Financial Accounting
3rd Edition
ISBN: 9780133791129
Author: Jane L. Reimers
Publisher: Pearson Higher Ed
expand_more
expand_more
format_list_bulleted
Question
Chapter 1, Problem 30EB
To determine
Identify and classify each business transactions as an operating, investing or financing activity.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Angel De Jesus, a business graduate student who was working as a mere employee in a company called
Think Computer, decided to become an entrepreneur and put up an internet shop. The following are the
transactions for the start-up transactions for March:
1 Angel started an internet shop called "Playnet.com" by investing her savings of P50,000 and the
proceeds from the sale of her car which amounted to P300,000.
5 Angel hired two workers to assist her in the shop for a monthly salary of P6,000 each worker.
10 Lessor (owner) of the shop required her to pay two months' rent deposit in cash, P10,000
15 She paid cash of P8,000 for furniture bought from Alexis Furniture Store.
18 She bought an aircon unit from Abbe Appliances for P45,000 promising to pay the account within
three months.
20 She purchased supplies and paid cash of P1,500.
25 The shop was ready for the installation of the computer units. Angel purchased 12 units of computer
hardware from Think PC She paid 50% in cash P125,000…
fter researching the different forms of business organization. Lily Koebel decides to operate "Cookie Creations" as a proprietorship.
he then starts the process of getting the business running. In November 2021, the following activities take place.
Nov. 8
8
11
13
14
(a)
16
17
20
25
30
Lily cashes her U.S. Savings Bonds and receives $540, which she deposits in her personal bank account.
She opens a bank account under the name "Cookie Creations" and transfers $520 from her personal account to the new
account.
Lily pays $70 for advertising.
She buys baking supplies, such as flour, sugar, butter, and chocolate chips, for $130 cash. (Hint: Use Supplies account.)
Lily starts to gather some baking equipment to take with her when teaching the cookie classes. She has an excellent top-
of-the-line food processor and mixer that originally cost her $780. Lily decides to start using it only in her new business.
She estimates that the equipment is currently worth $310. She invests the equipment in…
The Pizza and Coffee Company is owned and operated by Patty Patterson who commenced the business eight years ago. The company is now faced with financial challenges and is therefore in need of financial assistance from Ready Cash a local bank. You and your group members are the accounting associates supporting the credit request to Ready Cash and they are requesting a full set of financial statements to ensure that granting the loan would be financially feasible. Yourhead of finance has furnished you with the latest trial balance for The Pizza and Coffee The company, along with other information relevant to the year under review and you are tasked to prepare the documents requested by Ready Cash. Below is the trial balance which was extracted from the books of the business on December 31, 2020, the end of the company’s financial year. you are required to collaborate and analyse the problem at hand then apply the accrual basis of accounting in the preparation of the company’s financial…
