Assignment on

Principles of
accounting
Under supervision of
Dr Sherif El-halaby

By\ Dr George
Saad

Contribut
es
-Page 25
-Page 26

Chapte
r1

-Page 31,32 MSQ

- Page 32 Essay questions
2,3,4,5,9,11,12,13,15,17
Practical excercisesBE1-1 , BE1-2 , BE1-5 , BE1-8 , BE1-10 ,
BE1-11 ,Do it! 1-4
E1-1 , E1-6 , E1-7 , E1-11 , E1-12 , E1-13 , E115 , E1-16 , P1-1A
P1-3A , P1-4A , P1-5A , P1-4B
Page 73-Do It

Chapte
r2

Page 74- Do It
-Page 77,78 MCQ
Practical excercisesBE2-7 , BE2-10 , Do it! 2-3 , Do it! 2-4 ,
E2-2 , E2-9 , E2-10 ,E2-14 , P2-1A , P2-2A ,
P2-1B , P2-3B

PAGE 25
Presented below is selected information related to Flanagan Company at
December 31, 2012.
Flanagan reports financial information monthly .
Equipment $10,000
Cash 8,000
Service Revenue 36,000
Rent Expense 11,000
Accounts Payable 2,000

Utilities Expense $ 4,000

Accounts Receivable 9,000
Salaries and Wages Expense 7,000
Notes Payable 16,500
Owners Drawings 5,000

(a) Determine the total assets of Flanagan Company at

December 31, 2012.
(a) The total assets are $27,000,

comprised of Cash $8,000, Accounts Receivable

$9,000, and Equipment $10,000.

(b) Determine the net income that Flanagan Company reported

for December 2012.
(b) Net income is $14,000, computed as follows.
Revenues
Service revenue $36,000
Expenses
Rent expense $11,000
Salaries and wages expense 7,000
Utilities expense 4,000
Total expenses 22,000
Net income $14,000

(c) Determine the owners equity of Flanagan Company at

December 31, 2012.
.
(c) The ending owners equity of Flanagan Company is $8,500. By rewriting
the accounting equation, we can compute owners equity as assets minus
liabilities, as follows:
Total assets [as computed in (a)] $27,000
Less: Liabilities
Notes payable $16,500
Accounts payable $2,000 = $18,500
Owners equity $ 8,500

PAGE 26
Joan Robinson opens her own law office on July 1, 2012. During the
first month of
operations, the following transactions occurred.
1. Joan invested $11,000 in cash in the law practice.
2. Paid $800 for July rent on office space.
3. Purchased office equipment on account $3,000.
4. Provided legal services to clients for cash $1,500.
5. Borrowed $700 cash from a bank on a note payable.
6. Performed legal services for client on account $2,000.
7. Paid monthly expenses: salaries and wages $500, utilities $300, and
supplies $100.
8. Joan withdraws $1,000 cash for personal use.
Instructions

(a) Prepare a tabular summary of the transactions

.
(b) Prepare the income statement, owners equity statement, and balance
sheet at
July 31 for Joan Robinson, Attorney.

PAGE 31,32 MCQ Self-Test Questions

1. Which of the following is not a step in the accounting process?
a. Identification.
c. Recording.
b. Verification.
d. Communication.
2. Which of the following statements about users of accounting information is
incorrect?
a. Management is an internal user.
b. Taxing authorities are external users.
c. Present creditors are external users
d. Regulatory authorities are
internal users.
3. The cost principle states that:
a. assets should be initially recorded at cost and adjusted when the fair value
changes.
b. activities of an entity are to be kept separate and distinct from its owner.
c. assets should be recorded at their cost.
d. only transaction data capable of being expressed in terms of money be included
in the accounting records.
4. Which of the following statements about basic assumptions is correct?
a. Basic assumptions are the same as accounting principles.
b. The economic entity assumption states that there should be a
particular unit of accountability.
c. The monetary unit assumption enables accounting to measure employee morale.
.d. Partnerships are not economic entities
5. The three types of business entities are:
a. proprietorships, small businesses, and partnerships.
b. proprietorships, partnerships, and corporations.
c. proprietorships, partnerships, and large businesses.
d. fi nancial, manufacturing, and service companies.
6. Net income will result during a time period when:
a. assets exceed liabilities.
b. assets exceed revenues.
c. expenses exceed revenues.
d. revenues exceed expenses.
7. Performing services on account will have the following effects
on the components of the basic accounting equation:
a. increase assets and decrease owners equity.
b. increase assets and increase owners equity.
c. increase assets and increase liabilities.
d. increase liabilities and increase owners equity.
8. As of December 31, 2012, Stoneland Company has assets of $3,500 and owners
equity of $2,000. What are the liabilities
for Stoneland Company as of December 31, 2012?
a. $1,500. b. $1,000. c. $2,500. d. $2,000.
9. Which of the following events is not recorded in the accounting records?
a. Equipment is purchased on account.
b. An employee is terminated.

