Concept explainers
1.
Introduction: Cash Flow Analysis is a technique used by the company to know the overall worth of the company as well as its subsidiary or branches. Cash flow analysis helps in analyzing the company’s
To prepare: The general
1.
Answer to Problem 3PSB
The total for journal entries is $93430
Explanation of Solution
Date (November) | Particular | PR | Dr. | Cr. |
1stNov | Cash | 101 | 30,000 | |
Office Equipment | 163 | 15,000 | ||
To Common stock | 307 | 54,000 | ||
(Owner’s investment) | ||||
2ndNov | Prepaid rent | 131 | 4,500 | |
To Cash | 101 | 4,500 | ||
(Paid in advance for rent) | ||||
4rdNov | Office equipment | 163 | 2500 | |
Office supplies | 124 | 600 | ||
To account payable | 201 | 3100 | ||
(Purchased office equipment and office supplies) | ||||
8thNov | Cash | 101 | 3400 | |
To Service revenue | 403 | 3400 | ||
(Received cash for provided service) | ||||
12thNov | Account receivable | 106 | 10200 | |
To service revenue | 403 | 10200 | ||
(Provide service on credit) | ||||
13thNov | Account payable | 201 | 3100 | |
Cash | 101 | 3100 | ||
(Paid cash that was due) | ||||
19thNov | Prepaid Insurance | 128 | 1800 | |
To cash | 101 | 1800 | ||
(Paid cash as premium for insurance) | ||||
22thNov | Cash | 101 | 5200 | |
Account receivable | 106 | 5200 | ||
(Received cash) | ||||
24thNov | Account receivable | 106 | 1,750 | |
Service revenue | 403 | 1,750 | ||
28thNov | Dividends | 319 | 5300 | |
Cash | 101 | 5300 | ||
(to record the payment of cash as dividend) | ||||
29thNov | Office supplies | 163 | 249 | |
To Accounts payable | 201 | 249 | ||
(Purchase office supplies on credit) | ||||
30thNov | Utilities expense | 690 | 831 | |
To Cash | 101 | 831 | ||
(Paid cash for utilities) | ||||
Total | 93430 | 93430 |
2.
Introduction: Cash Flow Analysis is a technique used by the company to know the overall worth of the company as well as its subsidiary or branches. Cash flow analysis helps in analyzing the company’s cash outflow and inflow through different activities like financing activities, investing activities, operating activities. This analysis shows how the company generates money or revenue for its working.
To prepare: Ledger for the following transactions.
2.
Answer to Problem 3PSB
Balance of cash ledger is $23069, account receivable $6750, dividend $5300, office supplies $849, prepaid insurance is $1800, prepaid rent $4500, office equipment $17500, Account payable $249, Common stock $45000, service revenue $1350, and utilities is $831
Explanation of Solution
Cash Account No.101 | ||||
Date | PR | Debit | Credit | Balance |
1stNov | G1 | 30000 | 30,000 | |
2ndNov | G1 | 4500 | 25500 | |
8thNov | G1 | 3400 | 28900 | |
13thNov | G1 | 3100 | 25800 | |
19thNov | G1 | 1800 | 24000 | |
22ndNov | G1 | 5200 | 29200 | |
28thNov | G1 | 5300 | 23900 | |
30thNov | G1 | 831 | 23069 |
Account receivable | Account no.106 | |||
Date | PR | Debit | Credit | Balance |
12thNov | G1 | 10200 | 10200 | |
22ndNov | G1 | 5200 | 5000 | |
24thNov | G1 | 1750 | 6750 |
Prepaid insurance | Account no. 128 | |||
Date | PR | Debit | Credit | Balance |
19thNov | G1 | 1800 | 1800 | |
Office equipment | Account no. 163 | |||
Date | PR | Debit | Credit | Balance |
1stNov | G1 | 15000 | 15000 | |
4thNov | G1 | 2500 | 17500 | |
Office supplies | Account no. 124 | |||
Date | PR | Debit | Credit | Balance |
4rdNov | G1 | 600 | 600 | |
29thNov | G1 | 249 | 849 |
Prepaid rent | Account no. 131 | |||
Date | PR | Debit | Credit | Balance |
2ndNov | G1 | 4500 | 4500 | |
Account payable | Account no. 201 | |||
Date | PR | Debit | Credit | Balance |
4thNov | G1 | 3100 | 3100 | |
13thNov | G1 | 3100 | 0 | |
29thNov | G1 | 249 | 249 |
Common stock | Account no. 307 | |||
Date | PR | Debit | Credit | Balance |
1stNov | G1 | 45000 | 45000 | |
Dividend | Account no. 319 | |||
Date | PR | Debit | Credit | Balance |
28thNov | G1 | 5300 | 5300 | |
Service Revenue | Account no. 403 | |||
Date | PR | Debit | Credit | Balance |
8thNov | G1 | 3400 | 3400 | |
12thNov | G1 | 10200 | 13600 | |
24thNov | G1 | 2100 | 1350 | |
Utilities | Account no. 690 | |||
Date | PR | Debit | Credit | Balance |
30thNov | G1 | 831 | 831 |
3.
