Question

In: Accounting

  Cash $ 80 Accounts Payable $ 26   Accounts Receivable 12 Wages and Other Expenses Payable 111...

  Cash $ 80 Accounts Payable $ 26
  Accounts Receivable 12 Wages and Other Expenses Payable 111
  Inventories 188 Long-Term Debt 203
  Other Current Assets 26 Other Long-Term Liabilities 44
  Property, Plant, and Equipment 355 Contributed Capital 356
  Other Assets 99 Retained Earnings 20


Assume that the following events occurred in the quarter ended December 31 (amounts provided are in whole dollars):

  1. Paid $2,000,000 cash for an additional “other asset”.
  2. Issued additional shares for $2,000,000 in cash.
  3. Purchased property, plant, and equipment; paid $2,000,000 in cash and signed a note to pay the remaining $9,000,000 in two years.
  4. Sold, at cost, other assets for $1,000,000 cash.
  5. Conducted negotiations to purchase a sawmill, which is expected to cost $36,000,000.

transaction. asset =liabilities+shareowner's equity

a

b

c

d

e

2.

Record the transaction effects determined in requirement 1 using journal entries.

3.Summarize the journal entry effects from requirement 2 using T-accounts. Use the September 2017 ending balances as the beginning balances for the October to December 2017 quarter

4.Prepare a classified balance sheet at December 31, 2017

Solutions

Expert Solution

Requirement 1:

Accounting equation
Assets = Liabilities + Stockholder's equity
a ($2,000,000) = +
$2,000,000 = +
b $2,000,000 = + $2,000,000
c ($2,000,000) = $9,000,000 +
$11,000,000 = +
d $1,000,000 = +
($1,000,000) = +
e = +
Total $11,000,000 = $9,000,000 + $2,000,000

Requirement 2:

Account title and Explanation Debit Credit
a Other assets $2,000,000
Cash $2,000,000
[To record purchase of other assets for cash]
b Cash $2,000,000
Contributed capital $2,000,000
[To record issuance of shares for cash]
c Property,plant and equipment $11,000,000
Cash $2,000,000
Notes payable $9,000,000
[To record purchase of property,plant and equipment]
d Cash $1,000,000
Other assets $1,000,000
[To record sale of other assets]
e No entry

Requirement 3:

Cash
Beg. Bal. $80,000,000
b $2,000,000 a $2,000,000
d $1,000,000 c $2,000,000
End. Bal. $79,000,000
Accounts receivable
Beg. Bal. $12,000,000
End. Bal. $12,000,000
Inventories
Beg. Bal. $188,000,000
End. Bal. $188,000,000
Other current assets
Beg. Bal. $26,000,000
End. Bal. $26,000,000
Property,plant, and equipment
Beg. Bal. $355,000,000
c $11,000,000
End. Bal. $366,000,000
Other assets
Beg. Bal. $99,000,000
a $2,000,000 d $1,000,000
End. Bal. $100,000,000
Accounts payable
Beg. Bal. $26,000,000
End. Bal. $26,000,000
Wages and other expenses payable
Beg. Bal. $111,000,000
End. Bal. $111,000,000
Long-term debt
Beg. Bal. $203,000,000
c $9,000,000
End. Bal. $212,000,000
Other long-term liabilities
Beg. Bal. $44,000,000
End. Bal. $44,000,000
Contributed capital
Beg. Bal. $356,000,000
b $2,000,000
End. Bal. $358,000,000
Retained earnings
Beg. Bal. $20,000,000
End. Bal. $20,000,000

Requirement 4:

Balance Sheet
At December 31,2017
Assets Liabilities
Current assets: Current liabilities:
Cash $79,000,000 Accounts payable $26,000,000
Accounts receivable $12,000,000 Wages and other expenses payable $111,000,000
Inventories $188,000,000 Total current liabilities $137,000,000
Other current assets $26,000,000 Long-term debt:
Total current assets $305,000,000 Long-term debt $212,000,000
Property,plant, and equipment $366,000,000 Other long-term liabilities $44,000,000
Other assets $100,000,000 Total long-term debt $256,000,000
Total liabilities $393,000,000
Stockholder's Equity:
Contributed capital $358,000,000
Retained earnings $20,000,000
Total stockholder's equity $378,000,000
Total assets $771,000,000 total liabilities and stockholders' equity $771,000,000

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

Cash 20 Accounts payable 20 Accounts Receivable 30 Notes payable 50 Inventory 30 Long-term debt 80...
Cash 20 Accounts payable 20 Accounts Receivable 30 Notes payable 50 Inventory 30 Long-term debt 80 Net Fixed assets 180 Common Stock 90 Retained Earnings 20 Total assets 260 Total liabilities and equity 260 Sales for the year just ended were 400. The firm is operating at much less than full capacity, so it will not need to increase fixed assets. Sales are expected to grow by 5% next year, the profit margin is 6%, and the dividend payout ratio...
Explain how the accounts receivable, inventory, power and equipment, accounts payable, wages payable and long-term debt...
Explain how the accounts receivable, inventory, power and equipment, accounts payable, wages payable and long-term debt impacted cash flow from one year to the next. 200-word minimum.
the chart of accounts of pete's delivery services includes the following: cash 111 accounts receivable 112...
the chart of accounts of pete's delivery services includes the following: cash 111 accounts receivable 112 office equipment 121 delivery trucks 122 accounts payable 211 pete jean capital 311 pete jean withdrawals 312 delivery fees earned 411 advertising expense 511 gas expense 512 salaries expense 513 telephone expense 514 the following tranactions resulted for pete's delivery service during the month of march? a. pete invested $40,000 in the business for his personal savings account b. bought delivery trucks on account...
the chart of accounts of pete's delivery services includes the following: cash 111 accounts receivable 112...
the chart of accounts of pete's delivery services includes the following: cash 111 accounts receivable 112 office equipment 121 delivery trucks 122 accounts payable 211 pete jean capital 311 pete jean withdrawals 312 delivery fees earned 411 advertising expense 511 gas expense 512 salaries expense 513 telephone expense 514 the following tranactions resulted for pete's delivery service during the month of march? a. pete invested $40,000 in the business for his personal savings account b. bought delivery trucks on account...
cash collections of accounts receivable will increase ____ and decrease _____ 1) accounts payable , accounts...
cash collections of accounts receivable will increase ____ and decrease _____ 1) accounts payable , accounts receivable 2) accounts receivable, accounts payable 3) cash, accounts receivable 4) cast, accounts payable when developring cost functions , which of the following is false 1) the cost funtion must be believable 2) the cost function does not have to be reliable 3) personal observations of cost and activities provide the best evidence of a plausible relationship between a cost and its cost driver...
accounts payable and accounts receivable
What is the difference between accounts payable and accounts receivable?
Entries Accounts payable Cost of goods sold Factory overhead Factory wages payable Other accounts Raw materials...
Entries Accounts payable Cost of goods sold Factory overhead Factory wages payable Other accounts Raw materials inventory Work in process inventory Starr Company reports the following information for August. Raw materials purchased on account $ 85,800 Direct materials used in production $ 52,400 Factory wages earned (direct labor) $ 17,300 Overhead rate 125 % of direct labor cost Prepare journal entries to record the following events. Raw materials purchased. Direct materials used in production. Direct labor used in production. Applied...
Describe the following adjusting entries: accounts receivable (accrued revenues) and accounts payable (accrued expenses). Explain the...
Describe the following adjusting entries: accounts receivable (accrued revenues) and accounts payable (accrued expenses). Explain the consequences to the balance sheet and the income statement if each of these adjusting entries is not recorded at the end of the period.
Chart of Accounts Assets 111 Cash 112 Accounts Receivable 114 Prepaid Insurance 121 Land 122 Building...
Chart of Accounts Assets 111 Cash 112 Accounts Receivable 114 Prepaid Insurance 121 Land 122 Building 123 Accumulated Depreciation, Building 124 Pool/Slide Facility 125 Accumulated Depreciation, Pool/Slide Facility 126 Pool Furniture 127 Accumulated Depreciation, Pool Furniture Liabilities 221 Accounts Payable 222 Wages Payable 223 Mortgage Payable Owner's Equity 311 L. Judar, Capital 312 L. Judar, Drawing 313 Income Summary Revenue 411 Income from Services 412 Concessions Income Expenses 511 Pool Maintenance Expense 512 Wages Expense 513 Advertising Expense 514 Utilities...
Asset Liabilities and owners equity Cash 600 Accounts Payable 700 Inventory 80 Notes Payable 200 Accounts...
Asset Liabilities and owners equity Cash 600 Accounts Payable 700 Inventory 80 Notes Payable 200 Accounts Receivable 400 Current Maturing LTD 40 Fixed assets 1500 Stock 1300 Accumulated Depreciation (90) Retained Earnings 250 Total 2490 Total 2490 Use the following balance sheet for Delta Company to answer the following 3 questions. 1.Which of the following statements is accurate in regards to Delta's financial position? Delta's NWC suggests that solvency is a concern. Delta's NWC suggests that the firm has a...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT