3-Panda Case - 1 Panda received $9,600 cash in advance for...

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The accounting records for Panda Company, Inc. contained the following balances as of December 31, 2001: Assets Liabilities and equity Cash $40,000 Accounts payable $17,000 Accounts receivable 16,500 Contributed capital 45,000 Land 20,000 Retained earnings 14,500 Totals $76,500 $76,500 The following accounting events apply to Panda’s 2002 fiscal year: Jan. 1 The company acquired an additional $20,000 cash from the owners. 1 Panda purchased a computer that cost $17,000 for cash. The computer had a $2,000 salvage value and a 3-year useful life. Mar. 1 The company borrowed $10,000 by issuing a 1-year note at 12%. May 1 The company paid $2,400 cash in advance for a 1-year lease for office space. June 1 The company made a $5,000 cash distribution to the owners. July 1 The company purchased land that cost $10,000 cash. Aug. 1 Cash payments on account payable amounted to $6,000.
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Unformatted text preview: 1 Panda received $9,600 cash in advance for 12 months of service to be performed monthly for the next year, beginning on receipt of payment. Sept. 1 Panda sold land for $13,000 cash. The land originally cost $16,000. Oct. 1 Panda purchased $1,300 of supplies on account. Nov. 1 Panda purchased a 1-year, $20,000 certificate of deposit at 6%. Dec. 31 The company earned service revenue on account during the year that amounted to $40,000. 31 Cash collections from accounts receivable amounted to $44,000. 31 The company incurred other operating expenses on account during the year that amounted to $6,000. Also: Salaries that had been earned by the sales staff but not yet paid amounted to $2,300. There was $200 worth of supplies on hand at the end of the period....
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