![Cornerstones of Financial Accounting](https://www.bartleby.com/isbn_cover_images/9781337669450/9781337669450_largeCoverImage.jpg)
Cornerstones of Financial Accounting
4th Edition
ISBN: 9781337669450
Author: Rich
Publisher: Cengage
expand_more
expand_more
format_list_bulleted
Concept explainers
Textbook Question
Chapter 2, Problem 40E
Exercise 2-40 Transaction Analysis
Amanda Webb opened a home health care business under the name Home Care Inc. During its first month of operations. the business had the following transactions:
- Issued common stock to Ms. Webb and other stockholders in exchange for $30,000 cash.
- Paid $18,500 cash for a parcel of land on which the business will eventually build an office building.
- Purchased supplies for $2350 on credit.
- Used the supplies purchased in Transaction c.
- Paid rent for the month on office space and equipment. $800 cash.
- Performed services for clients in exchange for $3,910 cash.
- Paid salaries for the month. $1,100.
- Paid $650 cash for advertising in the current month.
- Paid $1,900 on account for supplies purchased in Transaction c.
- Performed services for clients on credit in the amount of 51,050.
- Paid a $600 dividend to stockholders
Required:
Prepare an analysis of the effects of these transactions on the
Expert Solution & Answer
![Check Mark](/static/check-mark.png)
Trending nowThis is a popular solution!
![Blurred answer](/static/blurred-answer.jpg)
Students have asked these similar questions
construct the Journal Entry of the transaction:
Date/#
Account Title
Debit
Credit
Oct-01
Garcia invested P30,000 cash to start his business.
2
Purchased medical Supplies on account, P10,000
2
Paid monthly office rent of P4,000.
3
Recorded P5,000 revenue for service rendered to patients: received cash of P2,000 and sent bills to patients for the remainder.
15
Borrowed P50,000 from the bank, signing a note payable
22
Performed service for patients on account, P3,600
30
Received cash from patients billed on September 3, P2,000
31
Received and paid a utility bill, P200
31
Paid monthly salary to nurses, P3,000
31
Paid interest expense of P200
Question
Sharon Kerr Owns South City Moving Service. She had the following transaction for February 2004
February 2 she started South City Moving Service by investing $ 62,000
February 6 Received an advertising bill for $2,000
February 10 Purchased $ 6,000of store Supplies on the account.
February 13 Purchased $8,000of equipment on account
February 16 Owner invested an additional $ 4,000 cash
February 20 Paid wages of $3,000.
February 23 Billed a customer $7,000 for moving services
Required
1- Prepare general journal and general T ledger account
2- Prepare from the T ledger account trial balance
QUESTION ONEJuan Cruz began professional practice as a system analyst on July 1. He plans to prepare a monthly financial statement. During July, the owner completed these transactionsJuly 1. Owner invested sh 500,000 cash along with computer equipment that had a market value of php. 120,000July 2. Paid sh. 15,000 cash for the rent of office space for the month.July 4. Purchased sh 12,000 of additional equipment on credit (due within 30 days).July 8. He completed a work for Mr. Patrick and immediately he was paid the sh. 32,000 cash.July 10. Completed work for Mr. simon and sent a bill for sh. 27,000 to be paid within 30 days.July 12. Purchased additional equipment for sh. 8,000 in cash.July 15. Paid assistant sh. 6,200 cash as wages for 15 days.July 18. Collected sh. 15,000 on the amount owed by Mr. simon.July 25. Paid sh 12,000 cash to settle the liability on the equipment purchased.July 28. Owner withdrew sh. 500 cash for personal use.July 30. Completed work for Miss Akinyi who paid…
Chapter 2 Solutions
Cornerstones of Financial Accounting
Ch. 2 - What is the conceptual framework of accounting?Ch. 2 - Prob. 2DQCh. 2 - Prob. 3DQCh. 2 - Prob. 4DQCh. 2 - Describe the constraint on providing useful...Ch. 2 - Prob. 6DQCh. 2 - Prob. 7DQCh. 2 - Prob. 8DQCh. 2 - Of all the events that occur each day, how would...Ch. 2 - Prob. 10DQ
