Cornerstones of Financial Accounting
4th Edition
ISBN: 9781337690881
Author: Jay Rich, Jeff Jones
Publisher: Cengage Learning
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Chapter 2, Problem 37E
Exercise 2-37 Events and Transactions
Several events are listed below
- Common stock is issued to investors.
- An agreement is signed with a janitorial service to provide cleaning services over the next 12 months.
- Inventory is purchased.
- Inventory is sold to customers.
- Two investors sell their common stock to another investor.
- A 2-year insurance policy is purchased
Required:
- CONCEPTUAL CONNECTION For each of the events1 identify which ones qualify for recognition in the financial statements.
- CONCEPTUAL CONNECTION For events that do not qualify for recognition, explain your reasoning.
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Mastery Problem: Investments
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You are working for The Wellington Company on temporary assignment while one of the accountants is on family leave. You have been asked to review the company’s investment journal entries and provide necessary information to the accountant preparing the financial statements.
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Credit
Jan. 17
Investments-Red Rock Co. Stock
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Cash
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EXERCISES
For questions number 1 to 7, given the accounting transaction, indicate
whether the asset, liability or owner's equity has increase or decrease or
has no effect by circling the appropriate answer.
1 The owner invests personal cash in the business. (Example)
Asset
Increase
Decrease
No Effect
Liability
Increase
Decrease
No Effect
Owner's Equity
Increase
Decrease
No Effect
2 The owner withdraws cash from the business for personal use.
Asset
Increase
Decrease
No Effect
Liability
Increase
Decrease
No Effect
Owner's Equity
Increase
Decrease
No Effect
3 The company receives cash from a bank loan
Asset
Increase
Decrease
No Effect
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26/10/2021
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Sample Worksheet
Work Sheet
For the Month Ended January 31, 2020
Trial Balance
Adjustments
Adj. T/Balance
Income Statement
Balance Sheet
Account Title
Dr.
Cr.
Dr.
Cr.
Dr.
Cr.
Dr.
Cr.
Dr.
Cr.
13,200
22,000
5,400
29,250
22,000
5,400
Cash
20,000 b-h
3,950
29,250
22,000
a
CD'S
Other Securities
5,400
Loan Payable
Owner' Equity
25,000
15,600 b
25,000
15,100
25,000
15,100
500
Revenue
a
20,000
20,000
20,000
Interest Income
Utilities expense
Internet & Telephone
Advertising Expense
C
300
300
300
150
150
150
e
300
300
300
Rent Expense
f
2,000
2,000
2,000
Supplies expense
450
450
450
Insurance expense
250
250
250
40,100
16,550
56,650
40,600
23,950
60,100
3,450
16,550
20,000
40,600
23,950
60,100
20,000
56,650
Net income
20,000
56,650
1. Cash is overstate by 500.00 and Owners Equity is overstated by $500.00.
2. Utilities Expense of $300.00 was paid on January 25.
3. Insurance expense of $250.00 was paid on January 27.
4. supplies for the month in the amount of $450.00 was purchased.
5. Rent for…
Chapter 2 Solutions
Cornerstones of Financial Accounting
Ch. 2 - What is the conceptual framework of accounting?Ch. 2 - Prob. 2DQCh. 2 - Prob. 3DQCh. 2 - Prob. 4DQCh. 2 - Describe the constraint on providing useful...Ch. 2 - Prob. 6DQCh. 2 - Prob. 7DQCh. 2 - Prob. 8DQCh. 2 - Of all the events that occur each day, how would...Ch. 2 - Prob. 10DQ