10. During 2012, Gibson Companys assets decreased $50,000 and its liabilities
decreased $90,000. Its owners equity therefore:
a. increased $40,000.
c. decreased $40,000.
b. decreased $140,000.
d. increased $140,000.
11. Payment of an account payable affects the components ofthe accounting
equation in the following way.
a. Decreases owners equity and decreases liabilities.
b. Increases assets and decreases liabilities.
c. Decreases assets and increases owners equity.
d. Decreases assets and decreases liabilities.
12. Which of the following statements is false?
a. A statement of cash flows summarizes information about the cash inflows
(receipts) and outflows (payments) for a specific period of time.
b. A balance sheet reports the assets, liabilities, and owners equity at a specific
date.
c. An income statement presents the revenues, expenses changes in
owners equity, and resulting net income or net loss for a specifi c period
of time.
d. An owners equity statement summarizes the changes in owners equity for
a specific period of time.
13. On the last day of the period, Jim Otto Company buys a
$900 machine on credit. This transaction will affect the:
a. income statement only.
b. balance sheet only.
c. income statement and owners equity statement only.
d. income statement, owners equity statement, and balance sheet.
14. The fi nancial statement that reports assets, liabilities, and owners equity is
the:
a. income statement.
b. owners equity statement.
c. balance sheet.
d. statement of cash fl ows.
* 15. Services provided by a public accountant include:
a. auditing, taxation, and management consulting.
b. auditing, budgeting, and management consulting.
c. auditing, budgeting, and cost accounting.
d. internal auditing, budgeting, and management consulting.

- Page 32 Essay questions

2. Identify and describe the steps in the accounting process.
. Accounting is the process of identifying, recording, and communicating the economic events of
an organization to interested users of the information.
The first step of the accounting process istherefore to identify economic events that are relevant
to a particular business.
The second step is to record the events to provide a history of the financial activities of the
Organization. Recording consists of keeping a chronological diary of these measured events in
an
orderly and systematic manner.
The third step is to communicate information through the preparation and
distribution of accounting reports,
The most common of which are called financial statements.
A vital element in the communication process is the accountants ability and responsibility to
analyze and interpret the reported information.

3. (a) Who are internal users of accounting data? (b) How does
accounting provide relevant data to these users?
(a) Internal users are those who plan, organize, and run the business and therefore are officers
and other decision makers.
(b) To assist management, accounting provides internal reports. Examples include financial
comparisons of operating alternatives, projections of income from new sales campaigns,
and forecasts of cash needs for the next year.

4. What uses of fi nancial accounting information are made by (a)

investors and (b) creditors?
(a) Investors (owners) use accounting information to make decisions to buy, hold, or sell stock.
(b) Creditors use accounting information to evaluate the risks of granting credit or lending
money.

5. Bookkeeping and accounting are the same. Do you

agree? Explain.
Bookkeeping usually involves only the recording of economic events and therefore is just one
part of the entire accounting process. Accounting, on the other hand, involves the entire process
of identifying, recording, and communicating economic events.

What are the three basic forms of business organizations for profit- -9
?oriented enterprises
The three basic forms of business organizations are:
(1) proprietorship, (2) partnership,
(3) corporation.

