Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please help place the following items into the transactions! i More Info The Baxter Company was incorporated on September 1, 20X0. Baxter had 20 holders

Please help place the following items into the transactions!image text in transcribed

i More Info The Baxter Company was incorporated on September 1, 20X0. Baxter had 20 holders of common stock. Reya Baxter, the president and chief e officer, held 59% of the shares. The company rented space in chain discount stores and specialized in selling ladies' accessories. Baxter's first ld was in a store that was part of The Ivy Hall in Cleveland. The following events occurred during September (Click the icon to view the events and transactions.) gnore mber Assets = A/R Merch. + Inv. +D Liabilities + Stockholders' Equity Paid-in Retained + A/P + Capital + Earnings + 800,000 + L Prepaid + Rent +D Equip. + and Fixt + Cash + 300.000 +D = NP a + a. The company was incorporated. Common stockholders invested $600.000 cash. b. Purchased merchandise inventory for cash. $25,000. c. Purchased merchandise inventory on open account, $65.000. d. Merchandise carried in inventory at a cost of $31,000 was sold for cash for $28,000 and on open account for $82,000, for a grand total of $110,000. Baxter (not The Ivy Hall) carries and collects these accounts receivable. e. Collection of accounts receivable, $5,000. See transaction (d). f. Payments of accounts payable $45.000. See transaction (c). g. Special display equipment and fixtures were acquired on September 1 for $115.200. Their expected useful life was 72 months. This equipment was removable. Baxter paid $18,000 as a down payment and signed a promissory note for $97,200. Also see transaction (k). h. On September 1, Baxter signed a rental agreement with The Ivy Hall. The agreement called for a flat $1,500 per month payable quarterly in advance. Therefore, Baxter paid $4,500 cash on September 1. i. The rental agreement also called for a payment of 3% of all sales. This payment was in addition to the flat $1.500 per month. In this way, The Ivy Hall would share in any success of the venture and be compensated for general services such as cleaning and utilities. This payment was to be made in cash on the last day of each month as soon as the sales for the month had been tabulated. Therefore, Baxter made the payment on September 30. 1. Employee wages and sales commissions were all paid for in cash. The amount was $31,000. k. Depreciation expense of $1.600 was recognized ($115,200/72 months). See transaction (9) I. The expiration of an appropriate amount of prepaid rental services was recognized. See transaction (h). + + + + + + + + + 7. A . DOON Print Done

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Regulation In Japan Evolution And Development From 2001 To 2015

Authors: Masatsugu Sanada, Yoshihiro Tokuga

1st Edition

0367221071, 9780367221072

More Books

Students also viewed these Accounting questions