FINANCIAL ACCOUNTING – Eleventh Edition Solutions Manual
E2-35B
(15-25 min.)
Requirement
Solution:
DEBIT CREDIT
$14,300
12,400
17,200
800
52,000
1. Prepare the correct trial balance at September 30, 2016, complete with a
heading. Journal entries are not required.
Carver, Inc.
Trial Balance
September 30, 2016
ACCOUNT
Cash
Accounts receivable
Inventory
Supplies
Land
Chapter 2: Transaction Analysis Page 41 of 90
850
500 _______
Accounts payable
Common stock
Sales revenue
Insurance expense
Salary expense
Utilities expense
Rent expense
FINANCIAL ACCOUNTING – Eleventh Edition Solutions Manual
E2-36B
(10-15 min.)
Solution:
(a) 23,000 (b) 1,000 (f) 10,900
(d) 2,500 Bal. 10,900
(e) 150
(g) 2,000
Bal. 17,350
(c) 700 (a) 9,400
Bal. 700 Bal. 9,400
Record the following transactions directly in the T-accounts without using a
journal. Use the letters to identify the transactions.
Cash
Accounts Receivable
Office Supplies
Office Furniture
Chapter 2: Transaction Analysis Page 42 of 90
Common Stock
Salary Expense
FINANCIAL ACCOUNTING – Eleventh Edition Solutions Manual
E2-37B
(15-20 min.)
Solution:
Req. 1
DEBIT CREDIT
Cash $17,350
Accounts receivable 10,900
Office supplies 700
Req. 2
1. After recording the transactions in Exercise 2-36B, and assuming they all
occurred in the month of December 2016, prepare the trial balance of Eric Newton,
Attorney, at December 31, 2016. Use the T-accounts that have been prepared for
the business.
2. How well did the business perform during its first month? Compute net income
(or net loss) for the month.
Eric Newton
Trial Balance
December 31, 2016
ACCOUNT
The business performed well during December. The result of operations
Chapter 2: Transaction Analysis Page 43 of 90
Office furniture 9,400
Accounts payable $550
Common stock 32,400
Service revenue 10,900
Salary expense 2,500
Rent expense 1,000
FINANCIAL ACCOUNTING – Eleventh Edition Solutions Manual
E2-38B
(15-20 min.)
Solution:
Req. 1
Req. 2
DEBIT CREDIT
Cash $9
1. Solve for Cash.
2. Prepare the trial balance of Wolf Products at May 31, 2016. List the accounts in
their
proper order. How much was Wolf Products Company’s net income or net loss?
(amounts in millions)
Wolf Products Company
Trial Balance
May 31, 2016
ACCOUNT
Chapter 2: Transaction Analysis Page 44 of 90
FINANCIAL ACCOUNTING – Eleventh Edition Solutions Manual
E2-39
(20-30 min.)
Requirements
Solution:
Req. 1
Date
ACCOUNT TITLES AND EXPLANATION
DEBIT CREDIT
Jan 2 Cash 10,000
Common Stock
10,000
2Rent Expense 600
Req. 2
Aug. 2 10,000 Aug. 2 600 Aug. 18 1,900
1. Journalize the transactions. Explanations are not required.
2. Post to the T-accounts. Key all items by date and determine the ending
balance in each account. Denote an account balance on August 18, 2016,
as Bal.
3. Using Excel, prepare a trial balance at August 18, 2016. In the Serial
Exercise of Chapter 3, we add transactions for the remainder of August
and will require a trial balance at August 31
Journal
Cash
Accounts Receivable
Chapter 2: Transaction Analysis Page 45 of 90
3Equipment 2,700
4Furniture 4,500
FINANCIAL ACCOUNTING – Eleventh Edition Solutions Manual
Aug. 5 800 Aug. 3 2,700
Bal. 800 Bal. 2,700
Equipment
Supplies
Chapter 2: Transaction Analysis Page 46 of 90
Aug. 4 4,500 Aug. 4 4,500
Aug. 2 600 Aug. 12 300
Bal. 600 Bal. 300
FINANCIAL ACCOUNTING – Eleventh Edition Solutions Manual
Quiz
Q2-40 a
Q2-41 d
Chapter 2: Transaction Analysis Page 47 of 90
Q2-42 d
Q2-43 b
Q2-45 b
Q2-46 a
Q2-48 a
Q2-51 a
Q2-52 a
Q2-54 a
Q2-55 d
Q2-56 d
Q2-57 d
Q2-59 b
FINANCIAL ACCOUNTING – Eleventh Edition Solutions Manual
P2-60A
(15-30 min.)
