Horngren's Financial & Managerial Accounting The Financial Chapters (Book & Access Card)
5th Edition
ISBN: 9780133868319
Author: MILLER-NOBLES
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Textbook Question
Chapter 1, Problem 1.46AP
Using the
Angela Petrillo recently opened her own law office, which she operates as a corporation. The name of the new entity is Angela Petrillo, Attorney. Petrillo experienced the following events during the organizing phase of the new business and its first month of operation, March 2016. Some of the events were person al and did not affect the law practice. Others were business transactions and should be accounted for by the business.
Mar. 1 | Sold persona l investment in Amazon stock, which she had owned for several years, receiving $31,000 cash. |
2 | Deposited the $31,000 cash from the sale of the Amazon stock in her personal bank account. |
3 | Deposited $72,000 cash in a new business bank account titled Angela Petrillo, Attorney. The business issued common stock to Petrillo. |
5 | Paid $350 cash for ink cartridges for the printer. |
7 | Purchased computer for the law office, agreeing to pay the account, $5,500, within three months. |
9 | Received $2,500 cash from customers for services rendered. |
15 | Received bill from The Lawyer for magazine subscription, $340. (Use Miscellaneous Expense account.) |
23 | Finished court hearings on behalf of a client and submitted a bill for legal services, $18,000, on account. |
28 | Paid bill from The Lawyer. |
30 | Paid utilities, $1,300. |
31 | Received $1,800 cash from clients billed on Mar. 23. |
31 | Cash dividends of $2,000 were paid to stockholders. |
Requirements
- 1. Analyze the effects of the preceding events on the accounting equation of Angela Petrillo, Attorney. Use a format similar to Exhibit 1-6.
- 2. Prepare the following financial statements:
- a. Income statement.
- b. Statement of
retained earnings . - c.
Balance sheet .
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Using the accounting equation for transaction analysis and preparing financial statements
Abby Perry recently opened her own law office on December 1, which she operates as a corporation. The name of the new entity is Abby Perry, Attorney. Perry experienced the following events during the organizing phase of the new business and its first month of operation, December 2018. Some of the events were personal and did not affect the law practice. Others were business transactions and should be accounted for by the business.
Requirements
Analyze the effects of the preceding events on the accounting equation of Abby Perry, Attorney. Use a format similar to Exhibit 1-6.
Prepare the following financial statements:
a. Income statement.
b. Statement of retained earnings.
c. Balance sheet.
d. Statement of cash flows.
Using the accounting equation for transaction analysis and preparing financial statements
Amos Sharp recently opened his own accounting firm on October 1, which he operates as a corporation. The name of the new entity is Amos Sharp, CPA. Sharp experienced the following events during the organizing phase of the new business and its first month of operations in 2018.
Requirements
1. Analyze the effects of the events on the accounting equation of Amos Sharp, CPA. Use a format similar to Exhibit 1-6.
2. Prepare the following financial statements:
a. Income statement.
b. Statement of retained earnings.
c. Balance sheet.
A few years ago, Sam Gig founded Gig n Spin Consultancy Services. Sam is aware that you and your group members are pursuing an accounting course while in college and therefore has approached the team for advice. He wishes to know how much net income his business earned during the past year in order to decide whether to keep the company going. His accounting records consist a trial balance and some additional notes required to make adjustments to the financial statements. The company unadjusted trial balance for the year ended December 31st, 2015 was shown as follows:
Gig n Spin Consultancy ServicesTrial BalanceDecember 31st 2015DR CRCash 120,000Accounts receivable 65,000Supplies 25,000Lease Hold Improvement 100,000Accumulated depreciation - Leasehold Improvement 40,000Furniture and Fixtures 500,000Accumulated depreciation - Furniture and Fittings 300,000Accounts payable 25,000Salary PayableUnearned service revenue 18,500Sam Gig, Capital 223,200Sam Gig, Withdrawal 148,000Service revenue…
Chapter 1 Solutions
Horngren's Financial & Managerial Accounting The Financial Chapters (Book & Access Card)
Ch. 1 - Prob. 1QCCh. 1 - Prob. 2QCCh. 1 - Prob. 3QCCh. 1 - Prob. 4QCCh. 1 - Prob. 5QCCh. 1 - Which of the following requires accounting...Ch. 1 - At the end of a recent year, Global Cleaning...Ch. 1 - Consider the overall effects on Global Cleaning...Ch. 1 - Assume that Global Cleaning Service performed...Ch. 1 - The balance sheet reports the a. financial...
