College Accounting, Chapters 1-27
23rd Edition
ISBN: 9781337794756
Author: HEINTZ, James A.
Publisher: Cengage Learning,
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Chapter 21, Problem 10SPB
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Journalize the given transactions in the books of Company K.
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Peter Senen Corporation provided the following account balances as of September 30, 2020:Cash P112,000 Accumulated depreciation P 36,000Accounts Receivable 64,000 Accounts payable 40,000Finished Goods 48,000 Income tax payable 9,000Work in process 36,000 Share Capital 500,000Raw materials 52,000 Retained Earnings 207,000Property and Equipment 480,000The following transactions occurred during October:1. Materials purchased on account, P150,0002. Materials issued to production: direct materials- P90,000, Indirect materials- P10,000.3. Payroll for the month of October 2020 consisted of the following (also paid during the month):Direct labor P62,000 Administrative salaries P16,000Indirect Labor 20,000Sales salaries 30,000Payroll deductions were as follows:Withholding taxes P19,800 Phil health contributions P2,000SSS contributions 7,100 HDMF contributions 2,0004. Employer contributions for the month were accrued:Factory Selling AdministrativeSSS contributions P5,700 P2,000 P1,100Philhealth…
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Wang Company began operations on January 1, year 1, by issuing common stock for $70,000 cash. During year 1, Wang received $88,000 cash from revenue and incurred costs that required $65,000 of cash payments.
Required
Prepare a GAAP-based income statement and balance sheet for Wang Company for year 1, for the below scenario:
Wang is a manufacturing company. The $65,000 was paid to purchase the following items:
(1) Paid $10,000 cash to purchase materials that were used to make products during the year.
(2) Paid $20,000 cash for wages of factory workers who made products during the year.
(3) Paid $5,000 cash for salaries of sales and administrative employees.
(4) Paid $30,000 cash to purchase manufacturing equipment. The equipment was used solely to make products. It had a three-year life and a $6,000 salvage value. The company uses straight-line depreciation.…
Entity A started operations on November 1, 20x1. The following were the transactions during the period:
Nov.
Transactions
1
Provided ₱100,000 cash as initial investment to the business.
1
Acquired equipment for ₱72,000 cash. The equipment has a useful life of 4 years. Entity A records depreciation expense only at year-end.
1
Paid a one-year insurance premium of ₱24,000. (Use ‘asset method’)
12
Purchased inventory costing ₱30,000 for cash. (Use periodic inventory system)
14
Sold goods for ₱30,000 cash.
Dec.
Transactions
1
Sold goods with sale price of ₱24,000 in exchange for a ₱24,000, 10%, one-year note receivable. Principal and interest are due at maturity.
5
Purchased inventory for ₱4,000 on account.
26
Sold goods for ₱34,000 on account.
27
Paid ₱2,000 account payable.
29
Collected ₱20,000 account receivable.
Additional information:
There is no beginning inventory. The ending inventory per physical…
Chapter 21 Solutions
College Accounting, Chapters 1-27
Ch. 21 - Income taxes are a unique expense of the corporate...Ch. 21 - Prob. 2TFCh. 21 - Prob. 3TFCh. 21 - Prob. 4TFCh. 21 - Prob. 5TFCh. 21 - Prob. 1MCCh. 21 - Prob. 2MCCh. 21 - Prob. 3MCCh. 21 - Prob. 4MCCh. 21 - Prob. 5MC
Ch. 21 - Prob. 1CECh. 21 - Prob. 2CECh. 21 - Teway Company declared and paid dividends in the...Ch. 21 - Prob. 4CECh. 21 - Prob. 5CECh. 21 - Prob. 1RQCh. 21 - Prob. 2RQCh. 21 - Prob. 3RQCh. 21 - Prob. 4RQCh. 21 - Prob. 5RQCh. 21 - Prob. 6RQCh. 21 - Prob. 7RQCh. 21 - Prob. 8RQCh. 21 - Prob. 9RQCh. 21 - Prob. 10RQCh. 21 - Prob. 11RQCh. 21 - CORPORATE INCOME TAX Stanton Company estimates...Ch. 21 - CLOSING INCOME SUMMARY AND DIVIDENDS TO RETAINED...Ch. 21 - Prob. 3SEACh. 21 - STOCK DIVIDENDS Kaufman Company currently has...Ch. 21 - STOCK SPLIT Goldstein Company has 100,000 shares...Ch. 21 - Prob. 6SEACh. 21 - STATEMENT OF RETAINED EARNINGS McGregor Company...Ch. 21 - Prob. 8SPACh. 21 - Prob. 9SPACh. 21 - Prob. 10SPACh. 21 - Prob. 11SPACh. 21 - Prob. 1SEBCh. 21 - CLOSING INCOME SUMMARY AND DIVIDENDS TO RETAINED...Ch. 21 - COMMON AND PREFERRED CASH DIVIDENDS Ramirez...Ch. 21 - STOCK DIVIDENDS Martinez Company currently has...Ch. 21 - Prob. 5SEBCh. 21 - Prob. 6SEBCh. 21 - Prob. 7SEBCh. 21 - Prob. 8SPBCh. 21 - CASH DIVIDENDS, STOCK DIVIDEND, AND STOCK SPLIT...Ch. 21 - Prob. 10SPBCh. 21 - Prob. 11SPBCh. 21 - Prob. 1MYWCh. 21 - Prob. 1ECCh. 21 - MASTRY PROBLEM On January 1, 20--, Dover Companys...Ch. 21 - CHALLENGE PROBLEM This problem challenges you to...
