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Chapter 2 Lecture Problems

Chapter 2 Lecture Problems - Chapter 2 Exercise 1(1 of 13...

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Chapter 2 – Exercise 1 (1 of 13) The following table sets forth a partial listing of items on Microsoft’s balance sheet as at June 30, 2002. Enter one “X” to indicate type of account, and one “X” to indicate usual account balance. Type of Account Usual Balance Account Asset Liability Shareholders’ Equity debit credit Accounts payable Accounts receivable Accrued salaries to employees Cash and short-term investments
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Chapter 2 – Exercise 1 (2 of 13) Type of Account Usual Balance Account Asset Liability Shareholders’ Equity debit credit Accounts payable X X Accounts receivable Accrued salaries to employees Cash and short-term investments Share capital Income taxes payable Investments Other current assets Other long-term assets Property and equipment
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Chapter 2 – Exercise 2 (A) a. Complete the following table by indicating the amount and direction (+ or -) of the effect of each transaction on each of the three components of the accounting equation. b. Prepare the journal entries for each of the transactions. Transaction Asset Liability Shareholders’ Equity A) Issued shares for cash of $14,000. + $14,000 + $14,000 Transaction Account debit credit A) Cash $14,000 Share capital $14,000 Journal entry:
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Chapter 2 – Exercise 2 (B) B) Borrowed $15,000 from a local bank and signed a six-month promissory note.
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