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Advanced Appliance Center-Cape May has just purchased a franchise from Advanced Appliance Center (AAC). (Click the icon to view the additional information.) Following is the chart of accounts for Advanced Appliance Center-Cape May. As a new business, all beginning balances are $0. (Click the icon to view the chart of accounts.) Advanced Appliance Center-Cape May completed the following transactions during 2018, its first year of operations: (Click the icon to view the transactions.) Read the requirements. Requirement 1. Record the transactions in the general journal. Omit explanations. (Record debits first, then credits. Exclude explanations from any journal entries.) a. Received $580,000 cash and issued common stock. Opened a new checking account at Cape May National Bank and deposited the cash received from the stockholders. Date Accounts Debit Credit (a) 7 Choose from any list or enter any number in the input fields and then click Check Answer. Advanced Appliance CenterCape May has just purchased a franchise from Advanced Appliance Center (AAC). (Click the icon to view the additional information.) i More Info - AAC is a manufacturer of kitchen appliances. AAC markets its products via retail stores that are operated as franchises. As a AAC franchisee, Advanced Appliance CenterCape May will receive many benefits, including having the exclusive right to sell AAC brand appliances in Cape May. AAC appliances have an excellent reputation and the AAC name and logo are readily recognized by consumers. AAC also manages national television advertising campaigns that benefit the franchisees. In exchange for these benefits, Advanced Appliance CenterCape May will pay an annual franchise fee to AAC based on a percentage of sales. The annual franchise fee is a separate cost and in addition to the purchase of the franchise. In addition to purchasing the franchise, Advanced Appliance CenterCape May will also purchase land with an existing building to use for its retail store, store fixtures, and office equipment. The business will purchase appliances from AAC and resell them in its store, primarily to local building contractors for installation in new homes. Print Done More Info Advanced Appliance Center-Cape May Chart of Accounts Cash Common Stock Petty Cash Retained Earnings Accounts Receivable Dividends Allowance for Bad Debts Sales Revenue Merchandise Inventory Interest Revenue Office Supplies Cost of Goods Sold Prepaid Insurance Franchise Fee Expense Interest Receivable Salaries Expense Notes Receivable Utilities Expense Insurance Expense Land Supplies Expense Building Accumulated DepreciationBuilding Bad Debt Expense Store Fixtures Bank Expense Accumulated Depreciation Store Fixtures Credit Card Expense Office Equipment Accumulated DepreciationOffice Equipment Depreciation ExpenseBuilding Depreciation Expense-Store Fixtures Print Done More Info Accounts Receivable Dividends Allowance for Bad Debts Sales Revenue Interest Revenue Merchandise Inventory Office Supplies Cost of Goods Sold Prepaid Insurance Franchise Fee Expense Interest Receivable Salaries Expense Notes Receivable Utilities Expense Insurance Expense Land Supplies Expense Building Accumulated DepreciationBuilding Store Fixtures Bad Debt Expense Bank Expense Accumulated DepreciationStore Fixtures Credit Card Expense Office Equipment Accumulated DepreciationOffice Equipment Franchise Depreciation ExpenseBuilding Depreciation ExpenseStore Fixtures Depreciation Expense-Office Equipment Amortization Expense-Franchise Accounts Payable Interest Payable Interest Expense Notes Payable Cash Short and Over Print Done More Info a. b. C. d. e. f. g. h. i. Received $580,000 cash and issued common stock. Opened a new checking account at Cape May National Bank and deposited the cash received from the stockholders. Paid $54,000 cash for a AAC franchise. Paid $255,000 cash and issued a $350,000, 10-year, 12% notes payable for land with an existing building. The assets had the following market values: Land, $50,000; Building, $555,000. Paid $105,000 for store fixtures. Paid $35,000 for office equipment. Paid $1,500 for office supplies. Paid $3,400 for a two-year insurance policy. Purchased appliances from AAC (merchandise inventory) on