(10-15 min.) E 2-25B
a. Increased assets (cash)
b. Increased assets (land)
c. Increased assets (supplies)
(10-20 min.) E 2-26B
Req. 1
Analysis of Transactions
ASSETS =
LIABILITIES + STOCKHOLDERS’
EQUITY
Date
Cash +
Accounts
Receivable +
Medical
Supplies +
Land =
Accounts
Payable +
Note
Payable +
Common
Stock +
Retained
Earnings
Type of Stockholders’
Equity Transaction
March 6
40,000
40,000
Issued stock
9
(21,000)
21,000
12
3,500
3,500
15
Not a transaction of the business.
15–31
10,050
10,050
20,100
Service revenue
15–31
(7,500)
(7,500)
Salary expense
(2,400)
(2,400)
Rent expense
(3,600)
(3,600)
Utilities expense
31
920
(920)
31
32,000
32,000
31
(500)
_(500)
Bal.
47,970
10,050
2,580
21,000
3,000
32,000
40,000
6,600
(continued) E2–26B
Req. 2
(10-15 min.) E 2-27B
Journal
DATE
ACCOUNT TITLES AND EXPLANATION
DEBIT
CREDIT
Mar.
6
Cash ……………………………………………..
40,000
Common Stock ………………………
40,000
Issued stock to owner.
9
Land ……………………………………………..
21,000
Cash ………………………………………
21,000
Purchased land.
12
Medical Supplies …………………………...
3,500
Accounts Payable …………………..
3,500
Purchased supplies on account.
15
Not a transaction of the business.
15–31
Cash ………………………………………………
10,050
Accounts Receivable ……………………..
10,050
Service Revenue …………………….
20,100
Performed service for cash and on account.
15–31
Salary Expense ………………………………
7,500
Rent Expense …………………………………
2,400
Utilities Expense …………………………….
3,600
Cash ………………………………………
13,500
Paid expenses.
31
Cash ……………………………………………..
920
Medical Supplies ……………………
920
Sold supplies.
31
Cash ……………………………………………..
32,000
Note Payable ………………………….
32,000
Borrowed money.
31
Accounts Payable …………………………..
500
Cash ………………………………………
500
Paid on account.
(20-30 min.) E 2-28B
Req. 1
Cash
Accounts Receivable
Mar. 6
40,000
Mar. 9
21,000
Mar. 15–31
10,050
15–31
10,050
15–31
13,500
Bal.
10,050
31
920
31
500
31
32,000
Bal.
47,970
Medical Supplies
Land
Mar. 12
3,500
Mar. 31
920
Mar. 9
21,000
Bal.
2,580
Bal.
21,000
Accounts Payable
Note Payable
Mar. 31
500
Mar. 12
3,500
Mar. 31
32,000
Bal.
3,000
Bal.
32,000
Common Stock
Service Revenue
Mar. 6
40,000
Mar. 15-31
20,100
Bal.
40,000
Bal.
20,100
Salary Expense
Rent Expense
Mar. 15-31
7,500
Mar. 15-31
2,400
Bal.
7,500
Bal.
2,400
Utilities Expense
Mar. 15-31
3,600
Bal.
3,600
(continued) E 2-28B
Req. 2
Dr. Fred Grimes, P.C.
Trial Balance
March 31, 2014
ACCOUNT
DEBIT
CREDIT
Cash……………………………………..
$47,970
Accounts receivable ………………
10,050
Medical supplies ……………………
2,580
Land …………………………..…………
21,000
Accounts payable ………………….
$ 3,000
Note payable …………………………
32,000
Common stock ………………………
40,000
Service revenue …………………….
20,100
Salary expense ……………………..
7,500
Utilities expense ……………………
3,600
Rent expense ………………………..
2,400
Total …………………………..…………
$95,100
$95,100
Req. 3
(10-15 min.) E 2-29B
Req. 1
Journal
ACCOUNT TITLES AND EXPLANATION
DEBIT
CREDIT
1.
Cash ……………………………………………………….
7,000
Common Stock ………………………………..
7,000
Issued common stock.
2.
Cash ……………………………………………………….
8,300
Note Payable ……………………………………
8,300
Borrowed money; signed note payable.
3.
Equipment ……………………………………………….
5,900
Cash ………………………………………………..
5,900
Paid cash for equipment.
4.
Supplies ………………………………………………….
820
Accounts Payable …………………………….
820
Purchased supplies on account.
5.
Cash… …………………………………………………….
130
Supplies …………………………………………..
130
Sold supplies for cash.
6.
Land ……………………………………………………….
36,000
Cash ………………………………………………..
7,000
Note Payable ……………………………………
29,000
Purchased land by paying cash and signing
a note payable.
7.
Accounts Payable …………………………………….
140
Cash ………………………………………………..
140
Paid cash on account.
(10-20 min.) E 2-30B
Req. 1
Castlerock Tree Service, Inc.
