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PROBLEM 4.1B (continued)
PAGE 2
POST.
REF.
1 2013 1
2 Sept. 10 Equipment Repair Expense 2 5 0 00 2
3 Cash 2 5 0 00 3
4 Paid for equipment repairs, Check 1002 4
5 5
14 14
15 18 Cleaning Supplies Expense 7 0 0 00 15
16 Cash 7 0 0 00 16
17 Paid for cleaning supplies, Check 1005 17
18 18
19 19 Office Supplies Expense 6 0 0 00 19
29 29
30 22 Cash 295000 30
31 Fees Income 295000 31
32 Performed services for cash 32
CREDIT
GENERAL JOURNAL
DATE DESCRIPTION DEBIT
PROBLEM 4.1B (continued)
PAGE 3
POST.
REF.
1 2013 1
2 Sept. 26 Accounts Receivable 360000 2
3 Fees Income 360000 3
4 Performed services on account 4
5 5
6 30 Salaries Expense 950000 6
PROBLEM 4.2B
PAGE 1
POST.
REF.
1 2013 1
2 June 1 Cash 101 1600000 2
3 Wallace King, Capital 301 1600000 3
4 Beginning investment of owner 4
5 5
GENERAL JOURNAL
GENERAL JOURNAL
DATE DESCRIPTION DEBIT
DATE DESCRIPTION DEBIT
CREDIT
CREDIT
PROBLEM 4.2B (continued)
PAGE 2
POST.
REF.
1 2013 1
2 June 6 Photographic Equipment 151 9 5 0 00 2
3 Cash 101 9 5 0 00 3
4 Purchased photo equipment, Check 1002 4
14 12 Cash 101 6 5 0 00 14
15 Accounts Receivable 111 6 5 0 00 15
16 Fees Income 401 130000 16
17 Performed services for cash and credit 17
18 18
29 29
30 20 Accounts Payable 202 210000 30
31 Cash 101 210000 31
32 Paid Brown, Inc., on account, Invoice 32
CREDIT
GENERAL JOURNAL
DATE DESCRIPTION DEBIT
PROBLEM 4.2B (continued)
PAGE 3
POST.
REF.
1 2013 1
2 June 27 Telephone Expense 520 2 9 0 00 2
3 Cash 101 2 9 0 00 3
4 Paid monthly phone bill, Check 1007 4
5 5
CREDIT
GENERAL JOURNAL
DATE DESCRIPTION DEBIT
PROBLEM 4.2B (continued)
ACCOUNT Cash ACCOUNT NO. 101
2013
June 1 J1 1600000 1600000
2 J1 90000 1510000
ACCOUNT Accounts Receivable ACCOUNT NO. 111
ACCOUNT Supplies ACCOUNT NO. 121
2013
POST
REF. DEBIT CREDIT
BALANC
E
DEBIT CREDIT
DATE DESCRIPTION
POST
REF.DATE DESCRIPTION DEBIT CREDIT
BALANC
E
DEBIT CREDIT
GENERAL LEDGER
DATE DESCRIPTION
POST
REF. DEBIT CREDIT
BALANC
E
DEBIT CREDIT
PROBLEM 4.2B (continued)
ACCOUNT Office Equipment ACCOUNT NO. 141
2013
ACCOUNT Photographic Equipment ACCOUNT NO. 151
2013
ACCOUNT Accounts Payable ACCOUNT NO. 202
2013
ACCOUNT Wallace King, Capital ACCOUNT NO. 301
POST
REF. DEBIT
POST
REF. DEBIT
BALANC
E
DEBIT CREDIT
CREDIT
BALANC
E
DEBIT CREDIT
CREDITDATE DESCRIPTION
DATE DESCRIPTION
DATE DESCRIPTION DEBIT
POST
REF.
DEBIT CREDIT
CREDIT
BALANC
E
DEBIT CREDIT
GENERAL LEDGER
DATE DESCRIPTION
POST
REF. DEBIT CREDIT
BALANC
E
PROBLEM 4.2B (continued)
ACCOUNT Wallace King, Drawing ACCOUNT NO. 302
ACCOUNT Fees Income ACCOUNT NO. 401
2013
ACCOUNT Office Cleaning Expense ACCOUNT NO. 511
ACCOUNT Rent Expense ACCOUNT NO. 514
2013
BALANC
E
DEBIT CREDIT
DEBIT CREDIT
POST
REF.
