2-101
191.
Below is a list of activities.
Transaction
Assets
=
Liabilities
+
Stockholders’
Equity
1. Issue common stock in
exchange for cash, $15,000
+$15,000
=
$0
+
+$15,000
2. Purchase equipment for cash,
20,000.
3. Pay cash for insurance in
advance, $2,400.
4. Pay cash for workers’
employees’ salaries in the current
period, $17,200.
5. Pay accounts payable, $1,000.
6. Purchase office supplies on
account, $3,750.
7. Provide services to customers
for cash, $6,800.
8. Provide services to customers
on account, $12,300.
9. Pay cash dividends to
stockholders, $2,500.
10. Pay cash for utilities in the
current period, $1,200.
Totals
Required:
For each activity, indicate the impact on the accounting equation. After doing all the
transactions, ensure that the accounting equation remains in balance.
2-102
2-103
192.
Reed owns a consulting company, while Sophie operates a maintenance shop. For the
month of June, the following transactions occurred.
June 2
Sophie decides that she would like consulting at the end of the month
and pays Reed $300 in advance.
June 5
Sophie provides maintenance to Reed on account, $175.
June 7
Reed borrows $500 from Sophie by signing a note.
June 14
Sophie purchases maintenance supplies from Tap Corporation, paying
cash of $250.
June 19
Reed pays $225 to Sophie for maintenance provided on June 5.
June 25
Reed pays the utility bill for the month of June, $200.
June 28
Sophie receives consulting from Reed equaling the amount paid on June
2.
June 30
Reed pays $500 to Sophie for money borrowed on June 7.
Required:
Record each transaction for Reed. Keep in mind that Reed may not need to record all
transactions.
June 2
Deferred Revenue
(Receive cash in advance from customer)
Accounts Payable
(Receive maintenance on account)
June 7
Notes Payable
(Receive cash and sign note payable)
2-105
193.
Reed owns a consulting company, while Sophie operates a maintenance shop. For the
month of June, the following transactions occurred.
June 2
Sophie decides that she would like consulting at the end of the month
and pays Reed $300 in advance.
June 5
Sophie provides maintenance to Reed on account, $175.
June 7
Reed borrows $500 from Sophie by signing a note.
June 14
Sophie purchases maintenance supplies from Tap Corporation, paying
cash of $250.
June 19
Reed pays $225 to Sophie for maintenance provided on June 5.
June 25
Reed pays the utility bill for the month of June, $200.
June 28
Sophie receives consulting from Reed equaling the amount paid on June
2.
June 30
Reed pays $500 to Sophie for money borrowed on June 7.
Reed
Sophie
Assets
=
Liabilities
+
Stockholders’
Equity
Assets
=
Liabilities
+
Stockholders’
Equity
June
2
+$300
=
+$300
+
$0
+$300
=
$0
+
$0
-$300
5
7
14
19
25
28
30
Required:
1. Record transactions for Sophie. Keep in mind that Sophie may not need to record all
transactions.
2. Using the format shown above, indicate the impact of each transaction on the
accounting equation for each company.
2-106
Requirement 1
2-108
194.
Below is a list of typical accounts.
Accounts
Type of Account
Normal Balance
(Debit or Credit)
1. Service Revenue
2. Common Stock
3. Dividends
4. Salaries Expense
5. Accounts Payable
6. Buildings
7. Interest Revenue
8. Accounts Receivable
9. Retained Earnings
10. Accounts Payable
11. Utilities Expense
12. Advertising Expense
Required:
For each account, (1) indicate the type of account and (2) whether the normal account
balance is a debit or credit. For type of account, choose from asset, liability, stockholders’
equity, dividend, revenue, or expense.
1. Service Revenue
2. Common Stock
3. Dividends
4. Salaries Expense
5. Accounts Payable
2-109
2-110
195
.
Below are the transactions for Racer, Inc. for April, the first month of operations.
April 1
Obtain a loan of $50,000 from the bank.
April 2
Issue common stock in exchange for cash of $20,000.
April 7
Purchase equipment for $40,000 cash.
April 10
Purchase cleaning supplies of $4,000 on account.
April 12
Provide services of $5,000 for cash.
April 16
Pay employees $1,200 for work performed.
April 19
Pay for advertising in a local newspaper, costing $500.
April 23
Provide services of $7,000 on account.
April 29
Pay employees $1,500 for work performed.
April 30
A utility bill of $1,200 for the current month is paid.
April 30
Pay dividends of $700 to stockholders.
Required:
1. Record each transaction.
2. Post each transaction to the appropriate T-accounts.
3. Calculate the balance of each account.
4. Prepare a trial balance for June.
Racer uses the following accounts: Cash, Accounts Receivable, Supplies, Equipment,
Accounts Payable, Notes Payable, Common Stock, Dividends, Service Revenue, Salaries
Expense, Advertising Expense, and Utilities Expense.
April 1
Notes Payable
(Obtain loan from bank)
2-111
2-112
2-113
196.
Wolverine Incorporated had the following trial balance at the beginning of April.
Account Title
Debits
Credits
Cash
$2,800
Accounts receivable
900
Supplies
3,600
Equipment
9,100
Accounts payable
$2,200
Notes payable
3,600
Common stock
9,000
Retained earnings
1,600
The following transactions occur in April:
April 1
Issue common stock in exchange for $15,000 cash.
April 2
Purchase equipment with a long-term note for $4,500 from Hoosier Corporation.
April 4
Purchase supplies for $1,500 on account.
April 10
Provide services to customers on account for $9,000.
April 15
Pay creditors on account, $1,200.
April 20
Pay employees $2,300 for the first half of the month.
April 22
Provide services to customers for $11,500 cash.
April 24
Pay $1,300 on the note from Hoosier Corporation.
April 26
Collect $7,100 on account from customers.
April 28
Pay $1,700 to the local utility company for April gas and electricity.
April 30
Pay $3,200 rent for the April.
Required:
1. Record each transaction.
2. Post each transaction to the appropriate T-accounts.
3. Calculate the balance of each account at April 30. (Hint: Be sure to include the balance at
the beginning of April in each T-account.)
4. Prepare a trial balance as of April 30.
Requirement 1