Question Details

(solution) Question 1 Mansion opened a public relations firm called Solid


The questions are listed on the attachment below 

Question 1

Mansion opened a public relations firm called Solid Gold on August 1, 2016. The following amounts summarize her business on August 31, 2016:

During September 2016, the business completed the following transactions: Analyze the effects of the transactions on the accounting equation of Solid Gold.


Question 1

 

Mansion opened a public relations firm called Solid Gold on August 1, 2016. The following amounts

 

summarize her business on August 31, 2016:

 

During September 2016, the business completed the following transactions: Analyze the effects of the

 

transactions on the accounting equation of Solid Gold.

 

a Mansion contributed $8,000 cash in exchange for capital.??

 

b. Performed service for a client and received cash of $1,300.

 

c. Paid off the beginning balance of accounts payable.

 

d. Purchased office supplies from OfficeMax on account, $400.

 

e. Collected cash from a customer on account, $2,200.

 

f. Missy withdrew $1,800.

 

g. Consulted for a new band and billed the client for services rendered, $6,500.

 

h. Recorded the following business expenses for the month:

 

1. Paid office rent: $1,400.

 

2. Paid advertising: $350. Question 1

 

Analyze the events chronologically, one transaction at a time. Beginning with transaction a., calculate the

 

balance in each account after analyzing the effect of the transaction on the accounting equation.

 

(Complete only the necessary answer boxes for your transaction lines. [Do not enter any zeros for your

 

transaction lines.] Carry down all balances to the "Bal." line, including zero balance accounts, entering

 

a "0" for any zero balances. Enter a decrease in an account with a minus sign or parentheses.

 

Abbreviations used: A/P = Accounts Payable; A/R = Accounts Receivable; Adv. = Advertising; Cap. =

 

Mansion, Capital; Exp. = Expense; Liab = Liabilities; Rev. = Revenue; Sup. = Supplies; Withdr. =

 

Mansion, Withdrawals.) ASSETS

 

= LIAB. +

 

EQUITY

 

Cash + A/R + Office + Land = A/P + Cap. - Withdr. + Service - Rent - Adv.

 

Sup.

 

Rev.

 

Exp.

 

Exp.

 

Bal. 2,400

 

2,600

 

0 15,000 = 3,000 14,400

 

0

 

2,600

 

0

 

0

 

a. + + + = + - + - - Bal. + + + = + - + - - Question 2

 

The account balances of Wilford Towing Service at June 30, 2016, follow: (Click the icon to view the account balances.) Equipment $17,500 Service Revenue $13,000 Office Supplies 1,300 Accounts Receivable 8,200 Notes Payable 6,900 Accounts Payable 6,000 Rent Expense 800 Wilford, Capital, June 1, 2016 7,700 Cash 1,900 Salaries Expense 1,900 Wilford, Withdrawals 2,000 Requirements

 

1. Prepare the income statement for Wilford Towing Service for the month ending June 30, 2016.

 

2. What does the income statement report?

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

0

 

Net Income

 

Question 3

 

Amazing Arrangements has just completed operations for the year ended December 31, 2016. This is the

 

third year of operations for the company. The following data have been assembled for the business:

 

(Click the icon to view the assembled data.)

 

Insurance Expense $2,500 Salaries Expense $39,000 Service Revenue 92,000 Accounts Payable 5,800 Utilities Expense 1,200 Office Supplies 2,100 Rent Expense 10,000 Rose, Withdrawals 22,100 Rose, Capital, Jan. 1, 2016 9,500 Accounts Receivable 4,000 Cash 5,000 Equipment 21,400 (Click the icon to view the income statement.)

 

Amazing Arrangements

 

Income

 

Statement

 

Year Ended December 31, 2016

 

Revenues:

 

Service Revenue $92,000 Expenses:

 

Salaries Expense

 

Rent Expense

 

Insurance

 

Expense

 

Utilities Expense $39,000

 

10,000

 

2,500

 

1,200

 

Total Expenses Net Income 52,700

 

$39,300 Prepare the statement of owner's equity of Amazing Arrangements for the year ended December 31,

 

2016.

 

Enter any increases in capital prior to the subtotal and any decreases to capital below the subtotal.

 

Assume the owner made no additional contributions during the year. (Complete all answer boxes. For

 

entries with a $0 balance, make sure to enter "0" in the appropriate column. Use a minus sign or

 

parentheses to show a decrease in capital.) Rose, Capital, January 1, 2016 Rose, Capital, December 31, 2016 Question 4

 

Clifford opened a public relations firm called Dance Fever on August 1, 2016. The following amounts

 

summarize her business on August 31, 2016:

 

(Click the icon to view the amounts.) During September 2016, the business completed the following transactions:

 

(Click the icon to view the transactions.)

 

a Meg Clifford contributed $13,000 cash in exchange for capital.??

 

b. Performed service for a client and received cash of $1,200.

 

c. Paid off the beginning balance of accounts payable.

