CHAPTER 2
SOLUTIONS TO PROBLEMS: SET B
PROBLEM 2-1B
J1
Date
Account Titles and Explanation
Ref.
Debit
Credit
Apr. 1
Cash ……………………………………………….
35,000
35,000
in business)
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)
11
Salaries and Wages Expense ……………
1,500
Cash ………………………………………..
1,500
(Paid salaries)
12
No entry—Not a transaction.
13
Prepaid Insurance …………………………...
1,650
Cash ………………………………………..
1,650
(Paid for one-year
insurance policy)
Cash ………………………………………..
(Withdrew cash for personal
use)
20
Cash ……………………………………………….
6,800
Service Revenue ……………………….
6,800
(Received cash for services
performed)
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
performed)
8,900
Accounts Payable …………………………...
Cash ………………………………………..
(Paid creditor on account)
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.
3
Supplies ………………………………………….
126
2,500
Accounts Payable …………………….
201
2,500
(Purchased supplies on
account)
7
Rent Expense ………………………………….
729
900
Cash ………………………………………..
101
900
(Paid office rent)
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)
Cash ……………………………………………….
Service Revenue ……………………….
400
1,200
(Received cash for services
performed)
31
Salaries and Wages Expense ……………
726
2,000
Cash ………………………………………..
101
2,000
(Paid salaries)
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
J1
23,800
J1
21,800
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
May 3
J1
2,500
Accounts Payable No. 201
Date
Explanation
Ref.
Debit
Credit
Balance
May 3
J1
2,500
2,500
31
J1
1,500
1,000
Date
Explanation
Ref.
Credit
Balance
J1
PROBLEM 2-2B (Continued)
Owner’s Capital No. 301
Date
Explanation
Ref.
Debit
Credit
Balance
May 1
J1
20,000
20,000
Ref.
Debit
Credit
Balance
Salaries and Wages Expense No. 726
Date
Explanation
Ref.
Debit
Credit
Balance
May 31
J1
2,000
2,000
Date
Ref.
Debit
Credit
Balance
May 7
J1
900
(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
(5) 15,000
6) 6,000
(7) 3,500
3,500
(8) 3,000
3,000
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
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
(5) 15,000
PROBLEM 2-3B (Continued)
(b)
Trans.
Account Titles and Explanation
Debit
Credit
1.
Advertising Expense …………………………
1,000
Cash ………………………………………..
1,000
2.
Supplies …………………………………………..
Accounts Payable …………………….
4,200
3.
Miscellaneous Expense …………………….
Cash ………………………………………..
2,000
4.
Cash ………………………………………………..
14,000
Accounts Receivable ………………..
14,000
5.
Accounts Payable …………………………….
15,000
Cash ………………………………………..
15,000
Cash ………………………………………………..
Accounts Receivable ………………………..
Service Revenue ………………………
15,000
Salaries and Wages Expense …………….
Cash ………………………………………..
3,000
Cash ………………………………………..
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
J1
3,000
2,700
J1
2,200
J1
5,200
7,400
J1
2,000
5,400
J1
5,485
J1
4,285
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
Apr. 30
J1
1,200
Land No. 140
Date
Explanation
Ref.
Debit
Credit
Balance
Apr. 1
Balance
10,000
Explanation
Credit
Balance
Apr. 1
Balance
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
Apr. 1
Balance
2,000
J1
1,000
1,000
J1
1,000
2,000
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
Balance
Service Revenue No. 400
Date
Explanation
Ref.
Debit
Credit
Balance
Apr. 9
J1
2,800
2,800
25
J1
5,200
8,000
Date
Explanation
Ref.
Debit
Credit
Balance
Apr. 30
J1
170
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
Date
Explanation
Ref.
Debit
Credit
Balance
Apr. 2
J1
1,100
(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
performed)
Cash …………………………..………..
(Made payments on
payable)
101
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
20
Rent Expense ………………………………….
Accounts Payable ……………………
(Rented film on account)
729
201
25
Cash …………………………..…………………..
Service Revenue………………………
(Received cash for services
performed)
101
400
5,200
5,200
29
Salaries and Wages Expense ……………
(Paid salaries expense)
726
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
Cash ……………………………………….
(Paid cash for future film
rentals)
101
1,200
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