Professional Documents
Culture Documents
I
E
B
B
B
I
B
B
B
Income statement
Statement of owners equity
Balance sheet
Balance sheet
Balance sheet
Income statement
Balance sheet
Balance sheet
Balance sheet
Debit
Debit
Credit
d.
e.
f.
Debit
Debit
Debit
g.
h.
i.
Credit
Debit
Credit
55
a.
b.
c.
d.
Debit
Debit
Credit
Credit
e.
f.
g.
h.
Debit
Credit
Credit
Debit
i.
j.
k.
l.
Credit
Debit
Debit
Credit
Debit
Credit
Credit
Credit
i.
j.
Credit
Debit
Debit
Credit
Debit
Credit
e.
f.
g.
h.
820
820
29 Cash ..........................................................................
Landscaping Services Revenue....................
8,700
8,700
30 Cash ..........................................................................
Unearned Landscaping Services Revenue ..
4,000
4,000
I
I
e.
f.
B
I
i.
j.
B
I
c.
d.
I
B
g.
h.
B
B
k.
l.
E
B
57
EXERCISES
Exercise 2-1 (15 minutes)
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
k.
l.
Account
Owner Capital.............................
Accounts Receivable.................
Owner Withdrawals....................
Cash ............................................
Equipment ..................................
Fees Earned................................
Wages Expense..........................
Unearned Revenue ....................
Accounts Payable ......................
Postage Expense .......................
Prepaid Insurance......................
Land ............................................
Type of
Account
equity
asset
equity
asset
asset
revenue
expense
liability
liability
expense
asset
asset
Increase
Normal
Balance
credit
debit
debit
debit
debit
credit
debit
credit
credit
debit
debit
debit
(Dr. or Cr.)
credit
debit
debit
debit
debit
credit
debit
credit
credit
debit
debit
debit
b.
c.
?
104,750
(101,607)
$ 17,069
$ 13,926
$ 83,250
?
(75,924)
$ 85,830
$ 78,504
$148,000
271,876
(
?)
$137,492
$282,384
Thus, of the a through f items listed, the following effects should be included:
75,525
2 Prepaid Insurance............................................
Cash ............................................................
3,300
3,300
5 Office Supplies.................................................
Cash ............................................................
2,707
2,707
20 Cash ..................................................................
Photography Fees Earned ........................
3,250
3,250
871
871
59
Balance
Cash
14,250
Aug. 2
3,250
5
31
10,622
Aug. 5
Office Supplies
2,707
Aug. 2
Prepaid Insurance
3,300
Aug. 1
20
3,300
2,707
871
Photography Equipment
Aug. 1
61,275
M. Harris, Capital
Aug. 1
75,525
Aug. 31
Utilities Expense
871
SPECIAL PICS
Trial Balance
August 31
Debit
Cash ...............................................................................
$10,622
2,707
3,300
Photography equipment...............................................
61,275
Credit
M. Harris, Capital...........................................................
$75,525
3,250
Utilities expense............................................................
871
_______
Totals..............................................................................
$78,775
$78,775
(a)
(d)
(h)
Balance
Cash
14,000
1,652
1,246
(b)
(e)
(g)
(i)
406
7,742
510
1,200
(e)
7,040
(f)
Balance
Accounts Receivable
2,968
(h)
1,722
(b)
Balance
Office Supplies
406
406
(c)
Balance
Office Equipment
7,742
7,742
1,246
(i)
Balance
Accounts Payable
7,742 (c)
Balance
7,742
0
S. Amena, Capital
(a)
Balance
14,000
14,000
S. Amena, Withdrawals
1,200
1,200
Fees Earned
(d)
(f)
Balance
(g)
Balance
1,652
2,968
4,620
Rent Expense
510
510
Debit
$ 7,040
1,722
406
7,742
Credit
0
14,000
1,200
510
$18,620
4,620
______
$18,620
61
b.
Salaries Expense.........................................
Cash .......................................................
1,233
1,233
d.
870
870
$25,620
20,104
$ 5,516
$
0
124,114
5,516
129,630
2,000
$127,630
TECH TALK
Balance Sheet
October 31
Assets
Cash...............................$ 12,614
Accounts receivable .... 25,648
Office supplies..............
4,903
Office equipment .......... 27,147
Land............................... 69,388
Total assets...................$139,700
*
Liabilities
Accounts payable................ $ 12,070
Equity
D. Shabazz, Capital .............
127,630*
.
63
a.
Liabilities
$56,159
72,900
= Equity
= $74,841
= 107,100
$32,259
$
?
0
(0)
$32,259
Net Income............................
Plus owner investments ......
Less owner withdrawals......
Change in equity ..................
Therefore, income must equal $32,259.
b.
?
0
(7,800)
$32,259
?
45,000
(0)
$32,259
?
25,000
(7,800)
$32,259
(a)
(b)
(c)
(d)
$(45,000)
$64,665
$71,347
$(47,000)
Computations:
Equity, Dec. 31, 2008..... $
64,665
85,347
201,871
Owner withdrawals........
(45,000)
(51,000)
(8,000)
(53,000)
27,000
78,000
(6,000)
(47,000)
$91,665
$71,347
$101,871
b.
Cash ...........................................................................
Equipment .................................................................
Automobiles ..............................................................
D. Belle, Capital .................................................
Owner invested in business.
12,000
15,200
24,000
Prepaid Insurance.....................................................
Cash....................................................................
Purchased insurance coverage.
4,800
51,200
4,800
McGraw-Hill Companies, 2009
65
c.
d.
e.
f.
g.
