Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Adarnson inc, is a small manufacturing company that makes model trains to sell to toy stores it has a small service department that. repairs customers'

image text in transcribed
image text in transcribed
image text in transcribed
Adarnson inc, is a small manufacturing company that makes model trains to sell to toy stores it has a small service department that. repairs customers' trains for a fee. The company has been in business for five years. At December 31,2022 (the compary's fiscal yearend), the accounting records reflected total assets of $740,000 (cash, $280,000; equipment, $110,000, buildings, $350,000 ), total Habilities of $320,000 (short-term notes payable, $220,000, long term notes payable, $100,000 ), and total shareholders" equity of $420.000 (contributed capital, $260.000, retained earnings, $160,000 ). During the current year, 2023 , the followirg events (summarized) occurred a. Borrowed $118,000 cash from the bank and signed a 10 -year note. b. Purchased equipment for $38,000, paying $3,800 in cash and signing a note due in sox months for the balance clssued 10,800 shares for $108,000 cash d Purchased a delivery truck (equipment) for $18,000, paid $9,000 cash and signed a short term note payable for the remainder e. Lent \$2,400 cash to the company president, Clark Adamson, who signed a note promising to pay the amount and annual interest at the rate of 10 percent in one year. f Built an addition on the factory for $320,000 and paid cash to the contractor. 9. Purchased $93,000 in long-term investments. h. Returned a $3,800 piece of equipment purchased in (b) because it proved to be defective; received a reduction of the note payable equal to the value of the defective equipment. I. A shareholder sold $5,800 of her shares in Adamson Inc. to her neighbour for $8,000 Required: 1. Prepare a summary of the preceding transactions. Develop a quick assessment of the transaction effects on Adamson Inc. (t) a transaction does not require an entry, leave the cells blank. Enter any decreases to accourit balances with a minus sign.) 3. Based on beginning balances plus the completed tabulation, calculate the following amounts at the end of 2023 . Compute the company's current ratio at the end of the year. (Round the final onswer to 2 decimal places.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing Teams Dynamics And Efficiency

Authors: Mara Cameran, Angelo Ditillo, Angela Pettinicchio

1st Edition

1032097000, 9781032097008

More Books

Students also viewed these Accounting questions

Question

How is a transaction loss different from an annual loss?

Answered: 1 week ago