Trial Balance
September 30, 2014
ACCOUNT
DEBIT
CREDIT
Cash …………………………………………
$19,300
Accounts receivable …………………
8,200
Land …………………………………………
29,600
Accounts payable ……………………..
$ 5,100
Note payable …………………………….
21,700
Common stock …………………………
12,000
Retained earnings …………………….
13,100
Dividends …………………………………
5,100
Service revenue ………………………..
32,300
Salary expense …………………………
18,500
Utilities expense ……………………….
2,700
Delivery expense ………………………
800
Total …………………………………………
$84,200
$84,200
Req. 2
Castlerock Tree Service, Inc.
Income Statement
For the Month Ended September 30, 2014
Service revenue ………………………………..
$32,300
Salary expense ………………………..
$18,500
Utilities expense ………………………
2,700
Delivery expense ……………………..
800
Total expenses …………………………………
22,000
Net income ……………………………………….
$10,300
(15-25 min.) E 2-31B
Yellow Car Sales, Inc.
Trial Balance
June 30, 2014
ACCOUNT
DEBIT
CREDIT
Cash… ………………………………..
$ 10,200*
Accounts receivable …………….
12,600*
Inventory …………………………….
17,100
Supplies………………………………
800
Land ……………………………………
53,000
Accounts payable ………………..
$ 15,550*
Common stock …………………….
47,600*
Sales revenue ……………………..
37,100
Salary expense ……………………
1,900
Insurance expense ………………
1,800*
Utilities expense ………………….
1,750*
Rent expense ………………………
1,100
_______
Total ……………………………………
$100,250
$100,250
_____
*Computations:
Cash: $9,600 + $600 = $10,200
(10-15 min.) E 2-32B
Cash
Accounts Receivable
(a)
26,000
(b)
2,600
(f)
9,100
(d)
3,700
Bal.
9,100
(e)
1,000
(g)
2,800
Bal.
15,900
Office Supplies
Office Furniture
(c)
1,900
(a)
8,100
Bal.
1,900
Bal.
8,100
Accounts Payable
Common Stock
(e)
1,000
(c)
1,900
(a)
34,100
Bal.
900
Bal.
34,100
Dividends
Service Revenue
(g)
2,800
(f)
9,100
Bal.
2,800
Bal.
9,100
Salary Expense
Rent Expense
(d)
3,700
(b)
2,600
Bal.
3,700
Bal.
2,600
(10-20 min.) E 2-33B
Req. 1
Laura Hull, Attorney
Trial Balance
July 31, 2014
ACCOUNT
DEBIT
CREDIT
Cash ……………………………………..
$ 15,900
Accounts receivable ………………
9,100
Office supplies ………………………
1,900
Office furniture ………………………
8,100
Accounts payable ………………….
$ 900
Common stock ………………………
34,100
Dividends ……………………………..
2,800
Service revenue …………………….
9,100
Salary expense ……………………..
3,700
Rent expense ………………………..
2,600
Total ……………………………………..
$44,100
$44,100
Req. 2
The business performed well during July. The result of operations was
net income of $2,800, as shown by the income statement accounts:
Serial Exercise
(20-30 min.) E 2-34
Req. 1
Journal
DATE
ACCOUNT TITLES AND EXPLANATION
DEBIT
CREDIT
Jan.
2
Cash …………………………………………………
11,000
Common Stock ………………………….
11,000
2
Rent Expense ……………………………………
700
Cash …………………………………………
700
3
Equipment ………………………………………..
3,900
Cash …………………………………………
3,900
4
Furniture …………………………………………..
4,700
Accounts Payable ……………………..
4,700
5
Supplies ……………………………………………
400
Accounts Payable ……………………..
400
9
Cash …………………………………………………
1,000
Service Revenue ……………………….
1,000
12
Utilities Expense …………………………..…..
200
Cash …………………………………………
200
18
Accounts Receivable …………………………
1,500
Service Revenue ……………………….
1,500
(continued) E 2-34
Req. 2
Cash
Accounts Receivable
Jan. 2
11,000
Jan. 2
700
Jan. 18
1,500
9
1,000
3
3,900
Bal.
1,500
12
200
Bal.
7,200
Supplies
Equipment
Jan. 5
400
Jan. 3
3,900
Bal.
400
Bal.
3,900
Furniture
Accounts Payable
Jan. 4
4,700
Jan. 4
4,700
Bal.
4,700
5
400
Bal.
5,100
Common Stock
Service Revenue
Jan. 2
11,000
Jan. 9
1,000
Bal.
11,000
18
1,500
Bal.
2,500
Rent Expense
Utilities Expense
Jan. 2
700
Jan. 12
200
Bal.
700
Bal.
200
(continued) E 2-34
Req. 3
Sean Huffman, Certified Public Accountant, P.C.
