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1. Groro Co. bills a client $62,000 for services provided and agrees to accept the following three
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1. Groro Co. bills a client $62,000 for services provided and agrees to accept the following three items in full payment: (1) $10,000 cash, (2) computer equipment worth $80,000, and (3) to assume responsibility for a $28,000 note payable related to the computer equipment. The entry Groro makes to record this transaction includes which one or more of the following? (Select all that apply.)

 

2.

Following are transactions of a new company called Pose-for-Pics.

   

Aug. 1  

Madison Harris, the owner, invested $6,500 cash and $33,500 of photography equipment in the company in exchange for common stock.

2  

The company paid $2,100 cash for an insurance policy covering the next 24 months.

5  

The company purchased office supplies for $880 cash.

20  

The company received $3,331 cash in photography fees earned.

31  

The company paid $675 cash for August utilities.

     

Prepare general journal entries for the above transactions.

 

 

3.

The transactions of Spade Company:

  

a.

Kacy Spade, owner, invested $100,750 cash in the company in exchange for common stock.

b.

The company purchased office supplies for $1,250 cash.

c.

The company purchased $10,050 of office equipment on credit.

d.

The company received $15,500 cash as fees for services provided to a customer.

e.

The company paid $10,050 cash to settle the payable for the office equipment purchased in transaction c.

f.

The company billed a customer $2,700 as fees for services provided.

g.

The company paid $1,225 cash for the monthly rent.

h.

The company collected $1,125 cash as partial payment for the account receivable created in transaction f.

i.

The company paid $10,000 cash in dividends to Spade (sole shareholder).

      

Prepare general journal entries to record the transactions below for Spade Company by using the following accounts: Cash; Accounts Receivable; Office Supplies; Office Equipment; Accounts Payable; Common Stock; Dividends; Fees Earned; and Rent Expense.

 

4.

The transactions of Spade Company:

  

a.

Kacy Spade, owner, invested $100,750 cash in the company in exchange for common stock.

b.

The company purchased office supplies for $1,250 cash.

c.

The company purchased $10,050 of office equipment on credit.

d.

The company received $15,500 cash as fees for services provided to a customer.

e.

The company paid $10,050 cash to settle the payable for the office equipment purchased in transaction c.

f.

The company billed a customer $2,700 as fees for services provided.

g.

The company paid $1,225 cash for the monthly rent.

h.

The company collected $1,125 cash as partial payment for the account receivable created in transaction f.

i.

The company paid $10,000 cash in dividends to Spade (sole shareholder).

  

Prepare a Trial Balance.

 

 

 

Questions 5-7
[The following information applies to the questions displayed below.]

Denzel Brooks opens a Web consulting business called Venture Consultants and completes the following transactions in March.

 

March 1  

Brooks invested $150,000 cash along with $22,000 in office equipment in the company in exchange for common stock.

2  

The company prepaid $6,000 cash for six months’ rent for an office. (Hint: Debit Prepaid Rent for $6,000.)

3  

The company made credit purchases of office equipment for $3,000 and office supplies for $1,200. Payment is due within 10 days.

6  

The company completed services for a client and immediately received $4,000 cash.

9  

The company completed a $7,500 project for a client, who must pay within 30 days.

12  

The company paid $4,200 cash to settle the account payable created on March 3.

19  

The company paid $5,000 cash for the premium on a 12-month insurance policy. (Hint: Debit Prepaid Insurance for $5,000.)

22  

The company received $3,500 cash as partial payment for the work completed on March 9.

25  

The company completed work for another client for $3,820 on credit.

29  

The company paid $5,100 cash in dividends.

30  

The company purchased $600 of additional office supplies on credit.

31  

The company paid $500 cash for this month’s utility bill.

5.

Required:

1.

Prepare general journal entries to record these transactions.

 

6.

2.

Post the journal entries from part 1  to the ledger accounts.

 

7.

3.

Prepare a trial balance as of the end of March.

 

 

8.