Chapter 1 Solutions
Financial Accounting
Ch. 1 - 1. What is the main purpose of a business? 2....Ch. 1 - Prob. 2YTCh. 1 - 1. What are the two sources of financing for a...Ch. 1 - 1. What are revenues and expenses? 2. What are the...Ch. 1 - 1. What are the two parts of shareholders equity?...Ch. 1 - Prob. 6YTCh. 1 - Prob. 7YTCh. 1 - Prob. 1QCh. 1 - Prob. 2QCh. 1 - Prob. 3Q
Ch. 1 - Prob. 4QCh. 1 - What are the advantages of the corporate form of...Ch. 1 - What are the disadvantages of the corporate form...Ch. 1 - Prob. 7QCh. 1 - Prob. 8QCh. 1 - What are the basic financial statements? Describe...Ch. 1 - What makes the income statement different from the...Ch. 1 - Prob. 11QCh. 1 - What type of activities relate to what the firm is...Ch. 1 - Prob. 2MCQCh. 1 - Prob. 3MCQCh. 1 - Prob. 4MCQCh. 1 - Prob. 5MCQCh. 1 - Online Pharmacy Company borrowed 5,000 cash from...Ch. 1 - Prob. 7MCQCh. 1 - During its first year of business, West Company...Ch. 1 - Interest is the cost of a. purchasing inventory....Ch. 1 - Prob. 10MCQCh. 1 - Classify business transactions. (LO 2). For each...Ch. 1 - Identify balance sheet items. (LO 4). Classify the...Ch. 1 - Calculate owners equity. (LO 4). Doughnut Company...Ch. 1 - Prob. 4SEACh. 1 - Prob. 5SEACh. 1 - Calculate owners equity. (LO 4). Pasta Enterprises...Ch. 1 - Super Shop had a retained earnings balance of...Ch. 1 - Prob. 8SEBCh. 1 - Prob. 9SEBCh. 1 - Breck Company shows 80,000 worth of assets on its...Ch. 1 - Prob. 11SEBCh. 1 - For each of the following, calculate the missing...Ch. 1 - Prob. 13SEBCh. 1 - M Company had a retained earnings balance of 4,200...Ch. 1 - Prob. 15EACh. 1 - Analyze business transactions using the accounting...Ch. 1 - Prob. 17EACh. 1 - Prob. 18EACh. 1 - Enter each transaction below into the accounting...Ch. 1 - Prob. 20EACh. 1 - For each of the transactions given, tell whether...Ch. 1 - Prob. 22EACh. 1 - Enter each transaction into the accounting...Ch. 1 - Prob. 24EACh. 1 - Relationship between income statement and balance...Ch. 1 - Bob started a pool cleaning business on the first...Ch. 1 - Prob. 27EACh. 1 - Retained earnings and cash. (LO 4). Checkmate...Ch. 1 - Prob. 29EACh. 1 - Prob. 30EBCh. 1 - Prob. 31EBCh. 1 - Prob. 32EBCh. 1 - Prob. 33EBCh. 1 - Prob. 34EBCh. 1 - Classify business transactions. (LO 2). For each...Ch. 1 - Prob. 36EBCh. 1 - Prob. 37EBCh. 1 - Enter each transaction into the accounting...Ch. 1 - Prob. 39EBCh. 1 - Prob. 40EBCh. 1 - Frank Frock started a consulting business on the...Ch. 1 - Prob. 42EBCh. 1 - Prob. 43EBCh. 1 - Prob. 44EBCh. 1 - Prob. 45PACh. 1 - Prob. 46PACh. 1 - Prob. 47PACh. 1 - Analyze business transactions and the effect on...Ch. 1 - Prob. 49PACh. 1 - Analyze business transactions and prepare the...Ch. 1 - Prob. 51PACh. 1 - Prob. 52PBCh. 1 - Analyze business transactions using the accounting...Ch. 1 - Prob. 54PBCh. 1 - Prob. 55PBCh. 1 - Prob. 56PBCh. 1 - Prob. 57PBCh. 1 - Prob. 58PBCh. 1 - Prob. 1FSACh. 1 - Prob. 2FSACh. 1 - Prob. 3FSACh. 1 - What is the Walt Disney Companys key objective? Go...
