Student Name: Chan Young Young Lee Class: ACCY 2001_13
M2-4 Classifying Accounts on a Balance Sheet The following are accounts of osa!"ere# Com$an%: .1/ Accounts "a%a+le CL Correct& .2/ Accounts ecei)a+le CA Correct& .3/ uildings NCA Correct& ./ Cash CA Correct& ./ Common Stoc S' Correct& .4/ Land NCA Correct& .5/ 6erchandise (n)entor% CA Correct& .7/ (ncome (n come Ta8es Ta8es "a%a+le CL Correct& .9/ Long!Te L ong!Term rm (n)estments (n)estmen ts NCA Correct& .10/ Notes "a%a+le .due in three %ears/ NCL Correct& .11/ Notes ecei)a+le .due in si8 months/ Correct& CA .12/ "re$aid ent CA Correct& .13/ etained 'arnings S' Correct& .1/ Su$$lies CA Correct& .1/ -tilities "a%a+le CL Correct& .14/ ages "a%a+le CL Correct& (n the s$ace $ro)ided* classif% each as it would +e re$orted on a +alance sheet, -se:
E2-8 Analyzing the Effects of Transactions in T-Accounts ;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, f,
Lent <2*00 to one of the in)estors who signed a note due in si8 months, Ted ;ranger +orrowed <5*000 for $ersonal use from a local +an* signing a one!%ear note,
Required:
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
.
E3'lain your res'onse to e$ents c 5 an* f 5.
"ot re&uire*! %ut reco((en*e*
A?L@'
#eference Account a Cash a Common Stoc + '>ui$ment + Notes "a%a+le + Cash d Land d Common Stoc e Notes ecei)a+le
6e%it Cre*it < 50*000 < *00 < 17*000 < 13*00 < *00 < 1*000 < 100 < 2*00
a Additional "aid!in Ca$ital d Additional "aid!in Ca$ital
d Cash
'8am$le: #eference Account a Cash '>ui$ment
< 4*940 < 15*900
<
3*000
6e%it Cre*it < 100 < 100
#e&uire(ent 1 ef, eg,
a d
< < <
CAS7 ! 50*000 < 3*000 <
ef,
2*00 e *00 +
< 44*000 Correct& "TES #ECE0:AB)E ! < 2*00
eg, <
e
< 2*00 Correct& eg, <
+
<
E;0+ME"T ! 17*000
< 17*000 Correct& eg, <
d
<
)A"6 ! 1*000
< 1*000 Correct&
ef,
"TES +A9AB)E ef, < ! eg, < 13*00 +
< 13*00 Correct&
ef,
CMM" STC< < ! < *00 < 100
ef, eg,
a d
< *10 Correct& A660T0"A) +A06-0" CA+0TA) < ! eg, < 4*940 a < 15*900 d
< 72*740 Correct&
#e&uire(ent 2 -sing the +alances in the T!accounts* fill in the following amounts for the accounting e>uation:
< 101*00 13*00 = Stoc,hol*ers> E&uity < 77*000 )ia%ilities < 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, (ts not a trasaction, Bor trasaction f* onwer got a loan from $ersonal +an and not +usiness, (t has no effect on the +usiness, Assets
en ata "02!0: 6E))! 0"C. Balance Sheet at /e%ruary ! 212 *ollars in (illions5 ASSETS Current Assets Cash Short!term in)estments ecei)a+les and other assets (n)entories Dther Total current assets "ro$ert%* $lant* and e>ui$ment Long!term in)estments Dther non!current assets Total assets )0AB0)0T0ES A"6 STC<7)6E#S> E;0T9 Current )ia%ilities Accounts $a%a+le Dther short!term o+ligations Total current lia%ilities Long!term Lia+ilities Total lia%ilities Stoc,hol*ers> e&uity Common Stoc .<0,01 $ar )alue/ Additional $aid!in ca$ital etained 'arnings Dther stocholders e>uit% items Total stoc,hol*ers> e&uity Total stoc,hol*ers> e&uity an* lia%ilities 212 transactions a, orrowed from ans due in two %ears, +, Loaned to affiliates* who signed si8!month note c, "urchased additional in)estments .1E long!term the remainder short!term/ d, Cash $aid for $urchase of $ro$ert%* $lant F e>ui$, an loan for $urchase of $ro$ert%* $lant F e>ui$, e, (ssued additional 1*000 shares of stoc for cash, f, Sold short!term in)estments costing Sold in)estments for cash g, i)idends $aid during 2012
