Question 4 Accounts + Receivable + Supplies + Equipment Payable + Capital - Drawings + Revenues Expenses Accounts Owner's Owner's Cash -2,000 -650 -$2,000 - $650 +450 -450 -4,800 -4,800 +400 -400 Required (a) Describe each transaction that occurred for the month. (b) Determine how much owner's equity increased for the month. (c) Compute the amount of net income for the month.

Question 4 Accounts + Receivable + Supplies + Equipment Payable + Capital - Drawings + Revenues Expenses Accounts Owner's Owner's Cash -2,000 -650 -$2,000 - $650 +450 -450 -4,800 -4,800 +400 -400 Required (a) Describe each transaction that occurred for the month. (b) Determine how much owner's equity increased for the month. (c) Compute the amount of net income for the month.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter2: The Accounting Information System

Section: Chapter Questions

Problem 22CE: Cornerstone Exercise 2-22 Transaction Analysis The Mendholm Company entered into the following...

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Cornerstone Exercise 2-22 Transaction Analysis The Mendholm Company entered into the following transactions: Performed services on account, 521,500. Collected $9,500 from client related to services performed in Item a. Find $500 dividend to stockholders. Paid salaries of $4,000 for the current month. (Continued) Required: Show the effect of each transaction using the following model:
Transactions; financial statements 2. Net income: 10,850 On April 1, 20Y8, Maria Adams established Custom Realty. Maria completed the following transactions during the month of April: a. Opened a business bank account with a deposit of 24,000 in exchange for common stock. b. Paid rent on office and equipment for the month, 3,600. c. Paid automobile expenses for month, 1,350, and miscellaneous expenses, 600. d. Purchased supplies on account, 1,200. e. Earned sales commissions, receiving cash, 19,800. f. Paid creditor on account, 750. g. Paid office salaries, 2,500. h. Paid dividends, 3,500. i. Determined that the cost of supplies on hand was 300; therefore, the cost of supplies used was 900. Instructions 1. Indicate the effect of each transaction and the balances after each transaction, using the following tabular headings: 2. Prepare an income statement for April, a statement of stockholders equity for April, and a balance sheet as of April 30.
Comprehensive Problem 1 8 Net income. 31,425 Kelly Pitney began her consulting business. Kelly Consulting, on April 1, 20Y8. The accounting cycle for Kelly Consulting for April, including financial statements, was illustrated in this chapter During May, Kelly Consulting entered into the following transactions: May 3.Received cash from clients as an advance payment for services to be provided and recorded it as unearned tree 4,500 5.Received cash from clients on account 2,450. 9.Paid cash for a newspaper advertisement 225. 13.Raid Office Station Co for part of the debt incurred on April , 640. 15.Recorded services provided on account for the period May 1-15, 9,180. 16 Paid part-time receptionist for two weeks salary including the amount owed on April 30, 750. 17.Recorded cash from cash clients for fees earned during the period May 116, 8,360. Record the following transactions on Page 6 of the Journal 20.Purchased support on account 735. 21.Recorded services provided on account for the period May 1620. 4,820 25.Recorded cash from cash clients for fees earned for the period May 1723, 7,900 27.Received cash from clients on account 9,520. 28.Paid part-time receptionist for two weeks salary. 7S0. 30.Raid telephone bill for May. 260 31.Paid electricity bill for May, 810. 31.Recorded cash from cash clients tor lees earned for the period May 2031. 3,300. 31.Recorded services provided on account for the remainder of May, 2,650. 31.Paid dividends 10,500 Instructions 1.The chart of accounts foe Kelly Consulting is shown us Exhibit 9. and the post-closing trial balance as of April 30, 20Y8, is shown in Exhibit 17. for each account in the post-closing trial balance, enter the balance in the appropriate Balance column of a four-column account. Date the balances May 1. 20Y8. and place a check mark () in the Posting Reference column. Journalize each of the May transactions in a two-column journal starting cm Page of the journal and using Kelly Consultings chart of accounts. (Do not insert the account numbers in the journal at this time.) 2.Post the journal to a ledger of four-column accounts. 5.Prepare an unadjusted trial balance. 4.At the end of May, the following adjustment data were assembled. Analyze and use these data to complete parts (5) and (6). (a)Insurance expired during May is 275. (b)Supplies on hand on May II are 715. (c)Depreciation of office equipment for May is 330. (d)Accrued receptionist salary on May 31 is 325. (e)Rent expired during May is 1600. (f)Unearned fees on May 31 are 3,210 5.(Optional) Enter the unadjusted trial balance on an end-of-period spreadsheet and complete the spreadsheet 6.Journalize and post the adjusting entries. Record the adjusting entries on Page 7 of the journal. 7.Prepare an adjusted trial balance. 8.Prepare an income statement, a statement of stockholders equity, and a balance sheet. 9.Prepare and post the closing entries. Record the closing entries on Page 8 of the journal. Indicate closed accounts by inserting a line in both the Balance columns opposite the closing entry. 10.Prepare a post-closing trial balance.
