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    A Friend Named Tom Tipple Has Asked What Effect Certain

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    Muhammad Shahid
    Tom Tipple's company had several transactions this month that will affect its net income. The transactions included depositing $10,000 cash and issuing shares, paying $300 for supplies, purchasing $4,400 of furniture on account, earning $7,000 in revenue on account, borrowing $5,000 from the bank, paying $1,700 in salaries and $600 in rent, collecting $1,200 in account receivables, paying $1,000 on account, earning $2,500 in revenue and receiving cash, and paying $800 for advertising. After recording the transactions, the company earned a net income of $10,000 for the month, so Tipple should continue the business.

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    A Friend Named Tom Tipple Has Asked What Effect Certain

    Uploaded by

    Muhammad Shahid
    45 views1 page
    Tom Tipple's company had several transactions this month that will affect its net income. The transactions included depositing $10,000 cash and issuing shares, paying $300 for supplies, purchasing $4,400 of furniture on account, earning $7,000 in revenue on account, borrowing $5,000 from the bank, paying $1,700 in salaries and $600 in rent, collecting $1,200 in account receivables, paying $1,000 on account, earning $2,500 in revenue and receiving cash, and paying $800 for advertising. After recording the transactions, the company earned a net income of $10,000 for the month, so Tipple should continue the business.

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    A Firm Has 100 Million Available for Capital Expenditures It

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    Tom Tipple's company had several transactions this month that will affect its net income. The transactions included depositing $10,000 cash and issuing shares, paying $300 for supplies, purchasing $4,400 of furniture on account, earning $7,000 in revenue on account, borrowing $5,000 from the bank, paying $1,700 in salaries and $600 in rent, collecting $1,200 in account receivables, paying $1,000 on account, earning $2,500 in revenue and receiving cash, and paying $800 for advertising. After recording the transactions, the company earned a net income of $10,000 for the month, so Tipple should continue the business.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    45 views1 page

    A Friend Named Tom Tipple Has Asked What Effect Certain

    Uploaded by

    Muhammad Shahid
    Tom Tipple's company had several transactions this month that will affect its net income. The transactions included depositing $10,000 cash and issuing shares, paying $300 for supplies, purchasing $4,400 of furniture on account, earning $7,000 in revenue on account, borrowing $5,000 from the bank, paying $1,700 in salaries and $600 in rent, collecting $1,200 in account receivables, paying $1,000 on account, earning $2,500 in revenue and receiving cash, and paying $800 for advertising. After recording the transactions, the company earned a net income of $10,000 for the month, so Tipple should continue the business.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
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    A friend named Tom Tipple has asked what effect certain

    #6581
    A friend named Tom Tipple has asked what effect certain transactions will have on his
    company. Time is short, so you cannot apply the detailed procedures of journalizing and
    posting. Instead, you must analyze the transactions without the use of a journal. Tipple will
    continue the business only if he can expect to earn monthly net income of $10,000. The
    following transactions occurred this month:a. Tipple deposited $10,000 cash in a business bank
    account, and the corporation issued common shares to him.b. Paid $300 cash for supplies.c.
    Purchased office furniture on account, $4,400.d. Earned revenue on account, $7,000.e.
    Borrowed $5,000 cash from the bank, and signed a note payable due within one year.f. Paid the
    following cash expenses for one month: employee's salary, $1,700; office rent, $600.g.
    Collected cash from customers on account, $1,200.h. Paid on account, $1,000.i. Earned
    revenue, and received $2,500 cash.j. Purchased advertising in the local newspaper for cash,
    $800.Requirements1. Set up the following T-accounts: Cash, Accounts Receivable, Supplies,
    Furniture, Accounts Payable, Notes Payable, Share Capital, Service Revenue, Salary Expense,
    Advertising Expense, and Rent Expense.2. Record the transactions directly in the accounts
    without using a journal. Key each transaction by letter.3. Prepare a trial balance at the current
    date. List expenses with the largest amount first, the next largest amount second, and so on.
    The business name will be Tipple Networks, Inc.4. Compute the amount of net income or net
    loss for this first month of operations. Why would you recommend that Tipple continue or not
    continue in business?View Solution:
    A friend named Tom Tipple has asked what effect certain

    ANSWER
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