1.
Assets = Liabilities + Shareholders Equity
Financial statements: Financial statements refer to those statements, which are prepared by the Company according to particular formats in accounting to show its financial position. Financial statements include the following statements:
- Cash flow statement
- Income statement
-
Balance sheet - Statement of Owner's Equity
To Indicate: The effect of each given transaction of Company SNV on the accounting equation.
2.
To Prepare: The income statement for Company SNV for the month ended September 30, 2019.
3.
To Prepare: The statement of owner's equity for Company SNV for the month ended September 30, 2019.
4.
To Prepare: The balance sheet for Company SNV for the month ended September 30, 2019.
5. a.
To compare: The two given alternatives to get the most income per month.
b.
To discuss: all the factors LD should consider before a long term arrangement with PTC.
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Chapter 1 Solutions
Cengagenow?v2, 1 Term Printed Access Card For Warren/reeve/duchac?s Accounting, 27th
- Business entity conceptBig Sky Sports sells hunting and fishing equipment and provides guided hunting and fishing trips. Big Sky Sports is owned and operated by Joe Flannery, a well-known sports enthusiast and hunter. Joe’s wife, Pam, owns and operates Glacier Boutique, a women's clothing store. Joe and Pam have established a trust fund to finance their children's college education. The trustfund is maintained by Kalispell State Bank in the name of the children, Trey and Brooke. a. For each of the following transactions, identify which of the entities listed should record the transaction in its records: Entities G Glacier Boutique K Kalispell State Bank B Big Sky Sports X None of the above 1. Pam deposited a $2,000 personal check in the trust fund at Kalispell State Bank.2. Pam purchased two dozen spring dresses from a Spokane designer for a special spring sale.3. Joe paid a breeder's fee for an English Springer Spaniel to be used as a hunting guide dog.4. Pam authorized…arrow_forwardBarry Bird opened the Barry Bird Basketball Camp for children ages 10 through 18. Campers typically register for one week in June or July, arriving on Sunday and returning home the following Saturday. College players serve as cabin counselors and assist the local college and high school coaches who run the practice sessions. The registration fee includes a room, meals at a nearby restaurant, and basketball instruction. In the off-season, the facilities are used for weekend retreats and coaching clinics. The following transactions took place during the month of June: June 1 Bird invested cash in the business, $10,000. 1 Purchased basketballs and other athletic equipment, $3,000. 2 Paid Hite Advertising for flyers that had been mailed to prospective campers, $5,000. 2 Collected registration fees, $15,000. 2 Rogers Construction completed work on a new basketball court that cost $12,000. Arrangements were made to pay the bill in July. 5 Purchased office supplies on account…arrow_forwardSee the answer Decision-Making Across the Organization Kathy and James Mohr, local golf stars, opened the Chip-Shot Driving Range Company on March 1, 2017. They invested $25,000 cash and received common stock in exchange for their investment. A caddy shack was constructed for cash at a cost of $8,000, and $800 was spent on golf balls and golf clubs. The Mohrs leased five acres of land at a cost of $1,000 per month and paid the first month's rent. During the first month, advertising costs totaled $750, of which $150 was unpaid at March 31, and $400 was paid to members of the high-school golf team for retrieving golf balls. All revenues from customers were deposited in the company's bank account. On March 15, Kathy and James received a dividend of $1,000. A $100 utility bill was received on March 31 but was not paid. On March 31, the balance in the company's bank account was $18,900. Kathy and James thought they had a pretty good first month of operations. But, their estimates of…arrow_forward
- dont uplode images in answerKathy owns her own marketing firm and incurred the following expenses in 2022 related to meetings with clients and potential clients. Assume that all entertainment expenses were directly associated with a business discussion. Dues to golf and country club $3,000 Green fees for playing golf with clients $2,000 Meals and drinks with clients after golf at a restaurant (separate invoice) $1,200 Tickets to NCAA Basketball Tournament (face value = $400) $2,000 How much of these expenses are deductible for the current year? $0 $1,200 $3,600 $8,200arrow_forwardFASTER BIKE SHOP Phil Murphy liked bikes. During a recent period of unemployment, he decided to turn his hobby into a business by opening: FASTER BIKE SHOP where he both would sell and repair bikes. Phil opened up an account at the local bank for FASTER BIKE SHOP and deposited all of his retirement money, $20,000, into the business. His friend, Sue Long, gave Phil a two-year lease on a building she owned for Phil to use as his bike shop for $12,000. To receive such a good deal on rent, he was required to pay the $12,000 up front. In addition, Phil bought some store fixtures and bicycle repair equipment for $10,000. He expected these to last for 5 years before they needed to be replaced. Phil spent $2,700 for hand tools. Because of heavy use Phil expected to need to replace the hand tools in 3 years. To get the business started Phil advertised heavily in the local newspaper. He spent $5,000 advertising Faster Bike Shop in the first month, including the grand opening. He spent…arrow_forwardKathy Wintz formed a lawn service business as a summer job. To start the corporation on May 1, 2018, she deposited $1,000 in a new bank account in the name of the business. The $1,000 consisted of a $600 loan from Bank One to her company, Wintz Lawn Service, and $400 of her own money. The company issued $400 of common stock to Wintz. Wintz rented lawn equipment, purchased supplies, and hired other students to mow and trim customers’ lawns. At the end of each month, Wintz mailed bills to the customers. On August 31, she was ready to dissolve the corporation and return to college. Because she was so busy, she kept few records other than the checkbook and a list of receivables from customers. At August 31, the business’s checkbook shows a balance of $2,000, and customers still owe $750. During the summer, the business collected $5,500 from customers. The business checkbook lists payments for supplies totaling $400 and it still has gasoline, weed trimmer cord, and other supplies that cost…arrow_forward