Introduction: Cash Flow Analysis is a technique used by the company to know the overall worth of the company as well as its subsidiary or branches. Cash flow analysis helps in analyzing the company’s cash outflow and inflow through different activities like financing activities, investing activities, operating activities. This analysis shows how the company generates money or revenue for its working.
To prepare: Trail balance.
3.
Answer to Problem 3PSB
Total of trail balance is $60599
Explanation of Solution
HTrail balance30thNov. | ||
Particular | Dr. | Cr. |
Cash | 23069 | |
Account receivable | 6750 | |
Office supplies | 849 | |
Prepaid insurance | 1,800 | |
Prepaid rent | 4500 | |
Office equipment | 17500 | |
Account payable | 249 | |
Common Stock | 45000 | |
Dividend | 5,300 | |
Service revenue | 15350 | |
Utilities | 831 | |
Total | 60599 | 60599 |
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Chapter 2 Solutions
Connect Access Card for Financial Accounting: Information and Decisions
- Inner Resources Company started its business on April 1, 2019. The following transactions occurred during the month of April. Prepare the journal entries in the journal on Page 1. A. The owners invested $8,500 from their personal account to the business account. B. Paid rent $650 with check #101. C. Initiated a petty cash fund $550 check #102. D. Received $750 cash for services rendered. E. Purchased office supplies for $180 with check #103. F. Purchased computer equipment $8,500, paid $1,600 with check #104 and will pay the remainder in 30 days. G. Received $1,200 cash for services rendered. H. Paid wages $560, check #105. I. Petty cash reimbursement office supplies $200, Maintenance Expense $140, Miscellaneous Expense $65. Cash on Hand $93. Check #106. J. Increased Petty Cash by $100, check #107.arrow_forwardIn March, T. Carter established Carter Delivery Service. The account headings are presented below. Transactions completed during the month of March follow. a. Carter deposited 25,000 in a bank account in the name of the business. b. Bought a used truck from Degroot Motors for 15,140, paying 5,140 in cash and placing the remainder on account. c. Bought equipment on account from Flemming Company, 3,450. d. Paid the rent for the month, 1,000, Ck. No. 3001. e. Sold services for cash for the first half of the month, 6,927. f. Bought supplies for cash, 301, Ck. No. 3002. g. Bought insurance for the truck for the year, 1,200, Ck. No. 3003. h. Received and paid the bill for utilities, 349, Ck. No. 3004. i. Received a bill for gas and oil for the truck, 218. j. Sold services on account, 3,603. k. Sold services for cash for the remainder of the month, 4,612. l. Paid wages to the employees, 3,958, Ck. Nos. 30053007. m. Carter withdrew cash for personal use, 1,250, Ck. No. 3008. Required 1. Record the transactions and the balance after each transaction 2. Total the left side of the accounting equation (left side of the equal sign), then total the right side of the accounting equation (right side of the equal sign). If the two totals are not equal, check the addition and subtraction. If you still cannot find the error, re-analyze each transaction.arrow_forwardB. Kelso established Computer Wizards during November of this year. The accountant prepared the following chart of accounts: The following transactions occurred during the month: a. Kelso deposited 45,000 in a bank account in the name of the business. b. Paid the rent for the current month, 1,800, Ck. No. 2001. c. Bought office desks and filing cabinets for cash, 790, Ck. No. 2002. d. Bought a computer and printer from Cyber Center for use in the business, 2,700, paying 1,700 in cash and placing the balance on account, Ck. No. 2003. e. Bought a neon sign on account from Signage Co., 1,350. f. Kelso invested her personal computer software with a fair market value of 600 in the business. g. Received a bill from Country News for newspaper advertising, 365. h. Sold services for cash, 1,245. i. Received and paid the electric bill, 345, Ck. No. 2004. j. Paid on account to Country News, a creditor, 285, Ck. No. 2005. k. Sold services for cash, 1,450. l. Paid wages to an employee, 925, Ck. No. 2006. m. Received and paid the bill for the city business license, 75, Ck. No. 2007. n. Kelso withdrew cash for personal use, 850, Ck. No. 2008. o. Kelso withdrew cash for personal use, 850, Ck. No. 2008. Required 1. Record the owners name in the Capital and Drawing T accounts. 2. Correctly place the plus and minus signs for each T account and label the debit and credit sides of the accounts. 3. Record the transactions in T accounts. Write the letter of each entry to identify the transaction. 4. Foot the T accounts and show the balances. 5. Prepare a trial balance, with a three-line heading, dated November 30, 20--.arrow_forward
