Question
Jack Hammer Company completed the following transactions. The annual accounting period ends December 31. Apr. 30 Received $660,000 from Commerce Bank after signing a 12-month,
Jack Hammer Company completed the following transactions. The annual accounting period ends December 31. |
Apr. 30 | Received $660,000 from Commerce Bank after signing a 12-month, 8.5 percent, promissory note. |
June 6 | Purchased merchandise on account at a cost of $80,000. (Assume a perpetual inventory system.) |
July 15 | Paid for the June 6 purchase. |
Aug. 31 | Signed a contract to provide security service to a small apartment complex and collected six months fees in advance amounting to $26,500. (Use an account called Unearned Revenue.) |
Dec. 31 | Determined salary and wages of $45,000 were earned but not yet paid as of 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 security service. |
Required: | |
1. | For each listed transaction and related adjusting entry, indicate the accounts, amounts, and effects on the accounting equation. (Do not round intermediate calculations. Enter any decreases to account balances with a minus sign. Enter your answers in transaction order provided in the problem statement.) |
2. | For each item, indicate whether the debt-to-assets ratio is increased or decreased or there is no change. (Assume Jack Hammers debt-to-assets ratio is less than 1.0.) (Enter your answers in transaction order provided in the problem statement.) |
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