Question: Indicate whether each of the following accounts

> Required: Indicate whether each of the following transactions is an asset source (AS), asset use (AU), asset exchange (AE), or claims exchange (CE) transaction. a. Acquired cash from the issue of stock. b. Paid a cash dividend to the stockholders. c. Pai

> Required: Identify each of the following events as an accrual, a deferral, or neither: a. Paid cash in advance for a one-year insurance policy. b. Paid cash to settle an account payable. c. Collected accounts receivable. d. Paid cash for current salaries

> Arnett Company was started in Year 1 when it acquired $30,000 cash by issuing common stock to Dan Arnett. Required: a. Was this event an asset source, use, or exchange transaction for Arnett Company? b. Was this event an asset source, use, or exchange t

> Riley Company paid $60,000 cash to purchase land from Smally Company. Smally originally paid $60,000 for the land. Required: a. Was this event an asset source, use, or exchange transaction for Riley Company? b. Was this event an asset source, use, or ex

> Lakeside, Inc. purchased land in January Year 1 at a cost of $250,000. The estimated market value of the land is $425,000 as of December 31, Year 8. Required: a. Name the December 31, Year 8, financial statement(s) on which the land will be shown. b. At

> Nevada Company experienced the following events during its first year of operations: 1. Acquired an additional $1,000 cash from the issue of common stock. 2. Paid $2,400 cash for utilities expense. 3. Paid a $1,500 cash dividend to the stockholders. 4. P

> Olive Enterprises experienced the following events during Year 1: 1. Acquired cash from the issue of common stock. 2. Paid cash to reduce the principal on a bank note. 3. Sold land for cash at an amount equal to its cost. 4. Provided services to clients

> Assume that Clayton Company acquires $1,200 cash from creditors and $1,700 cash from investors. Required: a. Explain the primary differences between investors and creditors. b. If Clayton has a net income of $800 and then liquidates, what amount of cash

> The following table shows the transactions experienced by Walter Enterprises during Year 8. The table contains missing data that are labeled with alphabetic characters (a) through (i). Assume all transactions shown in the accounting equation are cash tra

> The financial condition of White Inc. is expressed in the following accounting equation: Required: a. Are dividends paid to creditors or investors? Explain why. b. How much cash is in the Retained Earnings account? c. Determine the maximum dividend Whi

> Lewis Enterprises was started when it acquired $4,000 cash from creditors and $6,000 from owners. The company immediately purchased land that cost $9,000. Required: a. Record the events under an accounting equation. b. After all events have been 183 rec

> The following account titles were drawn from the general ledger of Pest Control, Incorporated (PCI): Cash, Notes Payable, Land, Accounts Payable, Office Furniture, Salaries Expense, Common Stock, Service Revenue, Interest Expense, Utilities Payable, Util

> As of December 31, Year 1, Dunn Company had total cash of $156,000, notes payable of $85,600, and common stock of $52,400. During Year 2, Dunn earned $36,000 of cash revenue, paid $20,000 for cash expenses, and paid a $3,000 cash dividend to the stockhol

> At the beginning of Year 2, Master Corp.’s accounting records had the following general ledger accounts and balances: Master Corp. completed the following transactions during Year 2: 1. Purchased land for $12,000 cash. 2. Acquired $2

> Morrison Co. experienced the following events during Year 1: 1. Acquired cash from the issue of common stock. 2. Borrowed cash. 3. Collected cash from providing services. 4. Purchased land with cash. 5. Paid operating expenses with cash. 6. Paid a cash d

> The following events apply to Lewis and Harper, a public accounting firm, for the Year 1 accounting period: 1. Performed $70,000 of services for clients on account. 2. Performed $40,000 of services for cash. 3. Incurred $36,000 of other operating expense

> As of December 31, Year 1, Moss Company had total cash of $195,000, notes payable of $90,500, and common stock of $84,500. During Year 2, Moss earned $42,000 of cash revenue, paid $24,000 for cash expenses, and paid a $3,000 cash dividend to the stockhol

