EBK ACCOUNTING PRINCIPLES
13th Edition
ISBN: 9781119411017
Author: Weygandt
Publisher: WILEY
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The following transactions occurred during 2021 for the Beehive Honey Corporation:
Feb.
1
Borrowed $12,000 from a bank and signed a note. Principal and interest at 10% will be paid on January 31, 2022.
Apr.
1
Paid $3,600 to an insurance company for a two-year fire insurance policy.
July
17
Purchased supplies costing $2,800 on account. The company records supplies purchased in an asset account. At the year-end on December 31, 2021, supplies costing $1,250 remained on hand.
Nov.
1
A customer borrowed $6,000 and signed a note requiring the customer to pay principal and 8% interest on April 30, 2022.
Required:1. Record each transaction in general journal form.2. Prepare any necessary adjusting entries at the year-end on December 31, 2021. No adjusting entries were recorded during the year for any item.
The following summarized transactions occurred in December 2020 in Syco Co.
Dec 1
Purchased plant and equipment for $515 in cash.
2
Borrowed $758 from a bank, signing a note payable.
5
Provided $37,522 in service to customers, with $27,250 on account and the rest received in cash.
9
Paid $4,300 cash on accounts payable.
14
Purchased $30,449 inventory on account.
18
Paid salaries, $3,500.
22
Received $37,410 on account paid by customers.
26
Purchased and used fuel of $750 in delivery vehicles during the year (paid for in cash).
31
Incurred $68 in utility usage during the year; paid $55 in cash and owed the rest on account.
Required:
Prepare journal entries for those transactions.
Gojo Company had the following transactions involving current assets and current liabilities
during February 2021.
Feb 3 Collected accounts receivable of $15,000.
7 Purchased equipment for $23,000 cash.
14 Paid accounts payable of S12,000.
18 Declared cash dividends, $4,000. The dividend will be paid next month.
Additional information:
As of 1* February 2020, current assets were $120,000 and current liabilities were $40,000.
Required:
1) Compute the current ratio as of the beginning of the month.
2) Compute the current ratio after evaluating the effect of each transaction (Consider the
effect of each transaction continuously). Did Gojo Company's current ratio improve,
deteriorate, or hold steady after each transaction? Show detailed workings to support your
answer.
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