Living Corporation (LC), maker of Samson paper products, decided to hold a manag
ID: 2337735 • Letter: L
Question
Living Corporation (LC), maker of Samson paper products, decided to hold a managers' meeting in Hawai in April. To take advantage of special fares, LC purchased airline tickets in advance from United One Airlines at a total cost of $78,000. These were acquired on October 1 for cash Requirements 1. By using the balance sheet equation format, analyze the impact of the October payment and the April travel on the financial position of both LC and United One. 2. Also prepare journal entries for April for both companies. minus sign to show a decrease in the accounting equation component. Leave any unused cells blank.) Enter the transactions into the equation one transaction at a time, beginning with the October payment on the books of LC first. Assets Liabilities Stockholders' Equity Prepaid Unearned Sales Travel Cash Travel Expense- Salek Revenue Revenue Expense October payment April travel Next, enter the transactions into the equation on the books of United One Airlines, beginning with the October payment. Assets Liabilities Stockholders' Equity Prepaid Sales Travel Cash Travel Expense Sales Revenue Revenue Expense October payment April travel Choose from any list or enter any number in the input fields and then continue to the next question.Explanation / Answer
Answer
Assets
Liabilities
Stockholder's Equity
Cash
Prepaid Travel Expense
Unearned Sales Revenue
Sales Revenue
Travel Expense
October payment
$ (78,000.00)
$ 78,000.00
April Travel
$ (78,000.00)
$ 78,000.00
Assets
Liabilities
Stockholder's Equity
Cash
Prepaid Travel Expense
Unearned Sales Revenue
Sales Revenue
Travel Expense
October payment
$ 78,000.00
$ -
$ 78,000.00
April Travel
$ (78,000.00)
$ 78,000.00
Date
Accounts (LC)
Debit
Credit
Apr-30
Travel Expense
$ 78,000.00
Prepaid Travel Expenses
$ 78,000.00
(expense recognised)
Date
Accounts (UNITED ONE)
Debit
Credit
Apr-30
Unearned Sales Revenue
$ 78,000.00
Sales Revenue
$ 78,000.00
(revenue recognised)
Assets
Liabilities
Stockholder's Equity
Cash
Prepaid Travel Expense
Unearned Sales Revenue
Sales Revenue
Travel Expense
October payment
$ (78,000.00)
$ 78,000.00
April Travel
$ (78,000.00)
$ 78,000.00
Assets
Liabilities
Stockholder's Equity
Cash
Prepaid Travel Expense
Unearned Sales Revenue
Sales Revenue
Travel Expense
October payment
$ 78,000.00
$ -
$ 78,000.00
April Travel
$ (78,000.00)
$ 78,000.00
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