Application Problem 2-15A a, b1-b4 (Part Level Submission) The Hughes Tools Company started business on October 1, 2019. Its fiscal year runs through to September 30 the following year. The following transactions occurred on October 1, 2019, and ended on September 30, 2020. 1 2. 3. 4. 5. 6. 7. On October 1, 2019, Jill Hughes invested $178,000 to start the business. Hughes is the only owner. She was issued 10,000 common shares. On October 1, Hughes Tools borrowed $228,000 from a venture capitalist (a lender who specializes in start-up companies) and signed a note payable. On October 1, the company rented a building. The rental agreement was a two-year contract requiring quarterly rental payments (every three months) of $15 first payment was made on October 1, 2019 (covering the period from October 1 to December 31). Thereafter, payments were due on December 31, March 3 for each three-month period that followed. All the rental payments were made as specified in the agreement. On October 1, the company purchased equipment costing $262,900 for cash. Initial inventory was purchased for $86,000 cash. Additional purchases of inventory during the year totalled $571,000, all on account. Sales during the year totalled $947,500, of which $852,750 were on account. Collections from customers on account totalled $658,500. Payments to suppliers on account totalled $515,000. The cost of the inventory that was sold during the year was $559,500. Selling and administrative expenses totalled $85,000 for the year. Of this amount, $5,900 was unpaid at year end. Interest on the note payable from the venture capitalist was paid at year end (September 30, 2020). The interest rate on the note is 10%. In addition, $29, repaid at that time. The equipment was depreciated based on an estimated useful life of 10 years and a residual value of $23,900. The company declared and paid a dividend of $5,400. 8. 9. 10. 11. 12. 13. 14. Part Level Sub on October 1, 2019. Its fiscal year runs through to September 30 the following u. II mber 30, 2020. od 1,000 to start the business. Hughes is the only owner. She was issued 10,000 common shares. ed $228,000 from a venture capitalist (a lender who specializes in start-up companies) and signed a note payable. building. The rental agreement was a two-year contract requiring quarterly rental payments (every three months) of $15,000, payable in advance. The 1, 2019 (covering the period from October 1 to December 31). Thereafter, payments were due on December 31, March 31, June 30, and September 30 lowed. All the rental payments were made as specified in the agreement. ed equipment costing $262,900 for cash. 36,000 cash. ing the year totalled $571,000, all on account 00, of which $852,750 were on account. totalled $658,500. led $515,000. during the year was $559,500. called $85,000 for the year of this amount, $5,900 was unpaid at year end. renture capitalist was paid at year end (September 30, 2020). The interest rate on the note is 10%. In addition, $29,500 of the note principal was on an estimated useful life of 10 years and a residual value of $23,900. end of $5,400. - accounting equation. (If an amount reduce STANDARD VIEW INT NE Re Porable 178000 178000 228000 228000 3. 15000 15000 bulb) Not Applicable Not Applicable -262900 262900 Not Applicable 5 -86000 86000 Not Applicable 6. 571000 571000 Not Applicable 7. 947500 852750 947500|| Revenue 8. 658500 -658500 bllllll Hub Not Applicable -515000 515000 Not Applicable 10. -559500 -559500|| Expense X 11. -85000 5900 -90900 x X z 947500 852750 00 947500 | Revers 8. 658500 -658500 Not Applicable -515000 S15000 Not Applicable 10. 559500 -559500 | Expens 85000 5900 -90900 | Expense Not Applicable 23900 -23900|| Expen -5400 Expense Totals 194250 97500 239000 61900 228000 178000 267800 STANDARD VIEW PRINTER VERSION RACK Application Problem 2-15A a, b1-4 (Part Level Submission) The Hughes Tools Company started business on October 1, 2019. Its fiscal year runs through to September 30 the following year. The following transactions occurred in the fiscal year that started on October 1, 2019, and ended on September 30, 2020. 1. 2 3. 4. 5. 6 7. 8. On October 1, 2019, Jill Hughes invested $178,000 to start the business. Hughes is the only owner. She was issued 10,000 common shares On October 1, Hughes Tools borrowed $228,000 from a venture capitalist (a lender who spedalizes in start-up companies) and signed a note payable. On October 1, the company rented a building. The rental agreement was a two-year contract requiring quarterly rental payments (every three months) of $15,000, payable in advance. The first payment was made on October 1, 2019 (covering the period from October 1 to December 31). Thereafter, payments were due on December 31, arch 31, June 30, and September 30 for each three-month period that followed. All the rental payments were made as specified in the agreement. On October 1, the company purchased equipment costing $262,900 for cash. Initial inventory was purchased for $86,000 cash. Additional purchases of inventory during the year totalled $571,000, all on account. Sales during the year totalled $947,500, of which $852,750 were on account Collections from customers on account totalled $658,500. Payments to suppliers on account totalled $515,000. The cost of the inventory that was sold during the year was $559,500. Selling and administrative expenses totalled $85,000 for the year of this amount, $5,900 was unpaid at year end. Interest on the note payable from the venture capitalist was paid at year end (September 30, 2020). The interest rate on the note is 10%. In addition, $29.500 of the note principal was rupaid at that time. The equipment was depreciated based on an estimated useful life of 10 years and a residual value of $23,900. The company decared and paid a dividend of $5,400. 9. 10. 11. 12 13. (a) Your answer is partially correct. Try again. an amount reduces the account balance then enter with negative it is or Divided UMP Not Applicable) Assets Llabilities Cash Accounts Receivable Prepaid Rent Shareholders' Equity Common Shares Retained Earnings Inventory Equipment Accounts Payable Note Payable Reventer Dhuldend bedared 178000 178000 Not Applicable E 2 228000 228000 Not Applicable 15000 15000 Not Applicable Not Applicable -262900 262900 Not Applicable 5 -86000 80000 Natacicable 6. 571000 571000 applicable 7. 947500 852750 9435 8 658500 -658500 pliesble 9 -515000 915000 10 -559500 -359500 X FT Type here to search o DI e a # E 12 ) ENG 23:13 27-05-2020 STANDARD VIEW PRINTER VERSIOR MACK NETO Not Applicable -262900 252900 Not Applicable 5 -86000 86000 Not Applicable 6. 571000 571000 Not Applicable 047500 852750 947500 Revenue 8 658500 -658500 Not Applicable S15000 515000 Not Applicable 10. 559500 -559500 | Expense 11 85000 5000 -90900 l Expense 12 Not Applicable 13 20000 23900 14 5400 -5400D ponse 178000 Totals 257800 20000 1042700 * ING 23 Olype here to search CH o 27-05-2020