Loose Leaf for Fundamental Accounting Principles
Loose Leaf for Fundamental Accounting Principles
23rd Edition
ISBN: 9781259687709
Author: John J Wild, Ken Shaw Accounting Professor, Barbara Chiappetta Fundamental Accounting Principles
Publisher: McGraw-Hill Education
Question
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Chapter 1, Problem 7APSA
To determine

Concept introduction:

Account Payables: For delivered goods or services, the cash owed by the business that they are required to pay to their suppliers is called the account payables. In the balances sheet, the account payables are shown as liabilities.

Account Receivables: For delivered goods or services, the cash owed by the customer that they need to pay to the business is called account payables. In the balances sheet, the account payables are shown as assets.

Asset: A resource which will generate a cash flow in a future for an individual, company or corporation. It has an economic value and helps to reduce expenses, benefits the firm’s operations and improve sales. Asset is mentioned on the credit side of the balance sheet.

Liabilities: During the course of the business operations, an obligation or the company’s debit that arises is known as liability. Liabilities such as mortgages, accounts payables, accrued expenses and loans are recorded on the right hand side of the balance sheet.

Equity: Equity is the value of an asset less the amount of all liabilities on that asset. It can be represented with the accounting equation: Assets -Liabilities = Equity.

Income Statement: The statement in which the profit and loss of a company is mentioned is called the income statement. In the income statement the revenues, expenses, net income, profit and loss will be mentioned. It is also a statement which gives us the effect of expenses and profit in a stipulated time period.

1. To write: The statement showing addition and subtraction of each transaction for the month of May.

Expert Solution
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Explanation of Solution

Assets =Liabilities + Equity
Date Cash Accounts Receivable Office Equipment Accounts payable G.Gram Capital G.Gram Withdrawals Revenues Expenses
May 1 $40,000       $40,000      
May 1 ($2,200)             $2,200
May 3     $1,890 $1,890        
May 5 ($750)             $750
May 8 $5,400           $5,400  
May 12   $2,500         $2,500  
May 15 ($750)             $750
May 20 $2,500 ($2,500)            
May 22   $3,200         $3,200  
May 25 $3,200 ($3,200)            
May 26 ($1,890)     ($1,890)        
May 27       $80       $80
May 28 ($750)             $750
May 30 ($300)             $300
May 30 ($280)             $280
May 31 ($1,400)         $1,400    
                 
Total $42,780 $0 $1,890 $80 $40,000 $1,400 $11,100 $5,110
                 
                 
To determine

2. To write: The income statement for the month of May

Expert Solution
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Explanation of Solution

Particulars   Amount
Revenue   $11,100
Total Revenues (A)   $11,100
     
Salaries expense   $1,500
Telephone expense   $300
Rental expense   $2,200
Selling and administrative expense   $1,110
Total Expense (B)   $5,110
Net Income (A-B)   $5,990
     

Owners Equity account for the month of May

Particulars Amount Amount
Owners Capital    
Opening Capital $0  
Add: Invested during the year $40,000  
Add: Profit during the year $5,990  
  $45,990  
     
Less: A. Armani Withdrawals $1,400 $44,590

Balance Sheet for the month of May

Particulars Amount Amount
Owners Capital   44,590
     
Current Liabilities    
Accounts Payable   $80
     
Total   $44,670
     
Fixed Assets    
Equipment   $1,890
     
Current Assets    
Accounts Receivable   $0
Cash   $42,780
     
Total   $44,670
To determine

3. To write: The cash flow for the month of May

Expert Solution
Check Mark

Explanation of Solution

Particulars Amount Amount
Cash from operating activities   $6,070
Cash used by investing activities   ($1,890)
Cash from financing activities    
Capital Introduced $40,000  
Amount withdrawn $1,400 $38,600
Net Increase/(decrease) in cash   $42,780
Add: Opening Cash Balance as on Dec.31, 2016   $0
     
