says, \"Showlng the land at $170,000 will make our company when we try to attrac
ID: 2330238 • Letter: S
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says, "Showlng the land at $170,000 will make our company when we try to attract new investors next month Instructions look lke a better Explain the ethical sinuation involved for Jana Barth, identifying the stakebholders d E1-4 The following sitsations involve accounting principles and assumptions 1. Tisinai Company owns buildings that are worth substantially more than they oriainally o a) cost. In an effort to peovide more relevant information. Tisinai reports the buildings at fair value in its accounting reports expressed in terns of money espenses of the business 2. Kingston Company includes in its accounting records only transaction data that can be 3. Roger Holloway, owner of Roger's Photographs, records his personal living costs as nstnuctiots For each of the three situations, say if the accounting method used is correct or incorrect. If correct, identily which principle or assumption supports the method used. If incorrect, identify which principle or assumption has been violated E1-5 Dichl Cleaners has the following balance sheet items Clanify accounts as ascs hielutiries, and ouner's equeity LO 3) Accounts payable Cash Equipment Supplies Accounts receivable Notes payable Salaries and wages payable Owners capital nstructions Classáfy each item as an asset, liability, or owner's equity E1-6 Selected transactions for Green Valley Lawn Care Company are listed below Anahyor the effect of Monsactions 1. Made cash investment to start business 2. Paid monthly rent. L0 4) 3. Purchased equipment on account. 4. Billed customers for services performed. 5. Withdrew cash for owner's personal use. 6. Received cash from customers billed in (4). 7. Incurred advertising expense on account. 8. Purchased additional equipment for cash 9. Received cash from customers when service was performed nstractions List the numbers of the above transactions and describe the effect of each transaction on assets,liabilities, and owner's equity. For example, the first answer is: (1) Increase in assets and increase in owner's equity E1-7 Falske Computer Timeshare Company entered May 2017 1. Purchased computers for $20,000 from Digital Equipment on account. 2. Paid $4,000 cash for May rent on storage space 3. Received $17,000 cash from customers for contracts billed in April. 4. Performed computer services for Viking Construction Company for $4,000 cash. 5. Paid Tri-State Power Co. $11,000 cash for energy usage in May 6. Falske invested an additional $29,000 in the business 7. Paid Digital Equipment for the computers purchased in (1) above. 8. Incurred advertising expense for May of $1,200 on account. into the following transactions during Analyge the effect of transactiots on assers abiliries, and owner's equity (LO 4) Instructions Indicate with the appropriate letter whether each of the transactions above results in: (a) An increase in assets and a decrease in assets (b) An increase in assets and an increase in owner's equity.Explanation / Answer
E1-4 1 Accounting method is correct.Building should be recorded at the Original cost.Hence,Cost principle is violated here. 2 Correct.Monetary unit assumption is follwed. 3 Incorrect.Only expenses related to business to be recorded.not personal expenses. Hence, Economic entity assumption is violated here. E1-5 Asset Liability Owner's Equity Cash Accounts payable Owner's capital Equipment Notes payable Supplies Salaries and wages payable Accounts receivable E1-6 1 Increase in assets (Cash-Debit) and Increase in owner's equity (Owner's capital-Credit) 2 Decrease in owner's equity (Rent-Debit) and decrease in assets (Cash-Credit) 3 Increase in assets (Equipment-Debit) and Increase in liability(Accounts payable-Credit) 4 Increase in assets (Accounts receivable-Debit) and Increase in owner's equity (Service revenue-Credit) 5 Decrease in owner's equity (Drawings-Debit) and decrease in assets (Cash-Credit) 6 Increase in assets (Cash-Debit) and decrease in assets(Accounts receivable-Credit) 7 Decrease in owner's equity (Advertising expense-Debit) and Increase in liability (Accounts payable-Credit) 8 Increase in assets (Equipment-Debit) and decrease in assets(Cash-Credit) 9 Increase in assets (Cash-Debit) and Increase in owner's equity (Service revenue-Credit) E1-7 1 © Computer-Debit and Accounts payable-Credit 2 Decrease in owner's equity (Rent-Debit) and decrease in assets (Cash-Credit) 3 (a) Cash-Debit and Accounts receivable-Credit 4 (b) Cash-Debit and Service revenue-Credit 5 Decrease in owner's equity (Energy charges-Debit) and decrease in assets (Cash-Credit) 6 (b) Cash-Debit and Owner's capital-Credit 7 Decrease in owner's equity (Computer maintenance-Debit) and decrease in assets (Cash-Credit) 8 Decrease in owner's equity (Advertising expense-Debit) and Increase in liability (Accounts payable-Credit)
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