account for $450,000. Established a petty cash fund for $100. Sold appliances on account to BCD Contractors for $245,000, terms n/30 (cost, $98,000). Sold appliances to Harris Contracting for $140,000 (cost, $61,000), receiving a 6-month, 15% note. Recorded credit card sales of $70,000 (cost, $31,000), net of processor fee of 1%. Received payment in full from BCD Contractors. Purchased appliances from AAC on account for $700,000. Made payment on account to AAC, $310,000. Sold appliances for cash to FB Home Builders for $360,000 (cost, $179,000). Received payment in full on the maturity date from Harris Contracting for the note. Sold appliances to Geard Contracting for $280,000 (cost, $136,000), receiving a 9-month, 15% note. j. k. 1. m. n. 0. p. q. r. Mada neumant annount to AA 610 non Print Done More Info g. h. i. j. k. 1. m. n. o. p. q. Paid $3,400 for a two-year insurance policy. Purchased appliances from AAC (merchandise inventory) on account for $450,000. Established a petty cash fund for $100. Sold appliances on account to BCD Contractors for $245,000, terms n/30 (cost, $98,000). Sold appliances to Harris Contracting for $140,000 (cost, $61,000), receiving a 6-month, 15% note. Recorded credit card sales of $70,000 (cost, $31,000), net of processor fee of 1%. Received payment in full from BCD Contractors. Purchased appliances from AAC on account for $700,000. Made payment on account to AAC, $310,000. Sold appliances for cash to FB Home Builders for $360,000 (cost, $179,000). Received payment in full on the maturity date from Harris Contracting for the note. Sold appliances to Geard Contracting for $280,000 (cost, $136,000), receiving a 9-month, 15% note. Made payment on account to AAC, $540,000. Sold appliances on account to various businesses for $1,040,000, terms n/30 (cost, $416,000). Collected $680,000 cash on account. Paid cash for expenses: Salaries, $130,000; Utilities, $13,000 Replenished the petty cash fund when the fund had $44 in cash and petty cash tickets for $54 for office supplies. Paid dividends, $2,000. Paid the franchise fee to AAC of 3% of total sales of $2,135,000. r. S. t. u. V. w. x. y. Print Done Requirement 1. Record the transactions in the general journal. Omit explanations. 2. Post to the general ledger. 3. It is a common business practice to reconcile the bank accounts on a monthly basis. However, in this problem, the reconciliation of the company's checking account will be done at the end of the year, based on an annual summary. Reconcile the bank account by comparing the following annual summary statement from Cape May National Bank to the Cash account in the general ledger. Record journal entries as needed and post to the general ledger. Use transaction z as the posting reference. $ 0 Beginning Balance, January 1, 2018 Deposits and other credits: $ 580,000 69,300 245,000 360,000 680,000 1,200 Interest Revenue 1,935,500 Checks and other debits: EFT to Bank Checks* $ 120 Checks: 54,000 255,000 Print Done Requirement 255,000 35,000 105,000 100 3,400 1,500 310,000 540,000 143,000 2,200 Bank service charge (1,449,320) $ 486,180 Ending balance, December 31, 2018 *Bank Checks is a company that prints business checks (considered a bank expense) for Advanced Appliance CenterCape May 4. In preparation for preparing the adjusting entries, complete depreciation schedules for the first five years for the depreciable plant assets, assuming the assets were purchased on January 2, 2018: a. Building, straight-line, 30 years, $75,000 residual value. b. Store Fixtures, straight-line, 15 years, no residual value. Office Equipment, double-declining-balance, 5 years, $2,500 residual value. Dorord diucting antrine for the voor ondod Docomhor 21 2018. C. Print Done Requirement 5. Record adjusting entries for the year ended December 31, 2018: a. One year of the prepaid insurance has expired. b. Management estimates that 5% of Accounts Receivable will be uncollectible. c. An inventory of office supplies indicates $1,374 of supplies have been used. d. Calculate the interest earned on the outstanding Geard Contracting note receivable. Assume the note was received on October 31. Round to the nearest dollar. e. Record depreciation expense for the year. f. Record amortization expense for the year on the franchise, which has a 10-year life. g. Calculate the interest owed on the note payable. Assume the note was issued on January 1. 