Reference no: EM132453438
Assignment -
Part A - The Rateliff Corporation had the following accounting framework available:
|
Assets=
|
Liabilities +
|
Owner Equity
|
|
Cash
|
A/R
|
Pre. Exp.
|
Inventory
|
Equip.
|
A/D.
|
A/P
|
N/P
|
Unearn. Rev.
|
Cap.
|
R/E
|
|
3,630
|
840
|
390
|
6,440
|
0
|
0
|
320
|
1,410
|
590
|
7,760
|
1,220
|
Required:
1. Using the accounting framework above, record each of the following transactions/events for the month:
May 1 Received $50 from customers on account
May 1 Borrowed $10,000 on a long-term note payable
May 1 Purchased equipment for $7,200, which is expected to be useful for 7 years at which time, it should be worth $900
May 3 Purchased $2,400 of inventory on account
May 8 Paid suppliers $180 for purchases previously made on account
May 10 Paid an insurance premium of $210
May 13 Received and paid utility bill for $600
May 19 Sold 25% of all inventory to a customer for $8,400
May 24 Sold a customer a gift card for $120
May 30 Paid employee salaries of $4,800
May 31 Insurance of $80 expired
2. Use the resulting accounting framework to prepare an income statement, statement of retained earnings and a balance sheet for the company at the end of the month.
3. Record the necessary transaction related to the equipment assuming it was sold for $8,000 on June 1st of the same year.
Part B - Nguyen & Company had the following account balances available:
|
Assets=
|
Liabilities +
|
Owner Equity
|
|
Cash
|
A/R
|
Pre. Exp.
|
Supp.
|
Equip.
|
A/D.
|
A/P
|
N/P
|
Unearn. Rev.
|
Cap.
|
R/E
|
|
12,500
|
2,500
|
450
|
320
|
0
|
0
|
180
|
2,900
|
600
|
8,800
|
3,290
|
1Required:
1. Using the accounting framework above, record each of the following transactions/events:
March 1 Services previously sold in advance of $300 were performed.
March 1 Purchased equipment for $11,360; management expects it will be useful for 4 years at which time it should be worth $800.
March 1 Performed $4,000 of consulting services for customers; sent bill.
March 1 Borrowed $2,600 on a note payable.
March 12 Paid advertising of $640.
March 18 Purchased supplies of $130 on account.
March 20 Received $600 from customers on account.
March 23 Paid utility bill of $150.
March 30 Paid employee payroll of $1,400.
March 30 Supplies on hand reported at $190.
March 30 Insurance of $150 expired.
2. Use the resulting accounting framework to prepare an income statement, statement of retained earnings and a balance sheet for the company for the month.
3. Record the necessary transaction related to the equipment assuming it was sold for $10,000 on April 1st of the same year.
Assignment Questions -
1. For the Rateliff Corporation, what net income would the company report in its financial statements?
2. For the Rateliff Corporation, what ending retained earnings would the company report in its financial statements?
3. For the Rateliff Corporation, what amount of total assets would the company report in its financial statements?
4. For the Rateliff Corporation, what amount of total liabilities would the company report in its financial statements?
5. When the Rateliff Corporation records the sale of equipment in the accounting framework, the transaction would include a ____(A)_____ of ____(B)______.
|
(A)
|
(B)
|
|
Loss on sale
|
8,000
|
|
7,200
|
|
875
|
|
Gain on sale
|
(8,000)
|
|
(7,200)
|
|
(875)
|
6. For Nguyen & Company, what net income would the company report in its financial statements?
7. For Nguyen & Company, what ending retained earnings would the company report in its financial statements?
8. For Nguyen & Company, what amount of total assets would the company report in its financial statements?
9. For Nguyen & Company, what amount of total liabilities would the company report in its financial statements?
10. When Nguyen & Company records the sale of equipment in the accounting framework, the transaction would include a ____(A)_____ of _____(B)_____.
|
(A)
|
(B)
|
|
Loss on sale
|
10,000
|
|
11,360
|
|
1,140
|
|
Gain on sale
|
(10,000)
|
|
(11,360)
|
|
(1,140)
|