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PAS. LO 12.2 Review the following transactions, and prepare any necessary journal entries. Al. On July 16, Arrow Corp. purchases 200 computers (Equipment) at S500

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PAS. LO 12.2 Review the following transactions, and prepare any necessary journal entries. Al. On July 16, Arrow Corp. purchases 200 computers (Equipment) at S500 per computer from a supplier, on credit. Terms of the purchase are 4/10, n/50 from the invoice date of July 16. AJ. On August 10, Hondo Inc. receives advance cash payment from a client for legal services in the amount of $9,000. Hondo had yet to provide legal services as of August 10. AK. On September 22, Jack Pies sells thirty pies for $25 cash per pie. The sales tax rate is 8%. AL. On November 8, More Supplies paid a portion of their noncurrent note in the amount of $3,250 cash. Solution AM Jul 16 liquipment Accounts Payable To recognize purchase of computers on credit. 4/10, r/50 AN Aug. 10 Cash Uneared Legal Revenue To recognise advance payment from client AO Sept. 22 Cash Sales Tax Payable Sales To recognize sale, including sales tax at 8% AP Nov. 8 Note Payable Cash To recognize payment of current portion of noncurrent mode PAG. LO 12.3 Machine Corp. has several pending lawsuits against its company. Review each situation and (1) determine the treatment for each situation as probable and estimable, probable and inestimable, reasonably possible, or remote; (2) determine what, if any, recognition or note disclosure is required; and (3) prepare any journal entries required to recognize a contingent liability. AQ. A pending lawsuit, claiming $100,000 in damages, is considered likely to favor the plaintiff and can be reasonably estimated. AR. Machine Corp, believes there might be other potential lawsuits about this faulty machinery, but this is unlikely to occur. AS. A claimant sues Machine Corp. for damages, from a dishonored service contract agreement; the plaintiff will likely win the case but damages cannot be reasonably estimated At Machine Corp, believes a customer will win a lawsuit it filed, but the outcome is not likely and is not remote. It is possible the customer will win

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