?What is the basic accounting equation .11

Define the terms assets, liabilities, and owners equity. (b) What (a) .12
?items affect owners equity
(a) Assets are resources owned by a business. Liabilities are claims against assets. Put more
simply, liabilities are existing debts and obligations. Owners equity is the ownership claim
on total assets.
Owners equity is affected by owners investments, drawings, revenues, and expenses (b)

Which of the following items are liabilities of Karl Jewelry .13

?Stores
.Cash.
.Accounts payable.

(e) Supplies (a)

(f) Equipment (b )

.Owners drawings.

(g) Salaries and wages payable (c)

.Accounts receivable.

(h) Service revenue (d)

.Rent expense (i)

?Are the following events recorded in the accounting records .15

.Explain your answer in each case
.The owner of the company dies (a)
.Supplies are purchased on account (b)
.An employee is fi red (c)
The owner of the business withdraws cash from the (d)
.business for personal use
Business transactions are the economic events of the enterprise recorded by accountants
because they affect the basic equation.
(a) The death of the owner of the company is not a business transaction as it does not affect the
basic equation.
(b) Supplies purchased on account is a business transaction as it affects the basic equation.
(c) An employee being fired is not a business transaction as it does not affect the basic
equation.
A withdrawal of cash from the business is a business transaction as it affects the basic (d)
.equation

17. Listed below are some items found in the financial statements
of Dave Ramsey Co. Indicate in which financial
statement(s) the following items would appear.
(a) Service revenue.
Income statement
(b) Equipment.
Balance sheet.
(c) Advertising expense. Income statement
(d) Accounts receivable.
Balance sheet.
(e) Owners capital.
Balance sheet and owners equity statement
(f) Salaries and wages payable. Balance sheet.

Practical excercisesBE1-1 Presented below is the basic accounting equation.

.Determine the missing amounts
Assets 5
$90,000

110000
$94,000

Liabilities 1
$50,000
$40,000

41000?

Owners Equity

? 40000 (a)
$70,000 ?(b)
$53,000 (c)

BE1-2 Given the accounting equation, answer each of the following

questions.
(a) The liabilities of Buerhle Company are $120,000 and the owners
equity is $232,000. What is
the amount of Buerhle Companys total assets?
(b) The total assets of Buerhle Company are $190,000 and its
owners equity is $91,000. What is
the amount of its total liabilities?
(c) The total assets of Buerhle Company are $800,000 and its
liabilities are equal to one half of
its total assets. What is the amount of Buerhle Companys owners
?equity

(a) $120,000 + $232,000 = $352,000 (Total assets).

(b) $190,000 $80,000 = $110,000 (Total liabilities).
.$800,000 0.5($800,000) = $400,000 (Owners equity) (c)
BE1-5 Indicate whether each of the following items is an asset (A),
liability (L), or part of owners equity (OE).
A (a) Accounts receivable
A (d) Office supplies
L (b) Salaries payable
OE (e) Owners investment
A (c) Equipment
L (f) Notes payable

BE1-8 Classify each of the following items as owners drawings (D),

revenue (R), or expense (E).
___E___(a) Advertising expense
___D___(e) Owners
drawings
___R___(b) Service revenue
___R___(f) Rent revenue
___E___(c) Insurance expense
___E___(g) Utilities expense
E___(d) Salaries and wages expense ___
BE1-10 In alphabetical order below are balance sheet items for George
Company at December
31, 2012. Kayla George is the owner of George Company. Prepare a
balance sheet, following the
format of Illustration 1-9.
Accounts payable $90,000
Accounts receivable
$72,500
Cash
$49,000
Owners capital
$31,50
Balance Sheet
December 31, 2012
Assets
Cash .......................................................................................
......... $ 49,000
Accounts
receivable ......................................................................
72,500
Total
assets.....................................................................................
$121,500
Liabilities and Owners Equity
Liabilities
Accounts
payable ............................................................................ $
90,000
Owners equity
Kayla George,
Capital.......................................................................... 31,500
Total liabilities and owners equity
=$121,500
BE1-11 Indicate whether the following items would appear on the
income statement (IS),
balance sheet (BS), or owners equity statement (OE).
___BS__(a) Notes payable
__BS___(d) Cash
___IS __(b) Advertising expense
__IS ___(e) Service revenue
OE,BS__(c) Owners capital_

