1500 Bal 7395 1000 4000 4395 Bal7305 1000 6250 506300

1500 bal 7395 1000 4000 4395 bal7305 1000 6250 506300

This preview shows page 93 - 99 out of 198 pages.

1,500 Bal. $7,395 $1,000 $ 6,250 $ 50 $6,300 $4,000 $4,395 6/30 –90 –90 Bal. $7,305 $1,000 $ 6,250 $ 50 $6,300 $4,000 $4,305 6/30 –6,250 –6,250 Bal. $ 1,055 $ 1,000 $ 6,250 $ 50 $ 50 $ 4,000 $ 4,305 TOTAL ASSETS: $8,355 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY: $8,355 2. BEACHWAY ENTERPRISES INCOME STATEMENT FOR THE MONTH ENDED JUNE 30, 2007 Rental fee revenue $ 4,500* Expenses: Registration fee $ 35 Advertising 70 Salaries and wages 90 195 Net income $ 4,305 *$1,000 + $2,000 + $1,500 3-93
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3-94 Financial Accounting Solutions Manual
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CHAPTER 3 PROCESSING ACCOUNTING INFORMATION PROBLEM 3-2A (Concluded) 3. BEACHWAY ENTERPRISES BALANCE SHEET JUNE 30, 2007 Assets Current assets: Cash $ 1,055 Accounts receivable 1,000 Supplies 50 Total current assets $ 2,105 Property, plant, and equipment: Equipment 6,250 Total assets $ 8,355 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 50 Capital stock $ 4,000 Retained earnings 4,305 Total stockholders’ equity 8,305 Total liabilities and stockholders’ equity $ 8,355 3-95
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3-96 Financial Accounting Solutions Manual LO 3 PROBLEM 3-3A TRANSACTION ANALYSIS AND FINANCIAL STATEMENTS 1. DYNAMIC SERVICES INC. TRANSACTIONS FOR THE MONTH OF MARCH, 2007 Assets = Liabilities + Stockholders’ Equity Accounts Accounts Notes Capital Retained Date Cash Receivable Computer Supplies Payable Payable Stock Earnings 3/2 $20,000 $20,000 3/7 7,500 $ 7,500 Bal. $27,500 $7,500 $20,000 3/12 $ 350 $ 350 Bal. $27,500 $350 $350 $7,500 $20,000 3/19 $ 2,000 $ 2,000 Bal. $27,500 $2,000 $350 $350 $7,500 $20,000 $ 2,000 3/20 –650 –650 Bal. $26,850 $2,000 $350 $350 $7,500 $20,000 $ 1,350 3/22 500 –500 Bal. $27,350 $1,500 $350 $350 $7,500 $20,000 $ 1,350 3/26 1,400 1,400 Bal. $28,750 $1,500 $350 $350 $7,500 $20,000 $ 2,750 3/29 –4,000 $ 4,000 Bal. $24,750 $1,500 $4,000 $350 $350 $7,500 $20,000 $ 2,750 3/30 –1,650 –1,650 Bal. $23,100 $1,500 $4,000 $350 $350 $7,500 $20,000 $ 1,100 3/31 –700 –700 Bal. $ 22,400 $ 1,500 $ 4,000 $ 350 $ 350 $ 7,500 $ 20,000 $ 400 TOTAL ASSETS: $28,250 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY: $28,250
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CHAPTER 3 PROCESSING ACCOUNTING INFORMATION PROBLEM 3-3A (Concluded) 2. DYNAMIC SERVICES INC. INCOME STATEMENT FOR THE MONTH ENDED MARCH 31, 2007 Tax preparation revenue $ 3,400* Expenses: Advertising $ 650 Salaries and wages 1,650 Gas, electricity, and water 700 3,000 Net income $ 400 *$2,000 + $1,400 3. DYNAMIC SERVICES INC. BALANCE SHEET MARCH 31, 2007 Assets Current assets: Cash $22,400 Accounts receivable 1,500 Supplies 350 Total current assets $24,250 Property, plant, and equipment: Equipment—computer system 4,000 Total assets $ 28,250 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 350 Long-term debt: Notes payable 7,500 Total liabilities $ 7,850 Capital stock $20,000 Retained earnings 400 Total stockholders’ equity 20,400 Total liabilities and stockholders’ equity $ 28,250 4. Trade accounts often have a 30-day collection or payment period. For example, cash should be received from the accounts receivable and cash paid for the ac- counts payable during the month of April. 3-97
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3-98 Financial Accounting Solutions Manual LO 3 PROBLEM 3-4A TRANSACTIONS RECONSTRUCTED FROM FI- NANCIAL STATEMENTS Sales on credit Collected cash from customers Purchase of equipment, furniture, and land Incurrence of salary and wage expense; $6,000 remains unpaid Received deposits from customers (unearned revenue) Capital stock issued Dividends paid (net income for the first month is more than the ending balance in retained earnings) Borrowed money on a promissory note Incurred rent expense Incurred utility expense ALTERNATE MULTI-CONCEPT PROBLEMS LO 1,2 PROBLEM 3-5A IDENTIFICATION OF EVENTS WITH SOURCE DOCUMENTS a.
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