Chapter 02 – Analyzing and Recording Transactions
Problem 2-2A (Concluded)
Part 3
ARACEL ENGINEERING
Trial Balance
June 30
Debit Credit
Cash………………………………………………….… $ 22,945
Accounts receivable.…………………………… 29,000
Prepaid insurance…………..…………………… 3,000
J. Aracel, Withdrawals…………………………. 9,480
Engineering fees earned………………………. 42,200
Wages expense……………………………………. 2,400
Equipment rental expense……………………. 1,333
Advertising expense……………………………. 2,500
Repairs expense…………………………..……… 925
Totals………………………………..………………… $261 ,733 $261 ,733
2-59
Chapter 02 – Analyzing and Recording Transactions
Problem 2-3A (90 minutes)
Part 1
Mar. 1 Cash………….……….………..…........…............101 150,000
Office Equipment………........…..........…......163 22,000
D. Brooks, Capital......…........…..........301 172,000
Owner invested cash and equipment.
Received cash for services.
9 Accounts Receivable………………........…....106 7,500
Services Revenue…………………..….....403 7,500
Billed client for completed work.
12 Accounts Payable……..……...........…..........201 4,200
Cash..…..…..………………………………….101 4,200
Paid balance due on account.
19 Prepaid Insurance…….………..…...…...........128 5,000
Cash..…..…..………………………………….101 5,000
Paid premium for insurance.
22 Cash………..………..………..……..........…........101 3,500
2-60
Chapter 02 – Analyzing and Recording Transactions
30 Office Supplies……..………..………......…......124 600
Accounts Payable..…..........…............201 600
Purchased supplies on account.
31 Utilities Expense………......…..........….........690 500
Cash..…..…..………………………………….101 500
Paid monthly utility bill.
2-61
Education.
Chapter 02 – Analyzing and Recording Transactions
Problem 2-3A (Continued)
Part 2
Cash Acct. No. 101
Date Explanation PR Debit Credit Balance
Mar. 1 G1 150,000 150,000
2 G1 6,000 144,000
6 G1 4,000 148,000
29 G1 5,100 137,200
31 G1 500 136,700
Accounts Receivable Acct. No. 106
Date Explanation PR Debit Credit Balance
Mar. 9 G1 7,500 7,500
Office Supplies Acct. No. 124
Date Explanation PR Debit Credit Balance
Mar. 3 G1 1,200 1,200
30 G1 600 1,800
Prepaid Insurance Acct. No. 128
Date Explanation PR Debit Credit Balance
Mar. 19 G1 5,000 5,000
Prepaid Rent Acct. No. 131
Date Explanation PR Debit Credit Balance
Mar. 2 G1 6,000 6,000
Office Equipment Acct. No. 163
Date Explanation PR Debit Credit Balance
2-62
Chapter 02 – Analyzing and Recording Transactions
Problem 2-3A (Continued)
Part 2 (Continued)
Accounts Payable Acct. No. 201
Date Explanation PR Debit Credit Balance
D. Brooks, Capital Acct. No. 301
Date Explanation PR Debit Credit Balance
Mar. 1 G1 172,000 172,000
D. Brooks, Withdrawals Acct. No. 302
Date Explanation PR Debit Credit Balance
Mar. 29 G1 5,100 5,100
Services Revenue Acct. No. 403
Date Explanation PR Debit Credit Balance
Utilities Expense Acct. No. 690
Date Explanation PR Debit Credit Balance
Mar. 31 G1 500 500
2-63
Chapter 02 – Analyzing and Recording Transactions
Problem 2-3A (Concluded)
Part 3
VENTURE CONSULTANTS
Trial Balance
March 31
Debit Credit
Cash ……………………………………………………………. $136,700
Accounts receivable…………………………………….. 7,820
Office supplies……………………………………………... 1,800
D. Brooks, Withdrawals……………..…………………. 5,100
Services revenue………………………………………….. 15,320
Utilities expense……………………………..……………. 500
Totals…………………………………………………………… $187 ,920 $187 ,920
2-64
Chapter 02 – Analyzing and Recording Transactions
Problem 2-4A (90 minutes)
Part 1
a. Cash………………………………………………….101 60,000
Office Equipment…………….…………………163 25,000
H. Venedict, Capital…..………............301 85,000
Owner invested cash and equipment.
c. Office Supplies…………………………….…….108 2,000
Accounts Payable………………….......201 2,000
Purchased office supplies on account.
d. Automobiles………………………………………164 16,500
H. Venedict, Capital……………………..301 16,500
Owner contributed automobile to business.
e. Office Equipment…………….…………………163 5,600
Accounts Payable………………….......201 5,600
Purchased office equipment on account.
