Financial Accounting
3rd Edition
ISBN: 9780133791129
Author: Jane L. Reimers
Publisher: Pearson Higher Ed
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Textbook Question
Chapter 1, Problem 48PA
Analyze business transactions and the effect on the financial statements. (LO 4). Using transactions a–j in P1-47A, answer the following questions:
Requirements
- 1. What is the cash balance at the end of Buck’s first month of business?
- 2. Does the company have any liabilities at the end of the first month of business? If so, how much?
- 3. Which assets will appear on the balance sheet at the end of Buck’s first month of business?
- 4. Did the company generate a net income or a net loss for its first month of business? How much?
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The purpose of this assignment is for you to demonstrate your ability to record business transactions and then prepare a properly formatted income statement and balance sheet. The one additional requirement is that you answer the questions that you find below.
Questions to be answer
1. What is the company's ending Cash balance? What is the company's ending Equity? Why is cash not equal to equity?
2. What is the company's net income for the period?
3. If you had to repay your creditors today, could you? Explain.
4. The company made a small amount of net income over the month. Explain why the equity actually decreased over the period.
5. You have recorded journal entries for the period of a month. If you were told that the business license in T12 was a annual expense, would this impact the reported net income? Explain why or why not.
Show how the below transactions affect the financial position of the business as represented by A = E + L. You need to clearly indicate whether the element has increased or decreased and provide the relevant amount and account that would be affected.EG. The business pays R6 333 per month for the rental of some business premises. All rentals were paid in cash during the year.
No.
A
=
E
+
L
Eg.
-75996 Bank
(6333 x 12)
- 75996 Rent Expense
Please use format of table above for the below transactionsThe following transactions occurred in the business during the year ended 31 December 2020:
1. The owner deposited R105 000 cash into the business’s bank account on 1 January 2020.2. The business bought R450 000 worth of inventory from various suppliers during the year. 80% of these purchases were on credit and the remaining 20% were paid for in cash.3. During the year the business paid R96 900 cash in operating costs. These costs related to goods and services that had all been…
Indicate what impact the following transactions would have on the accounting equation, Assets = Liabilities + Equity.
Transaction
Impact 1
Impact 2
Issued common stock for cash (EXAMPLE)
Increase Assets
Increased Equity
Paid monthly note payment to bank
Sold inventory on account
Bought supplies, to be paid for next month
Received cash from sales this month
Paid for inventory purchased on account last month
Paid this month’s utility bill
Purchased supplies for cash
Received cash for services performed
Collected cash from customer accounts receivable
Paid creditors on account
Chapter 1 Solutions
Financial Accounting
Ch. 1 - 1. What is the main purpose of a business? 2....Ch. 1 - Prob. 2YTCh. 1 - 1. What are the two sources of financing for a...Ch. 1 - 1. What are revenues and expenses? 2. What are the...Ch. 1 - 1. What are the two parts of shareholders equity?...Ch. 1 - Prob. 6YTCh. 1 - Prob. 7YTCh. 1 - Prob. 1QCh. 1 - Prob. 2QCh. 1 - Prob. 3Q
Ch. 1 - Prob. 4QCh. 1 - What are the advantages of the corporate form of...Ch. 1 - What are the disadvantages of the corporate form...Ch. 1 - Prob. 7QCh. 1 - Prob. 8QCh. 1 - What are the basic financial statements? Describe...Ch. 1 - What makes the income statement different from the...Ch. 1 - Prob. 11QCh. 1 - What type of activities relate to what the firm is...Ch. 1 - Prob. 2MCQCh. 1 - Prob. 3MCQCh. 1 - Prob. 4MCQCh. 1 - Prob. 5MCQCh. 1 - Online Pharmacy Company borrowed 5,000 cash from...Ch. 1 - Prob. 7MCQCh. 1 - During its first year of business, West Company...Ch. 1 - Interest is the cost of a. purchasing inventory....Ch. 1 - Prob. 10MCQCh. 1 - Classify business transactions. (LO 2). For each...Ch. 1 - Identify balance sheet items. (LO 4). Classify the...Ch. 1 - Calculate owners equity. (LO 4). Doughnut Company...Ch. 1 - Prob. 4SEACh. 1 - Prob. 5SEACh. 1 - Calculate owners equity. (LO 4). Pasta Enterprises...Ch. 1 - Super Shop had a retained earnings balance of...Ch. 1 - Prob. 8SEBCh. 1 - Prob. 9SEBCh. 1 - Breck Company shows 80,000 worth of assets on its...Ch. 1 - Prob. 11SEBCh. 1 - For each of the following, calculate the missing...Ch. 1 - Prob. 13SEBCh. 1 - M Company had a retained earnings balance of 4,200...Ch. 1 - Prob. 15EACh. 1 - Analyze business transactions using the accounting...Ch. 1 - Prob. 17EACh. 1 - Prob. 18EACh. 1 - Enter each transaction below into the accounting...Ch. 1 - Prob. 20EACh. 1 - For each of the transactions given, tell whether...Ch. 1 - Prob. 22EACh. 1 - Enter each transaction into the accounting...Ch. 1 - Prob. 24EACh. 1 - Relationship between income statement and balance...Ch. 1 - Bob started a pool cleaning business on the first...Ch. 1 - Prob. 27EACh. 1 - Retained earnings and cash. (LO 4). Checkmate...Ch. 1 - Prob. 29EACh. 1 - Prob. 30EBCh. 1 - Prob. 31EBCh. 1 - Prob. 32EBCh. 1 - Prob. 33EBCh. 1 - Prob. 34EBCh. 1 - Classify business transactions. (LO 2). For each...Ch. 1 - Prob. 36EBCh. 1 - Prob. 37EBCh. 1 - Enter each transaction into the accounting...Ch. 1 - Prob. 39EBCh. 1 - Prob. 40EBCh. 1 - Frank Frock started a consulting business on the...Ch. 1 - Prob. 42EBCh. 1 - Prob. 43EBCh. 1 - Prob. 44EBCh. 1 - Prob. 45PACh. 1 - Prob. 46PACh. 1 - Prob. 47PACh. 1 - Analyze business transactions and the effect on...Ch. 1 - Prob. 49PACh. 1 - Analyze business transactions and prepare the...Ch. 1 - Prob. 51PACh. 1 - Prob. 52PBCh. 1 - Analyze business transactions using the accounting...Ch. 1 - Prob. 54PBCh. 1 - Prob. 55PBCh. 1 - Prob. 56PBCh. 1 - Prob. 57PBCh. 1 - Prob. 58PBCh. 1 - Prob. 1FSACh. 1 - Prob. 2FSACh. 1 - Prob. 3FSACh. 1 - What is the Walt Disney Companys key objective? Go...
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