Horngren's Accounting, Student Value Edition Plus MyAccountingLab with Pearson eText, Access Card Package
11th Edition
ISBN: 9780134078946
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Textbook Question
Chapter 1, Problem E1.25E
Using the
Learning Objective 4
As the manager of a Papa Sean's restaurant, you must deal with a variety of business transactions. Give an example of a transaction that has each of the following effects on the accounting equation:
a. Increase one asset and decrease another asset.
b. Decrease an asset and decrease equity.
c. Decrease an asset and decrease a liability.
d. Increase an asset and increase equity.
e. Increase an asset and increase a liability.
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S1-5. (Learning Objective 3: Apply the accounting equation)1. If you know the assets and the equity of a business, how can you measure its liabilities?Give the equation.2. Use the accounting equation to show how to determine the amount of a company’s stockholders’ equity. How would your answer change if you were analyzing your own household?
(Learning Objective 3: Analyze the impact of business transactions on accounts)Set up the following T-accounts: Cash, Accounts Receivable, Office Supplies, Office Furniture,Accounts Payable, Common Stock, Dividends, Service Revenue, Salary Expense, and RentExpense. Record the following transactions directly in the T-accounts without using a journal.Use the letters to identify the transactions. Determine the ending balance in each account.a. Brian Durham opened a law firm by investing $25,500 cash and office furniture with afair value of $9,400. Organized as a professional corporation, the business issued common stock to Durham.b. Paid monthly rent of $1,500.c. Purchased office supplies on account, $700.d. Paid employees’ salaries of $2,900.e. Paid $250 of the account payable created in transaction c.f. Performed legal service on account, $11,000.g. Declared and paid dividends of $2,000.
(Learning Objective 3: Analyze the impact of business transactions on accounts)Set up the following T-accounts: Cash, Accounts Receivable, Office Supplies, Office Furniture,Accounts Payable, Common Stock, Dividends, Service Revenue, Salary Expense, and RentExpense. Record the following transactions directly in the T-accounts without using a journal.Use the letters to identify the transactions. Determine the ending balance in each account.a. Michael Dover opened a law firm by investing $23,500 cash and office furniture with afair value of $8,600. Organized as a professional corporation, the business issued common stock to Dover.b. Paid monthly rent of $1,100.c. Purchased office supplies on account, $800.d. Paid employee salaries of $2,800.e. Paid $200 of the account payable created in transaction c.f. Performed legal service on account, $10,700.g. Declared and paid dividends of $2,900.
Chapter 1 Solutions
Horngren's Accounting, Student Value Edition Plus MyAccountingLab with Pearson eText, Access Card Package
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