BALANC
E
DEBIT CREDIT
DEBIT CREDIT
POST
REF.
DATE DESCRIPTION
DATE DESCRIPTION
POST
REF.
GENERAL LEDGER
DATE DESCRIPTION
POST
REF. DEBIT CREDIT
BALANC
E
DEBIT CREDIT
DATE DESCRIPTION DEBIT CREDIT
BALANC
E
DEBIT CREDIT
PROBLEM 4.2B (continued)
ACCOUNT Salaries Expense ACCOUNT NO. 517
ACCOUNT Telephone Expense ACCOUNT NO. 520
ACCOUNT Utilities Expense ACCOUNT NO. 523
PROBLEM 4.3B
January 1: The debit should be to Accounts Receivable, not Accounts Payable.
CREDIT
BALANC
E
DEBIT CREDIT
POST
REF. DEBIT
POST
REF.
DATE DESCRIPTION
DATE DESCRIPTION
CREDIT
BALANC
E
DEBIT CREDIT
DEBIT CREDIT
BALANC
E
DEBIT CREDIT
GENERAL LEDGER
DATE DESCRIPTION
POST
REF. DEBIT
PROBLEM 4.4B
PAGE 1
POST.
REF.
1 2013 1
2 Dec. 3 Cash 101 1500000 2
3 Richard Boley, Capital 301 1500000 3
13 13
14 6 Office Equipment 141 109500 14
15 Cash 101 109500 15
16 Paid cash for equipment 16
17 17
18 10 Accounts Receivable 111 130000 18
CREDIT
GENERAL JOURNAL
DATE DESCRIPTION DEBIT
PROBLEM 4.4B (continued)
ACCOUNT Cash ACCOUNT NO. 101
2013
Dec. 3 J1 1500000 1500000
ACCOUNT Accounts Receivable ACCOUNT NO. 111
2013
ACCOUNT Office Supplies ACCOUNT NO. 121
ACCOUNT Computers ACCOUNT NO. 131
BALANC
E
DEBIT CREDIT
POST
REF. DEBIT CREDITDATE DESCRIPTION
CREDIT
BALANC
E
DEBIT CREDIT
POST
REF.DATE DESCRIPTION
POST
REF. DEBIT
DEBIT
GENERAL LEDGER
DATE DESCRIPTION
POST
REF. DEBIT CREDIT
BALANC
E
DEBIT CREDIT
DATE DESCRIPTION CREDIT
BALANC
E
DEBIT CREDIT
PROBLEM 4.4B (continued)
ACCOUNT Office Equipment ACCOUNT NO. 141
2013
ACCOUNT Furniture and Fixtures ACCOUNT NO. 151
ACCOUNT Accounts Payable ACCOUNT NO. 202
2013
ACCOUNT Richard Boley, Capital ACCOUNT NO. 301
2013
DEBIT CREDIT
BALANC
E
DEBIT CREDIT
DATE DESCRIPTION
POST
REF.
POST
REF.
BALANC
E
DEBIT CREDIT
DATE DESCRIPTION
POST
REF. DEBIT CREDIT
BALANC
E
DEBIT CREDIT
DEBIT CREDIT
GENERAL LEDGER
DATE DESCRIPTION
POST
REF. DEBIT CREDIT
BALANC
E
DEBIT CREDIT
DATE DESCRIPTION
PROBLEM 4.4B (continued)
ACCOUNT Fees Income ACCOUNT NO. 401
2013
CRITICAL THINKING PROBLEM 4.1
Income Statement Errors:
2.
3.
Balance Sheet Errors:
2.
4.
POST
REF. DEBIT CREDIT
GENERAL LEDGER
BALANC
E
DEBIT CREDIT
DATE DESCRIPTION
Accounts Payable and Accounts Receivable are classified incorrectly; they should be interchanged.
Accounts Payable is a liability and Accounts Receivable is an asset.
The amount for Owner’s Equity on the balance sheet should be the ending owner’s equity, not the
Drawing is not an expense but a reduction of owner’s equity and is included in the calculation of
ending owner’s equity, not on the income statement.
Arithmetic errors were made in adding column of expenses and in subtracting total expenses from
revenue.
