Intermediate Accounting
9th Edition
ISBN: 9781259722660
Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 2, Problem 2.7E
Transaction analysis; debits and credits
• LO2–2
Some of the ledger accounts for the Sanderson Hardware Company are numbered and listed below. For each of the October 2018 transactions numbered 1 through 12 below, indicate by account number which accounts should be debited and which should be credited. The company uses the perpetual inventory system. Assume that appropriate
- (1) Accounts payable
- (2) Equipment
- (3) Inventory
- (4)
Accounts receivable - (5) Cash
- (6) Supplies
- (7) Supplies expense
- (8) Prepaid rent
- (9) Sales revenue
- (10)
Retained earnings - (11) Note payable
- (12) Common stock
- (13) Deferred revenue
- (14) Rent expense
- (15) Salaries and wages payable
- (16) Cost of goods sold
- (17) Salaries and wages expense
- (18) Interest expense
Account(s) Debited | Account(s) Credited | |
Example: Purchased inventory for cash | 3 | 5 |
- 1. Paid a cash dividend.
- 2. Paid rent for the next three months.
- 3. Sold goods to customers on account.
- 4. Purchased inventory on account.
- 5. Purchased supplies for cash.
- 6. Paid employee salaries and wages for September.
- 7. Issued common stock in exchange for cash.
- 8. Collected cash from customers for goods sold in 3.
- 9. Borrowed cash from a bank and signed a note.
- 10. At the end of October, recorded the amount of supplies that had been used during the month.
- 11. Received cash for advance payment from customer.
- 12. Accrued employee salaries and wages for October.
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Serial Problem Business Solutions LO P1, A1
Selected ledger account balances for Business Solutions follow.
For Three MonthsEnded December 31, 2019
For Three MonthsEnded March 31, 2020
Office equipment
$
8,100
$
8,100
Accumulated depreciation—Office equipment
405
810
Computer equipment
20,000
20,000
Accumulated depreciation—Computer equipment
1,250
2,500
Total revenue
31,334
44,900
Total assets
83,360
121,668
Required:1. Assume that Business Solutions does not acquire additional office equipment or computer equipment in 2020. Compute amounts for the year ended December 31, 2020, for Depreciation expense—Office equipment and for Depreciation expense—Computer equipment (assume use of the straight-line method).2. Given the assumptions in part 1, what is the book value of both the office equipment and the computer equipment as of December 31, 2020?3. Compute the three-month total asset turnover for Business…
Q#3 The following account balance were taken from the general ledger of Aslam on June 30, 1994 before adjusting the accounts
Name of Accounts
Debit
Credit
Cash
15,000
Account Receivable
19,000
Merchandise Inventory (1/1/94)
41,200
Purchases
112,000
Office Equipment
45,100
Purchase discount
31,000
Carriage in
11,800
Sales Discount
1,200
Sales Revenue
126,200
Commission Income
3,500
Utilities Expense
2,500
Advertising Expense
8,000
Postages and Telephone expense
11,600
Salaries Expense
13,000
Rent Expense
14,500
Prepaid Insurance
11,500
Account Payable
60,000
Aslam Drawings
11,200
Aslam Capital
1,27,000
348,600
348,600
Adjustments at the end of the year:
Merchandise Inventory Dec 31, 1994 Rs. 6,000
Allowance for Depreciation on equipment…
Q#3 The following account balance were taken from the general ledger of Aslam on June 30, 1994 before adjusting the accounts
Name of Accounts
Debit
Credit
Cash
15,000
Account Receivable
19,000
Merchandise Inventory (1/1/94)
41,200
Purchases
112,000
Office Equipment
45,100
Purchase discount
31,000
Carriage in
11,800
Sales Discount
1,200
Sales Revenue
126,200
Commission Income
3,500
Utilities Expense
2,500
Advertising Expense
8,000
Postages and Telephone expense
11,600
Salaries Expense
13,000
Rent Expense
14,500
Prepaid Insurance
11,500
Account Payable
60,000
Aslam Drawings
11,200
Aslam Capital
1,27,000
348,600
348,600
Adjustments at the end of the year:
Merchandise Inventory Dec 31, 1994 Rs. 6,000
Allowance for Depreciation on equipment…
Chapter 2 Solutions
Intermediate Accounting
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