Chapter 2 Homework Template (Fixed)

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Student Name:

Student Name: Chan YChan Young Leeoung Lee Class: ACCY 2001_13 Class: ACCY 2001_13

M2-4 Classifying Accounts on a Balance Sheet

The following are accounts of osa!"ere# Com$an%:

CL

CL Correct&Correct&

CA

CA Correct&Correct&

NCA

NCA Correct&Correct&

CA

CA Correct&Correct&

S'

S' Correct&Correct&

NCA

CA

CA Correct&Correct&

CL

CL Correct&Correct&

NCA

NCL NCL Correct&Correct& CA CA Correct&Correct& CA CA Correct&Correct& S' S' Correct&Correct& CA CA Correct&Correct& CL CL Correct&Correct& CL CL Correct&Correct&

(n the s$ace $ro)ided* classif% each as it would +e re$orted on a +alance sheet, -se:

.1/ Accounts "a%a+le

.2/ Accounts ecei)a+le

.3/ uildings

./ Cash

./ Common Stoc

.4/ Land

.5/ 6erchandise (n)entor%

.7/ (n

come Ta

8es "a%a+le

.9/ L

ong!Te

rm (n)estmen

ts

.10/ Notes "a%a+le .due in three %ears/

.11/ Notes ecei)a+le .due in si8 months/

.12/ "re$aid ent

.13/ etained 'arnings

.1/ Su$$lies

.1/ -tilities "a%a+le

.14/ ages "a%a+le

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E2-8 Analyzing the Effects of Transactions in T-Accounts

Required:

;ranger Ser)ice Com$an%* (nc,* was organi#ed +% Ted ;ranger and fi)e other in)estors, The following acti)ities occurred during the %ear:

a, ecei)ed <50*000 cash from the in)estors= each was issued 7*00 shares of ca$ital stoc with a $ar )alue of <0,10 $er share,

+, "urchased e>ui$ment for use in the +usiness at a cost of <17*000= one!fourth was $aid in cash and the com$an% signed a note for the +alance .due in si8 months/,

c, Signed an agreement with a cleaning ser)ice to $a% <120 $er wee for cleaning the cor$orate offices ne8t %ear,

d, ecei)ed an additional contri+ution from in)estors who $ro)ided <3*000 in cash and land )alued at <1*000 in e8change for 1*000 shares of stoc in the com$an%,

e, Lent <2*00 to one of the in)estors who signed a note due in si8 months,

f, Ted ;ranger +orrowed <5*000 for $ersonal use from a local +an* signing a one!%ear note,

1. Create T-accounts for the following accounts Cash! "otes #ecei$a%le! E&ui'(ent! )an*! "otes +aya%le! Co((on Stoc,! an* A**itional +ai*-in Ca'ital. Beginning %alances are . /or each of the 'rece*ing transactions! recor* the effects of the transaction in the a''ro'riate T-accounts. 0nclu*e goo* referencing an* totals for each T-account.

2. sing the %alances in the T-accounts! fill in the following a(ounts for the accounting e&uation

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"ot re&uire*! %ut reco((en*e* A?L@'

#eference Account 6e%it Cre*it

a Cash < 50*000 a Common Stoc < *00 + '>ui$ment < 17*000 + Notes "a%a+le < 13*00 + Cash < *00 d Land < 1*000 d CommonStoc < 100 e Notes ecei)a+le < 2*00

a Additional "aid!in Ca$ital < 4*940 d Additional "aid!in Ca$ital < 15*900

d Cash < 3*000

'8am$le:

a Cash < 100

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#e&uire(ent 1

ef, CAS7 ef, ef, "TES +A9AB)E ef, ef,

eg, < ! < ! eg, a < 50*000 < 2*00 e < 13*00 + d < 3*000 < *00 + < 44*000 < 13*00 Correct& Correct& "TES #ECE0:AB)E eg, < ! e < 2*00 < 2*00 Correct& E;0+ME"T eg, < ! + < 17*000 < 17*000 Correct& )A"6 eg, < ! d < 1*000 < 1*000 Correct&

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CMM" STC< ef, < ! eg, < *00 a < 100 d < *10 Correct& < ! eg, < 4*940 a < 15*900 d < 72*740 Correct& A660T0"A) +A06-0" CA+0TA)

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#e&uire(ent 2

-sing the +alances in the T!accounts* fill in the following amounts for the accounting e>uation: Assets < 101*00 )ia%ilities < 13*00 = Stoc,hol*ers> E&uity < 77*000

Correct& Correct& Correct&

#e&uire(ent 

'8$lain %our res$onse to e)ents .c / and .f /,

The agreemnt c does not inl)o)e e8change of goods or ser)ice, (ts not a trasaction, Bor trasaction f* onwer got a loan from $ersonal +an and not +usiness, (t has no effect on the +usiness,