Ch. 2 - Prob. 11DQCh. 2 - In analyzing a transaction, can a transaction only...Ch. 2 - How do revenues and expenses affect the accounting...Ch. 2 - Prob. 14DQCh. 2 - Prob. 15DQCh. 2 - The words debit and credit are used in two ways in...Ch. 2 - Prob. 17DQCh. 2 - Prob. 18DQCh. 2 - Prob. 19DQCh. 2 - Prob. 20DQCh. 2 - Prob. 21DQCh. 2 - Prob. 22DQCh. 2 - Prob. 1MCQCh. 2 - Prob. 2MCQCh. 2 - Prob. 3MCQCh. 2 - Prob. 4MCQCh. 2 - Prob. 5MCQCh. 2 - Which principle requires that expenses be recorded...Ch. 2 - Taylor Company recently purchased a piece of...Ch. 2 - Prob. 8MCQCh. 2 - The effects of paying salaries for the current...Ch. 2 - Which of the following statements is false? The...Ch. 2 - Which of the following statements are true? Debits...Ch. 2 - Debits will: increase assets. expenses, and...Ch. 2 - Which of the following statements are true? A...Ch. 2 - Posting: involves transferring the information in...Ch. 2 - A trial balance: lists only revenue and expense...Ch. 2 - CORNERSTONE 2.1 Cornerstone Exercise 2-16...Ch. 2 - Prob. 17CECh. 2 - CORNERSTONE 2.1 Four statements are given below....Ch. 2 - Prob. 19CECh. 2 - Cornerstone Exercise 2-20 Transaction Analysis...Ch. 2 - Cornerstone Exercise 2-21 Transaction Analysis...Ch. 2 - Cornerstone Exercise 2-22 Transaction Analysis The...Ch. 2 - Cornerstone Exercise 2-23 Debit and Credit...Ch. 2 - Cornerstone Exercise 2-24 Journalize Transactions...Ch. 2 - Cornerstone Exercise 2-25 Journalize Transactions...Ch. 2 - Cornerstone Exercise 2-26 Preparing a Trial...Ch. 2 - Prob. 27BECh. 2 - Brief Exercise 2-28 Assumptions and Principles...Ch. 2 - Brief Exercise 2-2? Events and Transactions...Ch. 2 - Brief Exercise 2-30 Transaction Analysis Galle...Ch. 2 - Brief Exercise 2-31 Debit and Credit Procedures...Ch. 2 - Brief Exercise 2-32 Journalize Transactions Galle...Ch. 2 - Brief Exercise 2-33 Posting Journal Entries Listed...Ch. 2 - Brief Exercise 2-34 Preparing a Trial Balance The...Ch. 2 - Prob. 35ECh. 2 - Prob. 36ECh. 2 - Exercise 2-37 Events and Transactions Several...Ch. 2 - Exercise 2-38 Events and Transactions The...Ch. 2 - Exercise 2-39 Transaction Analysis OBJECTIVE e The...Ch. 2 - Exercise 2-40 Transaction Analysis Amanda Webb...Ch. 2 - Exercise 2-41 Transaction Analysis and Business...Ch. 2 - Exercise 2-42 Inferring Transactions from Balance...Ch. 2 - Exercise 2-43 Transaction Analysis Goal Systems, a...Ch. 2 - Exercise 2-44 Transaction Analysis OBJECTIVE 9...Ch. 2 - Prob. 45ECh. 2 - Exercise 2-46 Normal Balances and Financial...Ch. 2 - OBJECTIVE 9 Exercise 2-47 Debit and Credit Effects...Ch. 2 - Prob. 48ECh. 2 - Exercise 2-49 Journalizing Transactions Kauai...Ch. 2 - Exercise 2-50 Journalizing Transactions Remington...Ch. 2 - Exercise 2-51 Transaction Analysis and Journal...Ch. 2 - Exercise 2-52 Accounting Cycle Rosenthal...Ch. 2 - Exercise 2-53 Preparing a Trial Balance...Ch. 2 - Exercise 2-54 Effect of Errors on a Trial Balance...Ch. 2 - Problem 2-55A Events and Transactions The...Ch. 2 - Problem 2-56A Analyzing Transactions Luis Madero,...Ch. 2 - Problem 2-57A Inferring Transactions from...Ch. 2 - Prob. 58APSACh. 2 - Problem 2-59A Journalizing Transactions Monroe...Ch. 2 - Problem 2-60A Journalizing and Posting...Ch. 2 - Problem 2-61A The Accounting Cycle Karleens...Ch. 2 - Problem 2-62B Comprehensive Problem Mulberry...Ch. 2 - Prob. 55BPSBCh. 2 - Prob. 56BPSBCh. 2 - Prob. 57BPSBCh. 2 - Problem 2-58B Debit and Credit Procedures A list...Ch. 2 - Problem 2-593 Journalizing Transactions Monilast...Ch. 2 - Problem 2-603 Journalizing and Posting...Ch. 2 - Problem 2-6B The Accounting Cycle Sweetwater...Ch. 2 - Problem 2-62B Comprehensive Problem Mulberry...Ch. 2 - Prob. 63.1CCh. 2 - Prob. 63.2CCh. 2 - Prob. 63.3CCh. 2 - Prob. 64.1CCh. 2 - Prob. 64.2CCh. 2 - Case 2-64 Analysis of the Effects of Current Asset...Ch. 2 - Prob. 64.4CCh. 2 - Prob. 65.1CCh. 2 - Prob. 65.2CCh. 2 - Prob. 66.1CCh. 2 - Prob. 66.2CCh. 2 - Prob. 66.3CCh. 2 - Case 2-67 Comparative Analysis: Under Armour,...Ch. 2 - Prob. 67.2CCh. 2 - Case 2-67 Comparative Analysis: Under Armour,...Ch. 2 - Case 2-68 Accounting for Partially Completed...Ch. 2 - Prob. 68.2CCh. 2 - Prob. 69.1CCh. 2 - Case 2-69 CONTINUING PROBLEM: FRONT ROW...Ch. 2 - Case 2-69 CONTINUING PROBLEM: FRONT ROW...
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