Paid cash for utilities.
2-65
Chapter 02 – Analyzing and Recording Transactions
Problem 2-4A (Part 1 Continued)
i. Accounts Payable………………………………201 2,000
Cash……………………………………………101 2,000
Paid cash on account.
l. Salaries Expense………..……………………..601 1,800
Cash……………………………………………101 1,800
Paid assistant’s salary.
m. Cash……………………………….…………………101 4,000
Accounts Receivable…………………..106 4,000
Received cash due on account.
2-66
Chapter 02 – Analyzing and Recording Transactions
Problem 2-4A (Continued)
Part 2
Cash No. 101 Land No. 172
Date PR Debit Credit Balance Date PR Debit Credit Balance
(a) 60,000 60,000 (b) 40,000 40,000
(b) 30,000 30,000
(f) 1,800 28,200 Accounts Payable No. 201
(g) 8,000 36,200 Date PR Debit Credit Balance
(l) 1,800 11,465
(m) 4,000 15,465 Notes Payable No. 250
(n) 2,800 12,665 Date PR Debit Credit Balance
(b) 170,000 170,000
Accounts Receivable No. 106
H. Venedict, Withdrawals No. 302
Office Equipment No. 163 Date PR Debit Credit Balance
Date PR Debit Credit Balance (n) 2,800 2,800
(a) 25,000 25,000
(e) 5,600 30,600 Fees Earned No. 402
(j) 20,300 50,900 Date PR Debit Credit Balance
(g) 8,000 8,000
(k) 6,250 14,250
Automobiles No. 164 Salaries Expense No. 601
Date PR Debit Credit Balance Date PR Debit Credit Balance
Building No. 170
Date PR Debit Credit Balance Utilities Expense No. 602
(b) 160,000 160,000 Date PR Debit Credit Balance
(h) 635 635
2-67
Chapter 02 – Analyzing and Recording Transactions
Problem 2-4A (Concluded)
Part 3
HV CONSULTING
Trial Balance
September 30
Debit Credit
Cash …………………………………………………… $ 12,665
Accounts receivable.…………………………… 2,250
Office supplies…………………………………….. 2,000
H. Venedict, Capital …………………………….. 101,500
H. Venedict, Withdrawals……………….…….. 2,800
Fees earned……………..…………………………. 14,250
Salaries expense…………….…………………… 3,600
Utilities expense…………………….……………. 635
……………………………………………………………………..
2-68
Chapter 02 – Analyzing and Recording Transactions
Problem 2-5A (90 minutes)
Part 1
NETTLE DISTRIBUTION
Balance Sheet
December 31, 2014
Assets Liabilities
Cash……………………….… $ 64,300 Accounts payable……….......$ 3,500
Accounts receivable.... 26,240
Office supplies………….. 3,160
Trucks……………….……… 148,000 Equity
NETTLE DISTRIBUTION
Balance Sheet
December 31, 2015
Assets Liabilities
Trucks……………….……… 157,000
Office equipment.......... 44,000
Building…….……………… 80,000 Equity
Land……………….………… 60,000 Total equity………………………. 304,490
Total assets……..……….. $377,990 Total liabilities and equity.... $377,990
Part 2
Computation of 2015 net income:
Equity, December 31, 2014……………………………….………………….. $282,200
Equity, December 31, 2015……………………………….………………….. (304 ,490)
Increase in equity during 2015………………………………………..……. $ 22 ,290
Owner investment……………………………………………………………….. 35,000
Part 3
Debt Ratio = $73,500 / $377,990 = 19.4%
2-69