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en ata "02!0: 6E))! 0"C. Balance Sheet at /e%ruary ! 212 *ollars in (illions5 ASSETS Current Assets Cash < 13*72 Short!term in)estments 944

ecei)a+les and other assets 9*703

(n)entories 1*0

Dther 3*23

Total current assets 2?!448

"ro$ert%* $lant* and e>ui$ment 2*12

Long!term in)estments 3*0

Dther non!current assets 9*5

Totalassets  44!@

)0AB0)0T0ES A"6 STC<7)6E#S> E;0T9 Current )ia%ilities

Accounts $a%a+le < 11*44

Dther short!term o+ligations 10*3

Total current lia%ilities 22!1

Long!term Lia+ilities 13*41

Total lia%ilities @!1

Stoc,hol*ers> e&uity

Common Stoc .<0,01 $ar )alue/ 3

Additional $aid!in ca$ital 12*13

etained 'arnings 27*234

Dther stocholders e>uit% items .31*04/

Total stoc,hol*ers> e&uity 8!?1

Total stoc,hol*ers> e&uity an* lia%ilities  44!@ 212 transactions

a, orrowed from ans due in two %ears, < 0 +, Loaned to affiliates* who signed si8!month note 300

c, "urchased additional in)estments 13*000

.1E long!term the remainder short!term/

d, Cash $aid for $urchase of $ro$ert%* $lant F e>ui$, 75 an loan for $urchase of $ro$ert%* $lant F e>ui$, 1*10 e, (ssued additional 1*000 shares of stoc for cash, 00 f, Sold short!term in)estments costing 11*000

Sold in)estments for cash 11*000

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a, orrowed <0 from +ans due in two %ears,

+, Lent <300 to affiliates* who signed a si8!month note,

e, (ssued 1*000 additional shares of stoc for <00 in cash, f, Sold short!term in)estments costing <11*000 for <11*000 cash,

Required:

Assu(e that the following transactions in (illions5 occurre* *uring the re(ain*er of 212 en*ing on /e%ruary 1! 215

c, "urchased additional in)estments for <13*000 cash= one!fifth were long term and the rest were short term,

d, "urchased $ro$ert%* $lant* and e>ui$ment= $aid <75 in cash and <1*10 with additional long!term +an loans,

g, ell does not actuall% $a% di)idends= it rein)ests its earnings into the com$an% for growth $ur$oses, Assume instead for this $ro+lem that ell declared and $aid <40 in di)idends during 2012,

1, "re$are a Gournal entr% for each transaction, -se the account titles in the ell +alance sheet,

2, Create T!accounts for each +alance sheet account and include the Be+ruar% 3* 2012* +alances, "ost each Gournal entr% to the a$$ro$riate T!accounts,

3, "re$are a +alance sheet from the T!account ending +alances for ell at Be+ruar% 1* 2013* +ased on these transactions,

, Com$ute ells current ratio for 2012 .%ear ending on Be+ruar% 1* 2013/,  hat does this suggest a+out the com$an%H

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#e&uire(ent 1 A?L@S'

a CashA@ < 0 a LoanL@ < 0 + Note ecei)a+le A@ < 300 + CashA! < 300 c Long!term in)estment A@ < 2*400 c Short!term in)estment A@ < 10*00 c CashA! < 13*000

d "ro$et%* $lant* e>ui$ A@ < 2*27

d CashA! < 75

d LoanL@ < 1*10

e CashA@ < 00

e Common Stoc S'@ < 10

e Additional $aid!in ca$ital S'@ < 390

g etained earning S'@ < 40

g CashA! < 40

'8am$le:

a Cash < 100

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#e&uire(ent 2

ef, Cash ef, ef, Accounts 'aya%le ef, ef, eg, < 13*72 < 11*44 eg, a < 0 < 300,00 + e < 00 < 13*000,00 c f < 11*000 < 75,00 d < 40,00 g < 11*045 < 11*44 Short-ter( in$est(ents eg, < 944 < 10*3 eg, c < 10*00 < 11*000,00 f < 344 < 10*3 )ong-ter( lia%ilties eg, < 9*703 < 13*41 eg, + < 300 < 0 a a < 1*10 d < 10*103 < 1*05 0n$entories eg, < 1*0 eg, < 1*0

ther current assets eg, < 3*23 < 3*23 eg, < 2*12 < 2*27 ther short-ter( o%ligations

#ecei$a%les an* other assets

+ro'erty! 'lant! an* e&ui'(ent

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)ong-ter( in$est(ents eg, < 3*0

c < 2*400

< 4*00

ther noncurrent assets eg, < 9*5

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Co((on stoc, ef, < 3 eg, < 10 e <  < 12*13 eg, < 390 e < 12*3 #etaine* earnings < 27*234 eg, < 40 < 27*154 < 31*04 < .31*04/ A**itional 'ai*-in ca'ital ther stoc,hol*ers> e&uity

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Student Name: Class: +ro%le( 2-@ #e&uire(ent  6E))! 0"C. Balance Sheet at /e%ruary 1! 21 in (illions5 Assets Current Assets Cash < 11*045 Short!term in)estments 344

ecei)a+les and other assets 10*103

(n)entories 1*0

Dther current assets 3*23

Total current assets 2!

Correct&

"ro$ert%* $lant and e>ui$ment *09

Long!term in)estments 4*00

Dther non!current assets 9*5

Total assets 4!

Correct&

)ia%ilities an* Stoc,hol*ers> E&uity Current )ia%ilities

Accounts $a%a+le 11*44

Dther short!term o+ligations 10*3

Total current lia+ilities 22!1

Long!term Lia+ilities 1*05

Total lia+ilities 35*054

Correct&

Stoc,hol*ers> E&uity

Commonstoc 

Additional $aid!in ca$ital 12*3

etained earnings 27*154

Dther stocholders e>uit% items .31*04/

Total stocholders e>uit% 9*25

Total lia%ilities an* stoc,hol*ers> e&uity 4!

Correct&

#e&uire(ent 4

Current atio 1,20

Correct&