Chapter 2 - Solutions

Chapter 2 - Solutions - Chapter 2 Transaction Analysis...

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Chapter 2 Transaction Analysis 67 Chapter 2 Transaction Analysis Short Exercises (5 min.) S 2-1 Horton’s payment was not an expense. Horton acquired an asset , Equipment, because the computer is an economic resource of the business. (5 min.) S 2-2 a. $14,800 ($13,000 + $1,800 + $4,000 $4,000) b. $ 1,800
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Financial Accounting 8/e Solutions Manual 68 (5-10 min.) S 2-3 Cash 31,000 3,000 2,000 Bal. 30,000 (5 min.) S 2-4 Increased total assets: August 1 (Cash) August 1 (Medical supplies) August 3 (Cash, Accounts Receivable) (5-10 min.) S 2-5 a. Purchase of asset for cash Sale of asset for cash Collection of an account receivable b. Payment of dividends to owners Expense transaction c. Pay a liability d. Issuance of stock Revenue transaction e. Purchase of asset on account Borrow money (Answers may vary.)
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Chapter 2 Transaction Analysis 69 (10 min.) S 2-6 Journal DATE ACCOUNT TITLES AND EXPLANATION DEBIT CREDIT Jul. 15 Cash…………………………………… 34,000 Note Payable……………………… 34,000 Borrowed money from the bank. 22 Accounts Receivable………………. 8,500 Service Revenue…………………. 8,500 Performed service on account. 28 Cash…………………………………… 6,500 Accounts Receivable……………. 6,500 Received cash on account. 29 Utilities Expense……………………. 700 Accounts Payable………………. . 700 Received utility bill. 31 Salary Expense……………………… 3,100 Cash………………………………… 3,100 Paid salary expense.
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Financial Accounting 8/e Solutions Manual 70 (10-15 min.) S 2-7 Req. 1 Journal DATE ACCOUNT TITLES AND EXPLANATION DEBIT CREDIT Supplies………………………………. . 2,000 Accounts Payable………………… 2,000 Purchased supplies on account. Accounts Payable…………………… 500 Cash………………………………… 500 Paid cash on account. Req. 2 Accounts Payable 500 2,000 Bal. 1,500 Req. 3 The business owes $1,500, as shown in the Accounts Payable account.
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Chapter 2 Transaction Analysis 71 (10-15 min.) S 2-8 Req. 1 Journal DATE ACCOUNT TITLES AND EXPLANATION DEBIT CREDIT Accounts Receivable………………. . 5,200 Service Revenue…………………. . 5,200 Performed service on account. Cash……………………………………. 2,400 Accounts Receivable……………. . 2,400 Received cash on account. Req. 2 Cash Accounts Receivable Service Revenue 2,400 5,200 2,400 5,200 Bal. 2,400 Bal. 2,800 Bal. 5,200
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Financial Accounting 8/e Solutions Manual 72 (10 min.) S 2-9 Old Boardwalk Trial Balance December 31, 2010 ACCOUNT DEBIT CREDIT Millions Cash……………………….…. .. $ 6 Other assets…………………. . 13 Accounts payable…………… $ 1 Other liabilities………………. 5 Stockholders’ equity………. . 3 Revenues……………………. .. 37 Expenses……………………. .. 27 ___ Total……………………….…… $46 $46 Old Boardwalk’s net income: $10 million ($37
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Chapter 2 - Solutions - Chapter 2 Transaction Analysis...

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