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Complete The Following Problem Sets In Chapter 1 & 3

Customer Question

Complete the following problem sets in Chapter 1 & 3 of Financial Accounting:

• P1-3A

• P3-5A

ACC/300

Submitted: 2 years ago.
Category: Business and Finance Homework
Expert:  Neo replied 2 years ago.

Good day!

Welcome to JustAnswer!

Please let me know the title, edition and name of the authors of the book you are using as well as the deadline.

Thank you so much! :)

Customer: replied 2 years ago.

Financial Accounting Tools for Business Decision Making, Sixth Edition

Kimmel, P. D., Weygandt, J. J., & Kieso, D. E. ( 2010).
Financial accounting: Tools for business decision making (6th ed.).
Hoboken, NJ: John Wiley & Sons.

ACC/300 PRINCIPLES OF ACCOUNTING

Complete the following problem sets in Chapter 1 & 3 of Financial Accounting:

P1-3A

P3-5A

It is due by the 27th.

Expert:  Neo replied 2 years ago.
I do not have access to the book. Can you post the questions? Or send as an attachment?
Customer: replied 2 years ago.

Problems: Set A

P1-1A

Presented below are five independent situations.

(a) Three physics professors at MIT have formed a business to improve the speed of information transfer over the Internet for stock exchange transactions. Each has contributed an equal amount of cash and knowledge to the venture. Although their approach looks promising, they are concerned about the legal liabilities that their business might confront.

(b) Ed Toth, a college student looking for summer employment, opened a bait shop in a small shed at a local marina.

(c) Joan Stuebben and Ron Klinke each owned separate shoe manufacturing businesses. They have decided to combine their businesses. They expect that within the coming year they will need significant funds to expand their operations.

(d) Crystal, Allie, and Harry recently graduated with marketing degrees. They have been friends since childhood. They have decided to start a consulting business focused on marketing sporting goods over the Internet.

(e) Mark Willis wants to rent CD players and CDs in airports across the country. His idea is that customers will be able to rent equipment and CDs at one airport, listen to the CDs on their flights, and return the equipment and CDs at their destination airport. Of course, this will require a substantial investment in equipment and CDs, as well as employees and locations in each airport. Mark has no savings or personal assets. He wants to maintain control over the business.

Instructions

In each case, explain what form of organization the business is likely to take—sole proprietorship, partnership, or corporation. Give reasons for your choice.

P1-2A

Financial decisions often place heavier emphasis on one type of financial statement over the others. Consider each of the following hypothetical situations independently.

(a) The North Face, Inc. is considering extending credit to a new customer. The terms of the credit would require the customer to pay within 30 days of receipt of goods.

(b) An investor is considering purchasing common stock of Amazon.com. The investor plans to hold the investment for at least 5 years.

(c) Chase Manhattan is considering extending a loan to a small company. The company would be required to make interest payments at the end of each year for 5 years, and to repay the loan at the end of the fifth year.

(d) The president of Campbell Soup is trying to determine whether the company is generating enough cash to increase the amount of dividends paid to investors in this and future years, and still have enough cash to buy equipment as it is needed.

Instructions

In each situation, state whether the decision maker would be most likely to place primary emphasis on information provided by the income statement, balance sheet, or statement of cash flows. In each case provide a brief justification for your choice. Choose only one financial statement in each case.

Determine forms of business organization.

(SO 1) C

Identify users and uses of financial statements.

(SO 2, 4, 5) K

Problems: Set A

35

P1-3A

On June 1, Beardsley Service Co. was started with an initial investment in the company of $22,100 cash. Here are the assets and liabilities of the company at June 30, and the revenues and expenses for the month of June, its first month of operations:

Cash $ 4,600

Notes payable $12,000

Accounts receivable 4,000

Accounts payable 500

Service revenue 7,500

Supplies expense 1,000

Supplies 2,400

Maintenance and repairs expense 600

Advertising expense 400

Utilities expense 300

Equipment 26,000

Salaries and wages expense 1,400

In June, the company issued no additional stock, but paid dividends of $1,400.

Instructions

(a) Prepare an income statement and a retained earnings statement for the month of June and a balance sheet at June 30, 2012.

