Cornerstones of Financial Accounting
4th Edition
ISBN: 9781337690881
Author: Jay Rich, Jeff Jones
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 2, Problem 69.1C
To determine
Journal Entries:
Journal entries are medium of recording business transactions. A business enterprise must record all the business transaction to evaluate net income or loss and analyze the financial performance of a company during a specified accounting period.
Journalize transactions which occurred during the month of January.
Expert Solution & Answer
Answer to Problem 69.1C
Date | Accounts and Explanation | Debit | Credit |
Jan. | |||
1 | Cash | $16,000 | |
Common Stock | $16,000 | ||
1 | Cash | 25,000 | |
Notes Payable | 25,000 | ||
1 | Legal Expense | 1,200 | |
Cash | 1,200 | ||
1 | Equipment | 7,000 | |
Cash | 7,000 | ||
1 | Rent Expense | 800 | |
Cash | 800 | ||
3 | Prepaid Insurance | 3,600 | |
Cash | 3,600 | ||
3 | Supplies | 2,500 | |
Accounts Payable | 2,500 | ||
5 | No | ||
8 | Prepaid Rent | 10,000 | |
Cash | 10,000 | ||
12 | Advertising Expense | 4,500 | |
Cash | 4,500 | ||
18 | Accounts Payable | 1,000 | |
Cash | 1,000 | ||
25 | Cash | 400 | |
Accounts Receivable | 600 | ||
Sales Revenue | 1,000 | ||
25 | Artist Fee Expense | 800 | |
Cash | 800 | ||
28 | Cash | 3,800 | |
Unearned Sales Revenue | 3,800 | ||
30 | Cash | 200 | |
Accounts Receivable | 200 | ||
30 | Salaries Expense | 2,400 | |
Cash | 2,400 | ||
Explanation of Solution
Date | Assets | Liabilities | Equity |
Jan. | |||
1 | Cash (Increase) | Common Stock (Increase) | |
1 | Cash (Increase) | Notes Payable (Increase) | |
1 | Cash (Decrease) | Legal Expense (Decrease) | |
1 | Equipment (Increase) | ||
Cash (Decrease) | |||
1 | Cash (Decrease) | Rent Expense (Decrease) | |
3 | Prepaid Insurance (Increase) | ||
Cash (Decrease) | |||
3 | Supplies (Increase) | Accounts Payable (Increase) | |
8 | Prepaid Rent (Increase) | ||
Cash (Decrease) | |||
12 | Cash (Decrease) | Advertising Expense (Decrease) | |
18 | Cash (Decrease) | Accounts Payable (Decrease) | |
25 | Cash (Increase) | Sales Revenue (Increase) | |
Accounts Receivable (Increase) | |||
25 | Cash (Decrease) | Artist Fee Expense (Decrease) | |
28 | Cash (Increase) | Unearned Sales Revenue (Increase) | |
30 | Cash (Increase) | ||
Accounts Receivable (Decrease) | |||
30 | Cash (Decrease) | Salaries Expense (Decrease) | |
Want to see more full solutions like this?
Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
Victoria, Wilda and Xenia are partners in a consultancy firm which commenced its operation on July 1, 2018. Victoria is the managing partner. As per agreement for sharing profits, the managing partner will receive a salary of P12,000 per month and the remaining profit will be shared by the partners equally. On December 31, 2018, the firm determined that its income was P 300,000. How much will Wilda receive as her share in the profit?
A. P 76,000
B. P 96,000
C. P 52,000
D. P 84,000
Mrs. Shine was registered in Jamaica as a sole trader in 2015. To grow her practice Mrs. Shine decided to enter into a partnership agreement with Mr. Rain, thus the status of the business was changed in 2021. In 2022, the partnership income statement for Shine & Rain was as follows: Income Statement for the year ended 31 December 2022 $ $ Revenue 11,600,000 Expenses Salaries & Wages 7,600,000 Employer NIS Contribution 1,400,000 Rent and Rates 2.400,000 Interest 500,000 Maintenance 120,000 Depreciation 550,000 Loss on Disposal of Vehicle 80,000 Telephone 235,000 Electricity 255,000 General Expenses 700,000 Donations 85,000 Provision for Bad Debts 80,000 Fines and Penalties 115,000 Drawings 105,000 14,225,000 Net Loss 2,625,000 Notes to the Income Statement 1. $55,000 of the drawings relate to Mrs. Shine and $50,000 to Mr. Rain 2. Gross Salary for Mrs. Shine was $250,000 per month, and $200,000 for Mr. Rain. Both partners worked in the business during the year. 3. The annual…
Mrs. Shine was registered in Jamaica as a sole trader in 2015. To grow her practice Mrs. Shine decided to enter into a partnership agreement with Mr. Rain, thus the status of the business was changed in 2021.
