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Chapter 02 - The Accounting Cycle: During the Period
Chapter 2
The Accounting Cycle: During the Period
EXERCISES
Exercise 2-1
1.
c.
Exercise 2-2
Assets
=
Liabilities
+
Stockholders’ Equity
1.
Increase
=
No effect
+
Increase
Chapter 02 - The Accounting Cycle: During the Period
Exercise 2-3
Dual Effect
1. Pay for rent in the current
month, $1,500.
Assets decrease
Stockholders’
equity decreases
Chapter 02 - The Accounting Cycle: During the Period
Exercise 2-4
Dual Effect
1. Pay dividends of $2,000 to
stockholders.
Assets
decrease
Stockholders’
equity decreases
Exercise 2-5
Transaction
Balance
Retained earnings, April 1
$15,200
1. Issue common stock for cash, $12,000
0
Exercise 2-6
Debit or Credit
Account
1.
Debit
Cash
Exercise 2-7
Account
Debited
Account
Credited
Example: Purchase equipment in exchange for
cash.
Equipment
Cash
1. Provide services to customers on account.
Accounts
Receivable
Service
Revenue
Exercise 2-8
(1)
Debit
Credit
Prepaid Insurance
1,800
Cash
1,800
(Pay for insurance in advance)
(2)
Exercise 2-9
1. Receive cash by issuing a note payable, $8,600.
Chapter 02 - The Accounting Cycle: During the Period
Exercise 2-10
February 2
Debit
Credit
Accounts Receivable
4,500
Service Revenue
4,500
(Provide services to customers on account)
February 7
Cash
4,200
Exercise 2-11
March 1
Debit
Credit
Cash
21,300
Service Revenue
21,300
(Provide services to customers for cash)
March 5
Exercise 2-12
Corrections
External Transaction
Account Titles
Debit
Credit
1.
Provider services to customers on
Accounts Receivable
1,300
Exercise 2-13
Corrections
External Transaction
Account Titles
Debit
Credit
1.
Provider services to customers for
Cash
1,300
Exercise 2-14
Cash
(1)
4,000
16,000
9,000
(2)
Exercise 2-15
Cash
Accounts Receivable
3,200
1,100
3,900
Supplies
Accounts Payable
480
1,720
Deferred Revenue
Service Revenue
410
0
Advertising Expense
0
Exercise 2-16
1. Provide services on account.
2. Purchase supplies on account.
Chapter 02 - The Accounting Cycle: During the Period
Exercise 2-17
Sooner Company
Trial Balance
April 30
Accounts
Debit
Credit
Cash
$ 3,100
Accounts receivable
4,500
Exercise 2-18
Fightin’ Blue Hens Incorporated
Trial Balance
March 31
Accounts
Debit
Credit
Cash
$ 3,200
Accounts Receivable
6,900
Exercise 2-19
Requirement 1
(1)
Debit
Credit
(2)
(3)
(4)
No entry
(5)
(6)
(7)
Salaries Expense
6,900
Exercise 2-19 (continued)
Requirement 2
Cash
Common Stock
(1)
0
45,000
11,500
0
45,000
(1)
Land
Notes Payable
0
0
Equipment
Service Revenue
0
0
Supplies
Accounts Payable
0
0
Salaries Expense
(7)
0
6,900
Exercise 2-19 (concluded)
Requirement 3
Green Wave Company
Trial Balance
Accounts
Debit
Credit
Cash
$64,600
Supplies
4,500
Land
27,700
Exercise 2-20
Requirement 1
(1)
Debit
Credit
(2)
(3)
(4)
(5)
(6)
(7)
(8)
Cash
9,400
Exercise 2-20 (continued)
Requirement 2
Accounts Receivable
Service Revenue
Beg.
(1)
3,000
25,300
22,800
0
25,300
Beg.
(1)
Equipment
Cash
Beg.
(2)
5,100
12,600
Beg.
19,000
12,600
3,700
(2)
(4)
Supplies
Accounts Payable
Beg.
300
3,600
Beg.
Salaries Expense
Advertising Expense
Beg.
0
Beg.
0
Rent Expense
Deferred Revenue
Beg.
0
0
Beg.
Common Stock
Retained Earnings
15,000
Beg.
8,800
Beg.
Exercise 2-20 (concluded)
Requirement 3
Boilermaker House Painting Company
Trial Balance
Accounts
Debit
Credit
Cash
$28,950
Accounts Receivable
5,500
Common Stock
15,000
Retained Earnings
8,800
Service Revenue
25,300