- In July of this year, M. Wallace established a business called Wallace Realty. The account headings are presented below. Transactions completed during the month follow. a. Wallace deposited 24,000 in a bank account in the name of the business. b. Paid the office rent for the current month, 650, Ck. No. 1000. c. Bought office supplies for cash, 375, Ck. No. 1001. d. Bought office equipment on account from Dellos Computers, 6,300. e. Received a bill from the City Crier for advertising, 455. f. Sold services for cash, 3,944. g. Paid on account to Dellos Computers, 1,500, Ck. No. 1002. h. Received and paid the bill for utilities, 340, Ck. No. 1003. i. Paid on account to the City Crier, 455, Ck. No. 1004. j. Paid truck expenses, 435, Ck. No. 1005. k. Wallace withdrew cash for personal use, 1,500, Ck. No. 1006. Required 1. Record the transactions and the balance after each transaction. 2. Total the left side of the accounting equation (left side of the equal sign), then total the right side of the accounting equation (right side of the equal sign). If the two totals are not equal, check the addition and subtraction. If you still cannot find the error, re-analyze each transaction.arrow_forwardOn July 1, K. Resser opened Ressers Business Services. Ressers accountant listed the following chart of accounts: The following transactions were completed during July: a. Resser deposited 25,000 in a bank account in the name of the business. b. Bought tables and chairs for cash, 725, Ck. No. 1200. c. Paid the rent for the current month, 1,750, Ck. No. 1201. d. Bought computers and copy machines from Ferber Equipment, 15,700, paying 4,000 in cash and placing the balance on account, Ck. No. 1202. e. Bought supplies on account from Wigginss Distributors, 535. f. Sold services for cash, 1,742. g. Bought insurance for one year, 1,375, Ck. No. 1203. h. Paid on account to Ferber Equipment, 700, Ck. No. 1204. i. Received and paid the electric bill, 438, Ck. No. 1205. j. Paid on account to Wigginss Distributors, 315, Ck. No. 1206. k. Sold services to customers for cash for the second half of the month, 820. l. Received and paid the bill for the business license, 75, Ck. No. 1207. m. Paid wages to an employee, 1,200, Ck. No. 1208. n. Resser withdrew cash for personal use, 700, Ck. No. 1209. Required 1. Record the owners name in the Capital and Drawing T accounts. 2. Correctly place the plus and minus signs for each T account and label the debit and credit sides of the accounts. 3. Record the transactions in the T accounts. Write the letter of each entry to identify the transaction. 4. Foot the T accounts and show the balances. 5. Prepare a trial balance as of July 31, 20--. 6. Prepare an income statement for July 31, 20--. 7. Prepare a statement of owners equity for July 31, 20--. 8. Prepare a balance sheet as of July 31, 20--. LO 1, 2, 3, 4, 5, 6arrow_forwardJavier Jimenez operates a delivery service. During the month of April, the firm had the following transactions. April 1 Issued a check in the amount of $4,800 to pay the monthly rent for the next 3 months. April 2 Javier made an additional investment of cash in amount of $11,200. April 4 Performed services for $715 in cash. April 6 Sent a check in the amount of $410 to the utility company to pay the monthly bill. April 7 Purchased supplies in the amount of $870 on credit. Prepare journal entries to record the above transactions. View transaction list Journal entry worksheet 1 2 3 Date April 01 Issued a check in the amount of $4,800 to pay the monthly rent for the next 3 months. Note: Enter debits before credits. 5 General Journal Debit Credit >arrow_forward
- Sanyu Sony started a new business and completed these transactions during December. December 1 Sanyu Sony transferred $66,000 cash from a personal savings account to a checking account in the name of Sony Electric. December 2 The company paid $1,500 cash for the December rent. December 3 The company purchased $13,400 of electrical equipment by paying $5,200 cash and agreeing to pay the $8,200 balance in 30 days. December 5 The company purchased supplies by paying $900 cash. December 6 The company completed electrical work and immediately collected $1,600 cash for these services. December 8 The company purchased $2,950 of office equipment on credit. December 15 The company completed electrical work on credit in the amount of $5,900. December 18 The company