Concept explainers
Olivia’s Apple Orchard had the following transactions during the month of September, the first month in business.
Complete the chart to determine the ending balances. As an example, the first transaction has been completed. Note: Negative amounts should be indicated with minus signs and unaffected should be noted as $0.
(Hints: 1. each transaction will involve two financial statement elements; 2. the net impact of the transaction may be $0.)
Trending nowThis is a popular solution!
Chapter 2 Solutions
Principles of Accounting Volume 1
Additional Business Textbook Solutions
Principles of Management
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
Construction Accounting And Financial Management (4th Edition)
Principles of Accounting Volume 2
Cost Accounting (15th Edition)
Managerial Accounting (5th Edition)
- Wyoming Tours Co. is a travel agency. The nine transactions recorded by Wyoming Tours during June 2016, its first month of operations, are indicated in the following T accounts: Indicate for each debit and each credit: (a) whether an asset, liability, owners equity, drawing, revenue, or expense account was affected and (b) whether the account was increased (+) or decreased (). Present your answers in the following form, with transaction (1) given as an example:arrow_forwardConsidering the following events, determine which month the revenue or expenses would be recorded using the accounting method specified. a. Gerber Company uses the cash basis of accounting. Gerber prepays cash in May for insurance that only covers the following month, (June). b. Matthews and Dudley Attorneys uses the accrual basis of accounting. Matthews and Dudley Attorneys receives cash from customers in June for services to be performed in July. c. Eckstein Company uses the accrual basis of accounting. Eckstein prepays cash in October for rent that covers the following month, (October). d. Gerbino Company uses the cash basis of accounting. Gerbino makes a sale to a customer in February but does not expect payment until March.arrow_forwardAfter all revenue and expenses have been closed at the end of the fiscal period ended December 31, Income Summary has a debit of 45,550 and a credit of 36,520. On the same date, D. Mau, Drawing has a debit balance of 12,000 and D. Mau, Capital had a beginning credit balance of 63,410. a. Journalize the entries to close the remaining temporary accounts. b. What is the new balance of D. Mau, Capital after closing the remaining temporary accounts? Show your calculations.arrow_forward
- During June, Grass is Greener Company mows 100 lawns a week and is paid in July by those customers. The company uses accrual basis accounting. How will these events affect the company’s financial statements? Group of answer choices A. The income statement shows the effects of the transactions in July. B. The balance sheet shows no effect from the transactions in June. C. The transactions have no effect on the balance sheet. D. The income statement shows the effects of the transactions in June.arrow_forwardJohn Sullivan started a business. During the first month (February 20--), the following transactions occurred. Show the effect of each transaction on the accounting equation: Assets = Liabilities + Owner's Equity. After each transaction, show the new totals. Use the minus sign to indicate a decrease or reduction in the account. If an amount box does not require an entry, leave it blank. Assets = Liabilities + Owner's Equity a. Invested cash in the business, $29,000. fill in the blank 1 fill in the blank 2 fill in the blank 3 Bal. fill in the blank 4 fill in the blank 5 fill in the blank 6arrow_forwardBelow are transactions for Lobos, Inc., during the month of December. Calculate the amount of revenue to recognize in December. If the transaction does not require the company to recognize a revenue, indicate how it would report the transaction. a. Receive $1,200 cash from customers for services to be provided next month. b. Perform $900 of services during the month and bill customers. Customers are expected to pay next month. c. Perform $2,300 of services during the month and receive full cash payment from customers at the time of service.arrow_forward
- If Sweet Catering had recorded transactions using the Accrual method, how much net income (loss) would they have recorded for the month of May? If there is a loss, enter it with parentheses or a negative sign. May 1: Prepaid rent for three months, $2,400 May 5: Received and paid electricity bill, $160 May 9: Received cash for meals served to customers, $3,820 May 14: Paid cash for kitchen equipment, $3,580 May 23: Served a banquet on account, $2,750 May 31: Made the adjusting entry for rent (from May 1). May 31: Accrued salary expense, $1,590 May 31: Recorded depreciation for May on kitchen equipment, $140arrow_forward⦁ The following selected transactions were completed by Next Day Delivery Services during October:Indicate the effect of each transaction on the accounting equation by the listing the numbers identifying the transaction (1) through (12), in a vertical column, and inserting at the right of each number of appropriate letter from the following transactions: 1. Purchased supplies for cash, $3,000.2. Paid cash to owner for personal use, $1,500.3. Received cash for providing delivery services, $15,125.4. Paid rent for October, $2,500. 5. Billed customers for delivery services on account, $6,900.6. Received cash from owner as additional investment, $80,000.7. Paid advertising expense, $750.8. Paid creditors on account, $4,500.9. Purchased Office Equipment on account, $95010. Acquiring Land on acc ount by $42,000. ⦁ Increase in the asset, decrease in another asset. ⦁ Increase in an asset, increase in a liability.⦁ Increase in an asset, increase in owner’s equity.⦁ Decrease an asset, decrease…arrow_forwardThe following transactions occur for Badger Biking Company during the month of June: Provide services to customers on account for $49,000. Receive cash of $41,000 from customers in (a) above. Purchase bike equipment by signing a note with the bank for $34,000. Pay utilities of $4,900 for the current month. Analyze each transaction and indicate the amount of increases and decreases in the accounting equation. (Decreases to account classifications should be entered as a negative.) a) b) increase b) decrease c) d)arrow_forward
- Below are transactions for Bronco Corporation during the month of June. Calculate the amount of expense to recognize in June. If the transaction does not require an expense to be recognized, indicate how the transaction would be reported. a. Pay $600 cash to employees for work performed during June. b. Receive a $200 telephone bill for the month of June, but Bronco does not plan to pay the bill until early next month. c. Pay $500 on account for supplies purchased last month. All supplies were used last month.arrow_forwardJetson Corp. performed services for a customer worth $500 and the customer will pay for those services next month. When the transaction was journalized, however, Jetson's accountant debited the "Cash" account and credited the "Service Revenue" account for $500 each. Question: As a result of this error, which of the following statements is/are true? (check all that apply) Select one or more: a. Total debits and total credits will still equal but the balance sheet equation will not be satisfied. b. Total debits and total credits will still equal and the balance sheet equation will be satisfied. c. The "Accounts Receivable" account balance will be too low (understated) while the "Cash" account balance will be too high (overstated). d. The "Accounts Receivable" account balance will be too low (understated) while the "Service Revenue" account balance will be too high (overstated).arrow_forwardNeveranerror Inc. was organized on June 2 by a group of accountants to provide accounting and tax services to small businesses. The following transactions occurred during the first month of business: Required: Prepare journal entries on the books of Neveranerror Inc. to record the transactions entered into during the month. Ignore depreciation expense and interest expense. Indicate the effect on financial statement items by selecting "–" for decrease (or negative effect), "+" for increase (or positive effect) and "NE" for No Entry (or no effect) on the financial statement. June 2: Received contributions of $11,300 from each of the three owners of the business in exchange for shares of stock. June 5: Purchased a computer system for $11,400. The agreement with the vendor requires a down payment of $2,500 with the balance due in 60 days. June 8: Signed a two-year promissory note at the bank and received cash of $21,800. June 15: Billed $14,560 to clients for the first half…arrow_forward
- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax CollegeFinancial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage LearningCollege Accounting (Book Only): A Career ApproachAccountingISBN:9781337280570Author:Scott, Cathy J.Publisher:South-Western College Pub
- College Accounting (Book Only): A Career ApproachAccountingISBN:9781305084087Author:Cathy J. ScottPublisher:Cengage Learning