In 2022, the partnership income statement for Shine & Rain was as follows:
Income Statement for the year ended 31 December 2022
$
$
Revenue
11,600,000
Expenses
Salaries & Wages
7,600,000
Employer NIS Contribution
1,400,000
Rent and Rates
2.400,000
Interest
500,000
Maintenance
120,000
Depreciation
550,000
Loss on Disposal of Vehicle
80,000
Telephone
235,000
Electricity
255,000
General Expenses
700,000
Donations
85,000
Provision for Bad Debts
80,000
Fines and Penalties
115,000
Drawings Net Loss 2,625,000
105,000
14,225,000
Notes to the Income Statement
$55,000 of the drawings…
Chapter 2 Solutions
Cornerstones of Financial Accounting
Ch. 2 - What is the conceptual framework of accounting?Ch. 2 - Prob. 2DQCh. 2 - Prob. 3DQCh. 2 - Prob. 4DQCh. 2 - Describe the constraint on providing useful...Ch. 2 - Prob. 6DQCh. 2 - Prob. 7DQCh. 2 - Prob. 8DQCh. 2 - Of all the events that occur each day, how would...Ch. 2 - Prob. 10DQ
Ch. 2 - Prob. 11DQCh. 2 - In analyzing a transaction, can a transaction only...Ch. 2 - How do revenues and expenses affect the accounting...Ch. 2 - Prob. 14DQCh. 2 - Prob. 15DQCh. 2 - The words debit and credit are used in two ways in...Ch. 2 - Prob. 17DQCh. 2 - Prob. 18DQCh. 2 - Prob. 19DQCh. 2 - Prob. 20DQCh. 2 - Prob. 21DQCh. 2 - Prob. 22DQCh. 2 - Prob. 1MCQCh. 2 - Prob. 2MCQCh. 2 - Prob. 3MCQCh. 2 - Prob. 4MCQCh. 2 - Prob. 5MCQCh. 2 - Which principle requires that expenses be recorded...Ch. 2 - Taylor Company recently purchased a piece of...Ch. 2 - Prob. 8MCQCh. 2 - The effects of paying salaries for the current...Ch. 2 - Which of the following statements is false? The...Ch. 2 - Which of the following statements are true? Debits...Ch. 2 - Debits will: increase assets. expenses, and...Ch. 2 - Which of the following statements are true? A...Ch. 2 - Posting: involves transferring the information in...Ch. 2 - A trial balance: lists only revenue and expense...Ch. 2 - CORNERSTONE 2.1 Cornerstone Exercise 2-16...Ch. 2 - Prob. 17CECh. 2 - CORNERSTONE 2.1 Four statements are given below....Ch. 2 - Prob. 19CECh. 2 - Cornerstone Exercise 2-20 Transaction Analysis...Ch. 2 - Cornerstone Exercise 2-21 Transaction Analysis...Ch. 2 - Cornerstone Exercise 2-22 Transaction Analysis The...Ch. 2 - Cornerstone Exercise 2-23 Debit and Credit...Ch. 2 - Cornerstone Exercise 2-24 Journalize Transactions...Ch. 2 - Cornerstone Exercise 2-25 Journalize Transactions...Ch. 2 - Cornerstone Exercise 2-26 Preparing a Trial...Ch. 2 - Prob. 27BECh. 2 - Brief Exercise 2-28 Assumptions and Principles...Ch. 2 - Brief Exercise 2-2? Events and Transactions...Ch. 2 - Brief Exercise 2-30 Transaction Analysis Galle...Ch. 2 - Brief Exercise 2-31 Debit and Credit Procedures...Ch. 2 - Brief Exercise 2-32 Journalize Transactions Galle...Ch. 2 - Brief Exercise 2-33 Posting Journal Entries Listed...Ch. 2 - Brief Exercise 2-34 Preparing a Trial Balance The...Ch. 2 - Prob. 35ECh. 2 - Prob. 36ECh. 2 - Exercise 2-37 Events and Transactions Several...Ch. 2 - Exercise 2-38 Events and Transactions The...Ch. 2 - Exercise 2-39 Transaction Analysis OBJECTIVE e The...Ch. 2 - Exercise 2-40 Transaction Analysis Amanda Webb...Ch. 2 - Exercise 2-41 Transaction Analysis and Business...Ch. 2 - Exercise 2-42 Inferring Transactions from Balance...Ch. 2 - Exercise 2-43 Transaction Analysis Goal Systems, a...Ch. 2 - Exercise 2-44 Transaction Analysis OBJECTIVE 9...Ch. 2 - Prob. 45ECh. 2 - Exercise 2-46 Normal Balances and Financial...Ch. 2 - OBJECTIVE 9 Exercise 2-47 Debit and Credit Effects...Ch. 2 - Prob. 48ECh. 2 - Exercise 2-49 Journalizing Transactions Kauai...Ch. 2 - Exercise 2-50 Journalizing Transactions Remington...Ch. 2 - Exercise 2-51 Transaction Analysis and Journal...Ch. 2 - Exercise 2-52 Accounting Cycle Rosenthal...Ch. 2 - Exercise 2-53 Preparing a Trial Balance...Ch. 2 - Exercise 2-54 Effect of Errors on a Trial Balance...Ch. 2 - Problem 2-55A Events and Transactions The...Ch. 2 - Problem 2-56A Analyzing Transactions Luis Madero,...Ch. 2 - Problem 2-57A Inferring Transactions from...Ch. 2 - Prob. 58APSACh. 