Problem 2-6B (35 minutes)
Part 1
GOULD SOLUTIONS
Trial Balance
April 30
Debit Credit
Cash ……………………………………………………………. $19,982
Part 2: Likely transactions (following order of trial balance).
1. Purchased $760 of office supplies for cash.
Part 3
Report of Cash Received and Paid
Cash received
Owner investment ……………………………… $15,000
Serial Problem — SP 2
Part 1 (120 minutes) Serial Problem, Business Solutions
2016
6 Accounts Receivable ……………………….. 106 4,800
17 Repairs Expense—Computer …………….. 684 805
Serial Problem, Business Solutions (Continued)
28 Accounts Receivable ……………………….. 106 5,208
Nov. 1 Mileage Expense ………………………………. 676 320
24 Accounts Receivable ………………………… 106 3,950
Serial Problem, Business Solutions (Continued)
Part 2
General Ledger accounts
Cash Acct. No. 101
Date
Explanation
PR
Debit
Balance
Oct. 1 45,000 45,000
Accounts Receivable Acct. No.106
Date
Explanation
PR
Debit
Balance
Oct. 6 4,800 4,800
Computer Supplies Acct. No. 126
Date
Explanation
PR
Debit
Balance
Oct. 3 1,420 1,420
Serial Problem, Business Solutions (Continued)
Prepaid Insurance Acct. No. 128
Date
Explanation
PR
Debit
Balance
Date
Explanation
PR
Debit
Balance
Office Equipment Acct. No. 163
Date
Explanation
PR
Debit
Balance
Computer Equipment Acct. No. 167
Date
Explanation
PR
Debit
Balance
Accounts Payable Acct. No. 201
Date
Explanation
PR
Debit
Balance
Common Stock Acct. No. 307
Date
Explanation
PR
Debit
Balance
Dividends Acct. No. 319
Date
Explanation
PR
Debit
Balance
Serial Problem, Business Solutions (Continued)
Computer Services Revenue Acct. No. 403
Date
Explanation
PR
Debit
Balance
Oct. 6 4,800 4,800
Wages Expense Acct. No. 623
Date
Explanation
PR
Debit
Balance
Oct. 31 875 875
Date
Explanation
PR
Debit
Balance
Mileage Expense Acct. No. 676
Date
Explanation
PR
Debit
Balance
Nov. 1 320 320
Miscellaneous Expenses Acct. No. 677
Date
Explanation
PR
Debit
Balance
Repairs Expense—Computer Acct. No. 684
Date
Explanation
PR
Debit
Balance
Serial Problem, Business Solutions (Concluded)
Part 3
BUSINESS SOLUTIONS
Trial Balance
November 30
Debit Credit
Cash ………………………………………………………… $38,264
Dividends ………………………………………………… 5,600
Reporting in Action — BTN 2-1
1. Apple reports ($ millions):
2. Apple reports ($ millions):
3. ($ millions):
Comparative Analysis — BTN 2-2
1. Apple ($ millions)
2. Google ($ millions)
3. Apple has the higher degree of financial leverage. Apple’s debt ratio is
Ethics Challenge — BTN 2-3
This case involves a conflict between the need for efficiency and the need
for control. While it makes sense to take and process lunch orders quickly,
Communicating in Practice — BTN 2-4
MEMORANDUM
To: Lila Corentine
From:
Subject: Financial statements explanation
Date:
The four major financial statements and their purposes are:
• Income statement describes a company’s revenues and expenses along
with the resulting net income or loss over a period of time. It helps
Taking It to the Net — BTN 2-5
1. The prior three years’ net income or (loss) for Amazon are ($ millions):
Teamwork in Action — BTN 2-6
<Instructor note: There is no specific solution to this activity.>
The following sample solution gives a summary outline of what a minimum report
needs to include. Assume a team member selects assets:
Category: Assets
a. Increases (decreases) in assets are debits (credits) to asset accounts.
Entrepreneurial Decision — BTN 2-7
There are several issues that this entrepreneurial owner should consider.
Those considerations include the following three issues (among others):
Entrepreneurial Decision — BTN 2-8
1.
MARTIN MUSIC SERVICES
Balance Sheet
December 31, 2016
Assets Liabilities
Cash ……………………………… $ 3,600 Accounts payable ………………. $ 2,200
2.
Debt ratio = Total liabilities / Total assets = $17,800 / $80,700 = 22.1%
3. The prospects of a bank loan are likely to be good. (i) The debt ratio
indicates that 78% of the company’s funding is from equity. Also, there
Hitting the Road — BTN 2-9
Findings will vary. It is advisable that the instructor obtain a few classified
sections from newspapers that were published over the period of the
Global Decision — BTN 2-10
1. An analysis of return on assets suggests that Apple (18.0%) yields the
3. In this case, there is no clear answer based on these two ratios alone.
Apple has a relatively higher return on assets but also the highest debt