Knowledge Booster
Similar questions
- The Pizza and Coffee Company is owned and operated by Patty Patterson who commenced the business eight years ago. The company is now faced with financial challenges and is therefore in need of financial assistance from Ready Cash a local bank. You and your group members are the accounting associates supporting the credit request to Ready Cash and they are requesting a full set of financial statements to ensure that granting the loan would be financially feasible. Your head of finance has furnished you with the latest trial balance for The Pizza and Coffee Company, along with other information relevant to the year under review and you are tasked to prepare the documents requested by Ready Cash. Below is the trial balance which was extracted from the books of the business on December 31, 2020, the end of the company’s financial year. As a group, you are required to collaborate and analyse the problem at hand then apply the accrual basis of accounting in the preparation of the company’s…arrow_forwardThe Pizza and Coffee Company is owned and operated by Patty Patterson who commenced the business eight years ago. The company is now faced with financial challenges and is therefore in need of financial assistance from Ready Cash a local bank. You and your group members are the accounting associates supporting the credit request to Ready Cash and they are requesting a full set of financial statements to ensure that granting the loan would be financially feasible. Your head of finance has furnished you with the latest trial balance for The Pizza and Coffee Company, along with other information relevant to the year under review and you are tasked to prepare the documents requested by Ready Cash. Below is the trial balance which was extracted from the books of the business on December 31, 2020, the end of the company’s financial year. As a group, you are required to collaborate and analyse the problem at hand then apply the accrual basis of accounting in the preparation of the company’s…arrow_forwardThe Pizza and Coffee Company is owned and operated by Patty Patterson who commenced the business eight years ago. The company is now faced with financial challenges and is therefore in need of financial assistance from Ready Cash a local bank. You and your group members are the accounting associates supporting the credit request to Ready Cash and they are requesting a full set of financial statements to ensure that granting the loan would be financially feasible. Your head of finance has furnished you with the latest trial balance for The Pizza and Coffee Company, along with other information relevant to the year under review and you are tasked to prepare the documents requested by Ready Cash. Below is the trial balance which was extracted from the books of the business on December 31, 2020, the end of the company’s financial year. As a group, you are required to collaborate and analyse the problem at hand then apply the accrual basis of accounting in the preparation of the company’s…arrow_forward
- After researching the different forms of business organization, Natalie Koebel decides to operate “Cookie Creations” as a corporation. She then starts the process of getting the business running. In November 2022, the following activities take place. Nov. 8 Natalie cashes her U.S. Savings Bonds and receives $520, which she deposits in her personal bank account. 8 She opens a bank account under the name “Cookie Creations” and transfers $500 from her personal account to the new account in exchange for common stock. 11 Natalie pays $65 to have advertising brochures and posters printed. She plans to distribute these as opportunities arise. (Hint: Use Advertising Expense.) 13 She buys baking supplies, such as flour, sugar, butter, and chocolate chips, for $125 cash. 14 Natalie starts to gather some baking equipment to take with her when teaching the cookie classes. She has an excellent top-of-the-line food processor and mixer…arrow_forwardAfter researching the different forms of business organization, Natalie Koebel decides to operate “Cookie Creations” as a corporation. She then starts the process of getting the business running. In November 2022, the following activities take place. Nov. 8 Natalie cashes her U.S. Savings Bonds and receives $520, which she deposits in her personal bank account. 8 She opens a bank account under the name “Cookie Creations” and transfers $500 from her personal account to the new account in exchange for common stock. 11 Natalie pays $65 to have advertising brochures and posters printed. She plans to distribute these as opportunities arise. (Hint: Use Advertising Expense.) 13 She buys baking supplies, such as flour, sugar, butter, and chocolate chips, for $125 cash. 14 Natalie starts to gather some baking equipment to take with her when teaching the cookie classes. She has an excellent top-of-the-line food processor and mixer…arrow_forwardAfter investigating the different forms of business organization, Natalie Koebel decides to operate her business as a corporation, Cookie Creations Inc., and she begins the process of getting her business running.While at a trade show, Natalie is introduced to Gerry Richards, operations manager of “Biscuits,” a national food retailer. After much discussion, Gerry asks Natalie to consider being Biscuits’ major supplier of oatmeal chocolate chip cookies. He provides Natalie with the most recent copy of the financial statements of Biscuits. He expects that Natalie will need to supply Biscuits’ Watertown warehouse with approximately 1,500 dozen cookies a week. Natalie is to send Biscuits a monthly invoice, and she will be paid approximately 30 days from the date the invoice is received in Biscuits’ Chicago office.Natalie is thrilled with the offer. However, she has recently read in the newspaper that Biscuits has a reputation for selling cookies and donuts with high amounts of sugar and…arrow_forward