Do it! 1-4 Presented below is selected information related to Lance

Company at December
31, 2012. Lance reports fi nancial information monthly.
Accounts Payable $ 3,000 Salaries and Wages Expense $16,500
Cash 4,500 Notes Payable 25,000
Advertising Expense 6,000 Rent Expense 10,500
Service Revenue 51,500 Accounts Receivable 13,500
Equipment 29,000 Owners Drawings 7,500
(a) Determine the total assets of Lance Company at December 31, 2012.
(b) Determine the net income that Lance Company reported for
December 2012.
(c) Determine the owners equity of Lance Company at December 31,
2012.
Do it 1- A)47000 B)24000
C)19000
4
EXERCISE 1-1
C< Analyzing and interpreting information.
R< Classifying economic events.
C< Explaining uses, meaning, and limitations of data.
R< Keeping a systematic chronological diary of events.
R< Measuring events in dollars and cents.
C< Preparing accounting reports.
C< Reporting information in a standard format.
I < Selecting economic activities relevant to the company.
R< Summarizing economic events
EXERCISE 1-6
1. Increase in assets and increase in owners equity.
2. Decrease in assets and decrease in owners equity.
3. Increase in assets and increase in liabilities.
4. Increase in assets and increase in owners equity.
5. Decrease in assets and decrease in owners equity.
6. Increase in assets and decrease in assets.
7. Increase in liabilities and decrease in owners equity.
8. Increase in assets and decrease in assets.
9. Increase in assets and increase in owners equity.
E1-7 Thornton Computer Timeshare Company entered into the
following transactions during
May 2012.
1. Purchased computer terminals for $20,000 from Digital Equipment on account.
(c) An increase in assets and an increase in liabilities.
2. Paid $4,000 cash for May rent on storage space.
(d) A decrease in assets and a decrease in owners equity
3. Received $17,000 cash from customers for contracts billed in April.
(a) An increase in assets and a decrease in assets.
4. Provided computer services to Fisher Construction Company for $3,000 cash.
(b) An increase in assets and an increase in owners equity.

6. Thornton invested an additional $29,000 in the business.

(b) An increase in assets and an increase in owners equity.
7. Paid Digital Equipment for the terminals purchased in (1) above.
(e) A decrease in assets and a decrease in liabilities.
8. Incurred advertising expense for May of $1,200 on account.
(f) An increase in liabilities and a decrease in owners equity.

Assets
=liabilities
+owner equity
Cash ac.rec supplies equipment= ac.payable +capital drawing +revenueexpenses
10000
10000
5000
5000400400500
500250250
6100
6100
1000100020002000170170750
750
120120
.............-........... + ...................= ............+.......... + ......... + ........
................-.............+
2820- 6850+
1000- 10000+
250 =
5000+
500+
630+ 7150
4030+
9000+
250 =
13280
13280=
13280

Income statement
Revenue
Service revenue
6850
Total revenue
6850
6850
Expenses
Rent
400
Advertising
250
Salaries
2000
Utility
170
Total expenses
2820
2820
Net profit
4030

Income statement (from 1may2012 to 31may2012)

Revenue
Service revenue
8100
Total revenue
8100
8100
Expenses
Advertising
600
Rent
1200
Maintenance
400
Gasoline
2500
Insurance
400
Total expenses
5100
5100
Net profit
3000
Owner equity statement (from 1may2012 to 31may2012)
Owner capital on 1may2012
0
Add investment
40000
Net profit
3000
43000
Less drawing
1500
1500
Owner capital on 31may2012
41500
Balance sheet on 31may2012
Assets
Cash
3400
Account receivable
4900
Equipment
64000
Total assets
72300
Liabilities and owner equity
Liabilities
Account payable
800
Notes payable
30000
Total liabilities
30800

