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EZ Curb Company completed the following transactions. The annual accounting period ends December 31. Jan. 8 Purchased merchandise on account at a cost of $17,000.
EZ Curb Company completed the following transactions. The annual accounting period ends December 31.
Jan. | 8 | Purchased merchandise on account at a cost of $17,000. (Assume a perpetual inventory system.) | ||
Jan. | 17 | Paid for the January 8 purchase. | ||
Apr. | 1 | Received $44,800 from National Bank after signing a 12-month, 9.0 percent, promissory note. | ||
June | 3 | Purchased merchandise on account at a cost of $21,000. | ||
July | 5 | Paid for the June 3 purchase. | ||
July | 31 | Rented out a small office in a building owned by EZ Curb Company and collected six months rent in advance, amounting to $7,800. (Use an account called Deferred Revenue.) | ||
Dec. | 20 | Collected $160 cash on account from a customer. | ||
Dec. | 31 | Determined that wages of $7,700 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:
- For each listed transaction and related adjusting entry, indicate the accounts, amounts, and effects on the accounting equation.
- For each transaction and related adjusting entry, indicate whether the debt-to-assets ratio is increased or decreased or there is no change. (Assume EZ Curb Companys debt-to-assets ratio has always been less than 1.0.)
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