Ch. 2 - Prob. 11DQCh. 2 - In analyzing a transaction, can a transaction only...Ch. 2 - How do revenues and expenses affect the accounting...Ch. 2 - Prob. 14DQCh. 2 - Prob. 15DQCh. 2 - The words debit and credit are used in two ways in...Ch. 2 - Prob. 17DQCh. 2 - Prob. 18DQCh. 2 - Prob. 19DQCh. 2 - Prob. 20DQCh. 2 - Prob. 21DQCh. 2 - Prob. 22DQCh. 2 - Prob. 1MCQCh. 2 - Prob. 2MCQCh. 2 - Prob. 3MCQCh. 2 - Prob. 4MCQCh. 2 - Prob. 5MCQCh. 2 - Which principle requires that expenses be recorded...Ch. 2 - Taylor Company recently purchased a piece of...Ch. 2 - Prob. 8MCQCh. 2 - The effects of paying salaries for the current...Ch. 2 - Which of the following statements is false? The...Ch. 2 - Which of the following statements are true? Debits...Ch. 2 - Debits will: increase assets. expenses, and...Ch. 2 - Which of the following statements are true? A...Ch. 2 - Posting: involves transferring the information in...Ch. 2 - A trial balance: lists only revenue and expense...Ch. 2 - CORNERSTONE 2.1 Cornerstone Exercise 2-16...Ch. 2 - Prob. 17CECh. 2 - CORNERSTONE 2.1 Four statements are given below....Ch. 2 - Prob. 19CECh. 2 - Cornerstone Exercise 2-20 Transaction Analysis...Ch. 2 - Cornerstone Exercise 2-21 Transaction Analysis...Ch. 2 - Cornerstone Exercise 2-22 Transaction Analysis The...Ch. 2 - Cornerstone Exercise 2-23 Debit and Credit...Ch. 2 - Cornerstone Exercise 2-24 Journalize Transactions...Ch. 2 - Cornerstone Exercise 2-25 Journalize Transactions...Ch. 2 - Cornerstone Exercise 2-26 Preparing a Trial...Ch. 2 - Prob. 27BECh. 2 - Brief Exercise 2-28 Assumptions and Principles...Ch. 2 - Brief Exercise 2-2? Events and Transactions...Ch. 2 - Brief Exercise 2-30 Transaction Analysis Galle...Ch. 2 - Brief Exercise 2-31 Debit and Credit Procedures...Ch. 2 - Brief Exercise 2-32 Journalize Transactions Galle...Ch. 2 - Brief Exercise 2-33 Posting Journal Entries Listed...Ch. 2 - Brief Exercise 2-34 Preparing a Trial Balance The...Ch. 2 - Prob. 35ECh. 2 - Prob. 36ECh. 2 - Exercise 2-37 Events and Transactions Several...Ch. 2 - Exercise 2-38 Events and Transactions The...Ch. 2 - Exercise 2-39 Transaction Analysis OBJECTIVE e The...Ch. 2 - Exercise 2-40 Transaction Analysis Amanda Webb...Ch. 2 - Exercise 2-41 Transaction Analysis and Business...Ch. 2 - Exercise 2-42 Inferring Transactions from Balance...Ch. 2 - Exercise 2-43 Transaction Analysis Goal Systems, a...Ch. 2 - Exercise 2-44 Transaction Analysis OBJECTIVE 9...Ch. 2 - Prob. 45ECh. 2 - Exercise 2-46 Normal Balances and Financial...Ch. 2 - OBJECTIVE 9 Exercise 2-47 Debit and Credit Effects...Ch. 2 - Prob. 48ECh. 2 - Exercise 2-49 Journalizing Transactions Kauai...Ch. 2 - Exercise 2-50 Journalizing Transactions Remington...Ch. 2 - Exercise 2-51 Transaction Analysis and Journal...Ch. 2 - Exercise 2-52 Accounting Cycle Rosenthal...Ch. 2 - Exercise 2-53 Preparing a Trial Balance...Ch. 2 - Exercise 2-54 Effect of Errors on a Trial Balance...Ch. 2 - Problem 2-55A Events and Transactions The...Ch. 2 - Problem 2-56A Analyzing Transactions Luis Madero,...Ch. 2 - Problem 2-57A Inferring Transactions from...Ch. 2 - Prob. 58APSACh. 2 - Problem 2-59A Journalizing Transactions Monroe...Ch. 2 - Problem 2-60A Journalizing and Posting...Ch. 2 - Problem 2-61A The Accounting Cycle Karleens...Ch. 2 - Problem 2-62B Comprehensive Problem Mulberry...Ch. 2 - Prob. 55BPSBCh. 2 - Prob. 56BPSBCh. 2 - Prob. 57BPSBCh. 2 - Problem 2-58B Debit and Credit Procedures A list...Ch. 2 - Problem 2-593 Journalizing Transactions Monilast...Ch. 2 - Problem 2-603 Journalizing and Posting...Ch. 2 - Problem 2-6B The Accounting Cycle Sweetwater...Ch. 2 - Problem 2-62B Comprehensive Problem Mulberry...Ch. 2 - Prob. 63.1CCh. 2 - Prob. 63.2CCh. 2 - Prob. 63.3CCh. 2 - Prob. 64.1CCh. 2 - Prob. 64.2CCh. 2 - Case 2-64 Analysis of the Effects of Current Asset...Ch. 2 - Prob. 64.4CCh. 2 - Prob. 65.1CCh. 2 - Prob. 65.2CCh. 2 - Prob. 66.1CCh. 2 - Prob. 66.2CCh. 2 - Prob. 66.3CCh. 2 - Case 2-67 Comparative Analysis: Under Armour,...Ch. 2 - Prob. 67.2CCh. 2 - Case 2-67 Comparative Analysis: Under Armour,...Ch. 2 - Case 2-68 Accounting for Partially Completed...Ch. 2 - Prob. 68.2CCh. 2 - Prob. 69.1CCh. 2 - Case 2-69 CONTINUING PROBLEM: FRONT ROW...Ch. 2 - Case 2-69 CONTINUING PROBLEM: FRONT ROW...