Owner equity
Owner capital
41500
Total liabilities and owner equity
72300

Assets
=liabilities +owner equity
Cash + A.rec+ supplies+ equip =A.pay + A.not+ capital- drawing+
revenue- expenses
10000
10000
10000
12000
20005005004400
4400
200200150
150
1250- 1250
200
200
1300
1300
600600250-

250200-

200-

10001000..............-............+.........+...........=...........+..............+............+..........
............-.............+
+
200- 10000+ 9400+
150= 12000+
350+ 3150+ 7800
17505700
23300=
23300
Income statement 1june2012 to 31june2012
Revenue
Service revenue on account 4400(is this correct)
Service revenue
1300
Total revenue
5700
5700
Expenses
Rent
500
Utility
250
Salaries
1000
Total expenses
1750
1750
Net profit
3950
Owner equity statement 1june2012 to 31june2012
Owner capital on 1june2012
0
Add investment 10000
Net profit 3950
13950
Less drawing
200
Owner capital on 31june2012

200
13750

Balance sheet statement on 31june2012

Assets
Cash
7800
A.rec
3150
Supplies
350
Equipment
12000
Total assets
23300
Liabilities and owner equity
Liabilities
A.pay
150
A.not
9400
Total liabilities
9550
Owner equity
Owner capital
13750
Total liabilities and owner equity

23300

A) OE=A-L =95000-50000 =45000

B) A=L+OE =55000+63000 =118000
C) OE Change(owner capital)=OE on 31Dec - OE on 1Junury=6300045000=18000
Owner capital = Investment +net profit (Revenue-Expenses)-Drawing
Investment +(350000-320000)
-25000 =
18000
Investment
=13000
D) L=A-OE =110000-60000 =50000
E) OE=A-L =141000-75000 =66000
F) OE Change(owner capital)=OE on 31Dec - OE on 1Junury=6600060000=6000
Owner capital = Investment +net profit (Revenue-Expenses)-Drawing
drawing(420000-385000)+
15000 =
6000
Drawing
=46000
G) A=L+OE =75000+45000
=170000
H) L=A-OE =200000-130000 =70000
I) OE Change(owner capital)=OE on 31Dec - OE on 1Junury=13000045000=85000
Owner capital = Investment +net profit (Revenue-Expenses)-Drawing
14000(Revenue-342000 )+
10000=
85000
Revenue
=431000
J) L=A-OE =170000-90000 =80000
K) A=L+OE =80000+162000 =242000
L) OE Change(owner capital)=OE on 31Dec - OE on 1Junury=162000-

Assets
=liabilities +owner equity
Cash + A.rec+ supplies+ equip =A.pay + A.not+ capital- drawing+ revenueexpenses
7000
7000
90090000=72000
900rent
Owner
+net profit (Revenue-Expenses)-Drawing
600 capital = Investment
600
20000
(Expenses -520000)+
15000 =
72000
120Expenses
=44300
120adv
4000
4000
100010005400
5400
25002500sal
60060040004000
5000
5000
4200
4200
275275utl
..............-............+.........+...........=...........+..............+............+..........
............-.............+
9400+
1000 - 7000+ 5000+ 4200 = 4200+
600+ 14605+1400
3795
20805=
20805
Income statement 1may2012 to 31may2012
Revenue
Service revenue
9400
Total revenue
9400
9400
Expenses
Rent
900
Advertising
120
Salaries
2500
Utility
275
Total expenses
3795
3795
Net profit
5605
Owner equity statement 1may2012 to 31may2012
Owner capital on 1may2012
0
Add investment
7000
Net profit
5605
12605
12605
Less drawing
1000
1000
Owner capital on 31may2012
11605
Balance sheet on 31may2012
Assets
Cash
A.rec
Supply
Equipment
Total assets
Liabilities
A.pay
A.not

