CP10-1 Determining Financial Effects of Transactions Affecting Current Liabilities with Evaluation of Effects on the Quick Ratio [LO 10-2, LO 10-5]

EZ Curb Company completed the following transactions during 2013. The annual accounting period ends December 31, 2013.

Jan. 8	Purchased merchandise on account at a cost of $14,000. (Assume a perpetual inventory system.)
17	Paid for the January 8 purchase.
Apr. 1	Received $40,000 from National Bank after signing a 12-month, 6 percent, promissory note.
June 3	Purchased merchandise on account at a cost of $18,000.
July 5	Paid for the June 3 purchase.
Aug. 1	Rented out a small office in a building owned by EZ Curb Company and collected six months rent in advance amounting to $6,000. (Use an account called Unearned Rent Revenue.)
Dec. 20	Received a $100 deposit from a customer as a guarantee to return a large trailer borrowed for 30 days.
	TIP: Consider whether EZ Curb Company has an obligation to return the money when the trailer is returned.
Dec. 31	Determined that wages of $6,500 were earned but not yet paid on December 31 (Ignore payroll taxes).
Dec. 31	Adjusted the accounts at year-end, relating to interest.
Dec. 31	Adjusted the accounts at year-end, relating to rent.

Required:

1.

For each listed transaction and related adjusting entry, indicate the accounts, amounts, and effects (+ for increase, for decrease) on the accounting equation. (Do not round intermediate calculations. Enter all amounts as positive values. Enter your answers in transaction order provided in the problem statement.)

CP10-1 Determining Financial Effects of Transactions Affecting Current Liabilities with Evaluation of Effects on the Quick Ratio [LO 10-2, LO 10-5] EZ Curb Company completed the following transactions during 2013. The annual accounting period ends December 31, 2013.Jan. 8Purchased merchandise on account at a cost of $14,000. (Assume a perpetual inventory system.) 17Paid for the January 8 purchase. Apr. 1Received $40,000 from National Bank after signing a 12-month, 6 percent, promissory note. June 3Purchased merchandise on account at a cost of $18,000. July 5Paid for the June 3 purchase. Aug. 1Rented out a small office in a building owned by EZ Curb Company and collected six months½ rent in advance amounting to $6,000. (Use an account called Unearned Rent Revenue.) Dec. 20Received a $100 deposit from a customer as a guarantee to return a large trailer ½borrowed½ for 30 days.TIP: Consider whether EZ Curb Company has an obligation to return the money when the trailer is returned. Dec. 31Determined that wages of $6,500 were earned but not yet paid on December 31 (Ignore payroll taxes). Dec. 31Adjusted the accounts at year-end, relating to interest. Dec. 31Adjusted the accounts at year-end, relating to rent.Required: 1. For each listed transaction and related adjusting entry, indicate the accounts, amounts, and effects (+ for increase, ½ for decrease) on the accounting equation. (Do not round intermediate calculations. Enter all amounts as positive values. Enter your answers in transaction order provided in the problem statement.) 2. For each transaction and related adjusting entry, indicate whether the quick ratio s increased, decreased, or thee s no change. Assume EZ Curb Company?s quick ratio has always been greater than 1.0.) (Enter your answers in transaction order provided in the problem statement)