bank.d. Issued bonds payable for cash; management plans to use this cash in the near future to expandmanufacturing and warehouse capabilities.e. Paid salaries to employees in the finance department.f. Collected an account receivable from a customer.g. Transferred cash from the general bank account into a money market fund. h. Used the cash received in d, above, to purchase land and a building suitable for a manufactur-ing facility. i. Made a year-end adjusting entry to recognize depreciation expense.j. At year-end, purchased for cash an insurance policy covering the next 12 months.k. Paid the quarterly dividend on preferred stock.l. Paid the semiannual interest on bonds payable.m. Received a quarterly dividend from an investment in the preferred…
The company takes out a $1,000,000 loan from the bank. Provide the journal entry that would be necessary to record the transaction.