14605
1400
600
4200
20805
Liabilities and owner equity
4200
5000

!PAGE 73 Do it

Account

debit

Cash

7000

Account receivable

4000

Prepaid insurance

6000

Equipment

88000

credit

Account payable

22000

Account notes

19000

Salaries payable

2000

Owner capital

20000

Owner drawing

8000

Revenue

95000

Salaries expense

42000

Insurance expense

3000

158000

158000

Do it!PAGE 74

General journal
Date
2012sep1

2012sep2

2012sep3

2012sep4

2012sep10

2012sep20

2012sep30

Explain
Cash
Owner capital
Investment to start business
Rent expense
Cash
Rent expenses for September
Supplies
Cash
Notes payable
Purchasing washers and dryers
Prepaid insurance
Cash
One year insurance
Advertising expenses
Notes payable
Daily news advertising for Laundromat opening
Owner drawing
Cash
Drawing for personal use
Cash
Service revenue
Revenue for the month

Dr
20000

Cr
20000

1000
1000
25000
10000
15000
1200
1200
200
200
700
700
6200
6200

General ledger
Date
2012sep
1
2012sep
2
2012sep
3
2012sep
4
2012sep
20
2012sep
30
Date
2012sep
4
Balance
Date
2012sep
3
Date
2012sep
3
2012sep
10
Date
2012sep
1
Date
2012sep
20
Date
2012sep
30
Date
2012sep
2
Date

Cash

Dr

Cr

Balanc
e
20000

1000

19000

1000
0
1200

9000

700

7100

20000

6200
Prepaid Service

Dr

13300
Cr

Balanc
e
1200

Cr

Balanc
e
2500

Cr

Balanc
e
15000

1200

Supplies

1200
Dr
25000

Account notes

Dr

1500
0
200
Owner capital

Owner drawing

Dr

Dr

Cr
2000
0
Cr

700
Revenue

Dr

Cr
6200

Expense rent

Dr

Dr

15200
Balanc
e
20000
Balanc
e
700
Balanc
e
6200

Cr

Balanc
e
1000

Cr

Balanc

1000
Expense

7800

advertising
2012sep
10

e
200

200

Trial balance
Account
Cash
Prepaid service
Supplies
Accounting notes
Owner capital
Owner drawing
Revenue
Expense rent
Expense
advertising
Total

Self-Test Questions

$Debit
13300
1200
25000

$Credit

15200
20000
700
6200
1000
200
41400

41400

1. Which of the following statements about an account is true?

a. In its simplest form, an account consists of two parts.
b. An account is an individual accounting record of increases and
decreases in specific asset, liability, and owners equity items.
c. There are separate accounts for specific assets and liabilities but only one
account for owners equity
items.
d. The left side of an account is the credit or decrease side.
2. Debits:
a. increase both assets and liabilities.
b. decrease both assets and liabilities.
c. increase assets and decrease liabilities.
d. decrease assets and increase liabilities.
3. A revenue account:
a. is increased by debits.
b. is decreased by credits.
c. has a normal balance of a debit.
d. is increased by credits.
4. Accounts that normally have debit balances are:
a. assets, expenses, and revenues.
b. assets, expenses, and owners capital.

c. assets, liabilities, and owners drawings.