Requirement
Solution:
Dear Vicki,
This trial balance lists the accounts of the company, along with their
1. Write a short note to answer Vicki’s questions. In your note, state the
amounts of Amusement Specialties’ total assets, total liabilities, and net
income or net loss for the year. Also show how you computed each amount.
Chapter 2: Transaction Analysis Page 48 of 90
FINANCIAL ACCOUNTING – Eleventh Edition Solutions Manual
P2-61A
(45-60 min.)
Requirements
Solution:
Req. 1
+
Supplies
1. Analyze the effects of the preceding transactions on the accounting equation of Rodriguez Computing, Inc.
2. Prepare the income statement of Rodriguez Computing, Inc., for the month ended October 31, 2016. List expenses in
decreasing order by amount.
3. Prepare the entity’s statement of retained earnings for the month ended October 31, 2016.
4. Prepare the balance sheet of Rodriguez Computing, Inc., at October 31, 2016.
Equipment
=
Accounts
payable
+
Common
Stock
+
Analysis of Transactions
ASSETS = LIABILITIES + STOCKHOLDERS’ EQUITY
+
Accounts
Receivable
Retained
Earnings
+
Type of Stockholders’
Equity Transaction
+
Cash
Chapter 2: Transaction Analysis Page 49 of 90
FINANCIAL ACCOUNTING – Eleventh Edition Solutions Manual
Req. 2
Revenues:
Service revenue ($6,300 + $4,200) 10,000$
Req. 3
3,900$
Add: Net income
Less: Dividends declared
Rodriguez Computing, Inc.
Statement of Retained Earnings
Month Ended October 31, 2016
Rodriguez Computing, Inc.
Income Statement
Month Ended October 31, 2016
Retained earnings, October 1, 2016
Chapter 2: Transaction Analysis Page 50 of 90
Expenses:
Rent expense 1,300$
Advertising expense 700
Total expenses 2,000
FINANCIAL ACCOUNTING – Eleventh Edition Solutions Manual
Req. 4
Cash 4,900$ Accounts payable 3,900$
Accounts receivable 5,600
Rodriguez Computing, Inc.
Balance Sheet
October 31, 2016
ASSETS
LIABILITIES
Chapter 2: Transaction Analysis Page 51 of 90
Total assets 23,000$ stockholders’ equity 23,000$
FINANCIAL ACCOUNTING – Eleventh Edition Solutions Manual
P2-62A
(30-40 min.)
Requirements
Solution:
Req. 1
DEBIT CREDIT
a. Cash 3,800
Common Stock 3,800
ACCOUNT
Journal
1. Journalize the November transactions of Rodriguez Computing, Inc.
Explanations are not required.
2. Prepare T-Accounts for each account. Insert in each T-account its September
30 Balance as given (example: Cash $2,200). Then, post the October
transactions to the T-accounts.
3. Compute the balance in each account.
Chapter 2: Transaction Analysis Page 52 of 90
b. Cash 6,000
Service Revenue 6,000
Cash 4,300
d. Supplies 500
Accounts Payable 500
e. Cash 2,000
Service Revenue 4,000
FINANCIAL ACCOUNTING – Eleventh Edition Solutions Manual
Reqs. 2 and 3
2,200 4,300 3,600 2,000 500
3,800 2,000 4,000
1,300 700
1,300 700
Advertising
Expense
Rent Expense
Accounts
Receivable
Cash
Supplies
Chapter 2: Transaction Analysis Page 53 of 90
6,000 2,800
FINANCIAL ACCOUNTING – Eleventh Edition Solutions Manual
P2-63A
(50-60 min.)