> Required: Obtain the Target Corporation’s annual report at http://investors.target.com using the instructions in Appendix B, and use it to answer the following questions: a. Which accounts on Target’s balance sheet are accrual type accounts? b. Which acc

> At the beginning of Year 2, Better Corp.’s accounting records had the following general ledger accounts and balances: Better Corp. completed the following transactions during Year 2: 1. Purchased land for $5,000 cash. 2. Acquired $25,

> Milea Inc. experienced the following events in Year 1, its first year of operations: 1. Received $20,000 cash from the issue of common stock. 2. Performed services on account for $56,000. 3. Paid the utility expense of $2,500. 4. Collected $48,000 of the

> Required: a. Match the terms (identified as a through g) with the definitions and phrases (marked 1 through 7). For example, the term “a. Assets” matches with definition 7. Economic resources that will be used by a bus

> Karen White helped organize a charity fund to help cover the medical expenses of her friend, Vicky Hill, who was seriously injured in a bicycle accident. The fund was named the Vicky Hill Recovery Fund (VHRF). Karen contributed $1,000 of her own money to

> During Year 1, Chung Corporation earned $8,000 of cash revenue and accrued $5,000 of salaries expense. Required: Based on this information alone: a. Prepare the December Year 1, balance sheet. b. Determine the amount of net income that Chung would report

> Holloway Company earned $18,000 of service revenue on account during Year 1. The company collected $14,000 cash from accounts receivable during Year 1. Required: Based on this information alone, determine the following for Holloway Company. a. The balan

> Sammy’s Pizza opened on January 1, Year 1. Sammy’s reported the following for cash revenues and cash expenses for the years Year 1 to Year 3: Required: a. What would Sammy’s Pizza report for net inc

> As of December 31, Year 1, Flowers Company had total assets of $130,000, total liabilities of $50,000, and common stock of $70,000. The company’s Year 1 income statement contained revenue of $30,000 and expenses of $18,000. The Year 1 statement of change

> As of January 1, Year 2, Room Designs Inc. had a balance of $9,900 in Cash, $3,500 in Common Stock, and $6,400 in Retained Earnings. These were the only accounts with balances in the ledger on January 1, Year 2. Further analysis of the companyâ&#12

> On January 1, Year 2, the following information was drawn from the accounting records of Carter Company: cash of $800; land of $3,500; notes payable of $600; and common stock of $1,000. Required: a. Determine the amount of retained earnings as of Januar

> This chapter defined and discussed accrual and deferral transactions. Complete the requirements below using the most recent financial statements available on the Internet for Netflix, Inc. Obtain the statements by following the steps below. (Be aware tha

> Charlene Rose tells you that accountants where she works are real hair splitters. For example, they make a big issue over the difference between a cost and an expense. She says the two terms mean the same thing to her. Required: a. Explain to Charlene t

> Dakota Company experienced the following events during Year 2: 1. Acquired $30,000 cash from the issue of common stock. 2. Paid $12,000 cash to purchase land. 3. Borrowed $10,000 cash. 4. Provided services for $20,000 cash. 5. Paid $1,000 cash for utilit

> All-Star Automotive Company experienced the following accounting events during Year 1: 1. Performed services for $25,000 cash. 2. Purchased land for $6,000 cash. 3. Hired an accountant to keep the books. 4. Received $50,000 cash from the issue of common

> On January 1, Year 1, Moore, a fast-food company, had a balance in its Cash account of $45,800. During the Year 1 accounting period, the company had (1) net cash inflow from operating activities of $24,800, (2) net cash outflow for investing activities o

> Sung Company purchased land in April Year 1 at a cost of $500,000. The estimated market value of the land is $800,000 as of December 31, Year 7. Sung purchased marketable equity securities (bought the common stock of a company that is independent of Sung

> Majka Company was started on January 1, Year 1. During Year 1, the company experienced the following three accounting events: (1) earned cash revenues of $33,700, (2) paid cash expenses of $14,900, and (3) paid a $3,200 cash dividend to its stockholders.

