This Website Has Been Moved to a New Link


Loading

The following transactions of Emergency Pharmacies occurred during

Price: $3.99


P11-23A Journalizing liability transactions and reporting them on the balance
sheet [30–40 min]

The following transactions of Emergency Pharmacies occurred during 2014 and 2015:

2014
Mar 1 Borrowed $360,000 from Lessburg Bank. The six-year, 10% note requires payments due annually, on March 1. Each payment consists of $60,000 principal plus one year’s interest.

Mar 1 Reclassified current portion of Lessburg Bank note.

Dec 1 Mortgaged the warehouse for $200,000 cash with Saputo Bank. The mortgage requires monthly payments of $4,000.
The interest rate on the note is 9% and accrues monthly. The first payment
is due on January 1, 2015.

Dec 31 Reclassified current portion of the Saputo Bank note for the principal due in 2015 of $31,505. Recorded interest accrued on the Saputo Bank note.

and so on ...

Requirements
1. Journalize the transactions in Emergency Pharmacies’ general journal. Round all
answers to the nearest dollar. Explanations are not required.
2. Assume Emergency Pharmacies only adjusts the current portion of long-term
notes on the last day of each year, December 31. Prepare the liabilities section of
the balance sheet for Emergency Pharmacies on March 1, 2015.

Park Company reported the following March purchases and

Price: $3.99


Park Company reported the following March purchases and sales data for its only product.


Park uses a perpetual inventory system. Determine the cost assigned to ending inventory and to cost of goods sold using (a) specific identification, (b) weighted average, (c) FIFO, and (d) LIFO. (Round per unit costs to three decimals, but inventory balances to the dollar.) For specific identification, ending inventory consists of 225 units, where 90 are from the March 30 purchase, 80 are from the March 20 purchase, and 55 are from beginning inventory.

The following transactions occurred during February 2012 for Soul Art Gift Shop

Price: $2.99


E5-17 Journalizing purchase and sales transactions—perpetual system
[15–20 min]

The following transactions occurred during February 2012, for Soul Art Gift Shop:

Feb 3 Purchased $2,700 of inventory on account under terms of 4/10, n/eom (end of month) and FOB shipping point.

7 Returned $400 of defective merchandise purchased on February 3.

9 Paid freight bill of $110 on February 3 purchase.

10 Sold inventory on account for $4,350. Payment terms were 2/15, n/30. These goods cost the company $2,300.

12 Paid amount owed on credit purchase of February 3, less the return and the discount.

16 Granted a sales allowance of $500 on the February 10 sale.

23 Received cash from February 10 customer in full settlement of her debt, less the allowance and the discount.

Requirement

1. Journalize the February transactions for Soul Art Gift Shop. No explanations are required.

Link Back to Chapters 2 and 3

Price: $1.99


S4-2 Explaining worksheet items [10-15 min]

Link Back to Chapters 2 and 3 (Definitions of Accounts). Consider the following list of accounts:

Requirement
a. Accounts receivable
b. Supplies
c. Prepaid rent
d. Furniture
e. Accumulated depreciation— furniture
f. Accounts payable
g. Unearned service revenue h. Service revenue
i. Rent expense

1. Explain what a normal balance in each account means. For example, if the account is “Cash,” the explanation would be “the balance of cash on a specific date.”

Link Back to Chapter 3 (Adjusting Entries). Consider the following adjusting entries:

Price: $1.99


S4-1 Explaining worksheet items [10 min]
Link Back to Chapter 3 (Adjusting Entries). Consider the following adjusting entries:

Journal Entry
Date Accounts and Explanations

Rent expense 900
Prepaid rent 900
Unearned service revenue 350
Service revenue 350
Supplies expense 200
Supplies 200
Salary expense 850
salary payable 850

Requirement

1. State one reason why each of the previous adjusting entries were made.
Example: The explanation for journal entry a could be some of the Prepaid rent has expired. Another correct explanation would be the asset account Prepaid rent was overstated. A third correct explanation would be that Rent expense incurred was understated.

The common stock of Warner Inc

Price: $1.99


E15-13 (Stock Split and Stock Dividend) The common stock of Warner Inc. is currently selling at $110 per share. The directors wish to reduce the share price and increase share volume prior to a new issue. The per share par value is $10; book value is $70 per share. Five million shares are issued and outstanding.

Instructions
Prepare the necessary journal entries assuming the following.
(a) The board votes a 2-for-1 stock split.
(b) The board votes a 100% stock dividend.

Compute Famous Cut’s total assets at December 31, 2012

Price: $1.99


S3-12 6 Preparing a balance sheet [5 min]

Refer to the data in Short Exercise 3-10.

Requirement

1. Compute Famous Cut’s total assets at December 31, 2012.

data from S3-10

FAMOUS CUT HAIR STYLISTS 
Preparation of Adjusted Trial Balance 
December 31, 2012
Trial Balance
Adjustments
Adjusted Trial Balance
Account
Debit
Credit
Debit
Credit
Debit
Credit
Cash
$ 800
Supplies
900
Equipment
19,100
Accumulated depreciation
$ 1,000
Accounts payable
200
Interest payable
Note payable
2,500
Fabio, capital
7,400
Service revenue
14,800
Rent expense
4,500
Supplies expense
Depreciation expense
Interest expense
600
Total
$25,900
$25,900

S3-11 Refer to the data in Short Exercise 3-10.

Price: $1.99


S3-11 Refer to the data in Short Exercise 3-10.

Requirement

1. Compute Famous Cut’s net income for the year ended December 31, 2012.

data from S3-10

FAMOUS CUT HAIR STYLISTS 
Preparation of Adjusted Trial Balance 
December 31, 2012
Trial Balance
Adjustments
Adjusted Trial Balance
Account
Debit
Credit
Debit
Credit
Debit
Credit
Cash
$ 800
Supplies
900
Equipment
19,100
Accumulated depreciation
$ 1,000
Accounts payable
200
Interest payable
Note payable
2,500
Fabio, capital
7,400
Service revenue
14,800
Rent expense
4,500
Supplies expense
Depreciation expense
Interest expense
600
Total
$25,900
$25,900