6. Post adjusting entries and prepare an adjusted trial balance. 7. Prepare a multi-step income statement and statement of retained earnings for the year ended December 31, 2018. Prepare a classified balance sheet as of December 31, 2018. Assume Interest Receivable is a current asset and Interest Payable is a current liability. 8. Evaluate the company's success for the first year of operations by calculating the following ratios. Round to two decimal places. Comment on the results. Liquidity: i. Current ratio ii. Acid-test ratio iii. Cash ratio b. Efficiency: i. Accounts receivable turnover ii. Day's sales in receivables iii. Asset turnover a. Print Done Requirement a. C. One year of the prepaid insurance nas expired. b. Management estimates that 5% of Accounts Receivable will be uncollectible. An inventory of office supplies indicates $1,374 of supplies have been used. d. Calculate the interest earned on the outstanding Geard Contracting note receivable. Assume the note was received on October 31. Round to the nearest dollar. e. Record depreciation expense for the year. f. Record amortization expense for the year on the franchise, which has a 10-year life. g. Calculate the interest owed on the note payable. Assume the note was issued on January 1. 6. Post adjusting entries and prepare an adjusted trial balance. 7. Prepare a multi-step income statement and statement of retained earnings for the year ended December 31, 2018. Prepare a classified balance sheet as of December 31, 2018. Assume Interest Receivable is a current asset and Interest Payable is a current liability. 8. Evaluate the company's success for the first year of operations by calculating the following ratios. Round to two decimal places. Comment on the results. a. Liquidity: i. Current ratio ii. Acid-test ratio iii. Cash ratio b. Efficiency: i. Accounts receivable turnover ii. Day's sales in receivables iii. Asset turnover iv. Rate of return on total assets Print Done Requirement 1. Record the transactions in the general journal. Omit explanations. (Record debits first, then credits. Exclude explanations from any journal entries.) a. Received $580,000 cash and issued common stock. Opened a new checking account at Cape May National Bank and deposited the cash received from the stockholders. Date Accounts Debit Credit (a) Accounts Payable Accounts Receivable Accumulated DepreciationBuilding Accumulated DepreciationOffice Equipment Accumulated DepreciationStore Fixtures Allowance for Bad Debts Amortization Expense-Franchise Bad Debt Expense Bank Expense Building Cash Cash Short and Over Common Stock Choose fron Cost of Goods Sold Credit Card Expense parts. Depreciation ExpenseBuilding remair Depreciation Expense-Office Equipment lick Check Answer. 56 Clear All Requirement 1. Record the transactions in the general journal. Omit explanations. (Record debits first, then credits. Exclude explanations from any journal entries.) a. Received $580,000 cash and issued common stock. Opened a new checking account at Cape May National Bank and deposited the cash received from the stockholders. Date Accounts Debit Credit (a) Depreciation Expense-Office Equipment Depreciation ExpenseStore Fixtures Dividends Franchise Franchise Fee Expense Insurance Expense Interest Expense Interest Payable Interest Receivable Interest Revenue Land Merchandise Inventory Notes Payable Notes Receivable Choose front Office Equipment Office Supplies parts Petty Cash remair Prepaid Insurance lick Check Answer. 56 Clear All Requirement 1. Record the transactions in the general journal. Omit explanations. (Record debits first, then credits. Exclude explanations from any journal entries.) a. Received $580,000 cash and issued common stock. Opened a new checking account at Cape May National Bank and deposited the cash received from the stockholders. Date Accounts Debit Credit (a) Interest Expense Interest Payable Interest Receivable Interest Revenue Land Merchandise Inventory Notes Payable Notes Receivable Office Equipment Office Supplies Petty Cash Prepaid Insurance Retained Earnings Salaries Expense Sales Revenue Choose from Store Fixtures lick Check Answer. 