- Read the following passage, then answer the question that follow. Scenario Milly decided to start a business. She does not have any previous experience, but she is confident that she can make it in the restaurant business. She wants to start a business with an initial investment of $1million dollars in a business bank account. She plans to offer both dining and take-out meal services and is anxious to give it her all.On Jan 1, 2002, she brought additional items into her business: her personal car, her stove and a refrigerator valued at $500, 000, $100 000 and $80 000 respectively. On January 6, a customer purchased 10 meals that cost $500 each for which she wrote a receipt. These meals were bought via take out service. At the end of the first week her total sales amounted to $180 000 from which $100 000 was dining room sales and $80 000 from take-out sales. She has a few friends that she allows to order- take-out meals on credit and they have agreed to pay…arrow_forwardSeveral years ago, your brother opened Niagara Appliance Repairs. He made a small initial investment and added money from his personal bank account as needed. He withdrew money for living expenses at irregular intervals. As the business grew, he hired an assistant. He is now considering adding more employees, purchasing addi- tional service trucks, and purchasing the building he now rents. To secure funds for the expansion, your brother submitted a loan application to the bank and included the most recent financial statements (shown below) prepared from accounts maintained by a part-time bookkeeper. Indicate the accounts that might need to be adjusted before an accurate set of finan- cial statements can be prepared. c. Why did the loan officer ask your brother whether he used the accrual basis of accounting for revenues and expenses? Why would it have been important to use this method?arrow_forwardAnalyze the case below and answer the questions thereafter. An ABM graduate named Jason decided to start a bakery business in Cateel, Davao Oriental. Their house is in the heart of the Poblacion and so his mother allowed him to use a spare portion of their house for his bakeshop. For his startup capital, he loaned P200,000 from his father. He then proceeded to purchase an oven, a mixer and other related equipment, machines and tools for his baking needs. He also purchased raw materials such as flour, sugar, and all sort of baking supplies. Because it is the only bakeshop operating in town, the sale of bakery products rises steeply. In order for him to keep track of sales and expenses, he applied what he learned in Senior High School about the importance of record keeping. He uses a journal and a ledger for record keeping purposes. As his business continues to grow, he sees the opportunity to borrow bigger capital from the bank. The bank requires a Financial Report showing the health…arrow_forward
- Mr. Omar wanted to start a business of fish farming. He came across a government program run by ‘Ministry Agriculture and fisheries’. The ministry arranged free training for him. Additionally, the ministry arranged an easy loan for him to start the fish farming business. Among the following options, identify the advantage of a small business of Mr. Omar. a. The small business owners lack motivation b. Small business can be started from small investment c. The records of small business cannot be easily managed d. A small business owner has less freedom while running his/her businessarrow_forwardRustic Furniture Co. is owned and operated by Cam Pfeifer. The following is an excerpt from a conversation between Cam Pfeifer and Mitzi Wheeler, the chief accountant for Rustic Furniture Co.: Cam: Mitzi, I've got a question about this recent balance sheet. Mitzi: Sure, what's your question? Cam: Well, as you know, I'm applying for a bank loan to finance our new store in Garden Grove, and I noticed that the accounts payable are listed as $320,000. Mitzi: That's right. Approximately $275,000 of that represents amounts due our suppliers, and the remainder is miscellaneous payables to creditors for utilities, office equipment, supplies, etc. Cam: That's what I thought. But as you know, we normally receive a 2% discount from our suppliers for earlier payment, and we always try to take the discount. Mitzi: That's right. I can't remember the last time we missed a discount. Cam: Well, in that case, it seems to me the accounts payable should be listed minus the 2% discount. Let's list the…arrow_forwardYour Client, Ashley Mason, is an artist who specializes in henna tattoos. Four years ago, she entered into a five-year contract to rent a kiosk inside the local mall to sell henna tattoos to customers. She called the business “Ashley’s Arm Brands” and hired two other local artists to assist in the work. She opened a separate bank account to keep track of the business cash, and she tracked all expenses and income using a detailed spreadsheet. She is not incorporated. In the first year, the business did fairly well, but then revenues and customer interest declined. Another local artist opened a competing henna studio at a nearby location that seemed to get more foot traffic and was able to bring in celebrity artists to complete work. Ashley increased her marketing and advertising, including creating both a webpage and a Facebook page, offered discounts and contests, and created deals with other kiosks to increase business. Ashley works at the mall kiosk almost 40 hours a week. She is…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education