Question
purchases and Sales of Merchandise, Cash Flows Pedal City, a bike shop, opened for business on April 1. It uses a periodic inventory system. The
purchases and Sales of Merchandise, Cash Flows
Pedal City, a bike shop, opened for business on April 1. It uses a periodic inventory system. The following transactions occurred during the first month of business:
Required:
For all accounting equations, if a financial statement item is not affected, select "No Entry" and leave the amount box blank or enter "0". If the effect is negative, use the minus sign. Remember: if a contra account is increased, it will have the effect of decreasing the corresponding financial statement item.
1. Identify and analyze each of the following transactions of Pedal City.
April 1: Purchased five units from Giorgio, Inc. for $600 total, with terms 3/10, n/30, FOB destination.
How does this entry affect the accounting equation?
| Balance Sheet | Income Statement | |||||||||||||
| Stockholders' | Net | |||||||||||||
| Assets | = | Liabilities | + | Equity | Revenues | Expenses | = | Income | ||||||
| No Entry | Accounts Payable | No Entry | Purchases | |||||||||||
April 10: Paid for the April 1 purchase.
| Balance Sheet | Income Statement | |||||||||||||
| Stockholders' | Net | |||||||||||||
| Assets | = | Liabilities | + | Equity | Revenues | Expenses | = | Income | ||||||
| Cash | Accounts Payable | No Entry | No Entry | |||||||||||
April 15: Sold one unit for $200 cash.
How does this entry affect the accounting equation?
| Balance Sheet | Income Statement | |||||||||||||
| Stockholders' | Net | |||||||||||||
| Assets | = | Liabilities | + | Equity | Revenues | Expenses | = | Income | ||||||
| Cash | No Entry | Sales Revenue | No Entry | |||||||||||
April 18: Purchased ten units from Bush Enterprises for $900 total, with terms 3/10, n/30, FOB destination.
How does this entry affect the accounting equation?
| Balance Sheet | Income Statement | |||||||||||||
| Stockholders' | Net | |||||||||||||
| Assets | = | Liabilities | + | Equity | Revenues | Expenses | = | Income | ||||||
| No Entry | Accounts Payable | No Entry | Purchases | |||||||||||
April 25: Sold three units for $200 each, cash.
How does this entry affect the accounting equation?
| Balance Sheet | Income Statement | |||||||||||||
| Stockholders' | Net | |||||||||||||
| Assets | = | Liabilities | + | Equity | Revenues | Expenses | = | Income | ||||||
| Cash | No Entry | Sales Revenue | No Entry | |||||||||||
April 28: Paid for the April 18 purchase.
| Activity | Operating |
| Accounts | Cash Decrease, Account Payable DecreaseCash Decrease, Account Payable Decrease |
| Statement(s) | Balance Sheet only |
Feedback
How does this entry affect the accounting equation?
| Balance Sheet | Income Statement | |||||||||||||
| Stockholders' | Net | |||||||||||||
| Assets | = | Liabilities | + | Equity | Revenues | Expenses | = | Income | ||||||
| Cash | Accounts Payable | No Entry | No Entry | |||||||||||
2. Determine net income for the month of April. Pedal City incurred and paid $100 for rent and $50 for miscellaneous expenses during April. Ending inventory is $967. (Ignore income taxes.) $
3. Assuming that these are the only transactions during April (including rent and miscellaneous expenses), compute net cash flow from operating activities. Use the minus sign to indicate cash out flows, a decrease in cash or cash payments. $
4. Cash outflow during the first month of business is much larger than expenses as shown on the income statement due to
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Auditing Security And Controls Of Windows Active Directory Domains
Authors: Derek Melber
1st Edition
0894135635, 978-0894135637
