Problem 2-3A (90 minutes)
Part 1
Mar. 1 Cash……………………………………………………. 101 150,000
Office Equipment …………………………………. 163 22,000
Common Stock …………………………….. 307 172,000
Owner invested cash and equipment for stock.
Accounts Payable …………………………. 201 4,200
Purchased equipment and supplies on credit.
6 Cash……………………………………………………. 101 4,000
Services Revenue …………………………. 403 4,000
Received cash for services.
Paid balance due on account.
19 Prepaid Insurance …………………………..…… 128 5,000
Cash …………………………………………….. 101 5,000
Paid premium for insurance.
22 Cash……………………………………………………. 101 3,500
29 Dividends ……………………………………………. 319 5,100
Cash …………………………………………….. 101 5,100
Paid cash dividends.
30 Office Supplies ……………………………………. 124 600
Accounts Payable …………………………. 201 600
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
12
G1
4,200
143,800
19
G1
5,000
138,800
22
G1
3,500
142,300
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
22
G1
3,500
4,000
25
G1
3,820
7,820
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
Mar.
1
G1
22,000
22,000
3
G1
3,000
25,000
Problem 2-3A (Continued)
Part 2 (Continued)
Accounts Payable
Acct. No. 201
Date
Explanation
PR
Debit
Credit
Balance
Mar.
3
G1
4,200
4,200
12
G1
4,200
0
30
G1
600
600
Common Stock
Acct. No. 307
Date
Explanation
PR
Debit
Credit
Balance
Mar.
1
G1
172,000
172,000
Dividends
Acct. No. 319
Date
Explanation
PR
Debit
Credit
Balance
Mar.
29
G1
5,100
5,100
Services Revenue
Acct. No. 403
Date
Explanation
PR
Debit
Credit
Balance
Mar.
6
G1
4,000
4,000
9
G1
7,500
11,500
25
G1
3,820
15,320
Utilities Expense
Acct. No. 690
Date
Explanation
PR
Debit
Credit
Balance
Mar.
31
G1
500
500
Problem 2-3A (Concluded)
Part 3
VENTURE CONSULTANTS
Trial Balance
March 31
Debit Credit
Problem 2-4A (90 minutes)
Part 1
a. Cash …………………………………………………. 101 60,000
Office Equipment ………………………………. 163 25,000
Common Stock …………………………... 307 85,000
Owner invested cash and equipment for stock.
note payable.
c. Office Supplies …………………………………. 108 2,000
Accounts Payable ………………………. 201 2,000
Purchased office supplies on account.
d. Automobiles ……………………………………… 164 16,500
Purchased office equipment on account.
f. Salaries Expense ………………………………. 601 1,800
Cash ………………………………………….. 101 1,800
Paid assistant’s salary.
g. Cash …………………………………………………. 101 8,000
Problem 2-4A (Part 1 Continued)
i. Accounts Payable …………………………….. 201 2,000
Cash ………………………………………….. 101 2,000
Paid cash on account.
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
(h)
635
35,565
(c)
2,000
2,000
(i)
2,000
33,565
(e)
5,600
7,600
(j)
20,300
13,265
(i)
2,000
5,600
(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
Date
PR
Debit
Credit
Balance
(k)
6,250
6,250
Common Stock No. 307
(m)
4,000
2,250
Date
PR
Debit
Credit
Balance
(a)
85,000
85,000
Office Supplies No. 108
(d)
16,500
101,500
Date
PR
Debit
Credit
Balance
(c)
2,000
2,000
Dividends No. 319
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
(d)
16,500
16,500
(f)
1,800
1,800
(l)
1,800
3,600
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
Problem 2-4A (Concluded)
Part 3
HV CONSULTING
Trial Balance
September 30
Problem 2-5A (90 minutes)
Part 1
NETTLE DISTRIBUTION
Balance Sheet
December 31, 2014
Assets Liabilities
Total assets ………………. $285,700 Total liabilities and equity … $285,700
NETTLE DISTRIBUTION
Balance Sheet
December 31, 2015
Assets Liabilities
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
Add net income ……………………………………………………………………
?
Deduct dividends ($3,000 x 12) ……………………………………………..