2 - Problem 2-59A Journalizing Transactions Monroe...Ch. 2 - Problem 2-60A Journalizing and Posting...Ch. 2 - Problem 2-61A The Accounting Cycle Karleens...Ch. 2 - Problem 2-62B Comprehensive Problem Mulberry...Ch. 2 - Prob. 55BPSBCh. 2 - Prob. 56BPSBCh. 2 - Prob. 57BPSBCh. 2 - Problem 2-58B Debit and Credit Procedures A list...Ch. 2 - Problem 2-593 Journalizing Transactions Monilast...Ch. 2 - Problem 2-603 Journalizing and Posting...Ch. 2 - Problem 2-6B The Accounting Cycle Sweetwater...Ch. 2 - Problem 2-62B Comprehensive Problem Mulberry...Ch. 2 - Prob. 63.1CCh. 2 - Prob. 63.2CCh. 2 - Prob. 63.3CCh. 2 - Prob. 64.1CCh. 2 - Prob. 64.2CCh. 2 - Case 2-64 Analysis of the Effects of Current Asset...Ch. 2 - Prob. 64.4CCh. 2 - Prob. 65.1CCh. 2 - Prob. 65.2CCh. 2 - Prob. 66.1CCh. 2 - Prob. 66.2CCh. 2 - Prob. 66.3CCh. 2 - Case 2-67 Comparative Analysis: Under Armour,...Ch. 2 - Prob. 67.2CCh. 2 - Case 2-67 Comparative Analysis: Under Armour,...Ch. 2 - Case 2-68 Accounting for Partially Completed...Ch. 2 - Prob. 68.2CCh. 2 - Prob. 69.1CCh. 2 - Case 2-69 CONTINUING PROBLEM: FRONT ROW...Ch. 2 - Case 2-69 CONTINUING PROBLEM: FRONT ROW...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Mrs. Shine was registered in Jamaica as a sole trader in 2015. To grow her practice Mrs. Shine decided to enter into a partnership agreement with Mr. Rain, thus the status of the business was changed in 2021. In 2022, the partnership income statement for Shine & Rain was as follows: Income Statement for the year ended 31 December 2022 $ $ Revenue 11,600,000 Expenses Salaries & Wages 7,600,000 Employer NIS Contribution 1,400,000 Rent and Rates 2.400,000 Interest 500,000 Maintenance 120,000 Depreciation 550,000 Loss on Disposal of Vehicle 80,000 Telephone 235,000 Electricity 255,000 General Expenses 700,000 Donations 85,000 Provision for Bad Debts 80,000 Fines and Penalties 115,000 Drawings 105,000 14,225,000 Net Loss 2,625,000 Notes to the Income Statement 1. $55,000 of the drawings relate to Mrs. Shine and $50,000 to Mr. Rain 2. Gross Salary for Mrs. Shine was $250,000 per month, and $200,000 for Mr. Rain. Both partners worked in the business during the year. 3. The annual…arrow_forwardA Sole Proprietor and an Individual with No Business Form a Partnership On Apr. 8, 2020, Tolentino who has her own retail business and Tan, decided to form a partnership wherein they will divide profits in the ratio of 40:60, respectively. The statement of financial position of Tolentino is as follows: Tolentino Marketing Statement of Financial Position April 8, 2020 Assets Cash P 4,000 Accounts Receivable P160,000 Less: Allowance for Uncollectible Accounts 16.000 144,000 Inventory 200,000 Equipment P 50,000 Less: Accumulated Depreciation 10.000 40.000 Total Assets P388,000 Liabilities and Capital Accounts Payable P 36,000 Tolentino, Capital 352,000 Total Liabilities and Capital P388,000 Conditions agreed upon before the formation of the partnership: a. The accounts receivable of Tolentino is estimated to be 70% realizable. b. The accumulated depreciation of the equipment will be increased by P10,000. c. The accounts payable will be assumed by the partnership. d. The capital of the…arrow_forwardA Sole Proprietor and an Individual with No Business Form a Partnership On Apr. 8, 2020, Tolentino who has her own retail business and Tan, decided to form a partnership wherein they will divide profits in the ratio of 40:60, respectively. The statement of financial position of Tolentino is as follows: Tolentino Marketing Statement of Financial Position April 8, 2020 Assets Cash P 4,000 Accounts Receivable P160,000 Less: Allowance for Uncollectible Accounts 16,000 144,000 Inventory 200,000 Equipment P 50,000 Less: Accumulated Depreciation 10,000 40,000 Total Assets P388,000 Liabilities and Capital Accounts Payable P 36,000 Tolentino, Capital 352,000 Total Liabilities and Capital P388,000 Conditions agreed upon before the formation of the partnership: a. The accounts receivable of Tolentino is estimated to be 70% realizable. b. The accumulated depreciation of the equipment will be increased by P10,000. c. The accounts payable will be assumed by the partnership. d. The capital of the…arrow_forward
