On Dec. 31, 2021 Sweets Inc. sold an old delivery truck to a local farmer for$$ 5,000The following additional information was provided:The farmer paid Sweets Inc. the full amount in cash on December 31.The old delivery truck was on the books as follows:Equipment - Delivery TruckAccumulated Depreciation - Equipment - Delivery Truck$ 50,000$ 50,000On Dec. 31, 2021Sweets Inc. sold production equipment to a small candy manufacturerin Vermont for $ 40,000The following additional information was provided:The small candy manufacturer offered a note in payment. The note is an agreement to pay Sweets Inc.$ 50,000 on June 30, 2022.The production equipment was on the books as follows:Sweets Inc.EquipmentAccumulated Depreciation - Equipment $ 185,000$ 200,000Instructor Note:Make sure you prepare the necessary journal entry(s) for each of the four transactions,The President is not an accountant. Your memorandum needs to walk the Presidentfrom the accounting detail to the big picture. Case 3- Memorandum to an ExecutiveSweets Inc. made several capital purchases during the last month of the year. As part of thepurchases the company sold some existing fixed assets.Yesterday, as you were walking to the company cafeteria, you saw the President of Sweets Inc.While walking with the President you mentioned that recent capital purchases would significantlyimpact the financial statements.Today, the President called you directly and asked you to write a memorandum explaining the impactof the capital purchases (and related sale of some existing fixed assets) on each of the following financialstatements;Income StatementBalance SheetStatement of Cash FlowsSummary of December Capital TransactionsOn Dec. 1, 2021Sweets Inc. purchased a new delivery truck for$ 100,000The following additional information was provided:The truck was paid for with cash.The truck is expected to have a service life ofNo salvage value is expected after the service life.The company uses straight-line depreciation for their financial reporting.10 years.OnDec. 1, 2021Sweets Inc. purchased equipment for new production lineat the lowa Plant. The cost of the equipment was$ 1,500,000The following additional information was provided:The equipment was paid for with cash.The equipment has an expected service life of20 years.Salvage value at the end of the service life is estimated to be$ 150,000The company uses straight-line depreciation for their financial reporting.The equipment was installed in December 15, 2021. The installation cost was$ 50,000$ 10,000Trial runs were also completed on December 15, 2021. The cost of the trial run was1

Purchase of Capital Assets It is important for the firm to purchases the capital assets which are…

On Dec. 31, 2021 Sweets Inc. sold an old delivery truck to a local farmer for $ 5,000 The following additional information was provided: The farmer paid Sweets Inc. the full amount in cash on December 31. The old delivery truck was on the books as follows: Equipment - Delivery Truck Accumulated Depreciation - Equipment- Delivery Truck $ 50,000 $50,000

On Dec. 31, 2021 Sweets Inc. sold an old delivery truck to a local farmer for $ 5,000 The following additional information was provided: The farmer paid Sweets Inc. the full amount in cash on December 31. The old delivery truck was on the books as follows: Equipment - Delivery Truck Accumulated Depreciation - Equipment- Delivery Truck $ 50,000 $50,000

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter3: Processing Accounting Information

Section: Chapter Questions

Problem 3.4DC

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Problem 2-55A Events and Transactions The accountant for Boatsman Products Inc. received the following information: Boatsman sent its customers a new price list. Prices were increased an average of 3% on all items. Boatsman accepted an offer of 5150.000 for land that it had purchased 2 years ago for 130,000. Cash and the deed for the property are to be exchanged in 5 days. Boatsman accepted $150,000 cash and gave the purchaser the deed for the property described in Item b. Boatmens president purchased 600 shares of the firms common stock from another stock-holder; The president paid $15 per share. The former stockholder had purchased the stock from Boatsman for $4 per share. Boatsman leases its delivery trucks from a local dealer. The dealer also performs maintenance on the trucks for boats man. Boats man received a $1.254 bill for maintenance from the dealer. Required: l. CONCEPTUAL CONNECTION Indicate whether or not each item qualifies as a transaction and should be recorded in the amounting system. Explain your reasoning. 2. CONCEPTUAL CONNECTION What accounting concept is illustrated by Item d?
(Question 2) The Desk Company manufactures office desks in Toronto, Ontario. The company has raised $1,000,000 from an issue of common shares. The company paid off a long-term bank loan of $200,000. The company then purchased property for $1.5 million and borrowed $500,000 by way of a Bank mortgage that is to be repaid in 10 years. The company sold surplus property that was not being used for $200,000. Required a) Calculate the cash used or cash from investingactivities. Explain the reasoning why a company may prefer financing by way of issuing common shares versus by borrowing from a Bank. Please explain fully with all calculations and table.
Question 3 Working capital management is so critical in the organization. The following information below was obtained concerning the liquidity of the business. You are to study the following financial statements for two furniture stores and then answer the questions which follow. Financial Statements Profit and loss accounts for the year ending 31 December, 2020 X Y K K K K Sales 555,000 750,000 Less Cost of goods sold Opening stock 100,000 80,000 Add Purchases 200,000 320,000 300,000 400,000 Less Closing stock (60,000) (70,000)…
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.
WRITTEN TASK 6. Critical ThinkingDirections: Read carefully the following situation and determine the Assets, Liabilities, and Equality of this situation:1. The business was put up from a cash of ₱200,000, the initial capital of the owner. Then, ₱40,000 of the cash wasused 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? (10 points)Solution:2. The business is a trading business. For the period, it purchased goods for sale valued at ₱100,000. The goodswere all sold for a total price of ₱120,000. For the sale only 10% was received as down payment, 60% werelater collected, and at the end of the year 30% are still for collection. How much is the business income? (10points)Solution:
Question:Dr. Schekter, DVM, opened a veterinary clinic on May 1, 2011. The business transactions for May are shown below: May 1. Dr. Schekter invested $400,000 cash in the business in exchange for 5,000 shares of capital stock.May 4. Land and a building were purchased for $250,000. Of this amount, $70,000 applied to the land, and $180,000 to the building. A cash payment of $100,000 was made at the time of the purchase, and a note payable was issued for the remaining balance. May 9. Medical instruments were purchased for $130,000 cash. May 16. Office fixtures and equipment were purchased for $50,000. Dr. Schekter paid $20,000 at the time of purchase and agreed to pay the entire remaining balance in 15 days. May 21. Office supplies expected to last several months were purchased for $5,000 cash. May 24. Dr. Schekter billed clients $2,200 for services rendered. Of this amount, $1,900 was received in cash, and $300 was billed on account (due in 30 days). May 27. A $400 invoice was received…
A-2-Z Design Services engaged in the following significant activities during the year: a. The company issued common stock for $250,000. Management expects to use the proceeds to purchase land next year. b. A new office building was purchased by issuing a $700,000 long-term note payable to the seller. c. A-2-Z acquired equipment from one of its suppliers. In exchange, A-2-Z offers to provide design services to its supplier over the next two years. The services are valued at $90,000. Determine the impact of each transaction on cash flows from investing and financing activities in the current year.
Scenario: Ralph Collins founded Collins Consignment Sales Company and the company was operated from his home. As of September 1, 2021, Collins decided to move to rented quarters and to operate the business on a full-time basis. He wishes to know how much net income the business has earned but has no prior knowledge of accounting and has approached your group for advice. The company entered the following transactions during September: Sept 1. The following assets were received from Ralph in exchange for capital of Collins Consignment Sales Company: cash - $19,000, accounts receivable - $2,800, supplies - $2,050, and office equipment - $15,000. There were no liabilities received. 2.Paid three (3) months rent on a lease rental contract, $6,000. 3.Paid the premiums on the property and peril insurance policies, $3,000. 4.Received cash from clients as an advance payment for services to be provided in the coming months, $5,900. 5.Purchased additional office equipment on account from…
Scenario: Ralph Collins founded Collins Consignment Sales Company and the company was operated from his home. As of September 1, 2021, Collins decided to move to rented quarters and to operate the business on a full-time basis. He wishes to know how much net income the business has earned but has no prior knowledge of accounting and has approached your group for advice. The company entered the following transactions during September: Sept 1. The following assets were received from Ralph in exchange for capital of Collins Consignment Sales Company: cash - $19,000, accounts receivable - $2,800, supplies - $2,050, and office equipment - $15,000. There were no liabilities received. Paid three (3) months rent on a lease rental contract, $6,000. Paid the premiums on the property and peril insurance policies, $3,000. Received cash from clients as an advance payment for services to be provided in the coming months, $5,900. Purchased additional office equipment on…
Scenario: Ralph Collins founded Collins Consignment Sales Company and the company was operated from his home. As of September 1, 2021, Collins decided to move to rented quarters and to operate the business on a full-time basis. He wishes to know how much net income the business has earned but has no prior knowledge of accounting and has approached your group for advice. The company entered the following transactions during September: Sept 1. The following assets were received from Ralph in exchange for capital of Collins Consignment Sales Company: cash - $19,000, accounts receivable - $2,800, supplies - $2,050, and office equipment - $15,000. There were no liabilities received. Paid three (3) months rent on a lease rental contract, $6,000. Paid the premiums on the property and peril insurance policies, $3,000. Received cash from clients as an advance payment for services to be provided in the coming months, $5,900. Purchased additional office equipment on…
Scenario: Ralph Collins founded Collins Consignment Sales Company and the company was operated from his home. As of September 1, 2021, Collins decided to move to rented quarters and to operate the business on a full-time basis. He wishes to know how much net income the business has earned but has no prior knowledge of accounting and has approached your group for advice. The company entered the following transactions during September: Sept 1. The following assets were received from Ralph in exchange for capital of Collins Consignment Sales Company: cash - $19,000, accounts receivable - $2,800, supplies - $2,050, and office equipment - $15,000. There were no liabilities received. Paid three (3) months rent on a lease rental contract, $6,000. Paid the premiums on the property and peril insurance policies, $3,000. Received cash from clients as an advance payment for services to be provided in the coming months, $5,900. Purchased additional office equipment on…
Scenario: Ralph Collins founded Collins Consignment Sales Company and the company was operated from his home. As of September 1, 2021, Collins decided to move to rented quarters and to operate the business on a full-time basis. He wishes to know how much net income the business has earned but has no prior knowledge of accounting and has approached your group for advice. The company entered the following transactions during September: Sept 1. The following assets were received from Ralph in exchange for capital of Collins Consignment Sales Company: cash - $19,000, accounts receivable - $2,800, supplies - $2,050, and office equipment - $15,000. There were no liabilities received. 2. Paid three (3) months rent on a lease rental contract, $6,000. 3. Paid the premiums on the property and peril insurance policies, $3,000. 4. Received cash from clients as an advance payment for services to be provided in the coming months, $5,900. 5. Purchased additional office equipment on account from…