56 Pants Supplies Expense Clear All remair Utilities Expense Advanced Appliance Center-Cape May has just purchased a franchise from Advanced Appliance Center (AAC). (Click the icon to view the additional information.) Following is the chart of accounts for Advanced Appliance Center-Cape May. As a new business, all beginning balances are $0. (Click the icon to view the chart of accounts.) Advanced Appliance Center-Cape May completed the following transactions during 2018, its first year of operations: (Click the icon to view the transactions.) Read the requirements. Requirement 1. Record the transactions in the general journal. Omit explanations. (Record debits first, then credits. Exclude explanations from any journal entries.) a. Received $580,000 cash and issued common stock. Opened a new checking account at Cape May National Bank and deposited the cash received from the stockholders. Date Accounts Debit Credit (a) 7 Choose from any list or enter any number in the input fields and then click Check Answer. Advanced Appliance CenterCape May has just purchased a franchise from Advanced Appliance Center (AAC). (Click the icon to view the additional information.) i More Info - AAC is a manufacturer of kitchen appliances. AAC markets its products via retail stores that are operated as franchises. As a AAC franchisee, Advanced Appliance CenterCape May will receive many benefits, including having the exclusive right to sell AAC brand appliances in Cape May. AAC appliances have an excellent reputation and the AAC name and logo are readily recognized by consumers. AAC also manages national television advertising campaigns that benefit the franchisees. In exchange for these benefits, Advanced Appliance CenterCape May will pay an annual franchise fee to AAC based on a percentage of sales. The annual franchise fee is a separate cost and in addition to the purchase of the franchise. In addition to purchasing the franchise, Advanced Appliance CenterCape May will also purchase land with an existing building to use for its retail store, store fixtures, and office equipment. The business will purchase appliances from AAC and resell them in its store, primarily to local building contractors for installation in new homes. Print Done More Info Advanced Appliance Center-Cape May Chart of Accounts Cash Common Stock Petty Cash Retained Earnings Accounts Receivable Dividends Allowance for Bad Debts Sales Revenue Merchandise Inventory Interest Revenue Office Supplies Cost of Goods Sold Prepaid Insurance Franchise Fee Expense Interest Receivable Salaries Expense Notes Receivable Utilities Expense Insurance Expense Land Supplies Expense Building Accumulated DepreciationBuilding Bad Debt Expense Store Fixtures Bank Expense Accumulated Depreciation Store Fixtures Credit Card Expense Office Equipment Accumulated DepreciationOffice Equipment Depreciation ExpenseBuilding Depreciation Expense-Store Fixtures Print Done More Info Accounts Receivable Dividends Allowance for Bad Debts Sales Revenue Interest Revenue Merchandise Inventory Office Supplies Cost of Goods Sold Prepaid Insurance Franchise Fee Expense Interest Receivable Salaries Expense Notes Receivable Utilities Expense Insurance Expense Land Supplies Expense Building Accumulated DepreciationBuilding Store Fixtures Bad Debt Expense Bank Expense Accumulated DepreciationStore Fixtures Credit Card Expense Office Equipment Accumulated DepreciationOffice Equipment Franchise Depreciation ExpenseBuilding Depreciation ExpenseStore Fixtures Depreciation Expense-Office Equipment Amortization Expense-Franchise Accounts Payable Interest Payable Interest Expense Notes Payable Cash Short and Over Print Done More Info a. b. C. d. e. f. g. h. i. Received $580,000 cash and issued common stock. Opened a new checking account at Cape May National Bank and deposited the cash received from the stockholders. Paid $54,000 cash for a AAC franchise. Paid $255,000 cash and issued a $350,000, 10-year, 12% notes payable for land with an existing building. The assets had the following market values: Land, $50,000; Building, $555,000. Paid $105,000 for store fixtures. Paid $35,000 for office equipment. Paid $1,500 for office supplies. Paid $3,400 for a two-year insurance policy. Purchased appliances from AAC (merchandise inventory) on account for $450,000. Established