Trial Balance
January 18, 2014
ACCOUNT
DEBIT
CREDIT
Cash……………………………………..
$ 7,200
Accounts receivable ………………
1,500
Supplies ……………………………….
400
Equipment …………………………….
3,900
Furniture ……………………………….
4,700
Accounts payable ………………….
$ 5,100
Common stock ………………………
11,000
Dividends ……………………………..
—
Service revenue …………………….
2,500
Rent expense ………………………..
700
Utilities expense ……………………
200
Salary expense ……………………..
—
Total …………………………..…………
$18,600
$18,600
Quiz
Q2–35
b
Q2–36
d
Q2–37
d
Q2–38
a
Q2–39
c
Q2-40
b
Q2-41
c
Q2-42
d
Q2-43
a
Q2-44
c
Q2-45
d
Q2-46
a
Q2–47
b
Q2–48
c
Q2–49
b
Q2-50
d
Q2-51
b
Q2-52
c
Q2-53
b
Q2–54
a
($54,000 + $30,000 + $22,000) = $106,000
Problems
(15-30 min.) P 2-55A
Dear Annie,
This trial balance lists the accounts of the company, along with their
balances at December 31, 2014. The trial balance provides the data for
(45-60 min.) P 2-56A
Req. 1
Analysis of Transactions
ASSETS
= LIABILITIES + STOCKHOLDERS’
EQUITY
Cash
Accounts
+ Receivable
+ Supplies
+
Equipment
Accounts
= Payable
Common
+ Stock
Retained
+ Earnings
Type of Stockholders’
Equity Transaction
Bal.
2,600
3,300
11,700
8,100
6,500
3,000
a)
4,000
4,000
Issued stock
b)
6,300
6,300
Service revenue
c)
(4,100)
(4,100)
d)
1,200
1,200
e)
1,700
(1,700)
f)
4,200
4,200
Service revenue
g)
(1,600)
(1,600)
Rent expense
(1,200)
(1,200)
Advertising expense
h)
(2,700)
(2,700)
Dividends
Bal.
5,000
5,800
1,200
11,700
5,200
10,500
8,000
$23,700 $23,700
(continued) P 2-56A
Req. 2
Taylor Computing, Inc.
Income Statement
Month Ended November 30, 2014
Revenues:
Service revenue ($6,300 + $4,200) …………..
$10,500
Expenses:
Rent expense …………………………………………
$1,600
Advertising expense ………………………………
1,200
Total expenses ………………………………………
2,800
Net income …………………………………………………….
$7,700
Req. 3
Taylor Computing, Inc.
Statement of Retained Earnings
Month Ended November 30, 2014
Retained earnings, November 1, 2014……………………….
$ 3,000
Add: Net income ………………………………………………………
7,700
Subtotal
10,700
Less: Dividends declared …………………………………………
(2,700)
Retained earnings, November 30, 2014 …………………….
$ 8,000
Req. 4
Taylor Computing, Inc.
Balance Sheet
November 30, 2014
ASSETS
LIABILITIES
Cash …………………………….
$ 5,000
Accounts payable …………….
$ 5,200
Accounts receivable ……..
5,800
STOCKHOLDERS’
Supplies ……………………….
1,200
EQUITY
Equipment ……………………
11,700
Common stock …………………
10,500
Retained earnings …………….
8,000
Total stockholders’ equity
18,500
Total liabilities and
Total assets ………………….
$23,700
stockholders’ equity ……..
$23,700
(30-40 min.) P 2-57A
Req. 1
Journal
ACCOUNT TITLES
DEBIT
CREDIT
a.
Cash ………………………………………………..
4,000
Common Stock …………………………
4,000
b.
Cash ………………………………………………..
6,300
Service Revenue……………………….
6,300
c.
Accounts Payable …………………………….
4,100
Cash ………………………………………..
4,100
d.
Supplies …………………………………………..
1,200
Accounts Payable …………………….
1,200
e.
Cash ………………………………………………..
1,700
Accounts Receivable ………………..
1,700
f.
Accounts Receivable ………………………..
4,200
Service Revenue……………………….
4,200
g.
Rent Expense …………………………………..
1,600
Advertising Expense …………………………
1,200
Cash ………………………………………..
2,800
h.
Dividends …………………………………………
2,700
Cash ………………………………………..
2,700
(continued) P 2-57A
Reqs. 2 and 3
Cash
Accounts
Receivable
Supplies
Equipment
2,600
4,100
3,300
1,700
1,200
11,700
4,000
2,800
4,200
6,300
2,700
5,800
1,200
11,700
1,700
5,000
Accounts
Payable
Common Stock
Retained
Earnings
Dividends
4,100
8,100
6,500
3,000
2,700
1,200
4,000
5,200
10,500
3,000
2,700
Service
Revenue
Rent Expense
Advertising
Expense
6,300
1,600
1,200
4,200
10,500
1,600
1,200