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- Statement of Cash Flows Colorado Corporation was organized at the beginning of the year, with the investment of $250,000 in cash by its stockholders. The company immediately purchased an office building for $300,000, paying $210,000 in cash and signing a three-year promissory note for the balance. Colorado signed a five-year, $60,000 promissory note at a local bank during the year and received cash in the same amount. During its first year, Colorado collected $93,970 from its customers. It paid $65,600 for inventory, $20,400 in salaries and wages, and another $3,100 in taxes. Colorado paid $5,600 in cash dividends. Required Prepare a statement of cash flows for the year. What does this statement tell you that an income statement does not?arrow_forwardAnalyzing Transactions. Using the analytical framework, indicate the effect of the following related transactions of a firm. a. January 1: Issued 10,000 shares of common stock for 50,000. b. January 1: Acquired a building costing 35,000, paying 5,000 in cash and borrowing the remainder from a bank. c. During the year: Acquired inventory costing 40,000 on account from various suppliers. d. During the year: Sold inventory costing 30,000 for 65,000 on account. e. During the year: Paid employees 15,000 as compensation for services rendered during the year. f. During the year: Collected 45,000 from customers related to sales on account. g. During the year: Paid merchandise suppliers 28,000 related to purchases on account. h. December 31: Recognized depreciation on the building of 7,000 for financial reporting. Depreciation expense for income tax purposes was 10,000. i. December 31: Recognized compensation for services rendered during the last week in December but not paid by year-end of 4,000. j. December 31: Recognized and paid interest on the bank loan in Part b of 2,400 for the year. k. Recognized income taxes on the net effect of the preceding transactions at an income tax rate of 40%. Assume that the firm pays cash immediately for any taxes currently due to the government.arrow_forwardBalance sheets for Brierwold Corporation follow: Additional transactions were as follows: a. Purchased equipment costing 50,000. b. Sold equipment costing 60,000, with a book value of 25,000, for 40,000. c. Retired preferred stock at a cost of 110,000. (The premium is debited to Retained Earnings.) d. Issued 10,000 shares of common stock (par value, 4) for 10 per share. e. Reported a loss of 15,000 for the year. f. Purchased land for 50,000. Required: Prepare a statement of cash flows using the worksheet approach. Use the indirect method to prepare the statement.arrow_forward
- Balance sheets for Brierwold Corporation follow: Additional transactions were as follows: a. Purchased equipment costing 50,000. b. Sold equipment costing 60,000, with a book value of 25,000, for 40,000. c. Retired preferred stock at a cost of 110,000. (The premium is debited to Retained Earnings.) d. Issued 10,000 shares of common stock (par value, 4) for 10 per share. e. Reported a loss of 15,000 for the year. f. Purchased land for 50,000. Required: Prepare a statement of cash flows using the indirect method.arrow_forwardStatement of Cash Flows A list of Fischer Companys cash flow activities is presented here: a. Patent amortization expense, 3,500 b. Machinery was purchased for 39,500 c. At year-end, bonds payable with a face value of 20,000 were issued for 17,000 d. Net income, 47,200 k. Inventories increased by 15,400 e. Dividends paid, 16,000 f. Depreciation expense, 12,900 g. Preferred stock was issued for 13,600 h. Investments were acquired for 21,000 i. Accounts receivable increased by 4,300 j. Land was sold at cost, 11,000 k. Inventories increased by 15,400 l. Accounts payable increased by 2,700 m. Beginning cash balance, 19,400 Required: Prepare Fischers statement of cash flows.arrow_forwardJournal Entries Castle Consulting Agency began business in February. The transactions entered into by Castle during its first month of operations are as follows: Acquired articles of incorporation from the state and issued 10,000 shares of capital stock in exchange for $150,000 in cash. Paid monthly rent of $400. Signed a five-year promissory note for $100,000 at the bank. Purchased software to be used on future jobs. The software costs $950 and is expected to be used on five to eight jobs over the next two years. Billed customers $12,500 for work performed during the month. Paid office personnel $3,000 for the month of February. Received a utility bill of $100. The total amount is due in 30 days. Required Prepare in journal form, the entry to record each transaction.arrow_forward
