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CHAPTER 2
SOLUTIONS TO PROBLEMS: SET B
PROBLEM 2-1B
J1
Date
Account Titles and Explanation
Ref.
Debit
Credit
Apr. 1
Cash .......................................................
35,000
4
Land .......................................................
27,000
Cash ...............................................
27,000
(Purchased land for cash)
8
Advertising Expense .............................
1,800
Accounts Payable .........................
1,800
(Incurred advertising
expense on account)
12
No entry—Not a transaction.
13
Prepaid Insurance .................................
1,650
Cash ...............................................
1,650
(Paid for one-year
insurance policy)
PROBLEM 2-1B (Continued)
Date
Account Titles and Explanation
Ref.
Debit
Credit
Apr. 25
Cash ......................................................
Unearned Service Revenue .............
(Received cash for future
services)
2,500
2,500
PROBLEM 2-2B
(a) J1
Date
Account Titles and Explanation
Ref.
Debit
Credit
May 1
Cash .......................................................
101
20,000
Owner’s Capital .............................
301
20,000
(Owner’s investment of cash
in business)
2
No entry—not a transaction.
11
Accounts Receivable ............................
112
3,200
Service Revenue ............................
400
3,200
(Billed client for services
performed)
12
Cash .......................................................
101
3,500
Unearned Service Revenue ..........
209
3,500
(Received cash for future
services)
PROBLEM 2-2B (Continued)
Date
Account Titles and Explanation
Ref.
Debit
Credit
May 31
Accounts Payable ($2,500 X 60%) ..........
201
1,500
(b)
Cash No. 101
Date
Explanation
Ref.
Debit
Credit
Balance
May 1
J1
20,000
20,000
7
J1
900
19,100
Accounts Receivable No. 112
Date
Explanation
Ref.
Debit
Credit
Balance
May 11
J1
3,200
3,200
Supplies No. 126
Date
Explanation
Ref.
Debit
Credit
Balance
Accounts Payable No. 201
Date
Explanation
Ref.
Debit
Credit
Balance
May 3
J1
2,500
2,500
31
J1
1,500
1,000
PROBLEM 2-2B (Continued)
Owner’s Capital No. 301
Date
Explanation
Ref.
Debit
Credit
Balance
May 1
J1
20,000
20,000
Salaries and Wages Expense No. 726
Date
Explanation
Ref.
Debit
Credit
Balance
May 31
J1
2,000
2,000
(c) IRIS BECK, CPA
Trial Balance
May 31, 2017
Debit Credit
Cash ..................................................................... $20,300
Accounts Receivable .......................................... 3,200
Service Revenue ................................................. 4,400
Salaries and Wages Expense ............................ 2,000
PROBLEM 2-3B
(a) & (c)
Cash
Balance 8,000
(1) 1,000
(3) 2,000
(4) 14,000
Accounts Receivable
Balance 15,000
(4) 14,000
(7) 9,000
10,000
Supplies
Balance 13,000
(2) 4,200
17,200
Prepaid Rent
Balance 3,000
Equipment
Balance 20,000
20,000
Accounts Payable
Balance 19,000
Owner’s Capital
Balance 40,000
40,000
Service Revenue
(7) 15,000
15,000
Advertising Expense
(1) 1,000
1,000
Miscellaneous Expense
(3) 2,000
2,000
Salaries and Wages Expense
(7) 3,500
3,500
PROBLEM 2-3B (Continued)
(b)
Trans.
Account Titles and Explanation
Debit
Credit
1.
Advertising Expense ..............................
1,000
Cash ...............................................
1,000
4.
Cash ........................................................
14,000
Accounts Receivable ....................
14,000
5.
Accounts Payable ..................................
15,000
Cash ...............................................
15,000
PROBLEM 2-3B (Continued)
(d) VIAN REPAIR SERVICE
Trial Balance
January 31, 2017
Debit Credit
Cash .................................................................... $ 3,500
Accounts Receivable ......................................... 10,000
Supplies .............................................................. 17,200
Prepaid Rent ....................................................... 3,000
Equipment .......................................................... 20,000
PROBLEM 2-4B
SEAN DEVINE COMPANY
Trial Balance
May 31, 2014
Debit Credit
Cash ($5,850 + $520 – $486) ........................................ $ 5,884
Accounts Receivable ($2,570 – $210) ......................... 2,360
Prepaid Insurance ($700 + $100) ................................. 800
Owner’s Drawings ($0 + $1,000) .................................. 1,000
Service Revenue .......................................................... 6,960
Salaries and Wages Expense ($4,200 + $200) ............ 4,400
PROBLEM 2-5B
(a) & (c)
Cash No. 101
Date
Explanation
Ref.
Debit
Credit
Balance
Apr. 1
Balance
4,000
2
J1
1,100
2,900
9
J1
2,800
5,700
Accounts Receivable No. 112
Date
Explanation
Ref.
Debit
Credit
Balance
Apr. 30
J1
85
85
Prepaid Rent No. 136
Date
Explanation
Ref.
Debit
Credit
Balance
Land No. 140
Date
Explanation
Ref.
Debit
Credit
Balance
Apr. 1
Balance
10,000
PROBLEM 2-5B (Continued)
Equipment No. 157
Date
Explanation
Ref.
Debit
Credit
Balance
Apr. 1
Balance
6,000
Accounts Payable No. 201
Date
Explanation
Ref.
Debit
Credit
Balance
Mortgage Payable No. 275
Date
Explanation
Ref.
Debit
Credit
Balance
Apr. 1
Balance
8,000
10
J1
2,000
6,000
Owner’s Capital No. 301
Date
Explanation
Ref.
Debit
Credit
Balance
Service Revenue No. 400
Date
Explanation
Ref.
Debit
Credit
Balance
Apr. 9
J1
2,800
2,800
25
J1
5,200
8,000
PROBLEM 2-5B (Continued)
Advertising Expense No. 610
Date
Explanation
Ref.
Debit
Credit
Balance
Apr. 12
J1
500
500
Salaries and Wages Expense No. 726
Date
Explanation
Ref.
Debit
Credit
Balance
(b) J1
Date
Account Titles and Explanation
Ref.
Debit
Credit
Apr. 2
Rent Expense .....................................
Cash ...........................................
(Paid film rental)
729
101
1,100
1,100
3
No entry—not a transaction.
9
Cash ....................................................
Service Revenue .......................
101
400
2,800
2,800
PROBLEM 2-5B (Continued)
Date
Account Titles and Explanation
Ref.
Debit
Credit
Apr. 11
No entry—not a transaction.
12
Advertising Expense .............................
Cash ..............................................
(Paid advertising expenses)
610
101
500
500
25
Cash .......................................................
Service Revenue...........................
(Received cash for services
performed)
101
400
5,200
5,200
30
Cash .......................................................
Accounts Receivable ............................
Rent Revenue ...............................
(17% X $1,000)
(Received cash and
balance on account for
rent revenue)
101
112
429
85
85
170
PROBLEM 2-5B (Continued)
(d) CLASSIC THEATER
Trial Balance
April 30, 2017
Debit
Credit
Cash .................................................................... $ 4,285
Accounts Receivable ......................................... 85
Prepaid Rent ....................................................... 1,200
Land .................................................................... 10,000
