Revision c h 1&2 first year

Revision

P1-1A: on April 1 ,Julie spangle established spangle's travel agency . the following
:transactions were completed during the month

invested 15.000$ cash to start the agency -1

paid 600$ cash for April office rent -2

purchased equipment for 3.000$ cash -3

incurred 700$ of advertising costs in the Chicago tribune ,on account -4

paid 900$ for office supplies -5

performed services worth 10.000$ : 3.000$ cash is received from customers and the -6
balance of 7000$ is billed to customers on account

withdrew 600$ cash for personal use -7

paid Chicago tribune 500$ of the amount due in transaction 4 -8

paid employees` salaries 2.500$ -9

received 4.000$ in cash from customers who have previously been billed in transaction 6 -10

:Required

a)- prepare a tabular analysis of the transactions using the following column heading :
cash ,account receivable , supplies , equipment , accounts payable , owner`s capital ,owner`s
drawing , revenues and expenses

b)- from an analysis of the owner`s equity columns ,compute the net income or net loss for
April

p1-2A: Judi Salem opened a law office on July 1 , 2017 . on July 31, the balance sheet
showed cash 5000$ ,accounts receivable 1500$ ,supplies 500$ , equipment 6000$ .
accounts payable 4200$ and owner`s capital 8800$ . during august , the following
: transactions occurred

collected 1200$ of accounts receivable -1

paid 2800$ cash on accounts payable -2

recognized revenue of 7500$ of which 3000$ is collected in cash and the balance due in -3
September

purchased additional equipment for 2000$ ,paying 400$ in cash and the balance on -4
account

Mohammed safwat Mob/01099114517

 Revision c h 1&2 first year

paid salaries 2500$ ,rent for august 900$ and advertising expense 400$ -5

withdrew 700$ in cash for personal use -6

. received 2000$ from standard federal bank – money borrowed on a note payable -7

incurred utility expense for month on account 270$ -8

:Required

a)- prepare tabular analysis of august transactions beginning with July 31 balances . the
column headings should be as follows : cash + account receivable + supplies + equipment =
notes payable + accounts payable + owner`s capital – owner`s drawings + revenues –
expenses

b)- prepare an income statement for august , an owner`s equity statement for august and
. balance sheet at august 31

p1-3A: on June 1 , Cindy golfer started divine designs co , a company that provides craft
opportunities , by investing 12.000$ cash in the business . following are the assets and
liabilities of the company at June 30 and the revenues and expenses for the month of June

cash 10.150$ service revenue 6.500$

accounts receivable 2.800$ advertising expense 500$

supplies 2.000$ rent expense 1.600$

equipment 10.000$ gasoline expense 200$

notes payable 9.000$ utilities expense 150$

accounts payable 1.200$

Cindy made no additional investment in June but withdrew 1.300$ for personal use during
. the month

:required

a)- prepare an income statement and owner`s equity statement for the month of June and a
balance sheet at June 30.2017

b)- prepare an income statement and owner`s equity statement for the month of June
assuming the following data aren’t included above : 1- 900$ of services were performed and
billed but not collected at June 30 , and 2- 150$ of gasoline expense was incurred but not
. paid

Mohammed safwat Mob/01099114517

 Revision c h 1&2 first year

p1-4A: Trixie maye started her own consulting firm , matrix consulting , on May 1.2017 .
: the following transactions occurred during the month of may

may 1 Trixie invested 7000$ cash in the business

paid 900$ for office rent for the month 2

purchased 600$ of supplies on account 3

paid 125$ to advertise is the county news 5

received 4000$ cash for services performed 9

withdrew 1000$ cash for personal use 12

performed 5400$ service on account 15

paid 2500$ for employee salaries 17

paid for the supplies purchased on account on May 3 20

received a cash payment of 4000$ for services performed on account on May 15 23

borrowed 5000$ from the bank on a note payable 26

purchased equipment for 4200$ on account 29

paid 275$ for utilities 30

:Required

a)- show the effects of the previous transactions on the accounting equation

b)- prepare an income statement for the month of may

c)- prepare a balance sheet at May 31.2017

Mohammed safwat Mob/01099114517

 Revision c h 1&2 first year

: p1-5A: financial statement information about four different companies is as follows