 

d. Purchased office supplies from OfficeMax on account, $1,000.

 

e. Collected cash from a customer on account, $1,500.

 

f. Meg withdrew $1,900.

 

g. Consulted for a new band and billed the client for services rendered, $6,000.

 

h. Recorded the following business expenses for the month:

 

1. Paid office rent: $ 1 comma 400$1,400.

 

2. Paid advertising: $ 350$350.

 

Analyze the effects of the transactions on the accounting equation of Dance Fever.

 

Analyze the events chronologically, one transaction at a time. Beginning with transaction a., calculate the

 

balance in each account after analyzing the effect of the transaction on the accounting equation.

 

(Complete only the necessary answer boxes for your transaction lines. [Do not enter any zeros for your

 

transaction lines.] Carry down all balances to the "Bal." line, including zero balance accounts, entering

 

a "0" for any zero balances. Enter a decrease in an account with a minus sign or parentheses.

 

Abbreviations used: A/P = Accounts Payable; A/R = Accounts Receivable; Adv. = Advertising; Cap. =

 

Clifford, Capital; Exp. = Expense; Liab = Liabilities; Rev. = Revenue; Sup. = Supplies; Withdr. = Clifford,

 

Withdrawals.) ASSETS

 

= LIAB. +

 

EQUITY

 

Cash + A/R + Office + Land = A/P + Cap. - Withdr. + Service - Rent - Adv.

 

Sup.

 

Rev.

 

Exp.

 

Exp.

 

Bal. 2,100

 

2,500

 

0

 

11,000 = 6,000

 

7,100

 

0

 

2,500

 

0

 

0

 

a.

 

+

 

+

 

+

 

=

 

+

 

+

 

Bal.

 

+

 

+

 

+

 

=

 

+

 

+

 

- Question 5

 

Presented here are the accounts of Pembroke Pembroke Bookkeeping Company for the year ended

 

December 31, 2016.

 

(Click the icon to view the accounts.)

 

Land

 

Notes Payable

 

Property Tax Expense

 

Wayne, Withdrawals

 

Rent Expense

 

Salaries Expense

 

Salaries Payable

 

Service Revenue

 

Office Supplies

 

Wayne, Capital, 12/31/15 $6,000 Owner contribution, 2016

 

35,000 Accounts Payable

 

3,200 Accounts Receivable

 

36,000 Advertising Expense

 

9,000 Building

 

62,000 Cash

 

1,200 Equipment

 

175,000 Insurance Expense

 

10,000 Interest Expense

 

60,000 $28,000

 

13,000

 

1,300

 

10,000

 

140,400

 

2,800

 

22,000

 

2,700

 

6,800 Requirements

 

1. Prepare Pembroke Bookkeeping Company's Pembroke income statement.

 

2. Prepare the statement of owner's equity.

 

3. Prepare the balance sheet.

 

Requirement 1. Prepare Pembroke Bookkeeping Company's income statement. Net Income

 

Choose from any list or enter any number in the input fields and then click Check Answer. Question 6

 

During 2016, Sweet Breeze Spa reported revenue of $60,000. Total expenses for the year were $40,000.

 

Sweet Breeze Spa ended the year with total assets of $40,000, and it owed debts totaling $10,000. At

 

year-end 2015, the business reported total assets of $20,000 and total liabilities of $10,000.

 

Requirements

 

1. Compute Sweet Breeze Sweet Breeze Spa's net income for 20162016.

 

2. Did Sweet Breeze Sweet Breeze Spa's owner's equity increase or decrease during 2016? By how much?

 

Requirement 1. Compute

 

Sweet Breeze Sweet Breeze

 

Spa's net income for 2016.

 

Begin by identifying the formula to calculate net income and then enter the amounts to solve for net

 

income.

 

? = - = Net Income Question 7

 

Consider the following accounts:

 

(Click the icon to view the accounts.)

 

Identify the financial statement (or statements) that each account would appear on. Use I for Income

 

Statement, OE for Statement of Owner's Equity, and B for Balance Sheet. (If a box is not used in the table

 

leave the box empty; do not select a label.)

 

a.

 

b.

 

c.

 

d.

 

e.

 

f.

 

g. Accounts Payable

 

Cash

 

Owner, Capital

 

Accounts

 

Receivable

 

Rent Expense

 

Service Revenue

 

Office Supplies 0

 

0

 

0

 

0 0

 

0

 

0

 

0 0

 

0

 

0 0

 

0

 

0 h.

 

i.

 

j. Owner, Withdrawals

 

Land

 

Salaries Expense 0

 

0

 

0 0

 

0

 

0 Question 8

 

Advanced Water Services had net income for the month of October of $29,260. Assets as of the

 

beginning and end of the month totaled $374,000, and $462,000, respectively. Calculate Advanced

 

Water Services' return on assets (ROA) for the month of October. /

 

/ =

 

= ROA

 

% Question 9

 

Estella Osage publishes an online travel magazine. In need of cash, the business applies for a loan with

 

National Bank. The bank requires borrowers to submit financial statements. With little knowledge

 

of accounting, Estella Osage, theowner, does not know how to proceed.

