AFM123 Lecture Notes - Lecture 2: Accounts Payable, Promissory Note, General Ledger

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salmonkangaroo235

26 Oct 2015

School

University of Waterloo

Department

Accounting & Financial Management

Course

AFM123

Professor

Peter Blake

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Document Summary

Total assets = total liabilities + shareholders" equity. Remember: owns - owes = equity owns = owes + equity. A + e + d = l + c +r. Crs (this is what is meant by type ) Wednesday january 14th 2015 business transactions (sales) - source document - accounting department - analyze it (record at least 2 accounts) - eventually it makes its way to a financial statement. Jan31 (ix) electricity bill arrives due feb 19th (usage from jan 1st - 31st) At least two accounts that have been effected. Assets = liabilities + equity (r - e + c - d) debit credit (when they"re going up) You"re going to debit cash for 10,000 and credit common shares for 10,000. You"re going to debit office equipment and credit accounts payable. You"re going to debit office supplies and credit cash for . You"re going to debit accounts receivable and credit service revenues (sales)

Related Questions

. In a one-page memo, provide an explanation to the managementteam on July's financial performance. Please provide a one-pageexplanation. Thanks in advance

Ajayi Art Inc.
	Trial Balance

	Account Title& Explaination	Amt (Dr)	Amt (Cr)
	Cash	$ 2,48,525
	AccountsReceivable	$ 2,400
	Prepaid Rent	$ 2,000
	OfficeEquipment	$ 22,250
	Art Supplies	$ 8,790
	AccumulatedDepreciation		$ 371
	AccountsPayable		$ 6,800
	SalaryPayable		$ 3,800
	InterestPayable		$185
	ServiceRevenue		$ 4,300
	UneanedRevenue		$ 3,500
	Common Stock		$ 2,50,000
	Note Payable		$ 22,250
	SalaryExpenses	$ 3,800
	Misc OfficeExpenses	$ 375
	DepreciationExpenses	$ 371
	Rent	$ 1,000
	InterestExpenses	$ 185
	SuppliesExpenses	$ 1,510
	Total	$ 2,91,206	$ 2,91,206


	Ajayi Art Inc.
	Income Statement		-

	Service Revenue		$ 4,300.00
	Expenses
	Salary Expenses	$ 3,800.00
	Supplies Expenses	$ 1,510.00
	Rent Expenses	$ 1,000.00
	Interest Expenses	$ 185.42
	Depreciation	$ 370.83
	Misc.Office Expenses	$ 375.00

	Total Expenses=(B)		$ 7,241.25
	Net Income(A)-(B)		$ -2,941.25

	Ajayi Art Inc.
	Statement of Owner'sEquity
	July 31st
	Beginning RetainedEarnings	0
	Add: Net Income	$ (2,941.25)
	Ending Retained Earnings	$ (2,941.25)

	Ajayi Art Inc.
	Balance Sheet
	July 31st
	Assets
	Cash	$ 2,48,525.00
	Accounts Receivable	$ 2,400.00
	Art Supplies	$ 8,790.00
	Prepaid Rent	$ 2,000.00
	Office Equipment	$ 22,250.00
	AccumulatedDepreciation-Office Equipment	$ -370.83
	Total Assets		$ 2,83,594.17
	Liabilities &Stockholder's equity
	Liabilities
	Accounts Payable	$ 6,800.00
	Salary Payable	$ 3,800.00
	Interest Payable	$ 185.42
	Unearned Service Revenue	$ 3,500.00
	Note Payable	$ 22,250.00
	Total Liabilities		$ 36,535.42
	Stockholder's Equity
	Common Stock	$ 2,50,000.00
	Retained Earnings	$ (2,941.25)
	Total Equity		$ 2,47,058.75
	Total Liabilities &Stockholder's Equity		$ 2,83,594.17

violetbutterfly818

In addition to presenting the computed answers, please also discuss how you arrived at each answers the accounting problem asks. The accounting problem presents a companyâs balance sheet and income statement. The Diamond Gem Cleaning and Maintenance Service Company is in the business of contracting its cleaning and maintenance services to office buildings. The balance sheet and income statement have blank lines. Determine the values that would be appropriate for each blank line. Provide a narrative of how you arrived at each value. In doing so, explain the account being valued and its relationship to the other financial data. For example, if the accounts payable line was missing, explain that you can derive its value based on knowing all the other values of the current liabilities section. Then explain what an account liability is, as well as why it would belong in the current liabilities section of the balance sheet

Please refer to the income statement and balance sheet of the Diamond Gem Cleaning and Maintenance Service Company available down:

Superior papers will mention and explain the following elements when responding to the assignment question:

Provide correct balances for the blank financial account lines.

Provide a narrative about how the values were determined.

Provide a definition and explanation of each account line that was completed

Balance sheet
ASSETS

CURRENT ASSETS

Cash		225,971
Contracts receivables		[__A____]
Other assets		162,847

Total current assets		893,868

LONG TERM ASSETS

Equipment		[___B____]

TOTAL ASSETS		1,180,660

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

Accounts payable		[__C____]
Line of credit		85,000
Accrued expenses		72,495
Income tax payable		46,660
Current portion of notes payable		31,747
Deferred income taxes		78,460

Total current liabilities		571,697

LONG TERM LIABILITIES
Notes payable (long term)		172,467

TOTAL LIABILITIES		744,164

STOCKHOLDERS' EQUITY

Common stock	62,000
Additional paid-in capital	63,862

Retained Earnings	[___D___]

Total stockholders' equity		436,496

TOTAL LIABILITIES AND STOCKHOLDERS EQUITY		[___E___]

Income sheet

Contract Revenues	5,146,862

Contract Costs	[___F____]

Gross Profit	614,343

General and Administrative Expenses	322,356

Operating Income	291,987

Other Expense	25,770

Income Before Provision for Income Taxes	266,217

Provision for Income Taxes	[__G____]

Net Income	150,767


Retained Earnings, Beginning Balance	[__H____]

Net Income	150,767

Retained Earnings, Ending Balance	310,634

cyanmosquito456

7. Consider theeffects of the independent transactions, a through i, on acompanyâs balance sheet, income statement, statement of cash flows,and statement of stockholdersâ equity.

a. The company purchasedinventory on credit.

b. The company sold allinventory purchased in transaction a) on credit (and formore than its cost).

c. The company collectedcash from customers from transaction b).

d. The company purchasedequipment with cash.

e. The company paid cash fora note payable that came due.

f. The company paidcash for interest on borrowings.

g. Wages were earned bycompany employees but not yet paid.

h. The company paid cash individends.

i. The companyreceived cash for the issuance of stock.

Complete the table below to explainthe effects and financial statement linkages. Use â+â to indicatethe account increases and âââ to indicate the account decreases (15pts).

Balance sheet

Cash

Noncash assets

Total liabilities

Contributed capital

Retained earnings

Statement of cash flows

Operating cash flow

Investing cash flow

Financing cash flow

Income statement

Revenues

Expenses

Net earnings

Statement of stockholdersâ equity

Contributed capital

Retained earnings

skydog210

AFM123 Lecture Notes - Lecture 2: Accounts Payable, Promissory Note, General Ledger

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