Office Supplies..........................................................
Cash....................................................................
Purchased supplies with cash.
2,000
Office Supplies..........................................................
Equipment .................................................................
Accounts Payable .............................................
Purchased supplies and equipment on credit.
300
9,700
Cash ...........................................................................
Delivery Services Revenue...............................
Received cash from customer.
9,000
4,600
820
2,000
10,000
9,000
4,600
820
Description
(1)
(2)
Difference
between Column
Debit and with the
Credit
Larger
Columns
Total
(3)
(4)
Identify
account(s)
incorrectly
stated
$90
credit
Rent Expense
Rent Expense is
understated by $90
$3,560
credit
Cash
Cash is understated by
$3,560
Owner,
Capital
Owner, Capital is
understated by $7,120
Owner,
Withdrawals
Owner, Withdrawals is
understated by $7,120
Prepaid
Insurance
Prepaid Insurance is
understated by $1,630
$0
d. $1,630 debit to
Prepaid Insurance is
posted as a debit to
Insurance Expense.
$0
e. $31,150 debit to
Machinery is posted
as a debit to Accounts
Payable.
f.
$4,460 credit to
Services Revenue is
posted as a $446
credit.
$0
Insurance
Expense
Insurance Expense is
overstated by $1,630
Machinery
Accounts
Payable
Machinery is
understated by $31,150
Accounts Payable is
understated by $31,150
$4,014
debit
Services
Revenue
Services Revenue is
understated by $4,014
$820
credit
Store
Supplies
Store Supplies is
understated by $820
67
PROBLEM SET A
Problem 2-1A (90 minutes)
Part 1
a.
Cash.............................................................101 195,000
Office Equipment........................................163
8,200
Drafting Equipment ....................................164 80,000
J. Lancet, Capital ................................301
283,200
b.
Land.............................................................172
Cash.....................................................101
Note Payable .......................................250
52,000
8,900
43,100
c.
Building .......................................................170
Cash.....................................................101
55,000
55,000
Purchased building.
d.
2,300
2,300
e.
Cash.............................................................101
Engineering Fees Earned ..................402
6,600
6,600
f.
24,000
9,600
14,400
g.
14,500
14,500
h.
Office Equipment........................................163
Accounts Payable...............................201
1,100
1,100
i.
23,000
23,000
j.
1,410
1,410
k.
Cash.............................................................101
Accounts Receivable .........................106
8,000
8,000
l.
2,500
2,500
m.
1,100
1,100
n.
970
970
o.
J. Lancet, Withdrawals...............................302
Cash.....................................................101
10,450
10,450
p.
2,000
2,000
q.
Advertising Expense..................................603
Cash.....................................................101
2,400
2,400
69
Debit
195,000
Credit
8,900
55,000
2,300
6,600
9,600
8,000
2,500
1,100
970
10,450
2,000
2,400
No. 101
Balance
195,000
186,100
131,100
128,800
135,400
125,800
133,800
131,300
130,200
129,230
118,780
116,780
114,380
Accounts Receivable
No. 106
Date PR Debit
Credit
Balance
(g)
14,500
14,500
(i)
23,000
37,500
(k)
8,000
29,500
Debit
2,300
Debit
8,200
1,100
Debit
80,000
24,000
Debit
55,000
Debit
52,000
Date PR
(b)
(f)
Debit
J. Lancet, Capital
Date PR
(a)
Debit
No. 250
Credit
Balance
43,100
43,100
14,400
57,500
No. 301
Credit
Balance
283,200 283,200
J. Lancet, Withdrawals
Date PR
(o)
Debit
10,450
Credit
No. 302
Balance
10,450
Credit
No. 164
Balance
80,000
104,000
Date PR
(j)
Credit
No. 602
Balance
1,410
Credit
No. 170
Balance
55,000
Advertising Expense
Date PR Debit
Credit
(q)
2,400
No. 603
Balance
2,400
Repairs Expense
Credit
No. 172
Balance
52,000
No. 604
Balance
970
Date PR
(n)
Debit
No. 402
Credit
Balance
6,600
6,600
14,500
21,100
23,000
44,100
Credit
Land
Date PR
(b)
Notes Payable
Wages Expense
Date PR Debit
(l)
2,500
(p)
2,000
Building
Date PR
(c)
1,100
No. 163
Balance
8,200
9,300
Credit
Drafting Equipment
Date PR
(a)
(f)
Debit
Balance
2,300
No. 108
Office Equipment
Date PR
(a)
(h)
Date PR
(h)
(j)
(m)
No. 201
Credit
Balance
1,100
1,100
1,410
2,510
1,410
Date PR
(e)
(g)
(i)
Prepaid Insurance
Date PR
(d)
Accounts Payable
Debit
1,410
Debit
970
Credit
Credit
No. 601
Balance
2,500
4,500
Credit
Cash............................................................. $114,380
Accounts receivable .................................. 29,500
Prepaid insurance ......................................
2,300
Office equipment ........................................
9,300
Drafting equipment .................................... 104,000
Building ....................................................... 55,000
Land............................................................. 52,000
Accounts payable.......................................
Notes payable .............................................
J. Lancet, Capital........................................
J. Lancet, Withdrawals............................... 10,450
Engineering fees earned............................
Wages expense ..........................................
4,500
Equipment rental expense.........................
1,410
Advertising expense ..................................
2,400
Repairs expense.........................................
970
Totals........................................................... $386,210
1,410
57,500
283,200
44,100
$386,210
71