d. assets, owners drawings, and expenses.
5. The expanded accounting equation is:
a. Assets 1 Liabilities 5 Owners Capital 1 Owners Drawings 1 Revenues 1
Expenses
b. Assets 5 Liabilities 1 Owners Capital 1 Owners Drawings 1 Revenues 2
Expenses
c. Assets 5 Liabilities 2 Owners Capital 2 Owners Drawings 2 Revenues 2
Expenses
d. Assets 5 Liabilities 1 Owners Capital 2 Owners Drawings 1
Revenues 2 Expenses
6. Which of the following is not part of the recording process?
a. Analyzing transactions.
b. Preparing a trial balance.
c. Entering transactions in a journal.
d. Posting transactions.
7. Which of the following statements about a journal is false?
a. It is not a book of original entry.
b. It provides a chronological record of transactions.
c. It helps to locate errors because the debit and credit amounts for each
entry can be readily compared.
d. It discloses in one place the complete effect of a transaction.
8. The purchase of supplies on account should result in:
a. a debit to Supplies Expense and a credit to Cash.
b. a debit to Supplies Expense and a credit to Accounts Payable.
c. a debit to Supplies and a credit to Accounts Payable.
d. a debit to Supplies and a credit to Accounts Receivable.
9. The order of the accounts in the ledger is:
a. assets, revenues, expenses, liabilities, owners capital, owners drawings.
b. assets, liabilities, owners capital, owners drawings, revenues,
expenses.
c. owners capital, assets, revenues, expenses, liabilities, owners drawings.
d. revenues, assets, expenses, liabilities, owners capital, owners drawings
10. A ledger:
a. contains only asset and liability accounts.
b. should show accounts in alphabetical order.
c. is a collection of the entire group of accounts maintained by a
company.
d. is a book of original entry.
11. Posting:
a. normally occurs before journalizing.
b. transfers ledger transaction data to the journal.
c. is an optional step in the recording process.
d. transfers journal entries to ledger accounts.
12. Before posting a payment of $5,000, the Accounts Payable of Senator
Company had a normal balance of $16,000. The balance after posting this
transaction was:
a. $21,000. c. $11,000.
b. $5,000 . d. Cannot be determined.

13. A trial balance:

Cash
a. is a list of accounts with their balances at a given time.
b. proves the mathematical
accuracy of journalized
transactions.
Debit
credit
c. May12
will not balance if a correct journal
2400 entry is posted twice.
d.
proves
that
all
transactions
have
been recorded.
May15
3000
14. A trial balance will not 5400
balance if:
Balance
a. a correct journal entry is posted
twice.
Account
receivable
b. the purchase of supplies
Debit
credit on account is debited to Supplies and credited to
Cash.
May5
4100
c. a $100 cash drawing by the owner is debited
to Owners Drawings
May12
2400
for $1,000 and credited
Balance
1700 to Cash for $100.
d. a $450 payment on account is debited
to Accounts
Revenue
Debit
credit
Payable for $45 and credited
to Cash for $45.
May5
4100
15. The trial balance of Clooney Company had
accounts with the following
May15
3000$85,000, Salaries and Wages
normal balances: Cash $5,000, Service Revenue
Balance
Payable $4,000, Salaries and Wages Expense 7100
$40,000, Rent Expense $10,000,
Owners Capital $42,000; Owners Drawings $15,000; Equipment $61,000. In
preparing a trial balance, the total in the debit column is:
a. $131,000.
c. $91,000.
.b. $216,000
. d. $116,000

Cash
Debit
April1
April3
April16
April20
Balance

cred

1600
3400
700
300
4000

Account
Cash
Account receivable
Supplies
Equipment

Debit
$
6000
8000
6000
8000
0

Accounting payable

1100
0
2000
0
3000
2800
0

Accounting notes
Salaries payable
Owner capital
Owner drawing
Revenue
Expense salary
Expense supplies
Total

Credit
$

8000
8800
0
3800
0
4000
1500
00

1500
00

Cash
Debit
Credit
Aug1
Aug10
Aug12

5000
2400
3000
Aug31

900

Balance
Account receivable
Debit
Aug25
Aug31
Balance
Equipment
Debit
Aug25

5300
Credit
1700
900
800

Credit
5000
Aug31

Balance
Accounting notes
Debit
Aug12
Balance
Owner capital
Debit
Aug12
Balance
Revenue
Debit
Aug10
Aug25
Balance

5000
Credit
2000
2000
Credit
5000
5000
Credit

Account
Cash
Account receivable
Equipment
Accounting notes
Owner capital
Revenue
Total

2400
1700
4100
$Debit

$Credit

5300
800
5000

11100

2000
5000
4100
11100

E2-10

Date
April1

April1
2

April1
5
April2
5
April2
9
April3
0

explanation
Cash
Owner capital
Investment to start business
Cash
Revenue
Collect service revenue in April
12
Salaries expense
Cash
Pay salaries for employee
Account payable
Cash
Pay cash for creditor
Cash
Account receivable
Collect cash from billed customer
Cash
Unearned service revenue
Collect cash from service not
provided yet