- Journal Entries Atkins Advertising Agency began business on January 2. The transactions entered into by Atkins during its first month of operations are as follows: Acquired its articles of incorporation from the state and issued 100,000 shares of capital stock in exchange for $200,000 in cash. Purchased an office building for $150,000 in cash. The building is valued at $110,000, and the remainder of the value is assigned to the land. Signed a three-year promissory note at the bank for $125,000. Purchased office equipment at a cost of $50,000, paying $10,000 down and agreeing to pay the remainder in ten days. Paid wages and salaries of $13,000 for the first half of the month. Office employees are paid twice a month. Paid the balance due on the office equipment. Sold $24,000 of advertising during the first month. Customers have until the 15th of the following month to pay their bills. Paid wages and salaries of $15,000 for the second half of the month. Recorded $3,500 in commissions earned by the salespeople during the month. They will be paid on the fifth of the following month. Required Prepare in journal form the entry to record each transaction.arrow_forwardEntity A started operations on November 1, 20x1. The following were the transactions during the period: Nov. Transactions 1 Provided ₱100,000 cash as initial investment to the business. 1 Acquired equipment for ₱72,000 cash. The equipment has a useful life of 4 years. Entity A records depreciation expense only at year-end. 1 Paid a one-year insurance premium of ₱24,000. (Use ‘asset method’) 12 Purchased inventory costing ₱30,000 for cash. (Use periodic inventory system) 14 Sold goods for ₱30,000 cash. Dec. Transactions 1 Sold goods with sale price of ₱24,000 in exchange for a ₱24,000, 10%, one-year note receivable. Principal and interest are due at maturity. 5 Purchased inventory for ₱4,000 on account. 26 Sold goods for ₱34,000 on account. 27 Paid ₱2,000 account payable. 29 Collected ₱20,000 account receivable. Additional information: There is no beginning inventory. The ending inventory per physical…arrow_forwardJune 1, Cline Co. paid $800,000 cash for all of the issued and outstanding common stock of Renn Corp. The carrying values for Renn’s assets and liabilities on June 1 follow: Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $150,000 Accounts receivable . . . . . . . . . . . . . . . . . . . 180,000 Capitalized software costs. . . . . . . . . . . . . . . 320,000 Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000 Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . (130,000) Net assets . . . . . . . . . . . . . . . . . . . . . . . . . … $620,000 On June 1, Renn’s accounts receivable had a fair value of $140,000. Additionally, Renn’s in process research and development was estimated to have a fair value of $200,000. All other items were stated at their fair values. On Cline’s June 1 consolidated balance sheet, how much is reported for goodwill? A. $320,000. B. $20,000. C. $80,000. D $120,000. E.Non of the Abovearrow_forward
- Extracts from the trial balance of Ludwig,a limited liability company, for the year ended 30 April 20X6 are shown below: $000 $000 Trade payables 11,200 Plant and machinery 14,000 Plant and machinery accumulated depreciation 1 May 20X5 5,600 Capital 1,000 Allowance for receivables 1 May 20X5 2,300 Trade receivables 34,200 Opening inventory…arrow_forwardAn entity provided the following trial balance on June 30, 2020: Cash overdraft (200,000) Accounts receivable, net 700,000 Inventory 1,200,000 Prepaid expenses 200,000 Land held for resale 2,000,000 Property, plant and equipment, net 1,900,000 Accounts payable 700,000 Share capital 3,000,000 Share premium 500,000 Retained earnings 1,600,000 Checks amounting to P600,000 were written to vendors and recorded on June 30 resulting in cash overdraft of P200,000. The checks were mailed on July 9. Land held for resale was sold for cash on July 15. The financial statements were issued on July 31. 1. What total amount should be reported as current assets? a. 4,500,000 b. 4,100,000 c. 4,300,000 d. 2,500,000 2. What total amount should be reported as current liabilities? a. 1,300,000 b. 1,500,000 c. 900,000 d. 700,000 3. What is the total shareholders’ equity? a. 5,100,000 b. 3,500,000 c. 3,000,000 d. 4,600,000arrow_forwardThe company started August w/ cash of P320,000 receivable of P77,000 and equipment of P500,000 . Total liabilities amount to P90,300. How much is the total of all transactions metioned inthe capital of the company from beginning balance to ending balance? The following transactions were dealt with by Daria Company for the month of August: * Purchase of supplies worth P18,000 paid In cash* Rendered services to customer in which payment is yet to be received P20,000* Paid salaries of P10,000arrow_forward
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