- Kathy Wintz formed a lawn service business as a summer job. To start the corporation on May 1, 2018, she deposited $1,000 in a new bank account in the name of the business. The $1,000 consisted of a $600 loan from Bank One to her company, Wintz Lawn Service, and $400 of her own money. The company issued $400 of common stock to Wintz. Wintz rented lawn equipment, purchased supplies, and hired other students to mow and trim customers’ lawns. At the end of each month, Wintz mailed bills to the customers. On August 31, she was ready to dissolve the corporation and return to college. Because she was so busy, she kept few records other than the checkbook and a list of receivables from customers. At August 31, the business’s checkbook shows a balance of $2,000, and customers still owe $750. During the summer, the business collected $5,500 from customers. The business checkbook lists payments for supplies totaling $400 and it still has gasoline, weed trimmer cord, and other supplies that cost…arrow_forwardRequired information Skip to question [The following information applies to the questions displayed below.] Davidson Yachts is a small private company founded by two businesspeople who are friends and avid sailors. At present, they are interested in expanding the business and have asked you to review its financial statements. Davidson Yachts sells approximately 140 to 190 sailboats each year, ranging from 16-foot dinghies to 22-foot sailboats. Their sales prices range from $2,400 to more than $10,400. The company has a limited inventory of boats consisting primarily of one or two boats from each of the four manufacturers that supply Davidson. The company also sells a variety of supplies and parts and performs different types of service. Most sales are on credit. The company operates from a large building that has offices, storage, and sales space for some of the smaller sailboats. The larger sailboats are kept in a fenced area adjacent to the main building, and an ample parking…arrow_forwardEthics and Governance – The impact of a bonus incentive scheme on the financial statementsLucia works as an accountant for a motor vehicle engine parts manufacturer called Vroom Ltd, owned by an international car firm. Her manager, Freda Chuse, is paid a bonus depending on the profitability of the company. If Vroom Ltd makes $1 million profit, Freda receives a bonus of $20 000 that increases progressively to $30 000 for a $3 million profit. If the profit of Vroom Ltd exceeds $3 million, Freda receives the maximum bonus of $30 000. Vroom Ltd currently receives a grant from the government of $100 000 per year to employ and train apprentice mechanics.At the end of May, it appears that Vroom Ltd will make a profit of approximately $3.5 million for the year ending 30 June 2016. Freda approached Lucia and said that if the company made too much profit then the government may stop paying Vroom Ltd the grant for training apprentice mechanics, and it would lose the $100 000 tax-free cash inflow.…arrow_forward
- IT IS URGENT Sharon Samson starts a plumbing service called Reliable Waterworks. Selected transactions are described as follows: A) Sharon deposits $7,000 into a new checking account for the business, recording the capital contribution. B) Reliable pays $4,000 cash for equipment to be used for plumbing repairs. C) Reliable borrows $15,000 from a local bank and deposits the money in the checking account. D) Reliable pays $600 rent for the first month. E) Reliable pays $400 cash for plumbing supplies to be used on various jobs in the future. F) Reliable completes a plumbing repair project for a local lawyer and receives $1,300 cash. G) Sharon takes a cash withdrawal of $2,500. After all of the transactions, what is the amount of total liabilities? A)15,000 B)4,000 C)19,000 D)4.400arrow_forwardEvaluate Pete Donaldson’s ethical behavior. b. Suppose that you have been hired as the chief finance officer for Donaldson Mining Supplies. You have been told that the $30,000 has been donated to the company. During the second week of your employment, the father-in-law drops in unexpectedly and introduces himself. He then asks you how the company is doing and wants to know if his $30,000 loan is still likely to be repaid in 3 years. Suppose also that same day you overhear an employee mention that the safety equipment is no longer usable because regulations now require a newer and different model. b.1 Assume that you have yet to prepare the financial statements for the loan application. What should you do? b.2 Suppose that the financial statements have been prepared and submitted to the bank. In fact, that morning, you had received a call from the bank, indicating that a decision was imminent and that the line of credit would likely be approved. What should you do under these…arrow_forwardFASTER BIKE SHOPPhil Murphy liked bikes. During a recent period of unemployment, he decided to turn his hobbyinto a business by opening: FASTER BIKE SHOP where he both would sell and repair bikes.Phil opened up an account at the local bank for FASTER BIKE SHOP and deposited all of hisretirement money, $20,000, into the business. His friend, Sue Long, gave Phil a two-year leaseon a building she owned for Phil to use as his bike shop for $12,000. To receive such a gooddeal on rent, he was required to pay the $12,000 up front. In addition, Phil bought some storefixtures and bicycle repair equipment for $10,000. He expected these to last for 5 years beforethey needed to be replaced. Phil spent $2,700 for hand tools. Because of heavy use Philexpected to need to replace the hand tools in 3 years.To get the business started Phil advertised heavily in the local newspaper. He spent $5,000advertising Faster Bike Shop in the first month, including the grand opening. He spent another$2,000…arrow_forward
- Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,Pfin (with Mindtap, 1 Term Printed Access Card) (...FinanceISBN:9780357033609Author:Randall Billingsley, Lawrence J. Gitman, Michael D. JoehnkPublisher:Cengage Learning