Chapter 2: Q17E (page 85)
Use the information in Exercise 2-16 to prepare an August statement of retained earnings for Help Today.
(Hint:Net income for August is $10,470.)
The retained earnings for august 31 is $4,470.
Over 30 million students worldwide already upgrade their learning with Vaia!
All the tools & learning materials you need for study success - in one app.
Get started for free
Zucker Management Services opened for business and completed these transactions in November.
Nov. 1 Matt Zucker, the owner, invested \(30,000 cash along with \)15,000 of office equipment in the company in exchange for common stock.
2 The company prepaid \(4,500 cash for six months’ rent for an office. (Hint:Debit Prepaid Rent for \)4,500.)
4 The company made credit purchases of office equipment for \(2,500 and of office supplies for \)600. Payment is due within 10 days.
8 The company completed work for a client and immediately received \(3,400 cash.
12 The company completed a \)10,200 project for a client, who must pay within 30 days.
13 The company paid \(3,100 cash to settle the payable created on November 4.
19 The company paid \)1,800 cash for the premium on a 24-month insurance policy.
22 The company received \(5,200 cash as partial payment for the work completed on November 12.
24 The company completed work for another client for \)1,750 on credit.
28 The company paid \(5,300 cash in dividends.
29 The company purchased \)249 of additional office supplies on credit.
30 The company paid $831 cash for this month’s utility bill.
Required
3. Prepare a trial balance as of the end of November.
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).
Yi Min started an engineering firm called Min Engineering. He began operations and completed seven transactions in May, which included his initial investment of \(18,000 cash. After those seven transactions, the ledger included the following accounts with normal balances.
Cash ……………………………………….. \)37,600
Office supplies ………………………………... 890
Prepaid insurance …………………………...4,600
Office equipment ………………………….. 12,900
Accounts payable …………………………..12,900
Common stock …………………………….. 18,000
Dividends …………………………………….. 3,370
Engineering fees earned …………………. 36,000
Rent expense ………………………………… 7,540
Required
2. The following seven transactions produced the account balances shown above.
a. Y. Min invested \(18,000 cash in the business in exchange for common stock.
b. Paid \)7,540 cash for monthly rent expense for May.
c. Paid \(4,600 cash in advance for the annual insurance premium beginning the next period.
d. Purchased office supplies for \)890 cash.
e. Purchased \(12,900 of office equipment on credit (with accounts payable).
f. Received \)36,000 cash for engineering services provided in May.
g. The company paid $3,370 cash in dividends.
Prepare a Cash T-account, enter the cash effects (if any) of each transaction, and compute the ending Cash balance (code each entry in the T-account with one of the transaction codes athrough g).
What information is reported in a balance sheet?
In a recent year’s financial statements, Home Depot reported the following: Total liabilities = \(30,624 million and Total assets = \)39,946 million. Compute and interpret Home Depot’s debt ratio (assume competitors average a 60.0% debt ratio).
What do you think about this solution?
We value your feedback to improve our textbook solutions.
