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Richard
Richard, Attorney
Category: Business Law
Satisfied Customers: 46880
Experience:  32 years of experience practicing law and a businessman.
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Please consider answering these multiple question problems

Customer Question

Please consider answering these multiple question problems for me. If you accept, let me know what you expect as a payment before I decide to use you or not.
Thanks,
Customer

Problems below:

?#1      The Kara Elizabeth Company borrowed $85,000 in cash from Eastern Bank.

a. List the accounts impacted by the transaction.
b. Indicate whether the transaction increased or decreased the account.
c. Indicate how much the transaction increased or decreased the account.
d. Compute the impact of the transaction on total assets, total liabilities, and total owners’ equity.
e. Make the journal entry necessary to record the transaction.
f. Construct a T-account representing each account impacted by those five transactions.
g. Post all of the journal entries to these T-accounts.
h. Compute the ending balance in each account.
* Note: Assume that the beginning balance in each T-account is zero.
I. Using the ending balances in those T-accounts, construct a trial balance.
* Note: The only account that is common to these two sets of T-accounts is the cash account;
J. Add the two cash account balances together to get the total balance.



?#2      The Kara Elizabeth Company used $45,000 in cash to purchase land on the west side of Hatu Lake.

a. List the accounts impacted by the transaction.
b. Indicate whether the transaction increased or decreased the account.
c. Indicate how much the transaction increased or decreased the account.
d. Compute the impact of the transaction on total assets, total liabilities, and total owners’ equity.
e. Make the journal entry necessary to record the transaction.
f. Construct a T-account representing each account impacted by those five transactions.
g. Post all of the journal entries to these T-accounts.
h. Compute the ending balance in each account.
* Note: Assume that the beginning balance in each T-account is zero.
I. Using the ending balances in those T-accounts, construct a trial balance.
* Note: The only account that is common to these two sets of T-accounts is the cash account;
J. Add the two cash account balances together to get the total balance.






* Note: Journal entries are from the books of Kara Elizabeth Company:
Account                     Account Balance
a. Insurance Expense                          $1,600
b. Cash                               1,200
c. Sales Revenue                          7,500
d. Advertising Expense                     1,800
e. Accounts Payable                          2,100
f. Dividends                               600
g. Interest Revenue
Submitted: 5 years ago.
Category: Business Law
Expert:  Richard replied 5 years ago.
Hi there...The question I have for you is that subparagraph (f) references 5 transactions. Each problem seems to have only one transaction...one being borrowing the money; and the second being buying the land. Could you clear up this confusion?
Customer: replied 5 years ago.

I wish i could. That is one of the primary reasons I am coming to you to ask for help.

I dont get it either, and my educational facilitator is not any help. These are questions from a non-graded assignment from the text. However, there will be questions like this on the next test, I am sure.

I thought it was referring to the a-e paarts of the problem, since that makes-up five things.

Feel free to ask me more questions that might help clarify what this text question is expecting me to do.

Thanks,

Customer

Expert:  Richard replied 5 years ago.

Let me just address each of the questions for you. It's not as complicated as it may seem. Here we go...I will write the answer after the question.

?#1 The Kara Elizabeth Company borrowed $85,000 in cash from Eastern Bank.

a. List the accounts impacted by the transaction.
You would debit cash for $85,000 and credit a new account EasternBank Loan for $85,000.
b. Indicate whether the transaction increased or decreased the account. The cash account would increase by $85,000 and increase the Eastern Bank Loan account by $85,000.
c. Indicate how much the transaction increased or decreased the account. Each account was increased by $85,000.
d. Compute the impact of the transaction on total assets, total liabilities, and total owners' equity. Assets would increase by $85,000; liabilities would increase by $85,000; there would be no impact on owner's equity
e. Make the journal entry necessary to record the transaction. Same answer as for (a).
f. Construct a T-account representing each account impacted by those five transactions. Cash t-account would be debited with $85,000; Eastern Bank Loan account would be credited with $85,000.
g. Post all of the journal entries to these T-accounts. Same as (f) above.
h. Compute the ending balance in each account. The cash account would increase from $1200 to $86,500. The new Eastern Bank Loan account would increase from zero to $85,000.
* Note: Assume that the beginning balance in each T-account is zero.
I. Using the ending balances in those T-accounts, construct a trial balance.
* Note: The only account that is common to these two sets of T-accounts is the cash account;
J. Add the two cash account balances together to get the total balance.