> The December 31, Year 1, balance sheet for Deen Company showed total stockholders’ equity of $156,000. Total stockholders’ equity increased by $65,000 between December 31, Year 1, and December 31, Year 2. During Year 2, Deen Company acquired $20,000 cash

> Yard Professionals Inc. experienced the following events in Year 1, its first year of operation: 1. Performed services for $35,000 cash. 2. Purchased $6,000 of supplies on account. 3. A physical count on December 31, Year 1, found that there was $1,800 o

> Pizza Express Inc. began the Year 2 accounting period with $2,500 cash, $1,400 of common stock, and $1,100 of retained earnings. Pizza Express was affected by the following accounting events during Year 2: 1. Purchased $3,600 of supplies on account. 2. E

> The following table shows the transactions experienced by J G Gutter Works (JGGW), during Year 7. The table contains missing data which are labeled with alphabetic characters (a) through (j). Assume all transactions shown in the accounting equation are c

> This chapter introduced the basic four financial statements companies use annually to keep their stakeholders informed of their accomplishments and financial situation. Complete the requirements below using the most recent (20xx) financial statements ava

> Required: a. Based on this information alone, can you determine whether White can pay a $2,000 cash dividend? Why or why not? b. Reconstruct the accounting equation for each company using percentages on the right side of the equation instead of dollar va

> The following information was drawn from the accounting records of Wyckoff Company as of December 31, Year 2, before the temporary accounts had been closed. The Cash balance was $3,600, and Notes Payable amounted to $4,000. The company had revenues of $7

> Davos Company performed services on account for $160,000 in Year 1. Davos collected $120,000 cash from accounts receivable during Year 1, and the remaining $40,000 was collected in cash during Year 2. Required: a. Record the Year 1 transactions in T-acc

> Required Record each of the following Fred Co. events in T-accounts, and then explain how the event affects the accounting equation: a. Received $20,000 cash by issuing common stock. b. Purchased supplies for $1,000 cash c. Purchased land for $10,000 ca

> Required: For each of the following T accounts, indicate the side of the account that should be used to record an increase or decrease in the account balance: Cash Account Payable Common Stock Debit Credit Debit Credit Debit Credit Accounts Recelvab

> Identify whether each of the following transactions is an asset source (AS), asset use (AU), asset exchange (AE), or claims exchange (CE). Also explain how each event affects the accounting equation by placing a + for increase, − for de

> For each of the following independent events, identify the account that would be debited and the account that would be credited. The accounts for the first event are identified as an example. a. Received cash by issuing common stock. b. Received cash f

> a. In parallel columns, list the accounts that would be debited and credited for each of the following unrelated transactions: (1) Acquired cash from the issue of common stock. (2) Provided services for cash. (3) Paid cash for salaries expense. (4) Purch

> a. Describe some ways that U.S. GAAP and IFRS are different. b. How are U.S. GAAP and IFRS alike for reporting purposes?

> Assume that Kevin has been working for you for five years. He has had an excellent work history and has received generous pay raises in response. The raises have been so generous that Kevin is quite overpaid for the job he is required to perform. Unfortu

> The following information was drawn from the balance sheets of two companies: Required: a. Compute the debt-to-assets ratio to measure the level of financial risk of both companies. b. Compare the two ratios computed in Requirement a to identify which

> At the beginning of Year 2, Oak Consulting had the following normal balances in its accounts: The following events apply to Oak Consulting for Year 2: 1. Provided $185,000 of services on account. 2. Incurred $45,800 of operating expenses on account. 3.

> The following financial information was taken from the books of Zone Health Club, a small spa and fitness club: Required: a. Prepare the journal entries necessary to close the temporary accounts at December 31, Year 2, for Zone Health Club. b. What is

> Required: Explain how each of the following posting errors affects a trial balance. State whether the trial balance will be out of balance because of the posting error, and indicate which side of the trial balance will have a higher amount after each ind

> On December 31, Year 2, Morgan Company had the following normal account balances in its general ledger. Use this information to prepare a trial balance. Land $30,000 Unearned Revenue 32,000 8,000 5,600 Dividends Prepaid Rent 90,000 18,000 7,000 80,0

> The following events apply to Equipment Services Inc. in its first year of operation: 1. Acquired $60,000 cash from the issue of common stock. 2. Received an $8,200 cash advance for services to be provided in the future. 3. Purchased $2,000 of supplies o

> The following events apply to Montgomery Company for Year 1, its first year of operation: 1. Received cash of $36,000 from the issue of common stock. 2. Performed $48,000 of services on account. 3. Incurred $6,500 of other operating expenses on account.