Analyze Under Armour The following year-end data were taken from recent balance sheets, of Under Armour, Inc. (UA) (in millions): December 31 Year 2 Year 1 Current assets 1,965.2 1,498.8 Current liabilities 685.8 478.8 a. Compute the working capital and die current ratio as of December 31, Year 2 and Year 1. Round to one decimal place. b. What conclusions concerning the companys ability to meet its short-term obligations can you draw from part (a)?
Income statement FedEx Corporation had the following revenue and expense account balances (in millions) for a recent year ending May 31: Depreciation Expense 2,587 Fuel Expense 4,557 Maintenance and Repairs Expense 1,862 Other Expense (Income) Net 6,084 Provision for Income Taxes 1,192 Purchased Transportation 8,011 Rentals and Landing Fees 2,622 Revenues 45,567 Salaries and Employee Benefits 16,555 A. Prepare an income statement. B. Compare your income statement with the income statement that is available at FedExs Web site (http://investors.feclex.com). Under Annual Report, select Download PDF. What similarities and differences do you see?
Cornerstone Exercise 3-12 Accrual- and Cash-Basis Revenue McDonald Music sells used CDs for S4.00 each. During the month of April, McDonald sold 7,650 CDs for cash and 13,220 CDs on credit. McDonalds cash collections in April included $30,600 for the CDs sold for cash, $12,800 for CDs sold on credit during the previous month, and $29,850 for CDs sold on credit during April. Required: Calculate the amount of revenue recognized in April under (1) cash-basis accounting and (2) accrual-basis accounting.
Under Armour: Current ratio The following year-end data were taken from recent balance sheets of Under Armour, Inc. (in millions): December 31 Year 2 Year 1 Current assets 1,129 903 Current liabilities 427 252 A. Compute the working capital and the current ratio as of December 31, Year 2 and Year 1. (Round to one decimal place.) B. What conclusions concerning the company's ability to meet its short-term obligations can you draw from part (A)?
Net income and dividends The income statement for the month of February indicates a net income of 17,500. During the same period, 25,500 in cash dividends were paid. Would it be correct to say that the business incurred a net loss of 8,000 during the month? Discuss.
Missing amounts from financial statements The financial statements at the end of Wolverine Realtys first month of operations are as follows Wolverine Realty Income Statement For the Month Ended April 30, 2018 Fees earned A Expenses: Wages expense 300,000 Rent expense 100 Supplies expense B Utilities expense 20,000 Miscellaneous expense .. 25,000 Total expenses 475,000 Net income 275,000 Wolverine Realty Retained Earnings Statement For the Month Ended April 30,2018 Retained earnings, April 1,2018 c Net income D Dividends (125,000) Change in retained earnings E Retained earnings, April 30, 2018 F Wolverine Realty Balance Sheet April 30, 2018 Assets Cash 462,500 Supplies 12,500 Land 150,000 Total assets G Liabilities Accounts payable 100,000 Stockholders' Equity Common stock 375,000 Retained earnings H Total stockholders' equity I Total liabilities and stockholders' equity, J Wolverine Realty Statement of Cash Flows For the Month Ended April 30/ 2018 Cash flows from operating activities: Cash received from customers K Cash payments for expenses and payments to creditors (387,500) Net cash flows from operating activities L Cash flows used for investing activities: Cash payments for acquisition of land M Cash flows from financing activities: Cash received from issuing common stock N Cash dividends 0 Net cash flows from financing activities P Net increase (decrease) in cash and April 30,2018, cash balance Q Instructions By analyzing the interrelationships among the four financial statements, determine the proper amounts for A through Q.
Exercise 3-50 Prepayment of Expenses JDM Inc. made the following prepayments for expense items during 2019: Prepaid building rent for I year on April I by paying $6,600. Prepaid rent was debited for the amount paid. Prepaid 12 months' insurance on I by paying Prepaid insurance was debited. Purchased $5,250 of office supplies on 15, debiting supplies for the full amount. There were no office supplies on hand as of October 15. Office supplies costing $1,085 remain unused at December 3 1, 2019. Paid $600 for a 12-month service contract for repairs and maintenance on a computer. The contract begins November 1. The full amount of the payment was debited to prepaid repairs and maintenance.