I do not understand what is being requested by (I) and (J)

?#2 The Kara Elizabeth Company used $45,000 in cash to purchase land on the west side of Hatu Lake.

a. List the accounts impacted by the transaction.
A new Land account would be created and the cash account would be impacted.
b. Indicate whether the transaction increased or decreased the account. Land account would increase; the cash account would be decreased.
c. Indicate how much the transaction increased or decreased the account. Land account would increase by $45,000; Cash account would decrease by $45,000.
d. Compute the impact of the transaction on total assets, total liabilities, and total owners' equity. No effect on any of these.
e. Make the journal entry necessary to record the transaction. Debit the new Land account by $45,000; credit Cash account by $45,000.
f. Construct a T-account representing each account impacted by those five transactions. Cash T-Account would have $1200 and $85,000 on the debit side; adn $45,000 on the credit side; Land account would have $$45,000 on the debit side.
g. Post all of the journal entries to these T-accounts. Debit new Land account by $45,000; Credit Cash Account by $45,000
h. Compute the ending balance in each account. Cash would go from $86,200 to $41,200; New Land account would go from zero to $45,000. All other accounts would remain as below.
* Note: Assume that the beginning balance in each T-account is zero.
I. Using the ending balances in those T-accounts, construct a trial balance.
* Note: The only account that is common to these two sets of T-accounts is the cash account;
J. Add the two cash account balances together to get the total balance.

I don't really understand what is being requested for (I) and (J)

 

I hope this has given you the guidance you were seeking. I wish you the best of luck!

 

 

 

The information given here is not legal advice. As all states have different intricacies in their laws, the information given is general only. This communication does not establish an attorney-client relationship with you. I hope this answer has been helpful to you.





* Note: Journal entries are from the books of Kara Elizabeth Company:
Account Account Balance
a. Insurance Expense $1,600
b. Cash 1,200
c. Sales Revenue 7,500
d. Advertising Expense 1,800
e. Accounts Payable 2,100
f. Dividends 600
g. Interest Revenue

 

 

Customer: replied 5 years ago.

SeekingtoRenderAid,

 

I now think I understand what the other five transactions are, listed below:

 

 

1. The Kara Elizabeth Company borrowed $85,000 in cash from Eastern Bank.

 

2. The Kara Elizabeth Company used $45,000 in cash to purchase land on the west side of Hatu Lake.

 

3. The Kara Elizabeth Company used $30,000 in cash to repay a portion of its bank loan. For simplicity, assume that there is no interest on the loan.

 

4. The Kara Elizabeth Company received $75,000 in cash as an additional investment by the stockholders (owners) of the company.

 

5. The Kara Elizabeth Company purchased a building for $130,000. The company paid $50,000 of the purchase price in cash and signed a mortgage contract obligating it to pay the remaining $80,000 over the next 10 years.

 

 

I didn't understand it at first because we were not asked to do steps a through d for transactions 3 through 5.

 

I hope this helps clarify the problem.

 

I would have replied sooner, (after I replied the first time) but I do not know how to contact you unless you contact me first.

 

Thanks,

Customer

Expert:  Richard replied 5 years ago.

Ok...here is the answer to (f) which regard to each of the 5 transactions....

 

1. The Kara Elizabeth Company borrowed $85,000 in cash from Eastern Bank. The existing Cash T-Account is debited with $85,000 and the new Eastern Bank Loan T-Account is credited with $85,000. The existing Cash T-Account will now have two debits....the $1200 and the $85,000.

 

2. The Kara Elizabeth Company used $45,000 in cash to purchase land on the west side of Hatu Lake. The existing cash T-Account will be debited with $45,000...such account now having the 2 debits shown in (1) above and a credit of $45,000; A new Land T-Account will be debit with $45,000.

 

3. The Kara Elizabeth Company used $30,000 in cash to repay a portion of its bank loan. For simplicity, assume that there is no interest on the loan. Cash T-Account will be credited with $30,000...such account now having two debits described in (1) and two credits...the one described in (2) and the $30,000 described in this paragraph (3). Eastern Bank Loan T-Account will be debited by $30,000...now it will have debit of $30,000 and a credit of $85,000 (as described in paragraph (1).