- Rules for the Distribution of Profits or Losses In January 2019. Nick Marasigan and Dems Asacta agreed to produce and sell chocolate candies. Marasigan contributed P2,400,000 in cash to the business. Asacta contributed the building and equipment, valued at P2,200,000 and P1.400,000, respectively. The partnership had profits of P840,000 during 2019 but was less successful during 2020, when profit was only P400,000. Required: 1. Prepare the journal entry to record the investment of both partners in the partnership. 2. Determine the share of profit for each partner in 2019 and 2020 under each of the following conditions: a. The partners agreed to share profit equally b. The partners failed to agree on a profit sharing arrangement. The partners agreed to share profit according to the ratio of their original Investments d. The partners agreed to share profits by allowing interest of 10% on their original Investments and dividing the remainder equally The partners agreed to share profits by…arrow_forwardRules for the Distribution of Profits or Losses In January 2019. Nick Marasigan and Dems Asacta agreed to produce and sell chocolate candies. Marasigan contributed P2,400,000 in cash to the business. Asacta contributed the building and equipment, valued at P2,200,000 and P1.400,000, respectively. The partnership had profits of P840,000 during 2019 but was less successful during 2020, when profit was only P400,000. 2. Determine the share of profit for each partner in 2019 and 2020 under each of the following conditions: a. The partners agreed to share profit equally b. The partners failed to agree on a profit sharing arrangement. The partners agreed to share profit according to the ratio of their original Investments d. The partners agreed to share profits by allowing interest of 10% on their original Investments and dividing the remainder equally The partners agreed to share profits by allowing salaries of P400,000 for Marasigan and P280,000 for Asacta, and dividing the remainder…arrow_forward2. Amion admits Basa for a partnership interest in his business. The balance sheet accounts of Amion on November 30, 2020 prior to the admission of Basa are as follows: Debit Credit Cash 312,000 Merchandise inventory 468,000 Accounts receivable Accounts payable P161,200 Amion, capitalarrow_forward
- ces Purkerson, Smith, and Traynor have operated a bookstore for a number of years as a partnership. At the beginning of 2021, capital balances were as follows: Purkerson Smith Traynor $ 94,000 74,000 20,000 Due to a cash shortage, Purkerson invests an additional $10,000 in the business on April 1, 2021. Each partner is allowed to withdraw $600 cash each month. The partners have used the same method of allocating profits and losses since the business's inception: • Each partner is given the following compensation allowance for work done in the business: Purkerson, $14,000; Smith, $30,000; and Traynor, $4,000. . Each partner is credited with interest equal to 20 percent of the average monthly capital balance for the year without regard for normal drawings. • Any remaining profit or loss is allocated 5:3:2 to Purkerson, Smith, and Traynor, respectively. The net income for 2021 is $27,000. Each partner withdraws the allotted amount each month. Prepare a schedule showing calculations for…arrow_forwardSkip to question While James Craig and his former classmate Paul Dolittle both studied accounting at school, they ended up pursuing careers in professional cake decorating. Their company, Good to Eat (GTE), specializes in custom-sculpted cakes for weddings, birthdays, and other celebrations. James and Paul formed the business at the beginning of 