30 Minutes, Medium
a. (1) (a)
(b)
(2) (a)
(3) (a)
(b)
(4) (a)
(7) (a)
(b)
The liability Accounts Payable was decreased. Decreases in liabilities are recorded by
debits. Debit Accounts Payable, $100.
The asset Office Supplies was increased. Increases in assets are recorded by debits. Debit
PROBLEM 3.2B
The asset Cash was decreased. Decreases in assets are recorded by credits. Credit Cash,
$1,800.
The asset Office Supplies was decreased. Decreases in assets are recorded by credits.
Credit Office Supplies, $100.
LYONS, INC.
The asset Accounts Receivable was increased. Increases in assets are recorded by debits.
Debit Accounts Receivable, $5,000.
Revenue has been earned. Revenue increases owners’ equity. Increases in owners’ equity
are recorded by credits. Credit Consulting Revenue, $5,000.
The Dividends account was increased. Dividends decrease the owners’ equity account
Retained Earnings. Decreases in owners’ equity are recorded by debits. Debit Dividends,
$1,800.
The asset Cash was increased. Increases in assets are recorded by debits. Debit Cash,
$5,000.
$2,300.
credits. Credit Accounts Payable, $2,400.
Education.
b.
1 5,000
Consultin
g
Revenue 5,000
3 3,200
5 100
30 1,800
Cash 1,800
c.
Billed customers for services rendered.
(2)
General Journal
PROBLEM 3.2B
LYONS, INC. (continued)
20__ (1)
June Accounts Receivable
Office Supplies
Accounts Payable
revenue earned in the same period. Office supplies are recorded as an asset when they are first
purchased. As these supplies are used in a particular accounting period, their cost will be matched
against the revenue earned in that period.
The realization principle requires that revenue be recorded when it is earned , even if cash for the
Declared and paid a cash dividend.
Dividends
Education.
a.
Revenue Expenses = Assets Liabilities =
NE I D D NE D
INEII NEI
Oct. 1
Transaction
Oct. 4
Income Statement
PROBLEM 3.3B
35 Minutes, Medium
Net
Income
DANA, INC.
Balance Sheet Owners’
Equity
b.
Oct. 1 4,000
Cash 4,000
4 8,500
Service Revenue 8,500
Accounts Receivable 8,500
PROBLEM 3.3B
DANA, INC. (concluded
)
General Journal
Rent Expense
Paid October rent.
Accounts Receivable
Billed Milton Hotels for services.
Education.
a.
Revenue Expenses = Assets Liabilities =
NE NE NE I NE I
NE I D NE I D
NE NE NE NE I D
Mar. 30
Mar. 30
Mar. 2
Transaction
PROBLEM 3.4B
50 Minutes, Strong
TONE DELIVERIES
Balance Sheet Owners’
Equity
Net
Income
Income Statement
b.
Mar. 2 80,000
Ca
p
ital Stock 80,000
4 45,000
Service Revenue 11,300
15 7,100
Cash 7,100
PROBLEM 3.4B
TONE DELIVERIES (continued)
General Journal
2015
Salaries Expense
Cash
Issued stock to Mary Tone.
Truck
Billed customers.
Paid salaries for first half of March.
Declared dividend payable April 30.
Education.
c.
Debit Credit Balance
Mar. 2 80,000 80,000
4 15,000 65,000
5 2,500 62,500
15 7,100 55,400
Debit Credit Balance
2015
PROBLEM 3.4B
Date Cash
TONE DELIVERIES (continued)
Explanation
Date
Explanation
Accounts Receivable
2015
Debit Credit Balance
Debit Credit Balance
Debit Credit Balance
Debit Credit Balance
2015
2015
Maintenance Expense
Date Explanation
2015
Dividends
Date Explanation
PROBLEM 3.4B
Date
Explanation
TONE DELIVERIES (continued)
Dividend Payable
Capital Stock
Date
Explanation
2015
Debit Credit Balance
PROBLEM 3.4B
Date
TONE DELIVERIES (continued)
Fuel Expense
Explanation
d.
50,800$
21,900
45,000
30,000$
830
1,200
80,000
0
1,200
PROBLEM 3.4B
TONE DELIVERIES
March 31, 2015
Cash
TONE DELIVERIES (continued)
Trial Balance
Accounts payable
Dividends payable
Capital stock
Retained earnings
Accounts receivable
Dividends
Notes payable
Truck
e.
Total Assets: 50,800$
21,900
45,000
117,700$
30,000$
830
balance prior preparing the financial statements. The adjusting
Total Liabilities:
The above figures are most likely not the amounts to be
reported in the balance sheet dated March 31. The accounting
Accounts receivable
Accounts payable
Notes payable
Total assets
Trucks
PROBLEM 3.4B
TONE DELIVERIES (concluded)
Cash