 

4. The Kara Elizabeth Company received $75,000 in cash as an additional investment by the stockholders (owners) of the company. Cash T-Account debited by $75,000 and Owner's Equity T-Account credited with $75,000.

 

5. The Kara Elizabeth Company purchased a building for $130,000. The company paid $50,000 of the purchase price in cash and signed a mortgage contract obligating it to pay the remaining $80,000 over the next 10 years. Building T-Account debited by $130,000; Cash T-Account credited by $50,000; Mortgage T-Account credited by $80,000.

I hope this has given you the guidance you were seeking. I wish you the best of luck!

 

 

 

The information given here is not legal advice. As all states have different intricacies in their laws, the information given is general only. This communication does not establish an attorney-client relationship with you. I hope this answer has been helpful to you.

 

 

Customer: replied 5 years ago.

SeekingtoRenderAid,

 

When I originally posted the "question," (before it was sent to you) I chose a legal business person because it was the only thing that I saw that had the word "business" in the title. The other choices were medical, health, Toyota, Ford, etc.

 

I did not see an accountant listed for me to choose. Are you also an accountant, or do you know an accountant that you can ask about sections I and J? My questions are primarily for an accountant, not a lawyer, yet this service recommended you and you accepted. I really need to know what to do for parts I and J.

 

 

Thanks,

Customer

 

Expert:  Richard replied 5 years ago.

I'm an attorney and also have a masters degree in finance and am very familiar with this. But to be honest with you, it's beyond the scope of this format. Let me give you some guidance on what to do now that I have taken a closer look.

 

After you make all the T-Account adjustments I have described, then a trial balance is simply taking each resulting T-Account balance and preparing a balance sheet....The asset accounts first, then the liability account, then assets less liabilites will be owner's equity. Then you will want to do an income statement...it will have only income less expenses.

 

When he is referring to the two cash accounts...take the balance of the Cash T-Account (after making all the adjustments I have detailed) and add the Sales Revenue Cash.

 

 

I hope this has given you the guidance you were seeking. I wish you the best of luck!

 

 

 

The information given here is not legal advice. As all states have different intricacies in their laws, the information given is general only. This communication does not establish an attorney-client relationship with you. I hope this answer has been helpful to you.

Customer: replied 5 years ago.

 

SeekingtoRenderAid,

 

One final question before I accept. Do you have a website that would illustrate (for visual learners like myself) what you are explaining about J & I ?

 

I would also appreciate any other websites that you have found useful for helping people like me that are taking a class on accounting because it is a requirement for the program that I am in, but who have no intention or plans of ever using accounting in the future.

 

 

Thanks,

Customer

 

Expert:  Richard replied 5 years ago.

Since you just need to get through this class and don't want to pursue accounting thereafter...I would recommend "Accounting for Dummies." I think you can probably find it online, but if not...you can buy the book from Barnes & Noble or Amazon. It will answer all these things for you! I understand your frustration over this!

 

 

I hope this has given you the guidance you were seeking. I wish you the best of luck!

 

 

 

The information given here is not legal advice. As all states have different intricacies in their laws, the information given is general only. This communication does not establish an attorney-client relationship with you. I hope this answer has been helpful to you.

Richard, Attorney
Category: Business Law
Satisfied Customers: 46880
Experience: 32 years of experience practicing law and a businessman.
Richard and 6 other Business Law Specialists are ready to help you
Customer: replied 5 years ago.

This is only the second time that I used this website service. The last time I was charged double what was expected by both parties.

I do not want to pay double this time since it is already double what I wanted to pay originally ($20). I agree to paying you $40, so I clicked accept. However, I was typing a message when I accidentally hit the enter key I think.

Now I do not now if you are getting paid anything since I did not click on any of the buttons. I will check my online banking statement later, but if you know that you have or have not been paid by me let me know.

Thanks,

Customer

Expert:  Richard replied 5 years ago.
Thanks so much! I did receive payment...I appreciate it. Look me up if you need any help in the future. Best of luck to you!!!!

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