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Weygandt Accounting Principles, 12e
Chapter Two
Solutions to Challenge Exercises
Challenge Exercise 2-1 – Solution
1.
1
Cash………….. ...........................................................
25,000
Owner’s Capital ..............................................
25,000
2
No entry, not a transaction
6
Cash........................................................................
Accounts Receivable ................................................
600
3,000
Service Revenue .............................................
3,600
30
Salaries and Wages Expense ...................................
2,300
Cash .................................................................
2,300
2. The October 31 balance of Accounts Payable is $1,300 ($2,200 - $900), and would be reported in the
liabilities section of the balance sheet.
Challenge Exercise 2-2 – Solution
(a)
General Journal J1
Date
Account Titles
Ref.
Debit
Credit
Sept. 1
Cash…. ........................................................................
Owner’s Capital ...............................................
101
301
20,000
20,000
5
Equipment ..................................................................
Cash .................................................................
Accounts Payable ...........................................
157
101
201
17,000
6,000
11,000
25
Accounts Payable ......................................................
Cash .................................................................
201
101
7,000
7,000
29
Owner’s Drawings .....................................................
Cash .................................................................
306
101
600
600
30
Cash…. ........................................................................
Accounts Receivable......................................
101
112
1,500
1,500
(b)
Cash No. 101
Date
Explanation
Ref.
Debit
Credit
Balance
Sept. 1
J1
20,000
20,000
5
J1
6,000
14,000
Accounts Receivable No. 112
Date
Explanation
Ref.
Debit
Credit
Balance
Sept. 11
J1
2,900
2,900
30
J1
1,500
1,400
Challenge Exercise 2-2 – Solution (Continued)
Equipment No. 157
Date
Explanation
Ref.
Debit
Credit
Balance
Sept. 5
J1
17,000
17,000
Accounts Payable No. 201
Date
Explanation
Ref.
Debit
Credit
Balance
Owner’s Capital No. 301
Date
Explanation
Ref.
Debit
Credit
Balance
Sept. 1
J1
20,000
20,000
Owner’s Drawings No. 306
Date
Explanation
Ref.
Debit
Credit
Balance
Sept.29
J1
600
600
Service Revenue No. 400
Date
Explanation
Ref.
Debit
Credit
Balance
Sept. 11
J1
3,900
3,900
