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203. Listed below are accounts to use for transactions (a) through (d), each identified by a number. Following
this list are the transactions. You are to indicate for each transaction the accounts that should be debited and
credited by placing the account number(s) in the appropriate box.
1.
Cash
2.
Accounts Receivable
3.
Office Supplies
4.
Land
5.
Interest Receivable
6.
Building
7.
Accumulated Depreciation - Building
8.
Depreciation Expense - Building
9.
Accounts Payable
10.
Interest Payable
11.
Insurance Payable
12.
Utility Expense
13.
Notes Payable
14.
Prepaid Insurance
15.
Service Revenue
16.
Capital Stock
17.
Insurance Expense
18.
Utility Payable
19.
Office Supplies Expense
20.
Unearned Service Revenue
21.
Dividends
22.
Interest Expense
Transactions
Account(s) Debited
Account(s) Credited
a. Utility bill is received; payment will be made in 10 days.
b. Paid the utility bill previously recorded in transaction (a).
c. Bought a three-year insurance policy and paid in full.
d. Received $7,000 from a contract to perform accounting
services over the next two years.
204. Below is the unadjusted trial balance for Dawson Designs at December 31, 2011 - the end of its first year
in business.
(1) Identify the errors in the following trial balance. All accounts have normal balances.
(2) Prepare a corrected trial balance.
Dawson Designs
Unadjusted Trial Balance
For the Year Ended December 31, 2011
Debit Balances
Credit Balances
Cash
23,000
Accounts Receivable
49,700
Prepaid Insurance
11,300
Equipment
150,500
Accounts Payable
6,050
Salaries Payable
4,250
Capital Stock
110,000
Dividends
18,500
Service Revenue
236,600
Salary Expense
98,930
Miscellaneous Expense
4,970
Totals
424,020
424,020
205. The following two situations are independent of each other.
1. On June 1, the cash account balance was $45,750. During June, cash payments totaled $243,910 and the
June 30 balance was $53,200. Determine the cash receipts during June and show your calculation.
2. On March 1, the supplies account balance was $1,800. During March, supplies of $2,450 were purchased
and $630 of supplies were on hand as of March 31. Determine the supplies expense for March and show your
calculation.
206. On January 1, 2010, Cary Parsons established a catering service. Listed below are accounts she would like
to open in the general ledger. List the accounts in the order in which they should appear in the ledger and
propose a two-digit account numbering scheme that is consistent with the rules of a proper chart of accounts.
1.
Cash
2.
Supplies
3.
Equipment
4.
Accounts Payable
5.
Capital Stock
6.
Wages Expense
7.
Rent Expense
8.
Truck
9.
Utilities Expense
10.
Dividends
11.
Truck Expense
12.
Prepaid Insurance
13.
Fees Earned
14.
Miscellaneous Expense
15.
Insurance Expense
16.
Notes Payable
17.
Retained Earnings
18.
Accounts Receivable
207. Several transactions are listed below, with the accounting equation stated to the right side of each. Use the
following identification codes to indicate the effects of each transaction on the accounting equation. Write your
answers in the space provided under the accounting equation. You need an identification code for each element
of the accounting equation. An example is given before the first transaction.
I-Increase
D-Decrease
NE-No Effect
Stockholders’
Assets
=
Liabilities
+
Equity
Example
John Smith invests in a new business by
purchasing $3,500 of capital stock.
I
NE
I
A)
Cash sales are made.
B)
Equipment is purchased on credit.
C)
Payment is made for the equipment purchased on
credit in (B).
D)
The company sold excess supplies to another
company on credit.
E)
Cash is collected from customers for accounts
receivable balances.
208. Journalize the five transactions for Mirmax Rentals described below.
August
1
Mirmax purchases two new saws on credit at $425 each. The saws are added to
Mirmax’s rental inventory. Payment is due in 30 days.
8
Mirmax accepts advance deposits for tool rentals of $125 that will be applied to the
cash rental when the tools are returned.
15
Mirmax receives a bill from Macon Utility Company for $180. Payment is due in
30 days.