alpha company beta company psi company omega

company January 1.2017

assets 80.000$ 90.000$ (g) 150.000$

liabilities 41.000$ (d) 80.000$ (j)

owner`s equity (a) 40.000$ 49.000$ 90.000$

December 31.02017

Assets (b) 112.000$ 170.000$ (k)

Liabilities 60.000$ 72.000$ (h) 100.000$

Owner`s equity 50.000$ (e) 82.000$ 151.000$

Owner`s equity changes

In year

Additional investment (c) 8.000$ 10.000$ 15.000$

Drawings 15.000$ (f) 12.000$ 10.000$

Total revenues 350.000$ 410.000$ (i) 500.000$

Total expenses 333.000$ 385.000$ 350.000$ ( l)

:Required

a)- determine the missing amounts

b)- prepare the owner`s equity statement for alpha company

c)- write a memorandum explaining the sequence for preparing the financial statements and
the interrelationship of the owner`s equity statement to the income statement and balance
sheet

Mohammed safwat Mob/01099114517

 Revision c h 1&2 first year

:Example

Journalize the following business transitions in general journal form

john Amos invested 20.000$ cash to start an appliance repair business -1

hired an employee to be paid 400$ per week starting tomorrow -2

paid two year`s rent in advance , 7.200$ -3

paid the worker`s wages -4

recorded revenue earned and received for the week , 1.500$ -5

Solution

Date Explanation Dr Cr
1 Cash 50.000
John Amos capital 50.000
2 No entry
3 Prepaid rent 7.200
Cash 7.200
4 Wage expense 400
Cash 400
5 Cash 1500
Service revenue 1500

:Example

Journalize the following transactions for j.c. tyme company for June 2008 , the company's
. first month of operations

purchased equipment on account for 3000$ -1

billed customers 5000$ for services performed -2

made payment of 1500$ on account for equipment purchased earlier in month -3

collected 2.900$ on customer accounts -4

Solution

Date Explanation Dr Cr
1 Equipment 3000
Account payable 3000
2 Accounts receivable 5000
Service revenue 5000
3 Accounts payable 1500
Cash 1500
4 Cash 2900
Accounts payable 2900

Mohammed safwat Mob/01099114517

 Revision c h 1&2 first year

:Example

. Journalize the following business transactions in general journal form

the owner , mike derby invests 35.000$ in cash in starting a real estate office operating as -1
a sole proprietorship

purchased 400$ of office supplies on credit -2

purchased office equipment for 8000$ , paying 2000$ in cash and signed a 30-days 6000$ -3
notes payable

real estate commissions billed to clients amount to 4000$ -4

paid 700$ in cash for the current month`s rent -5

paid 200$ cash on account fo office supplies purchased in transaction 2 -6

received a bill for 600$ for advertising for the current month -7

paid 2.200$ cash for office salaries -8

derby withdrew 1.200$ from the business for living expenses -9

received a check for 3000$ from a client in payment on account for commissions billed -10
in transaction 4

Solution

Date Explanation Dr Cr
1 Cash 35.000
derby capital 35000
2 Office supplies 400
Account payable 400
3 Office equipment 8000
Cash 2000
Note payable 6000
4 Account receivable 4000
Commission revenue 4000
5 Cash 700
Rent expense 700

6 Account payable 200

Cash 200
7 Advertising expense 600
Account payable 600
8 Salaries expense 2200
Cash 2200
9 derby drawing 1200
cash 1200

Mohammed safwat Mob/01099114517

 Revision c h 1&2 first year

10 Cash 3000
Account receivable 3000

Mohammed safwat Mob/01099114517