4th EditionDon Herrmann, J. David Spiceland, Wayne Thomas1,097 explanations
16th EditionMadhav Rajan1,008 explanations
5th EditionEric W. Noreen, Peter C. Brewer, Ray H Garrison518 explanations
9th EditionCharles T. Horngren, Walter T Harrison, Walter T. Harrison Jr.1,143 explanations
ACCOUNTING1. Prepare general journal entries for the following transactions of Valdez Services. a. Brina Valdez invested $20,000 cash in the company in exchange for common stock. b. The company provided services to a client and immediately received$900 cash. c. The company received $10,000 cash from a client in payment for services to be provided next year. d. The company received$3,500 cash from a client in partial payment of accounts receivable. e. The company borrowed $5,000 cash from the bank by signing a note payable. 2. Transactions a, c, d, and e did not yield revenue. Match each transaction (a, c, d, and e) with one of the following reasons for not recording revenue. ________ This transaction changed the form of an asset from a receivable to cash. Total assets were not increased (revenue was recognized when the services were originally provided). __________ This transaction brought in cash (increased assets), and it also increased a liability by the same amount (represented by the signing of a note to repay the amount). ___________ This transaction brought in cash, but this is an owner investment. _________ This transaction brought in cash, and it created a liability to provide services to the client in the next year. ACCOUNTINGA fire destroyed a warehouse of the Goren Group, Inc., on May 4, 2016. Accounting records on that date indicated the following: Merchandise inventory, January 1, 2016 $1,900,000 Purchases to date 5,800,000 Freight-in 400,000 Sales to date 8,200,000 The gross profit ratio has averaged 20% of sales for the past four years. Required: Use the gross profit method to estimate the cost of the inventory destroyed in the fire.
