Chapter 2: Q10DQ (page 79)
Identify the four financial statements of a business.
There are four types of financial statements namely – income statement, statement of retained earnings, balance sheet, and cash flow statement.
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If assets are valuable resources and asset accounts have debit balances, why do expense accounts also have debit balances?
What kinds of transactions can be recorded in a general journal?
Heineken N.V., a global brewer based in the Netherlands, reports the following balance sheet accounts for the year ended December 31, 2015 (euros in millions). Prepare the balance sheet for this company as of December 31, 2015, following the usual IFRS format.
Current liabilities………….. € 8,516 Noncurrent liabilities…………. €14,128
Current assets……………….. 5,914 Noncurrent assets ……………… 31,800
Total equity ………………… 15,070
Business transactions completed by Hannah Venedict during the month of September are as follows.
a. Venedict invested \(60,000 cash along with office equipment valued at \)25,000 in exchange for common stock of a new company named HV Consulting.
b. The company purchased land valued at \(40,000 and a building valued at \)160,000. The purchase is paid with \(30,000 cash and a long-term note payable for \)170,000.
c. The company purchased \(2,000 of office supplies on credit.
d. Venedict invested her personal automobile in the company in exchange for more common stock. The automobile has a value of \)16,500 and is to be used exclusively in the business.
e. The company purchased \(5,600 of additional office equipment on credit.
f. The company paid \)1,800 cash salary to an assistant.
g. The company provided services to a client and collected \(8,000 cash.
h. The company paid \)635 cash for this month’s utilities.
i. The company paid \(2,000 cash to settle the account payable created in transaction c.
j. The company purchased \)20,300 of new office equipment by paying \(20,300 cash.
k. The company completed \)6,250 of services for a client, who must pay within 30 days.
l. The company paid \(1,800 cash salary to an assistant.
m. The company received \)4,000 cash in partial payment on the receivable created in transaction k.
n. The company paid $2,800 cash in dividends.
Required
1. Prepare general journal entries to record these transactions (use account titles listed in part 2).
Business transactions completed by Hannah Venedict during the month of September are as follows.
a. Venedict invested \(60,000 cash along with office equipment valued at \)25,000 in exchange for common stock of a new company named HV Consulting.
b. The company purchased land valued at \(40,000 and a building valued at \)160,000. The purchase is paid with \(30,000 cash and a long-term note payable for \)170,000.
c. The company purchased \(2,000 of office supplies on credit.
d. Venedict invested her personal automobile in the company in exchange for more common stock. The automobile has a value of \)16,500 and is to be used exclusively in the business.
e. The company purchased \(5,600 of additional office equipment on credit.
f. The company paid \)1,800 cash salary to an assistant.
g. The company provided services to a client and collected \(8,000 cash.
h. The company paid \)635 cash for this month’s utilities.
i. The company paid \(2,000 cash to settle the account payable created in transaction c.
j. The company purchased \)20,300 of new office equipment by paying \(20,300 cash.
k. The company completed \)6,250 of services for a client, who must pay within 30 days.
l. The company paid \(1,800 cash salary to an assistant.
m. The company received \)4,000 cash in partial payment on the receivable created in transaction k.
n. The company paid $2,800 cash in dividends.
Required
2. Open the following ledger accounts—their account numbers are in parentheses (use the balance column format): Cash (101); Accounts Receivable (106); Office Supplies (108); Office Equipment (163); Automobiles (164); Building (170); Land (172); Accounts Payable (201); Notes Payable (250); Common Stock (307); Dividends (319); Fees Earned (402); Salaries Expense (601); and Utilities Expense (602). Post the journal entries from part 1 to the ledger accounts and enter the balance after each posting.
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