(b) Briefly discuss whether the company’s first month of operations was a success.

(c) Discuss the company’s decision to distribute a dividend.

P1-4A

Presented below is selected financial information for Yvonne Corporation for December 31, 2012.

Inventory $ 25,000

Cash paid to purchase equipment $ 12,000

Cash paid to suppliers 104,000

Equipment 40,000

Building 200,000

Revenues 100,000

Common stock 50,000

Cash received from customers 132,000

Cash dividends paid 7,000

Cash received from issuing common stock 22,000

Instructions

(a) Determine which items should be included in a statement of cash flows and then prepare the statement for Yvonne Corporation.

(b) Comment on the adequacy of net cash provided by operating activities to fund the company’s investing activities and dividend payments.

P1-5A

Gabelli Corporation was formed on January 1, 2012. At December 31, 2012, John Paulus, the president and sole stockholder, decided to prepare a balance sheet, which appeared as follows.

GABELLI CORPORATION

Balance Sheet

December 31, 2012

Assets Liabilities and Stockholders’ Equity Cash $20,000

Accounts payable $30,000

Accounts receivable 50,000

Notes payable 15,000

Inventory 36,000

Boat loan 22,000

Boat 24,000

Stockholders’ equity 64,000

John willingly admits that he is not an accountant by training. He is concerned that his balance sheet might not be correct. He has provided you with the following additional information.

1. The boat actually belongs to Paulus, not to Gabelli Corporation. However, because he thinks he might take customers out on the boat occasionally, he decided to list it as an asset of the company. To be consistent, he also listed as a liability of the corporation his personal loan that he took out at the bank to buy the boat.

2. The inventory was originally purchased for $25,000, but due to a surge in demand John now thinks he could sell it for $36,000. He thought it would be best to record it at $36,000.

3. Included in the accounts receivable balance is $10,000 that John loaned to his brother 5 years ago. John included this in the receivables of Gabelli Corporation so he wouldn’t forget that his brother owes him money.

Instructions

(a) Comment on the proper accounting treatment of the three items above.

(b) Provide a corrected balance sheet for Gabelli Corporation.

(Hint: To get the balance sheet to balance, adjust stockholders’ equity.)

(a) Net increase $31,000

Prepare an income statement, retained earnings statement, and balance sheet; discuss results.

(SO 4, 5)

AP

Determine items included in a statement of cash flows, prepare the statement, and comment.

(SO 4, 5)

AP

Comment on proper accounting treatment and prepare a corrected balance sheet.

(SO 4, 5)

AP

Marginal check figures (in blue) provide a key number to let you know you are on the right track.

(a) Net income $3,800

Ret. earnings $2,400

Tot. assets $37,000

Tot. assets $85,000

Expert:  Neo replied 2 years ago.
Do you need the answer to all those problem above or just for:
• P1-3A
• P3-5A
Customer: replied 2 years ago.

Please try to reply to the question by tomorrow morning, if you need something else please respond before 9 PM tonight. Thank You.

Customer: replied 2 years ago.

Just questions P1-3A and P3-5A.

Expert:  Neo replied 2 years ago.
Please supply for the data for P3-5A.
Customer: replied 2 years ago.

3-5A

Towne Architects incorporated as licensed architects on April 1, 2012. During the first month of the operation of the business, these events and transactions occurred:

Apr. 1

Stockholders invested $18,000 cash in exchange for common stock of the corporation.

1 Hired a secretary-receptionist at a salary of $375 per week, payable monthly.

2 Paid office rent for the month $900.

3 Purchased architectural supplies on account from Spring Green Company $1,300.

10 Completed blueprints on a carport and billed client $1,900 for services.

11 Received $700 cash advance from J. Madison to design a new home.

20 Received $2,800 cash for services completed and delivered to M. Svetlana.

30 Paid secretary-receptionist for the month $1,500.

30 Paid $300 to Spring Green Company for accounts payable due.

The company uses these accounts: Cash, Accounts Receivable, Supplies, Accounts Payable, Unearned Service Revenue, Common Stock, Service Revenue, Salaries and Wages Expense and Rent Expense.

Expert:  Neo replied 2 years ago.

Please download HERE.

Thank you so much! :)

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