Requirements
Solution:
Req. 1
DEBIT CREDIT
May 2Cash 65,000
Common Stock
65,000
3Supplies 600
Equipment 11,700
1. Record each transaction in the journal. Be sure to record the date in each entry.
Explanations are not required.
2. Post the transactions to the T-accounts, using transaction dates as posting
references. Label the ending balance of each account Bal, as shown in the chapter.
3. Prepare the trial balance of Martinson Services, Inc., at May 31 of the current year.
4. Adam Martinson, the manager, asks you how much in total resources the business
has to work with how much it owes, and whether January was profitable (and by how
Journal
ACCOUNT TITLES
DATE
Chapter 2: Transaction Analysis Page 54 of 90
4Cash 5,600
7Land 37,000
FINANCIAL ACCOUNTING – Eleventh Edition Solutions Manual
22 Utilities Expense 440
Cash 440
29 Cash 2,500
Chapter 2: Transaction Analysis Page 55 of 90
Cash 2,400
FINANCIAL ACCOUNTING – Eleventh Edition Solutions Manual
Req. 2
65,000 May 7 37,000 May 11 2,900 May 18 800
5,600 16 11,700
800 17 610 Bal. 2,100
2,500 22 440
May 16 11,700 May 3 12,300
Bal. 600
May 31 2,000
May 22 440
May 2
Cash
4
Accounts Receivable
29
Accounts Payable
Common Stock
18
Chapter 2: Transaction Analysis Page 56 of 90
May 3 11,700
Bal.
FINANCIAL ACCOUNTING – Eleventh Edition Solutions Manual
Req. 3
DEBIT CREDIT
Cash 19,750$
Accounts receivable 2,100
Supplies 600
Req. 4
Total resources (assets) = $71,150 ($19,750 + $2,100 + $600 +
$37,000 + $11,700)
Martinson Service, Inc.
Trial Balance
May 31, 20XX
ACCOUNT
Chapter 2: Transaction Analysis Page 57 of 90
Accounts payable 600$
Common stock 65,000
Service revenue 11,000
Salary expense 2,400
Advertising expense 610
FINANCIAL ACCOUNTING – Eleventh Edition Solutions Manual
P2-64A
40-50 min.)
Requirements
Solution:
Req. 1
(a) 44,000 (c) 49,000 (g) 13,300 (j) 1,200
(b) 63,000 (e) 6,000 Bal. 12,100
(d) 230
(b) 63,000
Bal. 63,000 (e) 6,000
Service Revenue
1. Record each transaction directly in the T-accounts without using a journal.
Use the letters to identify the transactions.
2. Prepare the trial balance of Stein Music Services Corporation at April 30,
2016.
Cash
Accounts Receivable
Accounts Payable
Salary Expense
Supplies
Note Payable
Chapter 2: Transaction Analysis Page 58 of 90
FINANCIAL ACCOUNTING – Eleventh Edition Solutions Manual
Req. 2
DEBIT CREDIT
Cash 55,010$
Accounts receivable 12,100
Stein Music Services Corporation
Trial Balance
April 30, 2016
ACCOUNT
Chapter 2: Transaction Analysis Page 59 of 90
Common stock 150,000
Service revenue 17,010
Salary expense 6,000
Advertising expense 800
Utilities expense 700
FINANCIAL ACCOUNTING – Eleventh Edition Solutions Manual
P2-65B
(15-30 min.)
Requirement
Solution:
1. Write a short note to answer Amy’s questions. In your note, state
the amounts of Larrabee Design’s total assets, total liabilities, and
net income or net loss for the year. Also show how you computed
each amount.
Dear Amy,
This trial balance lists the accounts of the company, along with their
balances at December 31, 2016. The trial balance provides the data for
Chapter 2: Transaction Analysis Page 60 of 90