CHAPTER 3

Self-test question
1.d
2. b
3. a, c, and d
4. c
5. c
6. d
7. b, c, and d
8. a and c

Brief exercise
3.3
Jan.18 Cash 400,000
Capital stock 400,000
Jan.22 Cash 100,000
Note payable 100,000
Jan.23 Advertising expense 200
Cash 200
Jan.25 Cash 5,000
Service revenue 5,000
Jan.26 Accounts Receivable 18,000
Service renvenue 18,000

3.2
May 1 Dr Cash 75,000
Cr Capital stock 75,000
May 4 Dr scopping equipment 90,000
Cr Cash 30,000
Cr Notes payable 60,000
May 12 Dr Account payable 2,400
Cr Cash 2,400
May 19 Dr Office Supplies 240
Cr Account payable 240
May 25 Dr Cash 15,000
Cr Account receiable 15,000
May 31 Dr Devidences 50,000
Cr Cash 50,000

1. d 2. b 3. a, c, and d 4. c 5. c 6. d 7. b, c, and d 8. a and c

Exercise 3.10
May 3 Cash…………………………………………… .950,000
Capital Stock……………………………. 950,000
(Issued capital stock for $950,000)
May 4 Office Rent Expense……………………………..1,800
Cash………………………………………. 1,800
(Paid May office rent expense)
May 5 Office Supplies…………………………………… 600
Cash…………………………………. 600
(Purchased office supplies for cash)
May 15 Office Equipment………………………………… 12,400
Accounts Payable……………………… 12,400
(Purchased office equipment on account)
May 18 Vehicles………………………………………… 45,000
Cash ……………………………………. 15,000
 Notes Payable…………………………… 30,000
(Purchased a company car. Paid $15,000 cash andissued a $30,000 note payable for the
balance)
May 20 Accounts Receivable 120,000
Client Revenue……………………….. 120,000
(Billed clients on account)
May 26 Dividends………………………………………. 8,000
Dividends Payable……………………… 8,000
(Declared dividend to be distributed in June)
May 29 Utilities Expense………………………………. 500
Cash……………….…………………… 200
(Paid May utilities)
May 30 Cash…………………………………………… 90,000
Accounts Receivable…………………… 90,000
(Received $90,000 from clients billed)
May 31 Salary expense 132,000
Cash…………………………………… 132,000
(Recorded and paid salary expense)
Collected cash on account from clients billed
 b.
GENERAL LEDGER
Cash

Dr Cr
May.3 $950,000    
    May.4 $1,800
    May.5 $600
    May.18 $15,000
    May.29 $500
May.30 $90,000    
    May.31 $32,000
Bal: $990,100    

Account receivable

Dr Cr

May.20 $120,000    
    May.30 $90,000
Bal $30,000    

Office Supplies

Dr Cr
May.5 $600    
Bal $600    
 Office Equipment

Dr Cr
May.1 $12,40
5 0    
$12,40
Bal 0    

Vehicles

Dr Cr
May.1 $45,00
8 0    
$45,00
Bal 0    

Notes Payable

Dr Cr

    May.18 $30,000
    Bal $30,000

Accounts Payable

Dr Cr

    May.15 $12,400
    Bal $12,400

Dividends Payable

Dr Cr

    May.26 $8,000
    Bal $8,000

Dividends

Dr Cr
May.26 $8,000    
Bal $8,000    

Capital Stock

Dr Cr

    May.3 $950,000
    Bal $950,000

Client Revenue

Dr Cr

May.2
    0 $120,000
    Bal $120,000

Office Rent Expense

Dr Cr
May.4 $1,800    
Bal $1,800    

Salary Expense

Dr Cr
May.3 $32,00
1 0    
$32,00
Bal 0    

Utilities Expense
 Dr Cr
May.29 $500    
Bal $500    
Trafflet Enterprises
IncorporatedTrial Balance
May 31, 2011
Cash 990,100
Account Receivable 30,000
Office supplies 600
Office equipment 12,400
Vehicles 45,000
Notes payable 30,000
Accounts payable 12,400
Dividends payable 8,000
Dividends 8,000
Capital stock 950,000
Client revenue 120,000
Office rent expense 1,800
Salary expense 32,000
Utilities expense 500
Total $1,120,400 $1,120,400

Problem Set A:
3.1A
General journal
Date Account Title Ref Debit Credit
Feb.1 Cash 600,000
Capital stock 600,000
(Issued 25,000
shares of
Capital Stock.)
Feb.10 Office building 240,000
Land 120,000
Cash 72,000
Notes payable 288,000
(Purchased
land and office
building)
Feb.16 Computer 14,400
equipment
Cash 14,400
Purchased
computer
equiqment
Feb.18 Office 10,800
furnishings
Cash 1,200
Accounts 9,600
Payable
(Purchased
office
furnishings)
Feb.22 Office Supplies 360
Cash 360
(Purchased
office supplies.)
Feb.23 Account 36
Receivable
Computer 36
printer
(Refund due
from PC
World.)
Feb.27 Accounts 4,800
Payable
Cash 4,800
(Made payment
on an account
payable)
Feb.28 Cash 36
Account 36
Receivable
(Collected cash
refunded by PC
World.)
b.
PROBLEM 3.1B
Journal entries
Date

B.Ex.3.9
.
Cash received in September for October flights $1,700,000
Cash received in October for October flights 1,300,000
Total revenue : $3,000,000
B.Ex.3.10
Salary payments in May for work performed by employees in May 30,000
Salary payments in June for work performed by employees in May 10,000
Total expense : $40,000
Problem 3.6A
General journal
Date Account Title Ref Debit Credit
July 18 Cash 1,500
Capital stock 1,500
(Issued 5,00
shares of
Capital Stock.)
July 22 Office suplies 100
Acount payable 100
( Purchased
office supplies
on account)
July 23 Mowing 2,000
 equipment
Cash 400
Notes payable 1,600
(Purchased
mowing
equipment,
paid $400 cash
and issuing a
60-day note
payable for the
remaining
balance)
July 24 Fuel expense 25
Cash 25
(Paid $25 cash
for gasoline)
July 25 Accounts 150
Receivable
Mowing 150
revenue

July 26 Account 200

Receivable
Mowing 200
revenue

July 30 Cash 150

Account 150
Receivable

July 31 Salaries 80
expense
Cash 80
b.
c.
Problem 3.4A