> On December 31, Year 1, BIG Company had accrued salaries of $6,400. Required: a. Record in general journal format the adjustment required as of December 31, Year 1. b. Show the above adjustment in a horizontal statements model like the following one:

> Cherokee Company began operations when it issued common stock for $80,000 cash. It paid $60,000 cash in advance for a one-year contract to lease delivery equipment for the business. It signed the lease agreement on March 1, Year 1, which was effective im

> Required: Record each of the following transactions in general journal form and then show the effect of the transaction in a horizontal statements model. The first transaction is shown as an example. a. Performed $8,200 of services on account. b. Colle

> The following data are based on information in the 2016 annual reports of Abercrombie & Fitch, Co. and American Eagle Outfitters, Inc. Dollar amounts are in thousands. Abercrombie & Fitch is a specialty retailer of apparel and accessories for men

> The Garden Company began the accounting period with a $60,000 credit balance in its Accounts Payable account. During the accounting period, Garden Company incurred expenses on account of $152,000. The ending Accounts Payable balance was $64,000. Require

> River Co. began the accounting period with a $132,000 debit balance in its Accounts Receivable account. During the accounting period, River Co. earned revenue on account of $180,000. The ending Accounts Receivable balance was $116,000. Required: Based o

> Raylan received a $60,000 cash advance payment on June 1, Year 1, for consulting services to be performed in the future. Services were to be provided for a one year term beginning June 1, Year 1. Required: a. Record the June 1 cash receipt in T-accounts.

> Sye Chase started and operated a small family architectural firm in Year 1. The firm was affected by two events: (1) Chase provided $25,000 of services on account, and (2) he purchased $2,800 of supplies on account. There were $250 of supplies on hand as

> Required: Complete the following table by indicating whether a debit or credit is used to increase or decrease the balance of accounts belonging to each category of financial statement elements. The appropriate debit/credit terminology has been identifie

> In Year 1, Lee Inc. billed its customers $72,000 for services performed. The company collected $55,000 of the amount billed. Lee incurred $42,000 of other operating expenses on account. Lee paid $34,000 of the accounts payable. Lee acquired $44,000 cash

> Cordell Inc. experienced the following events in Year 1, its first year of operation: 1. Received $40,000 cash from the issue of common stock. 2. Performed services on account for $82,000. 3. Paid a $6,000 cash dividend to the stockholders. 4. Collected

> The following transactions pertain to the operations of Ewing Company for Year 1: 1. Acquired $30,000 cash from the issue of common stock. 2. Provided $65,000 of services on account. 3. Paid $22,000 cash on accounts payable. 4. Performed services for $8,

> Norell Inc. experienced the following accounting events during its Year 1 accounting period: 1. Recognized revenue on account. 2. Issued common stock. 3. Paid cash to purchase supplies. 4. Collected a cash advance for services that will be provided durin

> On October 1, Year 1, Josh Smith, attorney, accepted a $10,800 cash advance from his client, James Company, for services to be performed over the next six months. Required: a. Record the deferral and the related December 31, Year 1, adjustment for Josh

> The following information was drawn from the annual report of Machine Imports Company (MIC): Required: a. Compute the percentage of growth in net income from Year 1 to Year 2. Can stockholders expect a similar increase between Year 2 and Year 3? b. Ass

> Hart, Attorney at Law, experienced the following transactions in Year 1, the first year of operations: 1. Accepted $36,000 on April 1, Year 1, as a retainer for services to be performed evenly over the next 12 months. 2. Performed legal services for cash

> Lan, an accounting major, and Pat, a marketing major, are watching a Matlock rerun on late night TV. Of course, there is a murder and the suspect wants to hire Matlock as the defense attorney. Matlock will take the case but requires an advance payment of