Ch. 1 - Assume Global Cleaning Service had net income of...Ch. 1 - What is accounting?Ch. 1 - Prob. 2RQCh. 1 - Prob. 3RQCh. 1 - Prob. 4RQCh. 1 - Prob. 5RQCh. 1 - Prob. 6RQCh. 1 - Prob. 7RQCh. 1 - Prob. 8RQCh. 1 - Prob. 9RQCh. 1 - Which concept states that accounting information...Ch. 1 - Financial statements in the United States are...Ch. 1 - Prob. 12RQCh. 1 - Prob. 13RQCh. 1 - Prob. 14RQCh. 1 - Prob. 15RQCh. 1 - Prob. 16RQCh. 1 - List the four financial statements. Briefly...Ch. 1 - What is the calculation for return on assets...Ch. 1 - Identifying users of accounting information For...Ch. 1 - Prob. 1.2SECh. 1 - Prob. 1.3SECh. 1 - Prob. 1.4SECh. 1 - Applying accounting assumptions and principles...Ch. 1 - Using the accounting equation Kenmore Handyman...Ch. 1 - Using the accounting equation Joshs Overhead Doors...Ch. 1 - Identifying accounts Consider the following...Ch. 1 - Using the accounting equation to analyze...Ch. 1 - Using the accounting equation to analyze...Ch. 1 - Identifying accounts on the financial statements...Ch. 1 - Prob. 1.12SECh. 1 - Use the following injo17nation to answer Short...Ch. 1 - Prob. 1.14SECh. 1 - Prob. 1.15SECh. 1 - Calculating Return on Assets (ROA) Refined Water...Ch. 1 - Prob. 1.17ECh. 1 - Prob. 1.18ECh. 1 - Prob. 1.19ECh. 1 - Using the accounting equation Compute the missing...Ch. 1 - Using the accounting equation Green City Builders...Ch. 1 - Prob. 1.22ECh. 1 - Using the accounting equation During 2016,...Ch. 1 - Using the accounting equation The records of...Ch. 1 - Using the accounting equation to analyze...Ch. 1 - Using the accounting equation to analyze business...Ch. 1 - Using the accounting equation to analyze business...Ch. 1 - Prob. 1.28ECh. 1 - Using the accounting equation to analyze business...Ch. 1 - Preparing the financial statements Estella Osage...Ch. 1 - Use the following information to answer Exercises...Ch. 1 - Use the following information to answer Exercises...Ch. 1 - Use the following information to answer Exercises...Ch. 1 - Use the following information to answer Exercises...Ch. 1 - Use the following information to answer Exercises...Ch. 1 - Use the following information to answer Exercises...Ch. 1 - Preparing the statement of cash flows For each...Ch. 1 - Preparing the statement of cash flows Bean Town...Ch. 1 - Calculating return on assets (ROA) Alec Appliance...Ch. 1 - Using the accounting equation for transaction...Ch. 1 - Using the accounting equation for transaction...Ch. 1 - Preparing financial statements Presented here are...Ch. 1 - Preparing financial statements Click a Pix...Ch. 1 - Preparing financial statements The bookkeeper of...Ch. 1 - Prob. 1.45APCh. 1 - Using the accounting equation for transaction...Ch. 1 - Prob. 1.47BPCh. 1 - Using the accounting equation for transaction...Ch. 1 - Prob. 1.49BPCh. 1 - Prob. 1.50BPCh. 1 - Preparing financial statements The bookkeeper of...Ch. 1 - Using the accounting equation for transaction...Ch. 1 - Using the accounting equation for transaction...Ch. 1 - Using the accounting equation for transaction...Ch. 1 - Lets examine a case using Gregs Tunes and Sals...Ch. 1 - The tobacco companies have paid billions because...Ch. 1 - Prob. 1.1CTFCCh. 1 - This and similar cases in later chapters focus on...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- PURPOSE OF ACCOUNTING Match the following users with the information needed. 1. Ownersa. Whether the firm can pay its bills on time 2. Managersb. Detailed, up-to-date information to measure business performance (and plan for future operations) 3. Creditorsc. To determine taxes to be paid and whether other regulations are met 4. Government agenciesd. The firms current financial conditionarrow_forwardThe transactions completed by PS Music during June 2018 were described at the end of Chapter 1. The following transactions were completed during July, the second month of the businesss operations: July 1. Peyton Smith made an additional investment in PS Musk in exchange for common stock by depositing 5,000 in PS Music s checking account. 1. Instead of continuing to share office space with a local real estate agency, Peyton decided to rent office space near a local music store. Paid rent for July, 1,750. 1. Paid a premium of 2,700 for a comprehensive insurance policy covering liability, theft, and fire. The policy covers a one-year period. 2. Received 1,000 on account. 3. On behalf of PS Music, Peyton signed a contract with a local radio station, KXMD, to provide guest spots for the next three months. The contract requires PS Music to provide a guest disc jockey for 80 hours per month for a monthly fee of 3,600. Any additional hours beyond 80 will be billed to KXMD at 40 per hour. In accordance with the contract, Peyton received 7,200 from KXMD as an advance payment for the first two months. 3. Paid 250 on account. 4. Paid an attorney 900 for reviewing the July 3 contract with KXMD. (Record as Miscellaneous Expense.) 5. Purchased office equipment on account from Office Mart, 7,500. 8. Paid for a newspaper advertisement, 200. 11. Received 1,000 for serving as a disc jockey for a party. 13. Paid 700 to a local audio electronics store for rental of digital recording equipment. 