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Chapter 02 - Analyzing Business Transactions
58. The financial statement that is prepared first is
59. The rent paid for future months is a(n)
60. The statement of financial position is another term for which financial statement?
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© 2012 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
70. On December 1, 2013, Geneva Jordan opened her new business with the following assets
and liabilities. Complete the accounting equation for the firm.
Assets $________ = Liabilities $________ + Owner's Equity $________
71. During October, a firm had the following transactions involving revenue and expenses.
Did the firm earn a net income or incur a net loss for the period? What was the amount?
Chapter 02 - Analyzing Business Transactions
The transactions listed below took place at the Mitchell Advertising Agency. These
transactions affected the following accounts. Indicate the accounts affected and use plus and
minus to show the changes caused by each transaction.
72. Performed services on credit
73. Paid cash for utilities
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82. Guy McKinley started the McKinley Charter Service at the beginning of August 2013. On
August 31, 2013, the accounting records of the business showed the following information.
Prepare an income statement and a statement of owner's equity for the month and a balance
sheet as of August 31, 2013.
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© 2012 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
2-30
© 2012 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
On September 1, Shawn Dahl established Whitewater Rentals, a canoe and kayak rental
business. The following transactions occurred in the month of September and affected the
following accounts:
Transactions
1. Shawn Dahl invested $45,000 in cash to open the business
2. Paid $12,700 in cash for the purchase of kayak and canoe equipment
3. Paid $1,050 in cash for rent expense
4. Purchased additional kayak and canoe equipment for $3,800 on credit
5. Received $3,900 in cash for kayak rentals
6. Rented canoes and kayaks for $1,200 on account
7. Purchased office equipment for $125 in cash
8. Received $800 in cash from credit clients
9. Shawn Dahl withdrew $1,500 in cash for personal expenses
83. Based on the information shown in transaction #4 above, indicate the accounts affected
and use plus and minus to show the changes caused by the transaction.
Chapter 02 - Analyzing Business Transactions
The figure below shows the transactions for Sawyer Architecture Services during June. Greg
Sawyer opened this business on June 1 with a capital investment of $72,000 (Transaction 1).
86. What was the net income or net loss for Sawyer Architecture Services for the month of
June?
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88. Prepare the balance sheet for Sawyer Architecture Services as of June 30, 2013.
Cullen Beatty plans to start a consulting business—Cullen Consulting Services. In
preparation to do this, on April 1, 2013, he invested $50,000 in cash and $19,000 in
equipment, and opened an account at Office Plus by purchasing $1,500 in office supplies
which is due by the end of the month. He then signed a one-year lease agreement on an office
building for $6,000, paying the full amount in advance.