a petty cash fund for $100. Sold appliances on account to BCD Contractors for $245,000, terms n/30 (cost, $98,000). Sold appliances to Harris Contracting for $140,000 (cost, $61,000), receiving a 6-month, 15% note. Recorded credit card sales of $70,000 (cost, $31,000), net of processor fee of 1%. Received payment in full from BCD Contractors. Purchased appliances from AAC on account for $700,000. Made payment on account to AAC, $310,000. Sold appliances for cash to FB Home Builders for $360,000 (cost, $179,000). Received payment in full on the maturity date from Harris Contracting for the note. Sold appliances to Geard Contracting for $280,000 (cost, $136,000), receiving a 9-month, 15% note. j. k. 1. m. n. 0. p. q. r. Mada neumant annount to AA 610 non Print Done More Info g. h. i. j. k. 1. m. n. o. p. q. Paid $3,400 for a two-year insurance policy. Purchased appliances from AAC (merchandise inventory) on account for $450,000. Established a petty cash fund for $100. Sold appliances on account to BCD Contractors for $245,000, terms n/30 (cost, $98,000). Sold appliances to Harris Contracting for $140,000 (cost, $61,000), receiving a 6-month, 15% note. Recorded credit card sales of $70,000 (cost, $31,000), net of processor fee of 1%. Received payment in full from BCD Contractors. Purchased appliances from AAC on account for $700,000. Made payment on account to AAC, $310,000. Sold appliances for cash to FB Home Builders for $360,000 (cost, $179,000). Received payment in full on the maturity date from Harris Contracting for the note. Sold appliances to Geard Contracting for $280,000 (cost, $136,000), receiving a 9-month, 15% note. Made payment on account to AAC, $540,000. Sold appliances on account to various businesses for $1,040,000, terms n/30 (cost, $416,000). Collected $680,000 cash on account. Paid cash for expenses: Salaries, $130,000; Utilities, $13,000 Replenished the petty cash fund when the fund had $44 in cash and petty cash tickets for $54 for office supplies. Paid dividends, $2,000. Paid the franchise fee to AAC of 3% of total sales of $2,135,000. r. S. t. u. V. w. x. y. Print Done Requirement 1. Record the transactions in the general journal. Omit explanations. 2. Post to the general ledger. 3. It is a common business practice to reconcile the bank accounts on a monthly basis. However, in this problem, the reconciliation of the company's checking account will be done at the end of the year, based on an annual summary. Reconcile the bank account by comparing the following annual summary statement from Cape May National Bank to the Cash account in the general ledger. Record journal entries as needed and post to the general ledger. Use transaction z as the posting reference. $ 0 Beginning Balance, January 1, 2018 Deposits and other credits: $ 580,000 69,300 245,000 360,000 680,000 1,200 Interest Revenue 1,935,500 Checks and other debits: EFT to Bank Checks* $ 120 Checks: 54,000 255,000 Print Done Requirement 255,000 35,000 105,000 100 3,400 1,500 310,000 540,000 143,000 2,200 Bank service charge (1,449,320) $ 486,180 Ending balance, December 31, 2018 *Bank Checks is a company that prints business checks (considered a bank expense) for Advanced Appliance CenterCape May 4. In preparation for preparing the adjusting entries, complete depreciation schedules for the first five years for the depreciable plant assets, assuming the assets were purchased on January 2, 2018: a. Building, straight-line, 30 years, $75,000 residual value. b. Store Fixtures, straight-line, 15 years, no residual value. Office Equipment, double-declining-balance, 5 years, $2,500 residual value. Dorord diucting antrine for the voor ondod Docomhor 21 2018. C. Print Done Requirement 5. Record adjusting entries for the year ended December 31, 2018: a. One year of the prepaid insurance has expired. b. Management estimates that 5% of Accounts Receivable will be uncollectible. c. An inventory of office supplies indicates $1,374 of supplies have been used. d. Calculate the interest earned on the outstanding Geard Contracting note receivable. Assume the note was received on October 31. Round to the nearest dollar. e. Record depreciation expense for the year. f. Record amortization expense for the year on the franchise, which has a 10-year life. g. Calculate the interest owed on the note payable. Assume the note was issued on January 1. 