<
<
<
13*72 944 9*703 1*0 3*23 2?!448 2*12 3*0 9*5 44!@
11*44 10*3 22!1 13*41 @!1 3 12*13 27*234 .31*04/ 8!?1 44!@
0 300 13*000 75 1*10 00 11*000 11*000 40
Assu(e that the following transactions in (illions5 occurre* *uring the re(ain*er of 212 en*ing on /e%ruary 1! 215
a, orrowed <0 from +ans due in two %ears, +, Lent <300 to affiliates* who signed a si8!month note, 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, 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, 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,
Required: 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$ute ells current ratio for 2012 .%ear ending on Be+ruar% 1* 2013/, hat does this suggest a+out the com$an%H
#e&uire(ent 1
A?L@S'
#eference a a + + c c c d d d e e e g g
6e%it Cre*it < 0 < 0 < 300 < 300 < 2*400 < 10*00 < 13*000 < 2*27 < 75 < 1*10 < 00 < 10 < 390 < 40 < 40
Account Cash A@ Loan L@ Note ecei)a+le A@ Cash A! Long!term in)estment A@ Short!term in)estment A@ Cash A! "ro$et%* $lant* e>ui$ A@ Cash A! Loan L@ Cash A@ Common Stoc S'@ Additional $aid!in ca$ital S'@ etained earning S'@ Cash A!
'8am$le: #eference Account a Cash '>ui$ment
6e%it Cre*it < 100 < 100
#e&uire(ent 2 ef, eg, <
a e f
< < <
Cash 13*72 0 < 300,00 00 < 13*000,00 11*000 < 75,00 <
<
ef,
eg, <
<
11*045
344
10*103
0n$entories 1*0
1*0
ther current assets 3*23 eg, <
<
ef,
40,00 g
#ecei$a%les an* other assets 9*703 eg, < + < 300
<
Accounts 'aya%le ef, < 11*44 eg,
+ c d
Short-ter( in$est(ents 944 eg, < c < 10*00 < 11*000,00 f
<
ef,
3*23
+ro'erty! 'lant! an* e&ui'(ent 2*12 eg, < < 2*27
<
11*44
ther short-ter( o%ligations < 10*3 eg,
<
10*3
)ong-ter( lia%ilties < 13*41 eg, < 0 a < 1*10 d
<
a
1*05
eg,
)ong-ter( in$est(ents 3*0 eg, < c < 2*400
<
4*00
ther noncurrent assets 9*5 eg, <
<
9*5
Co((on stoc, ef, < 3 eg, < 10 e
<
A**itional 'ai*-in ca'ital < 12*13 eg, < 390 e
<
12*3
#etaine* earnings < 27*234 eg, < 40
<
27*154
ther stoc,hol*ers> e&uity < 31*04
<
.31*04/
Student Name: Class: +ro%le( 2-@ #e&uire(ent 6E))! 0"C. Balance Sheet at /e%ruary 1! 21 in (illions5 Assets Current Assets Cash Short!term in)estments ecei)a+les and other assets (n)entories Dther current assets Total current assets
<
11*045 344 10*103 1*0 3*23 2! Correct&
"ro$ert%* $lant and e>ui$ment Long!term in)estments Dther non!current assets Total assets
*09 4*00 9*5 4! Correct&
)ia%ilities an* Stoc,hol*ers> E&uity Current )ia%ilities Accounts $a%a+le Dther short!term o+ligations Total current lia+ilities Long!term Lia+ilities Total lia+ilities
11*44 10*3 22!1 1*05 35*054 Correct&
Stoc,hol*ers> E&uity Common stoc Additional $aid!in ca$ital etained earnings Dther stocholders e>uit% items Total stocholders e>uit% Total lia%ilities an* stoc,hol*ers> e&uity
12*3 27*154 .31*04/ 9*25 4! Correct&
#e&uire(ent 4 Current atio
1,20 Correct&
Current atio is Current AssetsECurrent Lia+ilities,
