Various Transactions of Plymouth Corporation Are Shown Below

question 103

Essay

Various transactions of Plymouth Corporation are shown below:
1. Bonds payable are issued for cash at a premium.
2. Equipment is sold for cash at book value.
3. Land is purchased by signing a 5-year, 8% note payable.
4. 1,000 shares of ABC Corporation's common stock are purchased for cash.
5. The conversion option is utilized and bonds payable are converted into common stock.
6. Common stock, with a $1 par value, is sold for $10 per share.
7. Interest receivable on a short-term note receivable is received.
8. Cash is paid on accounts payable.
9. Cash dividends are declared and paid.
10. Merchandise is sold for cash to customers.
Required: Categorize each transaction as either an operating activity, investing activity, financing activity, or a noncash activity.

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Definitions:

Revenue Recognition

The accounting principle that outlines the specific conditions under which revenue is recognized as earned and can be reported on financial statements.

Contract Price

The total agreed upon amount to be paid for goods or services as specified in a contract.

Percentage-Of-Completion Method

is an accounting technique used to recognize revenue and expenses of long-term contracts proportionally as the work is completed.

Revenue Recognition

The accounting principle that dictates the conditions under which revenue is recognized and how to measure the amount to be recorded.