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- 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_forwardTransaction Analysis and Financial Statements Just Rolling Along Inc. was organized on May 1 by two college students who recognized an opportunity to make money while spending their days at a beach along Lake Michigan. The two entrepreneurs plan to rent bicycles and in-line skates to weekend visitors to the lakefront. The following transactions occurred during the first month of operations: May 1: Received contribution of $9,000 from each of the two principal owners of the new business in exchange for shares of stock. May 1: Purchased ten bicycles for $300 each on an open account. The company has 30 days to pay for the bicycles. May 5: Registered as a vendor with the city and paid the $15 monthly fee. May 9: Purchased 20 pairs of in-line skates at $125 per pair, 20 helmets at $50 each, and 20 sets of protective gear (knee and elbow pads and wrist guards) at $45 per set for cash. May 10: Purchased $100 in miscellaneous supplies on account. The company has 30 days to pay for the supplies. May 15: Paid $125 bill from local radio station for advertising for the last two weeks of May. May 17: Customers rented in-line skates and bicycles for cash of $1,800. May 24: Billed the local park district $1,200 for in-line skating lessons provided to neighborhood children. The park district is to pay one-half of the bill within five working days and the rest within 30 days. May 29: Received 50% of the amount billed to the park district. May 30: Customers rented in-line skates and bicycles for cash of $3,000. May 30: Paid wages of $160 to a friend who helped over the weekend. May 31: Paid the balance due on the bicycles. Required Prepare a table to summarize the preceding transactions as they affect the accounting equation. Use the format in Exhibit 3-1. Identify each transaction with the date. Prepare an income statement for the month of May. Prepare a classified balance sheet at May 31. Why do you think the two college students decided to incorporate their business rather than operate it as a partnership?arrow_forwardLavender Company started its business on April 1, 2019. The following are the transactions that happened during the month of April. Prepare the journal entries in the journal on Page 1. A. The owners invested $7,500 from their personal account to the business account. B. Paid rent $600 with check #101. C. Initiated a petty cash fund $250 check #102. D. Received $350 cash for services rendered. E. Purchased office supplies for $125 with check #103. F. Purchased computer equipment $1,500, paid $500 with check #104, and will pay the remainder in 30 days. G. Received $750 cash for services rendered. H. Paid wages $375, check #105. I. Petty cash reimbursement Office Supplies $50, Maintenance Expense $80, Miscellaneous Expense $60. Cash on hand $8. Check #106. J. Increased Petty Cash by $70, check #107.arrow_forward
- Analyzing the Accounts The controller for Summit Sales Inc. provides the following information on transactions that occurred during the year: a. Purchased supplies on credit, $18,600 b. Paid $14,800 cash toward the purchase in Transaction a c. Provided services to customers on credit1 $46,925 d. Collected $39,650 cash from accounts receivable e. Recorded depreciation expense, $8,175 f. Employee salaries accrued, $15,650 g. Paid $15,650 cash to employees for salaries earned h. Accrued interest expense on long-term debt, $1,950 i. Paid a total of $25,000 on long-term debt, which includes $1.950 interest from Transaction h j. Paid $2,220 cash for l years insurance coverage in advance k. Recognized insurance expense, $1,340, that was paid in a previous period l. Sold equipment with a book value of $7,500 for $7,500 cash m. Declared cash dividend, $12,000 n. Paid cash dividend declared in Transaction m o. Purchased new equipment for $28,300 cash. p. Issued common stock for $60,000 cash q. Used $10,700 of supplies to produce revenues Summit Sales uses the indirect method to prepare its statement of cash flows. Required: 1. Construct a table similar to the one shown at the top of the next page. Analyze each transaction and indicate its effect on the fundamental accounting equation. If the transaction increases a financial statement element, write the amount of the increase preceded by a plus sign (+) in the appropriate column. If the transaction decreases a financial statement element, write the amount of the decrease preceded by a minus sign (-) in the appropriate column. 