Dr
1200
0

Cr
1200
0

900
900

1300
1300
1500
1500
400
400
1000

Account

$Debit

Cash
Account receivable

11500
2800

1000

$Credit

Supplies
Account payable
Unearned service
Owner capital
Revenue
Expense salaries
Total

1800
300
1000
12000
4100
1300
17400

17400

E2-14

Account
$Debit
cash
??
Account receivable
7642
Prepaid service(insurance)
1968
Equipment
49360
Account payable
Account notes
Salaries payable
Owner capital
Owner drawing
700
Revenue
Expense gasoline
758
Expense insurance
523
Expense repair
961
Expense salaries
4428
Total
78821
Credit = (cash account debit +other accounts debits)
cash debit + 66340=78821
Cash=12481
P2-1A

$Credit

8396
17000
815
42000
10610

78821

Date
April1

April4

April8

April11

April12

April13

April17

April20

April25

April30

Explain
Cash
Owner capital
Investment to start business
Land
Cash
Purchase a land for business
Expense advertise
Account payable
Advertising on account
Salaries and wage expense
Cash
Pay for employees
Salaries and wage expense
Account payable
Hiring park manager will be paid on may1
Prepaid insurance
Cash
Pay for one year insurance
Owner drawing
Cash
Drawing for personal use
Cash
Service revenue
Collecting revenue for admission
Cash
Service revenue
Selling coupons
Cash
Service revenue
Collecting cash for admission
Account payable
Cash
Pay for previous advertising on account

Dr
35000

Cr
35000

27000
27000
1800
1800
1500
1500
4000
4000
1650
1650
1000
1000
6800
6800
2500
2500

8900
8900

900
900

P2-2A

Journal
Date
May1

May2

May3

May7

May1
1
May1
2
May1
7
May3
1

Explain
Cash
Owner capital
Investment to start business
Salaries and wage expense
Unearned service revenue
Hiring a receptionist
Supplies
Account payable
Purchasing supplies from Read
company
Rent expense
Cash
Pay for month rent
Account receivable
Service revenue
Billing customer for service
Cash
Service revenue
Collecting cash for a service
Cash
Service revenue
Unearned service revenue??salary
payable
Cash
Paying month salary of hired
receptionist

Dr
20000

Cr
20000

2000
2000
2500
2500

900
900
3200
3200
3500
3500
1200
1200
2000
2000

1500
1500

Account payable
Cash

A cash payment for Read

company
Ledger
Date
May1
May7
May12
May17
May31
May31

account
Cash

Dr
20000

Cr
900

3500
1200
2000
1500

Balance
20000
19100
22600
23800
21800
20300

.Account receiv
May11

3200

3200

2500

2500

Supplies
May3
Account payable
May3
May31

2500

2500
1000

2000

2000
0

20000

20000

3200
3500
1200

3200
6700
7900

1500
Unearned service

May2
May31

2000
Owner capital

May1
Revenue
May11
May12
May17
Salaries expense
May2

2000

2000

Rent expense
May7

900
Trial balance
Account
Cash
Account receivable
Supply
Account payable
Owner capital
Revenue
Salaries expense
Rent expense
Total

$ Debit
20300
3200
2500

900
$ Credit

1000
20000
7900
2000
900
28900
P2-1B

28900

Date
Mar1

Mar3

Mar5
Mar6
Mar10
Mar18
Mar19
Mar25
Mar30

Mar31

Explain
Cash
Owner capital
Investment to start business
Land
Building
Equipment
Cash
Advertising expense
Cash
Prepaid insurance
Cash
Equipment
Account payable
Cash
Service revenue
Cash
Service revenue
Drawing
Cash
Salaries expense
Cash
Account payable
Cash
Cash
Service revenue

Dr
20000

Cr
20000

12000
2000
1000
15000
700
700
600
600
1050
1050
1100
1100
1500
1500
800
800
250
250
1050
1050
2100
2100