Karla Tanner opens a Web consulting business called Linkworks and completes the following transactions in its first month of operations.

  

 April 1  

Tanner invests $80,000 cash along with office equipment valued at $26,000 in the company in exchange for common stock.

2  

The company prepaid $9,000 cash for 12 months’ rent for office space. (Hint: Debit Prepaid Rent for $9,000.)

3  

The company made credit purchases for $8,000 in office equipment and $3,600 in office supplies. Payment is due within 10 days.

6  

The company completed services for a client and immediately received $4,000 cash.

9  

The company completed a $6,000 project for a client, who must pay within 30 days.

13  

The company paid $11,600 cash to settle the account payable created on April 3.

19  

The company paid $2,400 cash for the premium on a 12-month insurance policy. (Hint: Debit Prepaid Insurance for $2,400.)

22  

The company received $4,400 cash as partial payment for the work completed on April 9.

25  

The company completed work for another client for $2,890 on credit.

28  

The company paid $5,500 cash in dividends.

29  

The company purchased $600 of additional office supplies on credit.

30  

The company paid $435 cash for this month’s utility bill.

  

Required:

1. Prepare general journal entries to record these transactions.

2.

Post the journal entries from part 1 to the ledger accounts.

 

3. Prepare a trial balance as of April 30.

Questions 9-11
[The following information applies to the questions displayed below.]

 

The accounting records of Nettle Distribution show the following assets and liabilities as of December 31, 2012 and 2013.

  

December 31

2012

2013

  Cash

$  64,300        

$  15,640        

  Accounts receivable

26,240        

19,390        

  Office supplies

3,160        

1,960        

  Office equipment

44,000        

44,000        

  Trucks

148,000        

 157,000        

  Building

0        

80,000        

  Land

0        

60,000        

  Accounts payable

3,500        

33,500        

  Note payable

0        

40,000        

  

Late in December 2013, the business purchased a small office building and land for $140,000. It paid $100,000 cash toward the purchase and a $40,000 note payable was signed for the balance. Mr. Nettle had to invest $35,000 cash in the business (in exchange for common stock) to enable it to pay the $100,000 cash. The business also pays $3,000 cash per month for dividends.

 

9.

Required:

1.

Prepare balance sheets for the business as of December 31, 2012 and 2013.

 

10.

2.

By comparing equity amounts from the balance sheets and using the additional information presented in this problem, prepare a calculation to show how much net income was earned by the business during 2013.

 

11.

3.

Compute the 2013 year-end debt ratio for the business.

 

12.

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.

 

2.            Post the journal entries from part 1 to the ledger accounts.

                 

 

3. Prepare a trial balance as of the end of September.

 

13.
For each of the following (1) identify the type of account as an asset, liability, equity, revenue, or expense, (2) identify the normal balance of the account, and (3) select debit (Dr.) or credit (Cr.) to identify the kind of entry that would increase the account balance.
 

 

Questions 14-16
[The following information applies to the questions displayed below.]
 

Carmen Camry operates a consulting firm called Help Today, which began operations on August 1. On August 31, the company’s records show the following accounts and amounts for the month of August.

 

  Cash

$

25,360  

Consulting fees earned

$

27,000  

  Accounts receivable

22,360  

Rent expense

9,550  

  Office supplies

5,250  

Salaries expense

5,600  

  Land

44,000  

Telephone expense

860  

  Office equipment

20,000  

Miscellaneous expenses

520  

  Accounts payable

10,500  

Common stock

102,000  

  Dividends

6,000  

14.

Use the above information to prepare an August income statement for the business.

 

15.

Use the above information to prepare an August statement of retained earnings for Help Today. (The owner invested $102,000 cash in the company on August 1 in exchange for common stock.)

 

16.

se the above information to prepare an August 31 balance sheet for Help Today. (The owner invested $102,000 cash in the company on August 1 in exchange for common stock.)

 

 

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[Solved] 1. Groro Co. bills a client $62,000 for services provided and agrees to accept the following three
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