14. Paid wages of 1,200 to receptionist and part-time assistant. Enter the following transactions on lage 2 of the two-column journal: 16. Received 2,000 for serving as a disc jockey for a wedding reception. 18. Purchased supplies on account, 850. 21. Paid 620 to Upload Music for use of its current music demos in making various music sets. 22. Paid 800 to a local radio station to advertise the services of PS Music twice daily for the remainder of July. 23. Served as disc jockey for a party for 2,500. Received 750, with the remainder due August 4, 2018. 27. Paid electric bill, 915. 28. Paid wages of 1,200 to receptionist and part-time assistant. 29. Paid miscellaneous expenses, 540. 30. Served as a disc jockey for a charity ball for 1,500. Received 500, with the remainder due on August 9, 2018. 31. Received 3,000 for serving as a disc jockey for a party. July 31. Paid 1,400 royalties (music expense) to National Music Clearing for use of various artists music during July. 31. Paid dividends, 1,250. PS Musics chart of accounts and the balance of accounts as of July 1, 2018 (all normal balances), are as follows: 11 Cash 3,920 41 Fees Earned 6,200 12 Accounts Receivable 1,000 50 Wages Expense 400 14 Supplies 170 51 Office Rent Expense 800 15 Prepaid Insurance 52 Equipment Rent Expense 675 17 Office Equipment 53 Utilities Expense 300 21 Accounts Payable 250 54 Music Expense 1,590 23 Unearned Revenue 55 Advertising Expense 500 31 Common Stock 4,000 56 Supplies Expense 180 33 Dividends 500 59 Miscellaneous Expense 415 Instructions 1. Enter the July 1, 2018, account balances in the appropriate balance column of a four-column account. Write Balance in the Item column, and place a check mark () in the Posting Reference column. {Hint: Verify the equality of the debit and credit balances in the ledger before proceeding with the next instruction.) 2. Analyze and journalize each transaction in a two-column journal beginning on Page 1, omitting journal entry explanations. 3. Post the journal to the ledger, extending the account balance to the appropriate balance column after each posting. 4. Prepare an unadjusted trial balance as of July 31, 2018.arrow_forwardConsider the following transactions for Thomas Company and their effect on the accounting equation. Click on each transaction for transaction details. Determine the new balance for each component of the accounting equation (assets, liabilities, owner’s equity) resulting from the transaction. (You will not need to enter the amount of each transaction, only the balance after the transaction.) If an amount box does not require an entry, leave it blank. Transaction Assets = Liabilities + Owner's Equity Beginning $0 $0 $0 1. Investment in the business The owner of the company invested $16,810 cash into the business 2. Borrow cash The company borrows $7,770 from the local bank 3. Purchase equipment The company pays cash for a piece of equipment. The list price was $9,100, but after negotiation the final was $8,700 4. Revenues earned During the year, Thomas Company earned revenues totaling $ 296,600. The cash has been…arrow_forward
- Using the accounting equation for transaction analysis Meg McKinney opened a public relations firm called Solid Gold on August 1, 2018. The following amounts summarize her business on August 31, 2018 During September 2018, the business completed the following transactions: a. Received contribution of $17,000 cash from Meg McKinney in exchange for common stock. b. Performed service for a client and received cash of $800. c. Paid off the beginning balance of accounts payable. d. Purchased office supplies from OfficeMax on account, $1,200. e. Collected cash from a customer on account, $2,000. f. Cash dividends of $1,600 were paid to stockholders. g. Consulted for a new band and billed the client for services rendered, $4,500. h. Recorded the following business expenses for the month: Paid office rent: $1,000. Paid advertising: $500. Analyze the effects of the transactions on the accounting equation of Solid Gold using the format presented in Exhibit 1-6.arrow_forwardA few years ago, Sam Gig founded Gig n Spin Consultancy Services. Sam is aware that you and your group members are pursuing an accounting course while in college and therefore has approached the team for advice. He wishes to know how much net income his business earned during the past year in order to decide whether to keep the company going. His accounting records consist a trial balance and some additional notes required to make adjustments to the financial statements. The company unadjusted trial balance for the year ended December 31st, 2021, was shown as follows: Mig T Accounting Services Trial Balance December 31st, 2021 DR CR Cash 120,000 Accounts receivable 65,000 Supplies 25,000 Lease Hold Improvement 100,000 Accumulated depreciation - Leasehold Improvement 40,000 Furniture and Fixtures 500,000 Accumulated depreciation - Furniture and…arrow_forwardUsing the accounting equation for transaction analysis Conner Thomas started a new business, Thomas Gymnastics, and completed the $21 500 following transactions during December: Analyze the effects of the transactions on the accounting equation of Thomas Gymnastics using a format similar to Exhibit 1-6.arrow_forward
