ACC 557 Week 1 Homework Problems –
Strayer NEW
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Chapter 1
Exercise 1-4
Your answer is correct.
The
following situations involve accounting principles and assumptions.
For
each of the three situations, state if the accounting method used is correct or
incorrect. If correct, identify which principle or assumption supports the
method used. If incorrect, identify which principle or assumption has been
violated.
Accounting
method
Principle/Assumption
1.
Julia Company owns buildings that are worth substantially more than they
originally cost. In an effort to provide more relevant information, Julia
reports the buildings at fair value in its accounting
repor
2.
Dekalb Company includes in its accounting records only transaction data that
can be expressed in terms of money.
Monetary unit assumption
3.
Omar Shariff, president of Omar’s Oasis, records his personal living costs as
expenses of the Oasis
Exercise 1-7
Collins
Computer Timeshare Company entered into the following transactions during May
2014.
Describe
the effect of each transaction on assets, liabilities, and stockholder's
equity.
1.
Purchased computer terminals for $20,000 from Digital Equipment on
account.
2.
Paid $3,000 cash for May rent on storage
space.
3.
Received $15,000 cash from customers for contracts billed in
April.
4.
Provided computer services to Schmidt Construction Company for $2,400 cash.
5.
Paid Central States Power Co. $11,000 cash for energy usage in
May.
6.
Stockholders invested an additional $32,000 in the business.
7.
Paid Digital Equipment for the terminals purchased in (1)
above.
8.
Incurred advertising expense for May of $900 on
account.
Exercise 1-11
Your answer is correct.
Two
items are omitted from each of the following summaries of balance sheet and
income statement data for two corporations for the year 2014, Steven Craig and
Georgia Enterprises.
Determine
the missing amounts.
Steven
Craig
Georgia
Enterprises
Beginning
of
year:
Total
assets
Total
liabilities
Total stockholders’
equity
End of
year:
Total
assets
Total
liabilities
Total stockholders’ equity
Changes
during year in stockholders’
equity:
Additional investment
Dividends
Total
revenues
Total
expenses
Problem 1-2A
On
August 31, the balance sheet of Donahue Veterinary Clinic showed Cash $9,000,
Accounts Receivable $1,700, Supplies $600, Equipment $6,000, Accounts Payable
$3,600, Common Stock $13,000, and Retained Earnings $700. During September, the
following transactions occurred.
1.
Paid $2,900 cash for accounts payable due.
2.
Collected $1,300 of accounts receivable.
3.
Purchased additional office equipment for $2,100, paying $800 in cash and the
balance on account.
4.
Earned revenue of $7,300, of which $2,500 is paid in cash and the balance is
due in October.
5.
Declared and paid a $400 cash dividend
6.
Paid salaries $1,700, rent for September $900, and advertising expense $200.
7.
Incurred utilities expense for month on account $170.
8.
Received $10,000 from Capital Bank on a 6-month note payable.
1)
Prepare a tabular analysis of the September transactions beginning with August
31 balances. (If a transaction causes a decrease in Assets, Liabilities or
Stockholders' Equity, place a negative sign (or parentheses) in front of the
amount entered for the particular Asset, Liability or Equity item that was
reduced. See Illustration 1-8 for example.)
b1)
Prepare an income statement for September.
B2)
Prepare a retained earnings statement for September. (List items that increase
retained earnings first.)
B3)
Prepare a balance sheet at September 30. (List assets in order of liquidity.)
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