BAT4M / Quiz 1 Name: ___________________________________________________

Part A: In the space below, journalize the following business transactions in general journal
form. Identify each transaction by number (not date). You may omit explanations of the
transactions (just debits/credits needed).
1. The owner invests $35,000 in cash in starting a real estate office operating as a sole
proprietorship.
2. Purchased $400 of office supplies on credit.
3. Purchased office equipment for $6,000, paying $2,500 in cash and signed a 30-day,
$3,500, note payable.
4. Real estate commissions billed to clients amount to $4,000.
5. Paid $700 in cash for the current month's rent.

1. Cash ......................................................................................... 35,000

Owner's Capital ................................................................ 35,000

2. Office Supplies ......................................................................... 400

Accounts Payable ............................................................ 400

3. Office Equipment ...................................................................... 6,000

Cash ................................................................................ 2,500
Notes Payable ................................................................. 3,500

4. Accounts Receivable ................................................................ 4,000

Real Estate Commission Revenue .................................. 4,000

5. Rent Expense ........................................................................... 700

Cash ................................................................................ 700

Part B – Circle the correct answer

Jackson's Small Engine Repair Shop, a proprietorship, started the year with total assets of
$60,000 and total liabilities of $40,000. During the year the business recorded $100,000 in
repair revenues, $55,000 in expenses, and Mr. Jackson withdrew $10,000.

Jackson's Capital balance at the end of the year was

a. $55,000.
b. $35,000.
c. $65,000.
d. $45,000.

The net income reported by Jackson's Small Engine Repair Shop for the year was
a. $35,000.
b. $45,000.
c. $20,000.
d. $90,000.

Jackson's Capital balance changed by what amount from the beginning of the year to the end of
 the year?
a. $10,000.
b. $45,000.
c. $20,000.
d. $35,000.

Generally accepted accounting principles are

a. income tax regulations.
b. guidelines that indicate how to report economic events.
c. theories that are based on physical laws of the universe.
d. principles that have been proven correct by academic researchers.

After transaction information has been recorded in the journal, it is transferred to the
a. trial balance.
b. income statement.
c. book of original entry.
d. ledger.

Calculate the missing amount in each category of the accounting equation.

Assets Liabilities Owner's Equity

(a) $280,000 $ 182,000 $ 98,000
(b) $178,000 $ 63,000 $115,000
(c) $502,000 $202,000 $300,000
Part C – Balance sheet

At September 1, the balance sheet accounts for Roxanne’s Restaurant, a sole proprietorship,
were as follows:

Accounts Payable $ 3,800 Land $33,000

Accounts Receivable 1,600 R. Roy, Capital ?
Building 68,000 Notes Payable 48,000
Cash 5,000 Supplies 6,600
Furniture 18,700

The following transactions occurred during the next two days:

Roxanne invested an additional $22,000 cash in the business. The accounts payable were paid
in full. (No payment was made on the notes payable.)

Instructions: Prepare a balance sheet at end of September 3 (you will require a few changes
to the above figures).

ROXANNE'S RESTAURANT
Balance Sheet
September 3, 2001

ASSETS

Cash $ 23,200
Accounts receivable 1,600
Supplies 6,600
Furniture 18,700
Building 68,000
Land 33,000
Total assets $151,100

LIABILITIES
Accounts payable $ -0-
Notes payable 48,000

OWNER'S EQUITY
Roxanne Roy, Capital 103,100
Total liabilities and owner's equity $151,100

Cash ($5,000 + $22,000 – $3,800) = $23,200

Accounts Payable ($3,800 – $3,800) = $0
Roxanne Roy, Capital: Beginning balance ($132,900 – $51,800) $ 81,100
Additional investment 22,000
Ending balance $103,100