- Analyze the transactions of a business organized as proprietorship described below and indicate their effect on the basic accounting equation. Use a plus sign to indicate an increase and minus sign to indicate a decrease in asset, liabilities and owner's equity. Asset = liabilities + owner's equity Received cash for services rendered. Purchased office equipment on credit Paid employees salaries Recieved cash from customer in payment account Paid telephone bill for the month Paid for office equipment purchased in transaction 2. Purchased office supplies on credit Owner withdrew cash for personal expenses. Obtained a loan from the bank. Billed customer's for services rendered.arrow_forwardA few years ago, Miguel Thorpe founded Mig T Accounting Services. Mig T is aware that you and your group members are pursuing an accounting course while in college and therefore has approached the team for advice. He wishes to know how much net income his business earned during the past year in order to decide whether to keep the company going. His accounting records consist of a trial balance and some additional notes required to make adjustments to the financial statements. The company unadjusted trial balance for the year ended December 31st, 2021, was shown as follows: Mig T Accounting ServicesTrial BalanceDecember 31st, 2021 DRCRCash 120,000 Accounts receivable 65,000 Supplies 25,000 Lease Hold Improvement 100,000 Accumulated depreciation - Leasehold Improvement 40,000Furniture and Fixtures 500,000 Accumulated depreciation - Furniture and Fittings 300,000Accounts payable 25,000Salary Payable Unearned service revenue…arrow_forwardThe two main sets of accounting standards followed by businesses are GAAP and IFRS. Briefly explain how the balance sheet is formatted under each set. (You should search the internet to answer this question) B- Farah Consulting completed the following transactions during December 2016 5. Prepare a classified balance sheet as of December 31, 2016.6. Is Farah’s ability to pay its short term debts strong or weak? Support your answer by calculating the suitable ratio(s). (You should search the internet to answer this question)arrow_forward
- Describe a transaction that would: a. Increase both an asset and a liability. b. Increase one asset and decrease another asset. c. Decrease both a liability and an asset. d. Increase both an asset and retained earnings. e. Decrease both an asset and retained earnings. Identify whether the following group of people belongs to internal or external users of annual reports for a company. Eexplain their need for financial information. a. Johari, investment banker of CIMB Investment Bank.b. Daisy Ong, purchasing manager of the company. c. Happy Berhad, supplier of the company. d. Great Sdn Bhd, regular customer of the company.e. Amy, officer from Inland Revenue Board.Eng Hardwares has the following balance as at 30 November 2020: Accounts RM’000 Wages(Debit) 110,000 Insurance (Debit) 2,000 Rental (Credit) 50,000 Additional information: i. Eng Hardwares pays wages to its workers at the end of every month. However, some internal problems arise and it did not pay wages amounting to RM10,000 to…arrow_forwardD. Prepare the income statement, the statement of owner’s equity and balance sheet as at December 31st, 2015.E. Advice Sam Gig if he should continue the business given the company’s financial performancearrow_forwardABC consulting service provides legal consulting services to client. ABC received total $16,000 of service fees during the operation of last month. Now Owner of the ABC is thinking about recording the services fees in his financial statements. Given that situation Owner of ABC would to know from you regarding the following matters. Briefly explain the following to the owner ABC. a. Is there a difference between an economic event and a business transaction that should be recorded in the accounting records? b. Can a business transaction benefit a business even though no cash is received when the transaction takes place? c. What is the difference between an asset and an expense?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Survey of Accounting (Accounting I)AccountingISBN:9781305961883Author:Carl WarrenPublisher:Cengage LearningFinancial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage LearningFinancial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning
- College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,Financial & Managerial AccountingAccountingISBN:9781337119207Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage LearningCorporate Financial AccountingAccountingISBN:9781305653535Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Survey of Accounting (Accounting I)
Accounting
ISBN:9781305961883
Author:Carl Warren
Publisher:Cengage Learning
Financial Accounting
Accounting
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Cengage Learning
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning
College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,
Financial & Managerial Accounting
Accounting
ISBN:9781337119207
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Corporate Financial Accounting
Accounting
ISBN:9781305653535
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
ACCOUNTING BASICS: Debits and Credits Explained; Author: Accounting Stuff;https://www.youtube.com/watch?v=VhwZ9t2b3Zk;License: Standard Youtube License