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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
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Exercise 2-44 Transaction Analysis OBJECTIVE 9

During December, Cynthiana Refrigeration Service engaged in the following transactions:

  1. On December 3, Cynthiana sold a 1-year service contract to Cub Foods for $12,000 cash.
  2. On December 10, Cynthiana repaired equipment of the A&W Root Beer Drive-In. A&W paid $1,100 in cash for the service call.
  3. On December 10, Cynthiana purchased a new Chevy truck for business use. The truck cost $36,500. Cynthiana paid $5,500 down and signed a 1-year note for the balance.
  4. Cynthiana received a $3,200 order of repair parts from Carrier Corporation on December 19. Carrier is expected IO bill Cynthiana for $3,200 in early January.
  5. On December 23, Cynthiana purchased 20 turkeys from Cub Foods for $300 cash. Cynthiana gave the turkeys to its employees as a Christmas gift

Required:

For each transaction described above, indicate the effects on assets’ liabilities, and stockholders’ equity using the formal below.

Chapter 2, Problem 44E, Exercise 2-44 Transaction Analysis OBJECTIVE 9 During December, Cynthiana Refrigeration Service

To determine

Accounting Equation:

The accounting equation explains that the assets must be equal to the liabilities and stockholders’ equity on the occurrence of a business transaction. The dual aspect concept of accounting signifies that on each transaction the elements of the accounting equations are affected equally.

Describe the effects on assets, liabilities, and stockholders’ equity using the format.

Explanation
    ...
    AssetsLiabilitiesStockholders’ Equity
    ACash (Increase)Unearned Revenue (Increase)
    BCash (Increase) Revenue (Increase)
    C

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