20
Customers are charged $1,250 by Mirmax for tool rentals. Payment is due from the
customers in 30 days.
31
Mirmax receives $600 in payments from the customers that were billed for rentals
on August 20.
209. Journalize the following five transactions for Nexium & Associates, Inc. Omit explanations.
Mar.
1
Bills are sent to clients for services provided in February in the amount of
$800.
9
Corner Office, Inc. delivers office furniture ($1,060) and office supplies ($160)
to Nexium leaving an invoice for $1,220.
15
Payment is made to Corner Office, Inc. for the furniture and office supplies
delivered on March 9.
23
A bill for $430 for electricity for the month of March is received and will be
paid on its due date in April.
31
Salaries of $850 are paid to employees.
210. McMann Company has condensed income statements as follows:
2011
2010
Sales
$178,400
$162,500
Wage expenses
100,000
92,500
Rent expenses
33,000
30,000
Utilities expenses
30,000
25,000
Total operating expenses
163,000
147,500
Net income
15,400
15,000
REQUIRED:
Prepare a horizontal analysis of McMann Company’s income statements. Comment on the trends, both favorable and unfavorable.
211. Georgia Company has condensed income statements as follows:
2011
2010
Sales
$158,400
$162,500
Wage expenses
80,000
92,500
Rent expenses
28,000
30,000
Utilities expenses
30,000
25,000
Total operating expenses
138,000
147,500
Net income
20,400
15,000
REQUIRED:
Prepare a horizontal analysis of Georgia Company’s income statements. Comment on the trends, both favorable and unfavorable.
212. On January 31, the cash account balance was $96,750. During January, cash receipts totaled $305,000 and
cash payments totaled was $375,880. Determine the cash balance on January 1.
??? + $305,000 - $375,880 = $96,750
213. Organize the following accounts into the usual sequence of a chart of accounts.
Miscellaneous Expense
Accounts Payable
Retained Earnings
Accounts Receivable
Cash
Capital Stock
Fees Earned
Prepaid Rent
Salaries Expense
Unearned Revenue
Dividends
214. Selected accounts from the ledger of Garrison Company appear below. For each account, indicate the
following:
(a)
In the first column at the right, indicate the nature of each
account, using the following abbreviations:
Asset - A
Rev
enu
e -
R
Liability - L
Exp
ense
- E
None of the above - N
(b)
In the second column, indicate the increase side of each account
by inserting Dr. or Cr.
Account
Typ
e of
Acc
ount
Increase Side
(1)
Supplies
___
___
_
________
(2)
Notes Receivable
___
___
_
________
(3)
Fees Earned
___
___
_
________
(4)
Dividends
___
___
_
________
(5)
Accounts Payable
___
___
_
________
(6)
Salaries Expense
___
___
_
________
(7)
Capital Stock
___
___
_
________
(8)
Accounts Receivable
___
___
_
________
(9)
Equipment
___
___
_
________
(10)
Notes Payable
___
___
_
________
215. Calculate the following:
(a)
Determine the cash receipts for April based on the following data:
Cash payments during April
$63,000
Cash account balance, April 1
25,500
Cash account balance, April 30
31,750
(b)
Determine the cash received from customers on account during April based on the following data:
Accounts receivable account balance, April 1
$22,500
Accounts receivable account balance, April 30
15,250
Fees received from customers during April
45,000
216. Increases and decreases in various types of accounts are listed below. In each case, indicate by "Dr." or
"Cr." (a) whether the change in the account would be recorded as a debit or a credit and (b) whether the normal
balance of the account is a debit or a credit.
(a)
(b)
Recorded
As
Normal
Balance
(1)
Increase in Capital Stock
________
_______
(2)
Increase in Dividends
________
_______
(3)
Decrease in Accounts Receivable
________
_______
(4)
Increase in Note Payable
________
_______
(5)
Increase in Accounts Payable
________
_______
(6)
Decrease in Supplies
________
_______
(7)
Decrease in Salaries Expense
________
_______
(8)
Increase in Accounts Receivable
________
_______
(9)
Increase in Cash
________
_______
(10)
Decrease in Land
________
_______