purchased $500 of supplies on credit. December 20 The company paid $2,950 cash for the office equipment purchased on December 8. December 24 The company billed a client $1,000 for electrical work completed; the…arrow_forwardSanyu Sony started a new business and completed these transactions during December. December 1 Sanyu Sony transferred $66,000 cash from a personal savings account to a checking account in the name of Sony Electric. December 2 The company paid $1,500 cash for the December rent. December 3 The company purchased $13,400 of electrical equipment by paying $5,200 cash and agreeing to pay the $8,200 balance in 30 days. December 5 The company purchased supplies by paying $900 cash. December 6 The company completed electrical work and immediately collected $1,600 cash for these services. December 8 The company purchased $2,950 of office equipment on credit. December 15 The company completed electrical work on credit in the amount of $5,900. December 18 The company purchased $500 of supplies on credit. December 20 The company paid $2,950 cash for the office equipment purchased on December 8. December 24 The company billed a client $1,000 for electrical work completed; the…arrow_forwardGreen Wave Company plans to own and operate a storage rental facility. For the first month of operations, the company had the following transactions. 1. Issue 10,000 shares of common stock in exchange for $32,000 in cash. 2. Purchase land for $19,000. A note payable is signed for the full amount. 3. Purchase storage container equipment for $8,000 cash. 4. Hire three employees for $2,000 per month. 5. Receive cash of $12,000 in rental fees for the current month. 6. Purchase office supplies for $2,000 on account. 7. Pay employees $6,000 for the first month’s salaries. Required: For each transaction, describe the dual effect on the accounting equation. For example, in the first transaction, (1) assets increase and (2) stockholders’ equity increases.arrow_forward
- [The following information applies to the questions displayed below.] Sanyu Sony started a new business and completed these transactions during December. 1 Sanyu Sony transferred $65,300 cash from a personal savings account to a checking account in the name of Sony Electric in exchange for its common stock. 2 The company paid $1,800 cash for the December rent. 3 The company purchased $14,200 of electrical equipment by paying $6,000 cash and agreeing to pay the $8,200 balance in 30 days. 5 The company purchased supplies by paying $1,000 cash. 6 The company completed electrical work and immediately collected $1,800 cash for these services. 8 The company purchased $2,820 of office equipment on credit. 15 The company completed electrical work on credit in the amount of $5,500. 18 The company purchased $450 of supplies on credit. 20 The company paid $2,820 cash for the office equipment purchased on December 8. 24 The company billed a client $900 for electrical work completed; the balance is…arrow_forwardGreen Wave Company plans to own and operate a storage rental facility. For the first month of operations, the company has the following transactions. 1. January 1 Issue 10,000 shares of common stock in exchange for $42,000 in cash. 2. January 5 Purchase land for $24,000. A note payable is signed for the full amount. 3. January 9 Purchase storage container equipment for $9,000 cash. 4. January 12 Hire three employees for $3,000 per month. 5. January 18 Receive cash of $13,000 in rental fees for the current month. 6. January 23 Purchase office supplies for $3,000 on account. 7. January 31 Pay employees $9,000 for the first month’s salaries. Required: 1. Record each transaction. Green Wave uses the following accounts: Cash, Supplies, Land, Equipment, Common Stock, Accounts Payable, Notes Payable, Service Revenue, and Salaries Expense. 2. Post each transaction to T-accounts and compute the ending balance of each account. Since this is the first month of operations, all T-accounts have a…arrow_forward1 Sanyu Sony transferred $65,300 cash from a personal savings account to a checking account in the name of Sony Electric in exchange for its common stock. 2 The company paid $1,800 cash for the December rent. 3 The company purchased $14,200 of electrical equipment by paying $6,000 cash and agreeing to pay the $8,200 balance in 30 days. Dec.arrow_forward
- College Accounting (Book Only): A Career ApproachAccountingISBN:9781337280570Author:Scott, Cathy J.Publisher:South-Western College PubPrinciples of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax CollegeCornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning