Financial Accounting
15th Edition
ISBN: 9781337272124
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 1, Problem 4PA
1.
To determine
Indicate the effect of each given transaction of Company HMR on the
b)
To determine
Prepare the financial statements for Company HMR for the month ended July 31, 2019.
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Prepare journal entries for the following transactions that took place during the year, 2021:
a. Borrowed $50,000 cash on July 1, 2020, signing a two-year, 10% note payable.
b. Purchased Land for $54,000 cash on July 1, 2020.
c. Earned $50,000 in revenue, including $23,000 in cash and the rest on credit.
d. Collected accounts receivable, $15,000.
e. Paid wages to employees, $22,000.
f. Purchased supplies of $4,500 on account.
g. Paid accounts payable, $4,500.
h. Recorded depreciation of $2,300 for the year.
i. Recorded estimated bad debt expense of $500.
j. Determined that only $1,500 of the supplies purchased in f. were on hand at the end of the year.
Kelly Jones and Tami Crawford borrowed $10,500 on a 7-month, 8% note from Gem State Bank to open their business, Oriole’s Coffee House. The money was borrowed on June 1, 2022, and the note matures January 1, 2023.
Prepare the entry to record the receipt of the funds from the loan.
Date
Account Titles and Explanation
Debit
Credit
June 1
enter an account title to record the receipt of the funds from the loan on June 1enter an account title to record the receipt of the funds from the loan on June 1
enter a debit amountenter a debit amount
enter a credit amountenter a credit amount
enter an account title to record the receipt of the funds from the loan on June 1enter an account title to record the receipt of the funds from the loan on June 1
enter a debit amountenter a debit amount
Ms. Ang put up an accounting firm on Nov. 1, 2021. The registered name of the business is "Ang Accounting Firm." The following were the transactions during the months of November and December, 2021.
1. The owner provided ₱300,000 cash as initial investment to the business on December 1, 2021.
2. Obtained a 12%, one year, bank loan for ₱50,000 on November 1, 2021. Principal and interest are due at maturity date.
3. On December 1, 2021, She purchased office supplies worth ₱60,000 for cash during the period. (the firm uses asset method).
4. The business acquired computer equipment for ₱150,000 cash on November 1, 2021, which has a useful life of 5 years with a residual value of ₱30,000.
5. On December 1, 2021, the business took one year insurance for ₱42,000 covering the months of December, 2021 to February, 2022. The business uses expense method in recording this transaction.
6. As of December 31, 2021, rendered services billed to clients are worth ₱280,000 for cash and ₱200,000 on…
Chapter 1 Solutions
Financial Accounting
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