2. Indicate whether each transaction results in a cash inflow or a cash outflow in the Effect on Cash Flows column. If the transaction has no effect on cash flow, then indicate this by placing none in the Effect on Cash Flows column. 3. For each transaction that affected cash flows, indicate whether the cash flow would be classified as a cash flow from operating activities, cash flow from investing activities, or cash flow from financing activities. If there is no effect on cash flows, indicate this as a non-cash activity.arrow_forwardANALYSIS OF T ACCOUNTS Roberto Alvarez began a business called Robertos Fix-It Shop. 1. Create T accounts for Cash; Supplies; Roberto Alvarez, Capital; and Utilities Expense. Identify the following transactions by letter and place them on the proper side of the T accounts: (a) Invested cash in the business, 6,000. (b) Purchased supplies for cash, 51,200. (c) Paid utility bill, 900. 2. Foot the T account for cash and enter the ending balance.arrow_forwardform the Journal entry of the given transaction: date/s transaction debit credit Sep-02 Garcia invested P30,000 cash to start his business. 2 Purchased medical Supplies on account, P10,000 3 Paid monthly office rent of P4,000. 4 Recorded P5,000 revenue for service rendered to patients: received cash of P2,000 and sent bills to patients for the remainder. 10 Borrowed P50,000 from the bank, signing a note payable 15 Performed service for patients on account, P3,600 22 Received cash from patients billed on September 3, P2,000 25 Received and paid a utility bill, P200 26 Paid monthly salary to nurses, P3,000 30 Paid interest expense of P200arrow_forward
- ANALYSIS OF TRANSACTIONS Jona passed the bar exam in April and immediately set up her own law practice. During the first month of operation, she completed the following transactions: Began the law practice by placing P2,000,000 in a bank account establish for the business Purchase a Law Library for P290,000 cash Purchase office supplies for P30,000 on credit Accepted P50,000 in cash for completing a contract Billed clients for P39,500 for service rendered during the month Paid P20,000 of the amount owed for office supplies Received P30,000 in cash from clients who had been previously billed Paid rent expense for the month in the amount of P10,000 Withdrew P50,000 for personal use Paid utilities for P15,000 Office supplies that were consumed for the period is 90%. REQUIREMENTS: Analysis of Transaction (increase/decrease) Statement of Financial Position Statement of Comprehensive Incomearrow_forwardProblem 1 Yuhom had the following transactions in its September 2020 operation: Parah Yuhom started a beauty saloon business by depositing Php600,000 into her business 'Yuhom Palangga'. Sept. 1 Sept. 2 Paid Php8,000 to cover her first months rent. Sept. 2 Ordered beauty saloon equipment worth Php150,000. Sept. 5 Purchased beauty supplies Php10,000 on account. Sept. 7 Saloon equipment is receive paying Php50,000 cash, and the balance in two equal monthly installment. A full time worker is hired. The employee will work 40 hours per week starting Sept. 8 at a rate of Php80 per hour. Sept. 7 Sept. 15 Paid employee Php6,400 for a week of work. Sept. 20 Finished jobs for the week earning Php30,000, receiving Php17,000 cash and the balance to be billed. Sept. 22 Received Php18,000 down payment for a wedding job in October 2020 Sept. 29 Received cash Php10,000 from customers billed on Sept. 20. Sept. 30 Makeup and hairstyling job finished receiving cash of Php40,000. Sept. 30 Received water…arrow_forwardJOURNAL ENTRY and LEDGER Mr. Lopez opened a mini grocery store with business name Lopez Fiesta Mart. Operations began on January 1, 2022, and the following transactions were completed during the month: 1 Mr. Lopez withdrew ₱150,000 from a personal savings account and used it to open a new account in the name of Lopez Fiesta Mart. 2 Bought grocery supplies on account ₱10,700. 4 Acquired a service vehicle costing ₱76,000. A payment of ₱25,000 Cash was made and a note payable given for the ₱51,000 remainder payable for 6 equal monthly installment. 6 Purchased merchandise from Puregold ₱49,500, terms 5/10, 3/20. 7 Paid ₱1,600 delivery charge for January 6 transactions. 8 Paid for three months of advertising and recorded Prepaid Advertising in the amount of ₱6,000. 11 Sold merchandise on account ₱42,000 with 40% mark-up from the inventory cost of ₱30,000, term 2/10, n/30. 12 Paid ₱1,200 freight for January 11 transactions. 14 Returned defective merchandise to Puregold…arrow_forward
- Journalize the transaction Post the ledger Mr. Lopez opened a mini grocery store with business name Lopez Fiesta Mart. Operations began on January 1, 2021, and the following transactions were completed during the month: 1.Mr. Lopez withdrew ₱150,000 from a personal savings account and used it to open a new account in the name of Lopez Fiesta Mart. 2.Bought grocery supplies on account ₱10,700. 4.Acquired a service vehicle costing ₱76,000. A payment of ₱25,000 Cash was made and a note payable given for the ₱51,000 remainder payable for 6 equal monthly installment. 6.Purchased merchandise from Puregold ₱49,500, terms 5/10, 3/20. 7.Paid ₱1,600 delivery charge for January 6 transactions. 8.Paid for three months of advertising and recorded Prepaid Advertising in the amount of ₱6,000. 11.Sold merchandise on account ₱42,000 with 40% mark-up from the inventory cost of ₱30,000, term 2/10, n/30. 12.Paid ₱1,200 freight for January 11 transactions. 14.Returned defective merchandise to…arrow_forwardjournal entry Mr. Lopez opened a mini grocery store with business name Lopez Fiesta Mart. Operations began on January 1, 2022, and the following transactions were completed during the month: 1 Mr. Lopez withdrew ₱150,000 from a personal savings account and used it to open a new account in the name of Lopez Fiesta Mart. 2 Bought grocery supplies on account ₱10,700. 4 Acquired a service vehicle costing ₱76,000. A payment of ₱25,000 Cash was made and a note payable given for the ₱51,000 remainder payable for 6 equal monthly installment. 6 Purchased merchandise from Puregold ₱49,500, terms 5/10, 3/20. 7 Paid ₱1,600 delivery charge for January 6 transactions. 8 Paid for three months of advertising and recorded Prepaid Advertising in the amount of ₱6,000. 11 Sold merchandise on account ₱42,000 with 40% mark-up from the inventory cost of ₱30,000, term 2/10, n/30. 12 Paid ₱1,200 freight for January 11 transactions. 14 Returned defective merchandise to Puregold amounting to…arrow_forwardJournalize the following business transactions in general journal form Adriana Diaz invested $50,000 cash to start an appliance repair business. Hired an employee to be paid $400 per week, starting tomorrow. Paid two years’ rent in advance, $7,200. Paid the worker’s weekly wage. Recorded revenue earned and received for the week, $1,500 Date Description Debit Creditarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage LearningPrinciples of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax CollegeFinancial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,
- Century 21 Accounting Multicolumn JournalAccountingISBN:9781337679503Author:GilbertsonPublisher:CengageCollege Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,
![Text book image](https://www.bartleby.com/isbn_cover_images/9781305654174/9781305654174_smallCoverImage.gif)
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337902663/9781337902663_smallCoverImage.jpg)
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
Century 21 Accounting Multicolumn Journal
Accounting
ISBN:9781337679503
Author:Gilbertson
Publisher:Cengage
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337794756/9781337794756_smallCoverImage.gif)
College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,
The accounting cycle; Author: Alanis Business academy;https://www.youtube.com/watch?v=XTspj8CtzPk;License: Standard YouTube License, CC-BY