523
APPENDIX A
DOUBLE-ENTRY ACCOUNTING SYSTEMS
EXERCISES
E–1
a. credit g. credit
E–2
a. and b.
Account Debited Account Credited
Transaction Type Effect Type Effect
(1) asset + capital stock +
(2) asset + asset –
(3) asset + asset –
liability +
524
E–3
(1) Cash …………………………………………………………… 25,000
Capital Stock ………………………………………….. 25,000
(3) Equipment ………………………………………………….. 18,000
Accounts Payable …………………………………… 14,400
Cash ………………………………………………………. 3,600
(4) Operating Expenses ……………………………………. 2,700
Cash ………………………………………………………. 2,700
(8) Operating Expenses ……………………………………. 1,050
Supplies ………………………………………………… 1,050
(9) Dividends ……………………………………………………. 2,500
Cash ………………………………………………………. 2,500
E–4
WILD RIVER TOURS CO.
Trial Balance
May 31, 20Y5
Debit Credit
Balances Balances
Cash ………………………………………………………………………… 16,950
Accounts Receivable ………………………………………………… 3,500
Supplies …………………………………………………………………… 700
525
E–5
1. debit and credit entries (c)
2. debit and credit entries (c)
3. debit and credit entries (c)
E–6
a. Liability—credit f. Revenue—credit
E–7
a. The increase of $184,000 ($515,000 – $331,000) in the cash account does
not necessarily indicate earnings of that amount. Earnings will represent
the net change in all assets and liabilities from operating transactions.
526
E–8
a.
Accounts Payable
Oct. 1 X
100,000
115,150
Oct. 31 39,000
b.
Accounts Receivable
May 1 36,200
315,000
X
May 31 41,600
c.
Cash
June 1 20,000
X
279,100
June 30 15,500
527
E–9
20Y9
July 1 Rent Expense ……………………………………………… 4,500
Cash ………………………………………………………. 4,500
2 Advertising Expense …………………………………… 1,800
Cash ………………………………………………………. 1,800
15 Accounts Payable ……………………………………….. 1,200
Cash ………………………………………………………. 1,200
27 Miscellaneous Expense ……………………………….. 500
Cash ………………………………………………………. 500
30 Utilities Expense …………………………………………. 180
Cash ………………………………………………………. 180
E–10
a.
20Y3
Nov. 2 Supplies ………………………………………….. 1,800
529
E–11
a.
1. Accounts Receivable …………………………………… 41,730
Fees Earned …………………………………………… 41,730
b.
Cash
Accounts Payable
(3) 39,150
(4) 1,100
(4) 1,100
(2) 1,800
Supplies
Fees Earned
(2) 1,800
(1) 41,730
530
E–12
CUPID CO.
Trial Balance
December 31, 20Y7
Debit Credit
Balances Balances
Cash ………………………………………………………………………… 26,000*
Accounts Receivable ………………………………………………… 59,900
Notes Payable …………………………………………………………… 60,000
Capital Stock ……………………………………………………………. 50,000
Retained Earnings …………………………………………………….. 83,500
Dividends …………………………………………………………………. 30,000
Fees Earned ……………………………………………………………… 465,000
Wages Expense ………………………………………………………… 262,500
*Hint: Total debits must equal total credits. To get the cash amount, first find the
total Credit column balance, which is $700,000. Once you know that the total
credit column balance is $700,000, then you know that the total Debit column
must be the same amount. Once you have the total balance for the Debit column,
$700,000, you can solve for the missing number, which is cash.
531
PROBLEMS
P–1
1.
(a) Cash …………………………………………………………… 20,000
Capital Stock ………………………………………….. 20,000
(e) Accounts Payable ……………………………………….. 600
Cash ………………………………………………………. 600
(f) Dividends ……………………………………………………. 3,000
Cash ………………………………………………………. 3,000
532
P–1, Concluded
2.
Cash
Sales Commissions
(a) 20,000
(d) 3,800
(c) 12,250
(c) 12,250
(e) 600
(g) 1,900
(h) 3,100
(d) 3,800
(b) 1,000
(i) 725
(h) 3,100
(e) 600
(b) 1,000
Bal. 400
(a) 20,000
(i) 725
3. VALLEY REALTY
Trial Balance
March 31, 20Y1
Debit Credit
Balances Balances
Cash ………………………………………………………………………… 19,850
Supplies …………………………………………………………………… 275
Accounts Payable …………………………………………………….. 400
Capital Stock ……………………………………………………………. 20,000
P–2
2.
20Y4
Nov. 1 Office Supplies ………………………………… 2,100
Accounts Payable ………………………… 2,100
2 Rent Expense ………………………………….. 4,000
Cash …………………………..……………….. 4,950
29 Miscellaneous Expense ……………………. 500
Cash …………………………..……………….. 500
30 Automobile Expense ………………………… 1,500
Cash …………………………..……………….. 1,500
P–2, Continued
1. and 3.
Cash
20Y4
Nov. 1 Bal.
33,920
Nov. 2
30
4,000
5,000
Nov. 30 Bal.
18,170
Accounts Receivable
20Y4
Nov. 1 Bal.
30
69,800
83,000
Nov. 3
44,600
______
Nov. 30 Bal.
108,200
Office Supplies
20Y4
Nov. 1 Bal.
1
Nov. 30 Bal.
1,600
2,100
3,300
Nov. 9
400
___
Nov. 30
535
P–2, Continued
Land
20Y4
Nov. 30
75,000
Nov. 30 Bal.
75,000
Unearned Rent
20Y4
Nov. 30
3,600
Nov. 30 Bal.
3,600
536
P–2, Continued
Fees Earned
20Y4
Nov. 1 Bal.
30
Nov. 30 Bal.
352,000
83,000
435,000
Capital Stock
20Y4
Nov. 1 Bal.
10,000
Retained Earnings
20Y4
Nov. 1 Bal.
53,080
537
P–2, Continued
Rent Expense
20Y4
Nov. 1 Bal.
2
Nov. 30 Bal.
28,000
4,000
32,000
Nov. 1 Bal.
22,880
Automobile Expense
20Y4
Nov. 1 Bal.
30
Nov. 30 Bal.
10,240
1,500
11,740
20Y4
Nov. 1 Bal.
29
Nov. 30 Bal.
538
P–2, Concluded
4.
APPLE REALTY
Trial Balance
November 30, 20Y4
Debit Credit
Balances Balances
Cash ………………………………………………………………………… 18,170
Accounts Receivable ………………………………………………… 108,200
Prepaid Insurance …………………………………………………….. 12,900
Office Supplies …………………………..…………………………….. 3,300
Land …………………………………………………………………………. 75,000
Accounts Payable …………………………………………………….. 6,670