Closing Cash Balance as on Dec.31, 2017   $42,780

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Chapter 1 Solutions

Loose Leaf for Fundamental Accounting Principles

Ch. 1 - Prob. 11DQCh. 1 - Prob. 12DQCh. 1 - Prob. 13DQCh. 1 - Prob. 14DQCh. 1 - Prob. 15DQCh. 1 - Prob. 16DQCh. 1 - Prob. 17DQCh. 1 - Prob. 18DQCh. 1 - Prob. 19DQCh. 1 - Prob. 20DQCh. 1 - Prob. 21DQCh. 1 - Prob. 22DQCh. 1 - Prob. 23DQCh. 1 - Prob. 24DQCh. 1 - Prob. 25DQCh. 1 - Prob. 26DQCh. 1 - Prob. 27DQCh. 1 - Define and explain return on assets.Ch. 1 - Prob. 29DQCh. 1 - Prob. 30DQCh. 1 - Prob. 31DQCh. 1 - Prob. 32DQCh. 1 - Prob. 33DQCh. 1 - Prob. 1QSCh. 1 - Prob. 2QSCh. 1 - Prob. 3QSCh. 1 - Prob. 4QSCh. 1 - Prob. 5QSCh. 1 - Prob. 6QSCh. 1 - Prob. 7QSCh. 1 - Prob. 8QSCh. 1 - Prob. 9QSCh. 1 - Prob. 10QSCh. 1 - Prob. 11QSCh. 1 - Prob. 12QSCh. 1 - Prob. 13QSCh. 1 - Prob. 14QSCh. 1 - Prob. 15QSCh. 1 - Prob. 16QSCh. 1 - Prob. 17QSCh. 1 - Prob. 1ECh. 1 - Prob. 2ECh. 1 - Prob. 3ECh. 1 - Prob. 4ECh. 1 - Prob. 5ECh. 1 - Prob. 6ECh. 1 - Prob. 7ECh. 1 - Prob. 8ECh. 1 - Prob. 9ECh. 1 - Prob. 10ECh. 1 - Prob. 11ECh. 1 - Prob. 12ECh. 1 - Prob. 13ECh. 1 - Prob. 14ECh. 1 - Prob. 15ECh. 1 - Exercise 1–16 Preparing a statement of owner’s...Ch. 1 - Prob. 17ECh. 1 - Prob. 18ECh. 1 - Prob. 19ECh. 1 - Prob. 20ECh. 1 - Prob. 21ECh. 1 - Prob. 22ECh. 1 - Prob. 1APSACh. 1 - Prob. 2APSACh. 1 - Prob. 3APSACh. 1 - Prob. 4APSACh. 1 - Prob. 5APSACh. 1 - Prob. 6APSACh. 1 - Prob. 7APSACh. 1 - Prob. 8APSACh. 1 - Prob. 9APSACh. 1 - Prob. 10APSACh. 1 - Prob. 11APSACh. 1 - Problem 1–12AA Identifying risk and...Ch. 1 - Prob. 13APSACh. 1 - Prob. 14APSACh. 1 - Prob. 1BPSBCh. 1 - Prob. 2BPSBCh. 1 - Prob. 3BPSBCh. 1 - Prob. 4BPSBCh. 1 - Prob. 5BPSBCh. 1 - Prob. 6BPSBCh. 1 - Prob. 7BPSBCh. 1 - Prob. 8BPSBCh. 1 - Prob. 9BPSBCh. 1 - Prob. 10BPSBCh. 1 - Prob. 11BPSBCh. 1 - Prob. 12BPSBCh. 1 - Prob. 13BPSBCh. 1 - Prob. 14BPSBCh. 1 - Prob. 1SPCh. 1 - Prob. 1BTNCh. 1 - Prob. 2BTNCh. 1 - Prob. 3BTNCh. 1 - Prob. 4BTNCh. 1 - Prob. 5BTNCh. 1 - Prob. 6BTNCh. 1 - Prob. 7BTNCh. 1 - Prob. 8BTNCh. 1 - Prob. 9BTN
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