> Yard Designs (YD) experienced the following events in Year 1, its first year of operation: 1. On October 1, Year 1, YD collected $54,000 for consulting services it agreed to provide during the coming year. 2. Adjusted the accounts to reflect the amount o

> Leach Company borrowed $80,000 cash by issuing a note payable on June 1, Year 1. The note had an 8 percent annual rate of interest and a one-year term to maturity. Required: a. What amount of interest expense will Leach recognize for the year ending Dec

> Ben Bradley started Bradley Company on January 1, Year 1. The company experienced the following events during its first year of operation: 1. Earned $2,000 of cash revenue for performing services. 2. Borrowed $8,000 cash from the bank. 3. Adjusted the ac

> On January 1, Year 1, Your Ride Inc. paid $36,000 cash to purchase a taxi cab. The taxi had a four-year useful life and a $4,000 salvage value. Required: a. Determine the amount of depreciation expense that would appear on the Year 1 and Year 2 income s

> The following events apply to Tracey’s Restaurant for the Year 1 fiscal year: 1. Started the company when it acquired $21,000 cash from the issue of common stock. 2. Purchased a new cook top that cost $22,000 cash. 3. Earned $32,000 in cash revenue. 4. P

> On April 1, Year 1, Maine Corporation paid $18,000 cash in advance for a one-year lease on an office building. Assume that Maine records the prepaid rent as an asset and that the books are closed on December 31. Required: a. Show the payment for the one

> Required: Identify whether each of the following transactions is an asset source (AS), asset use (AU), asset exchange (AE), or claims exchange (CE). Also show the effects of the events on the financial statements using the horizontal statements model. In

> Required: a. Name an asset use transaction that will not affect the income statement. b. Name an asset exchange transaction that will affect the statement of cash flows. c. Name an asset source transaction that will not affect the income statement. d. Na

> The following cash transactions occurred in five real-world companies: 1. During the third quarter of 2016 (July 1 through September 30) Ford Motor Company paid approximately $31.5 billion in expenses related to the production for the vehicles it sold. 2

> Life, Inc. experienced the following events in Year 1, its first year of operation: 1. Performed counseling services for $36,000 cash. 2. On February 1, Year 1, paid $18,000 cash to rent office space for the coming year. 3. Adjusted the accounts to refle

> Give an example of a transaction that will do the following: a. Increase an asset and increase equity (asset source event). b. Decrease an asset and decrease equity (asset use event). c. Increase an asset and decrease another asset (asset exchange event)

> Composite Fabricators, Inc. is a U.S.-based company that develops its financial statements under GAAP. The total amount of the company’s assets shown on its balance sheet for the current year was approximately $370 million. The president of Composite Fab

> The Candle Shop experienced the following events during its first year of operations, Year 1: 1. Acquired cash by issuing common stock. 2. Paid a cash dividend to the stockholders. 3. Paid cash for operating expenses. 4. Borrowed cash from a bank. 5. Pro

> Explain the matching concept.

> Critz Company was started on January 1, Year 1. During the month of January, Critz earned $7,500 of revenue and incurred $4,800 of expenses. During the remainder of Year 1, Critz earned $86,000 and incurred $51,000 of expenses. Critz closes its books on

> What is the going concern doctrine?

> What is a business liquidation?

> Which of the general-purpose financial statements provides information about the enterprise at a specific designated date?

> What information does the return-on-assets ratio provide about a company?

> If a company has $2,000 cash, $1,200 liabilities, and $800 retained earnings, can it pay a dividend of $1,000?

> What information does the debt-to-assets ratio provide about a company?

> How does net income affect the stockholders’ claims on the business’ assets?

> What does the term posting mean?

> When should a trial balance be prepared?

> What is the purpose of a trial balance?

> The trial balance of Pacilio Security Services, Inc. as of January 1, Year 3, had the following normal balances: During Year 3, Pacilio Security Services experienced the following transactions: 1. Paid the salaries payable from Year 2. 2. Paid the bal