(36,000)
Increase in equity during 2015 ………………………………………………
$ 22,290
Part 3
Problem 2-6A (35 minutes)
Part 1
MIN ENGINEERING
Trial Balance
May 31
Debit Credit
Cash ……………………………………………………. $37,641
Office supplies …………………………………….. 890
Prepaid insurance ……………………………….. 4,600
Part 2: Likely transactions (following order of trial balance).
1. Purchased $890 of office supplies for cash.
2. Paid $4,600 insurance premium in advance.
Part 3
Report of Cash Received and Paid
Cash received
Owner investment ……………………………… $18,000
PROBLEM SET B
Problem 2-1B (90 minutes)
Part 1
Sept. 1 Cash …………………………………………………. 101 38,000
Office Equipment ………………………………. 163 15,000
Common Stock…………………………... 307 53,000
Owner invested in the business for stock.
Accounts Payable ………………………. 201 10,400
Purchased equipment and supplies on credit.
8 Cash …………………………………………………. 101 3,280
Services Revenue ………………………. 401 3,280
Received cash for services.
Paid balance due on account.
19 Prepaid Insurance …………………………….. 128 1,900
Cash ………………………………………….. 101 1,900
Paid premium for insurance.
22 Cash …………………………………………………. 101 7,700
28 Dividends …………………………………………. 319 5,300
Cash ………………………………………….. 101 5,300
Paid cash for dividends.
29 Office Supplies …………………………………. 124 550
Accounts Payable ………………………. 201 550
Problem 2-1B (Continued)
Part 2
Cash
Acct. No. 101
Date
Explanation
PR
Debit
Credit
Balance
Sept.
1
G1
38,000
38,000
2
G1
9,000
29,000
8
G1
3,280
32,280
13
G1
10,400
21,880
19
G1
1,900
19,980
22
G1
7,700
27,680
28
G1
5,300
22,380
30
G1
860
21,520
Accounts Receivable
Acct. No. 106
Date
Explanation
PR
Debit
Credit
Balance
Sept.
12
G1
15,400
15,400
22
G1
7,700
7,700
24
G1
2,100
9,800
Office Supplies
Acct. No. 124
Date
Explanation
PR
Debit
Credit
Balance
Sept.
4
G1
2,400
2,400
29
G1
550
2,950
Prepaid Insurance
Acct. No. 128
Date
Explanation
PR
Debit
Credit
Balance
Sept.
19
G1
1,900
1,900
Prepaid Rent
Acct. No. 131
Date
Explanation
PR
Debit
Credit
Balance
Sept.
2
G1
9,000
9,000
Office Equipment
Acct. No. 163
Date
Explanation
PR
Debit
Credit
Balance
Sept.
1
G1
15,000
15,000
4
G1
8,000
23,000
Problem 2-1B (Continued)
Accounts Payable
Acct. No. 201
Date
Explanation
PR
Debit
Credit
Balance
Sept.
4
G1
10,400
10,400
13
G1
10,400
0
29
G1
550
550
Common Stock
Acct. No. 307
Date
Explanation
PR
Debit
Credit
Balance
Sept.
1
G1
53,000
53,000
Dividends
Acct. No. 319
Date
Explanation
PR
Debit
Credit
Balance
Sept.
28
G1
5,300
5,300
Services Revenue
Acct. No. 401
Date
Explanation
PR
Debit
Credit
Balance
Sept.
8
G1
3,280
3,280
12
G1
15,400
18,680
24
G1
2,100
20,780
Utilities Expense
Acct. No. 690
Date
Explanation
PR
Debit
Credit
Balance
Sept.
30
G1
860
860
Problem 2-1B (Concluded)
Part 3
HUMBLE MANAGEMENT SERVICES
Trial Balance
September 30
Debit Credit
Cash ………………………………………………………… $21,520
Accounts receivable ………………………………… 9,800
Problem 2-2B (90 minutes)
Part 1
a. Cash……………………………………………………. 101 65,000
Office Equipment …………………………………. 163 5,750
Computer Equipment …………………………... 164 30,000
Cash …………………………………………….. 101 800
Notes Payable ………………………………. 250 3,700
Purchased equipment with cash and note
payable.
g. Accounts Receivable …………………………... 106 4,250