6. Post adjusting entries and prepare an adjusted trial balance. 7. Prepare a multi-step income statement and statement of retained earnings for the year ended December 31, 2018. Prepare a classified balance sheet as of December 31, 2018. Assume Interest Receivable is a current asset and Interest Payable is a current liability. 8. Evaluate the company's success for the first year of operations by calculating the following ratios. Round to two decimal places. Comment on the results. Liquidity: i. Current ratio ii. Acid-test ratio iii. Cash ratio b. Efficiency: i. Accounts receivable turnover ii. Day's sales in receivables iii. Asset turnover a. Print Done Requirement a. C. One year of the prepaid insurance nas expired. b. Management estimates that 5% of Accounts Receivable will be uncollectible. An inventory of office supplies indicates $1,374 of supplies have been used. d. Calculate the interest earned on the outstanding Geard Contracting note receivable. Assume the note was received on October 31. Round to the nearest dollar. e. Record depreciation expense for the year. f. Record amortization expense for the year on the franchise, which has a 10-year life. g. Calculate the interest owed on the note payable. Assume the note was issued on January 1. 6. Post adjusting entries and prepare an adjusted trial balance. 7. Prepare a multi-step income statement and statement of retained earnings for the year ended December 31, 2018. Prepare a classified balance sheet as of December 31, 2018. Assume Interest Receivable is a current asset and Interest Payable is a current liability. 8. Evaluate the company's success for the first year of operations by calculating the following ratios. Round to two decimal places. Comment on the results. a. Liquidity: i. Current ratio ii. Acid-test ratio iii. Cash ratio b. Efficiency: i. Accounts receivable turnover ii. Day's sales in receivables iii. Asset turnover iv. Rate of return on total assets Print Done Requirement 1. Record the transactions in the general journal. Omit explanations. (Record debits first, then credits. Exclude explanations from any journal entries.) a. Received $580,000 cash and issued common stock. Opened a new checking account at Cape May National Bank and deposited the cash received from the stockholders. Date Accounts Debit Credit (a) Accounts Payable Accounts Receivable Accumulated DepreciationBuilding Accumulated DepreciationOffice Equipment Accumulated DepreciationStore Fixtures Allowance for Bad Debts Amortization Expense-Franchise Bad Debt Expense Bank Expense Building Cash Cash Short and Over Common Stock Choose fron Cost of Goods Sold Credit Card Expense parts. Depreciation ExpenseBuilding remair Depreciation Expense-Office Equipment lick Check Answer. 56 Clear All Requirement 1. Record the transactions in the general journal. Omit explanations. (Record debits first, then credits. Exclude explanations from any journal entries.) a. Received $580,000 cash and issued common stock. Opened a new checking account at Cape May National Bank and deposited the cash received from the stockholders. Date Accounts Debit Credit (a) Depreciation Expense-Office Equipment Depreciation ExpenseStore Fixtures Dividends Franchise Franchise Fee Expense Insurance Expense Interest Expense Interest Payable Interest Receivable Interest Revenue Land Merchandise Inventory Notes Payable Notes Receivable Choose front Office Equipment Office Supplies parts Petty Cash remair Prepaid Insurance lick Check Answer. 56 Clear All Requirement 1. Record the transactions in the general journal. Omit explanations. (Record debits first, then credits. Exclude explanations from any journal entries.) a. Received $580,000 cash and issued common stock. Opened a new checking account at Cape May National Bank and deposited the cash received from the stockholders. Date Accounts Debit Credit (a) Interest Expense Interest Payable Interest Receivable Interest Revenue Land Merchandise Inventory Notes Payable Notes Receivable Office Equipment Office Supplies Petty Cash Prepaid Insurance Retained Earnings Salaries Expense Sales Revenue Choose from Store Fixtures lick Check Answer. 56 Pants Supplies Expense Clear All remair Utilities Expense
