Chapter 2: Q18E (page 85)
Use the information in Exercise 2-16 to prepare an August 31 balance sheet for Help Today. (Hint: The ending Retained Earnings account balance as of August 31 is $4,470.)
The total of balance sheet matches at$116,970
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Question: 1.Prepare general journal entries for the following transactions of Valdez Services.
a. Brina Valdez invested \(20,000 cash in the company in exchange for common stock.
b. The company provided services to a client and immediately received \)900 cash.
c. The company received \(10,000 cash from a client in payment for services to be provided next year.
d. The company received \)3,500 cash from a client in partial payment of accounts receivable.
e. The company borrowed $5,000 cash from the bank by signing a note payable.
2. Transactions a, c, d,and edid not yield revenue. Match each transaction (a, c, d,and e) with one of the following reasons for not recording revenue.
_______This transaction changed the form of an asset from a receivable to cash. Total assets were not increased (revenue was recognized when the services were originally provided).
_______This transaction brought in cash (increased assets), and it also increased a liability by the same amount (represented by the signing of a note to repay the amount).
_______This transaction brought in cash, but this is an owner investment.
This transaction brought in cash, and it created a liability to provide services to the client in the next year.
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
Question:Indicate whether a debit or credit decreasesthe normal balance of each of the following accounts.
a. Interest Payable e. Common Stock i. Dividends
b. Service Revenue f. Prepaid Insurance j. Unearned Revenue
c. Salaries Expense g. Buildings k. Accounts Payable
d. Accounts Receivable h. Interest Revenue l. Land
Question:Assume that Catherine Mahugu of Soko plans on expanding her business to accommodate more product lines. She is considering financing her expansion in one of two ways: (1) contributing more of her own funds to the business or (2) borrowing the funds from a bank.
Required
Identify at least two issues that Catherine should consider when trying to decide on the method for financing her expansion.
Indicate the financial statement on which each of the following items appears. Use Ifor income statement, Efor statement of retained earnings, and Bfor balance sheet.
a. Services Revenue e. Equipment i. Dividends
b. Interest Payable f. Prepaid Insurance j. Office Supplies
c. Accounts Receivable g. Buildings k. Interest Expense
d. Salaries Expense h. Rental Revenue l. Insurance Expense
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