Homework Answers
Solution:
Accounting equation: Assets = Liabilities + Stockholder's equity
Purchase of truck will result in assets would increase by $30,000 (Truck increase $35,000, Cash decrease $5,000) and liabilities (Notes payable) would increase by $30,000. There is no effect on stockholder's equity.
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Recursos LO2-3 BRIEF EXERCISE 2.2 Recording Transactions Foster, Inc., purchased a truck by paying $5.000 and...
Brief Exercise 2-4 Analyze the impact of transactions on the accounting equation (LO2-2) The following transactions...
Brief Exercise 2-4 Analyze the impact of transactions on the accounting equation (LO2-2) The following transactions occur for Badger Biking Company during the month of June: a. Provide services to customers on account for $47,000. b. Receive cash of $39,000 from customers in (a) above. c. Purchase bike equipment by signing a note with the bank for $32,000. d. Pay utilities of $4,700 for the current month. Analyze each transaction and indicate the amount of increases and decreases in the...
LO2-3 EXERCISE 2.7 Effects of Business Transactions For each of the following categories, state concisely a...
LO2-3 EXERCISE 2.7 Effects of Business Transactions For each of the following categories, state concisely a transaction that will have the required effect on the elements of the accounting equation. a. Increase an asset and increase a liability. b. Decrease an asset and decrease a liability c. Increase one asset and decrease another asset d. Increase an asset and increase owners' equity. e. Increase one asset, decrease another asset, and increase a liability
LO2-3 EXERCISE 2.6 The Accounting Equation A number of business transactions carried out by Smalling Manufacturing...
LO2-3 EXERCISE 2.6 The Accounting Equation A number of business transactions carried out by Smalling Manufacturing Company are as follows a. Borrowed money from a bank. b. Sold land for cash at a price equal to its cost. c. Paid a liability d. Returned for credit some of the office equipment previously purchased on credit but not yet paid for. (Treat this the opposite of a transaction in which you purchased office equipment on credit e. Sold land for cash...
E2-5 Determining Financial Statement Effects of Several Transactions LO2-3 FootCovers, Inc., with headquarters in Beaverton, Oregon,...
E2-5 Determining Financial Statement Effects of Several
Transactions LO2-3
FootCovers, Inc., with headquarters in Beaverton, Oregon, is one
of the world’s leading manufacturers of athletic shoes and sports
apparel. The following activities occurred during a recent year.
The amounts are rounded to millions.
Purchased additional buildings for $184 and equipment for $270;
paid $402 in cash and signed a long-term note for the rest.
Issued 100 shares of $2 par value common stock for $355
cash.
Declared $145 in dividends...
3 E2-4 (Algo) Determining Financial Statement Effects of Several Transactions LO2-3 The following events occurred for...
3 E2-4 (Algo) Determining Financial Statement Effects of Several Transactions LO2-3 The following events occurred for Johnson Company: 5 points Skipped a. Received investment of cash by organizers and distributed to them 1,140 shares of $1 par value common stock with a market price of $20 per share. b. Purchased $7,800 of equipment, paying $1,300 in cash and owing the rest on accounts payable to the manufacturer. c. Borrowed $14,000 cash from a bank. d. Loaned $1,000 to an employee...
Brief Exercise 3-10 Cheyenne Corp. has the following transactions during August of the current year. Aug....
Brief Exercise 3-10 Cheyenne Corp. has the following transactions during August of the current year. Aug. 1 Issues shares of common stock to investors in exchange for $10,090. Aug. 4 Pays insurance in advance for 3 months, $1,270. Aug. 16 Receives $700 from clients for services rendered. Aug. 27 Pays the secretary $490 salary. Indicate the basic analysis and the debit-credit analysis. Basic Analysis Debit-Credit Analysis Aug. 1 Debits The asset Debit the stockholders' equity account $ Credits Credit Debits...
Exercise 2-1 Transaction analysis [LO2-1 The following transactions occurred during March 2018 for the Wainwright Corporation....
Exercise 2-1 Transaction analysis [LO2-1 The following transactions occurred during March 2018 for the Wainwright Corporation. The company owns and operates a wholesale warehouse. 1 Issued 40,000 shares of common stock in exchange for $400,000 in cash 2 Purchased equipment at a cost of $60,000 $15,000 cash was paid and a note payable was signed for the balance owed 3. Purchased inventory on account at a cost of $122,000 The company uses the perpetual inventory system 4 Credit sales for...
Brief Exercise 2-3 (Algo) T-accounts (LO2-4) The Marchetti Soup Company entered into the following transactions during...
Brief Exercise 2-3 (Algo) T-accounts (LO2-4) The Marchetti Soup Company entered into the following transactions during the month of June: (1) purchased inventory on account for $205,000 (assume Marchetti uses a perpetual inventory system); (2) paid $52,000 in salaries to employees for work performed during the month; (3) sold merchandise that cost $144,000 to credit customers for $260,000; (4) collected $240,000 in cash from credit customers; and (5) paid suppliers of inventory $185,000. Post the above transactions to the below...
Brief Exercise 2-32 (Algorithmic) Journalize Transactions Galle Inc. entered into the following transactions during January. a....
Brief Exercise 2-32 (Algorithmic) Journalize Transactions Galle Inc. entered into the following transactions during January. a. January 1: Borrowed $57,000 from First Street Bank by signing a note payable. b. January 4: Purchased $25,000 of equipment for cash. C. January 6: Paid $500 to landlord for rent for January. d. January 15: Performed services for customers on account, $41,800. e. January 25: Collected $3,000 from customers for services performed in Transaction d. f. January 30: Paid salaries of $7,500 for...
Exercise: Transactions and their effect on the accounting equation (20 points) INSTRUCTIONS: For each transaction, identify...
Exercise: Transactions and their effect on the accounting equation (20 points) INSTRUCTIONS: For each transaction, identify the account titles that would be used. Additionally, determine the impact on the accounting equation by writing “Increase (I)”, “Decrease (D), or Both (B). If something is not affected then leave it blank. EXAMPLE: X Corp. issues $50,000 of common stock for cash. Account Titles Amount Assets Liabilities Equity Cash $50,000 Increase Increase Common Stock $50,000 Events: ABC Company borrows $100,000 from Origin Bank....
Brief Exercise 2-4 Analyze the impact of transactions on the accounting equation (LO2-2) The following transactions occur for Badger Biking Company during the month of June: a. Provide services to customers on account for $47,000. b. Receive cash of $39,000 from customers in (a) above. c. Purchase bike equipment by signing a note with the bank for $32,000. d. Pay utilities of $4,700 for the current month. Analyze each transaction and indicate the amount of increases and decreases in the...
LO2-3 EXERCISE 2.7 Effects of Business Transactions For each of the following categories, state concisely a transaction that will have the required effect on the elements of the accounting equation. a. Increase an asset and increase a liability. b. Decrease an asset and decrease a liability c. Increase one asset and decrease another asset d. Increase an asset and increase owners' equity. e. Increase one asset, decrease another asset, and increase a liability
LO2-3 EXERCISE 2.6 The Accounting Equation A number of business transactions carried out by Smalling Manufacturing Company are as follows a. Borrowed money from a bank. b. Sold land for cash at a price equal to its cost. c. Paid a liability d. Returned for credit some of the office equipment previously purchased on credit but not yet paid for. (Treat this the opposite of a transaction in which you purchased office equipment on credit e. Sold land for cash...
E2-5 Determining Financial Statement Effects of Several
Transactions LO2-3
FootCovers, Inc., with headquarters in Beaverton, Oregon, is one
of the world’s leading manufacturers of athletic shoes and sports
apparel. The following activities occurred during a recent year.
The amounts are rounded to millions.
Purchased additional buildings for $184 and equipment for $270;
paid $402 in cash and signed a long-term note for the rest.
Issued 100 shares of $2 par value common stock for $355
cash.
Declared $145 in dividends...
3 E2-4 (Algo) Determining Financial Statement Effects of Several Transactions LO2-3 The following events occurred for Johnson Company: 5 points Skipped a. Received investment of cash by organizers and distributed to them 1,140 shares of $1 par value common stock with a market price of $20 per share. b. Purchased $7,800 of equipment, paying $1,300 in cash and owing the rest on accounts payable to the manufacturer. c. Borrowed $14,000 cash from a bank. d. Loaned $1,000 to an employee...
Brief Exercise 3-10 Cheyenne Corp. has the following transactions during August of the current year. Aug. 1 Issues shares of common stock to investors in exchange for $10,090. Aug. 4 Pays insurance in advance for 3 months, $1,270. Aug. 16 Receives $700 from clients for services rendered. Aug. 27 Pays the secretary $490 salary. Indicate the basic analysis and the debit-credit analysis. Basic Analysis Debit-Credit Analysis Aug. 1 Debits The asset Debit the stockholders' equity account $ Credits Credit Debits...
Exercise 2-1 Transaction analysis [LO2-1 The following transactions occurred during March 2018 for the Wainwright Corporation. The company owns and operates a wholesale warehouse. 1 Issued 40,000 shares of common stock in exchange for $400,000 in cash 2 Purchased equipment at a cost of $60,000 $15,000 cash was paid and a note payable was signed for the balance owed 3. Purchased inventory on account at a cost of $122,000 The company uses the perpetual inventory system 4 Credit sales for...
Brief Exercise 2-3 (Algo) T-accounts (LO2-4) The Marchetti Soup Company entered into the following transactions during the month of June: (1) purchased inventory on account for $205,000 (assume Marchetti uses a perpetual inventory system); (2) paid $52,000 in salaries to employees for work performed during the month; (3) sold merchandise that cost $144,000 to credit customers for $260,000; (4) collected $240,000 in cash from credit customers; and (5) paid suppliers of inventory $185,000. Post the above transactions to the below...
Brief Exercise 2-32 (Algorithmic) Journalize Transactions Galle Inc. entered into the following transactions during January. a. January 1: Borrowed $57,000 from First Street Bank by signing a note payable. b. January 4: Purchased $25,000 of equipment for cash. C. January 6: Paid $500 to landlord for rent for January. d. January 15: Performed services for customers on account, $41,800. e. January 25: Collected $3,000 from customers for services performed in Transaction d. f. January 30: Paid salaries of $7,500 for...
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