 

Requirements

 

1. What are the four financial statements that the business will need toprepare?

 

2. Is there a specific order in which the financial statements must be prepared?

 

3. Explain how to prepare each statement.

 

Requirements 1, 2, and 3. What are the four financial statements that the business will need to prepare?

 

Is there a specific order in which the financial statements must be prepared? Explain how to prepare each

 

statement.

 

In the first column, select the four financial statements that the business will need to prepare. In the

 

second column, select the number corresponding with the order the financial statements must be

 

prepared. If there is no specific order, select "n/a" for each statement. In the third column, select the letter

 

grouping that corresponds with the proper explanations for how to prepare each statement.

 

LOADING...

 

(Click the icon to view the explanations for how to prepare each statement.)

 

a. Each asset account is listed separately and then totaled. Cash is always listed

 

first.

 

b. Each dollar amount is calculated by evaluating the cash column on the

 

transaction detail.

 

c. Each expense account is listed separately from largest to smallest and then

 

subtotaled if necessary.

 

d. Financing activities include cash contributions by the owner and owner

 

withdrawals of cash.

 

e. Investing activities include the purchase and sale of land and equipment.

 

f. Liabilities are listed separately and then totaled. Liabilities that are to be paid

 

first are listed first.

 

g. Net income is calculated as total revenues minus total expenses.

 

h. Operating activities involve cash receipts for services provided and cash payments for expenses paid.

 

i. The beginning capital is listed first and will always be the ending capital from

 

the previous time period.

 

j. The ending cash balance must match the cash balance on the balance sheet.

 

k. The header includes the name of the business, the title of the statement, and

 

the date, listed as a period of time.??

 

l. The header includes the name of the business, the title of the statement, and

 

the date, listed as a specific date.

 

m. The owner's contribution and net income are added to the beginning capital.

 

n. The owner's equity is taken directly from the statement of owner's equity.

 

o. The owner's withdrawals are subtracted from capital. If there had been a net

 

loss, this would also be subtracted.

 

p. The revenue accounts are always listed first and then subtotaled if necessary.

 

q. This statement must always balance. Assets = Liabilities + Equity 1. Financial statement 2. Order 3. How to prepare Question 10

 

Decorating Arrangements has just completed operations for the year ended December 31, 20162016.

 

This is the third year of operations for the company. The following data have been assembled for the

 

business:

 

(Click the icon to view the assembled data.)

 

Insurance Expense

 

Service Revenue

 

Utilities Expense

 

Rent Expense $2,000

 

80,000

 

500

 

11,000 $37,000

 

4,300

 

1,500

 

4,500 13,300 Salaries Expense

 

Accounts Payable

 

Office Supplies

 

Richards,

 

Withdrawals

 

Accounts Receivable Richards, Capital, Jan. 1,

 

2016

 

Cash 7,000 Equipment 26,600 (Click the icon to view the income statement.) 7,500 Decorating Arrangements Income Statement Year Ended December 31, 2016

 

Revenues: Service Revenue $80,000

 

Expenses: Salaries Expense

 

$37,000 Rent Expense

 

11,000 Insurance Expense

 

2,000 Utilities Expense

 

500 Total Expenses

 

50,500

 

Net Income $29,500 (Click on the icon to view the statement of owner's equity.) Decorating Arrangements Statement of Owner's Equity Year Ended December 31, 2016

 

Richards, Capital, January 1, 2016

 

$13,300 Owner contribution

 

0 Net income for the year

 

29,500 $42,800 Owner withdrawals

 

-4,500 Richards, Capital, December 31, 2016

 

$38,300 Prepare the balance sheet of Decorating Arrangements as of December 31, 20162016. (If a box is not

 

used in the table leave the box empty; do not select a label or enter a zero.) 0 0 0 Assets Liabilities

 

0 0 0 0 0 Owner's Equity

 

0 0 0 0 Question 11

 

Appliance Service had net income for the year of $28,000. In addition, the balance sheet reports the

 

following balances:

 

(Click the icon to view the balances.) Jan. 1, 2016

 

Dec. 31, 2016

 

Notes Payable

 

$32,000

 

$70,000 Cash

 

36,000

 

253,600 Office Furniture

 

28,000

 

36,000 Building

 

175,000

 

175,000 Accounts Payable

 

12,500

 

9,000 Total Owner's Equity

 

217,500

 

459,000 Accounts Receivable

 

2,000

 

16,800 Equipment

 

16,000

 

55,000 Office Supplies

 

5,000

 

1,600 Calculate the return on assets (ROA) for Alexander Appliance Service for the year ending December 31,

 

2016. 0 /

 

/ 0 =

 

= ROA

 

%

 


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