2023, and each contributed $140,000 in exchange for a 50 percent ownership interest. GTE also borrowed $560,000 from a local bank Both James and Paul had to personally guarantee the loan. Both owners provide significant services for the business. The following information pertains to GTE's 2023 activities: GTE uses the cash method of accounting (for both book and tax purposes) and reports income on a calendar-year basis. GTE received $900,000 of sales revenue and reported $420,000 of cost of goods sold (it did not have any ending inventory). GTE paid $75,000 compensation to James, $75,000 compensation to Paul, and $85,000 of compensation to…arrow_forwardPart AMrs. Shine was registered in Jamaica as a sole trader in 2015. To grow her practice Mrs. Shine decided to enter into a partnership agreement with Mr. Rain, thus the status of the business was changed in 2021. In 2022, the partnership income statement for Shine & Rain was as follows: Income Statement for the year ended 31 December 2022 $ $ Revenue 11,600,000Expenses Salaries & Wages 7,600,000Employer NIS Contribution 1,400,000Rent and Rates 2.400,000Interest 500,000Maintenance 120,000Depreciation…arrow_forward
- On March 1, 20Y8, Eric Keene and Renee Wallace form a partnership. Keene agrees to invest $23,400 in cash and merchandise inventory valued at $62,600. Wallace invests certain business assets at valuations agreed upon, transfers business liabilities, and contributes sufficient cash to bring her total capital to $60,000. Details regarding the book values of the business assets and liabilities, and the agreed valuations, follow: Wallace's Ledger Balance Agreed-Upon Valuation Accounts Receivable $19,900 $19,500 Allowance for Doubtful Accounts 1,200 83,5001 29,800 15,000 37,500 1,400 Equipment Accumulated Depreciation-Equipment Accounts Payable Notes Payable (current) 55,400 15,000 37,500 The partnership agreement includes the following provisions regarding the division of net income: interest on original investments at 10%, salary allowances of $19,000 (Keene) and $24,000 (Wallace), and the remainder equally. Instructions 1. Journalize the entries to record the investments of Keene and…arrow_forwardPart AMrs. Shine was registered in Jamaica as a sole trader in 2015. To grow her practice Mrs. Shine decided to enter into a partnership agreement with Mr. Rain, thus the status of the business was changed in 2021. In 2022, the partnership income statement for Shine & Rain was as follows: Income Statement for the year ended 31 December 2022 $ $ Revenue 11,600,000Expenses Salaries & Wages 7,600,000Employer NIS Contribution 1,400,000Rent and Rates 2.400,000Interest 500,000Maintenance 120,000Depreciation…arrow_forwardOn March 1, 20Y8, Eric Keene and Renee Wallace form a partnership. Keene agrees to invest $23,400 in cash and merchandise inventory valued at $62,600. Wallace invests certain business assets at valuations agreed upon, transfers business liabilities, and contributes sufficient cash to bring her total capital to $60,000. Details regarding the book values of the business assets and liabilities, and the agreed valuations, follow: Wallace's Ledger Balance Agreed-Upon Valuation Accounts Receivable $19900 $19500 Allowance for Doubtful Accounts 1200 1400 Equipment 83500 55400 Accumulated Depreciation - Equipment 29800 Accounts Payable 15000 15000 Notes Payable (current) 37500 37500 The partnership agreement includes the following provisions regarding the division of net income: interest on original investments at 10%, salary allowances of $19,000 (Keene) and $24,000 (Wallace), and the remainder equally. The journal entries AND balance for both…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT
Individual Income Taxes
Accounting
ISBN:9780357109731
Author:Hoffman
Publisher:CENGAGE LEARNING - CONSIGNMENT
The KEY to Understanding Financial Statements; Author: Accounting Stuff;https://www.youtube.com/watch?v=_F6a0ddbjtI;License: Standard Youtube License