Using Financial Accounting Information
10th Edition
ISBN: 9781337276337
Author: Porter, Gary A.
Publisher: Cengage Learning,
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Question
Chapter 1, Problem 1.1E
To determine
Concept Introduction:
Business activities can be categorized into three types; operating, investing, and financing. Operating activities include day to day business operation activities. Investing activities includes purchase or sale of assets of the business. Financing activities include the capital transactions like issuance of shares and repayment of debt, etc.
To indicate:The type of the activity for each of the given transactions.
Expert Solution & Answer
Explanation of Solution
The type of the activity for each of the given transactions is explained as follows:
| # of Activity | Type | |
| 1 | F | Issuance of shares is a financing activity. |
| 2 | I | Purchase of cars is an investing activity. |
| 3 | O | Payment of rent is an operating activity. |
| 4 | F | Taking loan from bank is a financing activity. |
| 5 | O | Receiving cash from customer is an operating activity. |
| 6 | O | Payment of wages is an operating activity. |
| 7 | I | Purchase of fuel tank is an investing activity. |
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Students have asked these similar questions
Classifying Business Transactions
Bob Jacobs opened an advertising agency. The following transactions occurred during January of the current year. Classify each transaction as an operating, an investing, or a financing activity.
a.
Invested cash in the business, $5,000.
b.
Purchased office equipment. Paid $2,500 cash and agreed to paythe balance of $2,000 in four monthly installments.
c.
Paid office rent, $400.
d.
Received cash for services rendered, $700.
e.
Paid phone bill, $95.
f.
Received cash for services rendered, $600.
g.
Made payment on loan in transaction (b), $500.
h.
Paid wages to part-time employee, $800.
i.
Paid electricity bill, $100.
j.
Withdrew cash for personal use, $500.
k.
Paid wages to part-time employee, $600.
Use the following information for the Exercises below. (Algo)
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[The following information applies to the questions displayed below.] On December 1, Jasmin Ernst organized Ernst Consulting. On December 3, the owner contributed $85,050 in assets in exchange for its common stock to launch the business. On December 31, the company’s records show the following items and amounts.
Cash
$ 7,950
Cash dividends
$ 3,070
Accounts receivable
17,450
Consulting revenue
17,450
Office supplies
4,200
Rent expense
4,530
Office equipment
19,060
Salaries expense
8,090
Land
46,010
Telephone expense
880
Accounts payable
9,430
Miscellaneous expenses
690
Common stock
85,050
[The following information applies to the questions displayed below.] On December 1, Jasmin Ernst organized Ernst Consulting. On December 3, the owner contributed $82,780 in assets in exchange for its common stock to launch the business. On December 31, the company’s records show the following items and amounts.
Cash
$ 15,760
Cash dividends
$ 640
Accounts receivable
12,590
Consulting revenue
12,590
Office supplies
1,960
Rent expense
2,270
Office equipment
16,580
Salaries expense
5,450
Land
46,030
Telephone expense
760
Accounts payable
7,250
Miscellaneous expenses
580
Common stock
82,780
Use the above information to prepare a December 31 balance sheet for Ernst Consulting.
Chapter 1 Solutions
Using Financial Accounting Information
Ch. 1 - Prob. 1.1ECh. 1 - Prob. 1.2ECh. 1 - Prob. 1.3ECh. 1 - Prob. 1.4.1ECh. 1 - Prob. 1.4.2ECh. 1 - Prob. 1.4.3ECh. 1 - Prob. 1.4.4ECh. 1 - Prob. 1.5.1ECh. 1 - Prob. 1.5.2ECh. 1 - Prob. 1.5.3E
Ch. 1 - Changes in Owners’ Equity The following amounts...Ch. 1 - Prob. 1.6.2ECh. 1 - Prob. 1.6.3ECh. 1 - Prob. 1.7ECh. 1 - Prob. 1.8ECh. 1 - Prob. 1.9ECh. 1 - Prob. 1.10.1ECh. 1 - Prob. 1.10.2ECh. 1 - Prob. 1.10.3ECh. 1 - Prob. 1.10.4ECh. 1 - Prob. 1.10.5ECh. 1 - Prob. 1.10.6ECh. 1 - Prob. 1.11ECh. 1 - Prob. 1.12ECh. 1 - Prob. 1.13ECh. 1 - Prob. 1.14ECh. 1 - Prob. 1.15MCECh. 1 - Prob. 1.16MCECh. 1 - Prob. 1.1PCh. 1 - Prob. 1.2PCh. 1 - Prob. 1.3PCh. 1 - Prob. 1.4.1PCh. 1 - Prob. 1.4.2PCh. 1 - Prob. 1.5.1PCh. 1 - Prob. 1.5.2PCh. 1 - Prob. 1.5.3PCh. 1 - Prob. 1.5.4PCh. 1 - Prob. 1.6.1PCh. 1 - Prob. 1.6.2PCh. 1 - Income Statement and Balance Sheet Green Bay...Ch. 1 - Prob. 1.7.1PCh. 1 - Prob. 1.7.2PCh. 1 - Prob. 1.7.3PCh. 1 - Prob. 1.7.4PCh. 1 - Prob. 1.8.1PCh. 1 - Prob. 1.8.2PCh. 1 - Prob. 1.9PCh. 1 - Prob. 1.10MCPCh. 1 - Prob. 1.1AAPCh. 1 - Prob. 1.2AAPCh. 1 - Prob. 1.3AAPCh. 1 - Prob. 1.4AAPCh. 1 - Prob. 1.5AAPCh. 1 - Prob. 1.5.1AAPCh. 1 - Prob. 1.5.2AAPCh. 1 - Prob. 1.5.3AAPCh. 1 - Prob. 1.5.4AAPCh. 1 - Prob. 1.6.1AAPCh. 1 - Prob. 1.6.2AAPCh. 1 - Prob. 1.6.3AAPCh. 1 - Prob. 1.7.1AAPCh. 1 - Prob. 1.7.2AAPCh. 1 - Prob. 1.7.3AAPCh. 1 - Prob. 1.7.4AAPCh. 1 - Prob. 1.8.1AAPCh. 1 - Prob. 1.8.2AAPCh. 1 - Prob. 1.9AAPCh. 1 - Prob. 1.10AAMCP
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