2024 – ACC 557 Financial Accounting Strayer ACC 557 Week 1 Homework Chapter 1 E1 4 E1 7 E1 11 P1 2A Exercise

ACC 557 Financial Accounting – Strayer

ACC 557 Week 1 Homework Chapter 1 (E1-4, E1-7, E1-11, P1-2A) 

Exercise 1-4

The following situations involve accounting principles and assumptions.

For each of the three situations, state if the accounting method used is correct or incorrect. If correct, identify which principle or assumption supports the method used. If incorrect, identify which principle or assumption has been violated.

Accounting method

Principle/Assumption

1. Julia Company owns buildings that are worth substantially more than they originally cost. In an effort to provide more relevant information, Julia reports the buildings at fair value in its accounting reports.

Exercise 1-7

Collins Computer Timeshare Company entered into the following transactions during May 2014.

Describe the effect of each transaction on assets, liabilities, and stockholder’s equity.

Exercise 1-11

Two items are omitted from each of the following summaries of balance sheet and income statement data for two corporations for the year 2014, Steven Craig and Georgia Enterprises.

Determine the missing amounts.

Problem 1-2A

On August 31, the balance sheet of Donahue Veterinary Clinic showed Cash $9,000, Accounts Receivable $1,700, Supplies $600, Equipment $6,000, Accounts Payable $3,600, Common Stock $13,000, and Retained Earnings $700. During September, the following transactions occurred.

1. Paid $2,900 cash for accounts payable due.

2. Collected $1,300 of accounts receivable.

3. Purchased additional office equipment for $2,100, paying $800 in cash and the balance on account.

4. Earned revenue of $7,300, of which $2,500 is paid in cash and the balance is due in October.

5. Declared and paid a $400 cash dividend

6. Paid salaries $1,700, rent for September $900, and advertising expense $200.

7. Incurred utilities expense for month on account $170.

 

8. Received $10,000 from Capital Bank on a 6-month note payable.