When cash is borrowed from bank, cash balance increases (along total assets) and loan increases.
When the equipment is purchased with cash, cash balance decreases ( along total assets) and equipment balance increases( along total assets)
Insurance policy has been paid in advance for 2 years creating advance insurance account which is total assets and outflow of cash. The net impact on total asset would be zero here.
The loan payment decreases the cash balance(along total assets)
1.
Particulars |
Amount ($) |
Opening cash balance |
39,388 |
Add: Cash borrowed from bank |
26,000 |
Less: paid for equipment |
5,600 |
Less: Insurance policy taken ( 6000 * 2/5) |
2,400 |
Less: previous loan paid back |
3,270 |
Cash balance on July 31 |
$ 54,118 |
2.
Particulars |
Amount ($) |
Total assets balance |
131,311 |
Cash borrowed |
26,000 |
Equipment bought (10,500 – 5,600) |
4,900 |
Insurance policy paid (2,400 – 2,400) |
0 |
Previous loan paid |
(3,270) |
Total assets balance on July 31 |
158,941 |
kindly upvote
X Company prepares monthly financial statements. The following is the company's Equities Accounts Payable Notes Payable...
X Company prepares monthly financial statements. The following is the company's July 1 Balance Sheet: Balance Sheet July 1 Assets Equities Cash $35,468 Accounts Payable $5,422 Accounts Receivable 5,138 Notes Payable 20,732 Inventory 10,785 Prepayments 3,667 Paid-In Capital 60,177 Equipment 68,219 Retained Earnings 36,946 Total Assets $123,277 Total Equities $123,277 The following were the company's July transactions: borrowed $30,000 from a bank bought equipment costing $10,000, paying the manufacturer $5,200 in cash and signing a note for $4,800 purchased a...
web> X Company is a merchandiser and prepares monthly financial statements. The following is its balance sheet at the beginning of July: Balance Sheet July 1 Equities Assets Cash Accounts Receivable Inventory Prepaid Rent Equipment Total Assets $50,369 Accounts Payable 34,152 Notes Payable $55,049 31,017 83,921 6,383 Paid-In Capital 210,794 Retained Earnings 227,096 72,457 $385,619 $385,619 Total Equities The following summary transactions occurred during July: 1. Sold stock to investors for $43,000 2. Borrowed $27,000 from a bank and paid...
Balance Sheet July 1 Assets Equities Cash $37,504 Accounts Payable $5,597 Accounts Receivable 5,251 Notes Payable 24,393 Inventory 14,842 Prepayments 3,199 Paid-In Capital 59,466 Equipment 61,801 Retained Earnings 33,141 Total Assets $122,597 Total Equities $122,597 The following were the company's July transactions: borrowed $26,000 from a bank bought equipment costing $10,200, paying the manufacturer $5,800 in cash and signing a note for $4,400 purchased a $5,000, five-year insurance policy, paying for three years in advance paid back a previous loan...
X Company is a merchandiser and prepares monthly financial statements. The following is its balance sheet at the beginning of July: Balance Sheet July 1 Assets Equities Cash $52,438 Accounts Payable $53,176 Accounts Receivable 34,819 Notes Payable 30,627 Inventory 80,386 Prepaid Rent 6,377 Paid-In Capital 227,278 Equipment 211,910 Retained Earnings 74,849 Total Assets $385,930 Total Equities $385,930 The following summary transactions occurred during July: Sold stock to investors for $42,000. Borrowed $26,000 from a bank and paid off a $13,000...
Questions 4, 5, and 6 refer to the following balance sheet and transactionswebs X Company is a merehandiser and prepares monthly financial statements. The following is its balance sheet at the beginning of July: Balance Sheet July 1 Assets Cash Accounts Receivable Inventory Prepaid Rent Equipment Total Assets Equities S53,017 Accounts Payable 32,513 Notes Payable 78,989 5,686 Paid-In Capital 213,255 Retained Earnings $56,601 33,195 218,915 74,749 $383,460 $383,460 Total Equities The following summary transactions occurred during July: 1. Sold stock...
Questions 4, 5, and G refer to the following balance sheet and transactions:web> X Company is a m and prepares monthly financial statements. The following is its balance sheet at the beginning of July: erchandiser Balance Shect July 1 Assets Cash Accounts Receivable Inventory Prepaid Rent Equities S51,256 Accounts Payable $62,519 31,599 32,765 Notes Payable 84,187 5,377 Paid-In Capital 233,176 Retained Earnings 249,758 62,885 $406,761 Total Assets 8406,761 Total Equities The following summary transactions occurred during July: 1. Sold stock...
Questions 4, 5, and 6 refer to the following balance sheet and transactions: web> X Company is a merchandiser and prepares monthly financial statements. The following is its balance sheet at the beginning of July: Balance Sheet July 1 Assets Equities Cash $52,340 Accounts Payable $63,268 Accounts Receivable 34,362 Notes Payable 31,309 Inventory 75,228 Prepaid Rent 5,467 Paid-In Capital 234,140 Equipment 223,352 Retained Earnings 62,032 Total Assets $390,749 Total Equities $390,749 The following summary transactions occurred during July: Sold stock...
X Company prepares monthly financial statements. Its accountant recorded the following October 1 transactions and the appropriate adjusting entries on October 31: On October 1, the company paid rent for the final three months of the year. Rent was $1,500 per month. On October 1, the company purchased equipment that cost $20,000, borrowing the full amount from a bank. The equipment has a life of four years and a salvage value at that time of $2,000. The company will repay...
Stiner Company has the following selected accounts after posting adjusting entries: Accounts Payable 45.000 Notes Payable, 3-month 80,000 Accumulated Depreciation Equipment 14,000 Payroll and Benefits Payable 27,000 Notes Payable, 5-year, 8% 30,000 Estimated Warranty Liability 34,000 Payroll Tax Expense 6,000 Interest Payable 3,000 Mortgage Payable 200,000 Sales Tax Payable 16,000 Instructions (a) Prepare the current liability section of Stiner Company's balance sheet, assuming $25,000 of the mortgage is payable next year. (List liabilities in magnitude order, with largest first.) (b)...
X Company prepares monthly financial statements. On May 14, the company paid a supplier for a purchase it made in April on account. X Company's accountant recorded the May 14 transaction as a decrease in Cash and a decrease in Retained Earnings. What was the effect of this incorrect entry on the May 31 financial statements? Retained Earnings was overstated. Inventories were understated. Revenue was understated. Cash was understated. Accounts Receivable was overstated. Accounts Payable was overstated.