79
Exercise 2-20 (20 minutes)
Description
(1)
Difference
between
Debit and
Credit
Columns
(2)
Column
with the
Larger
Total
(3)
Identify
account(s)
incorrectly
stated
(4)
Amount that account(s)
is overstated or
understated
$2,050 debit to
$10,900 debit to the
Owner,
80
Exercise 2-21 (15 minutes)
Amount
81
Exercise 2-22 (15 minutes)
a.
Co.
Liabilities
/
Assets
=
Debt
Ratio
Net
Income
/
Average
Assets
=
ROA
1
$11,765
$ 90,500
0.13
$20,000
$100,000
0.200
2
0.73
0.095
4
147,000
0.38
0.105
6
104,500
0.50
0.150
Exercise 2-23 (15 minutes)
HEINEKEN N.V.
Balance Sheet (in Euro millions)
December 31, 2015
Assets Equity and liabilities
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 2
82
PROBLEM SET A
Problem 2-1A (90 minutes)
Part 1
April 1 Cash……………………………………………………. 101 80,000
13 Accounts Payable ……………………………….. 201 11,600
83
Problem 2-1A (Continued)
Part 2
Cash
Acct. No. 101
Date
Explanation
PR
Debit
Credit
Balance
April
1
G1
80,000
80,000
2
G1
71,000
6
G1
75,000
G1
11,600
63,400
G1
61,000
G1
65,400
G1
59,900
G1
59,465
Accounts Receivable
Acct. No. 106
Date
Explanation
PR
Debit
Credit
Balance
April
9
G1
G1
G1
Office Supplies
Acct. No. 124
Date
Explanation
PR
Debit
Credit
Balance
April
3
G1
G1
Prepaid Insurance
Acct. No. 128
Date
Explanation
PR
Debit
Credit
Balance
April
G1
Acct. No. 131
Date
Explanation
PR
Debit
Credit
Balance
April
2
G1
Acct. No. 163
Date
Explanation
PR
Debit
Credit
Balance
April
1
G1
26,000
26,000
3
G1
34,000
84
Problem 2-1A (Continued)
Accounts Payable
Acct. No. 201
Date
Explanation
PR
Debit
Credit
Balance
April
K. Tanner, Capital
Acct. No. 301
Date
Explanation
PR
Debit
Credit
Balance
K. Tanner, Withdrawals
Acct. No. 302
Date
Explanation
PR
Debit
Credit
Balance
April
Services Revenue
Acct. No. 403
Date
Explanation
PR
Debit
Credit
Balance
Acct. No. 690
Date
Explanation
PR
Debit
Credit
Balance
85
Problem 2-1A (Continued)
Part 3
LINKWORKS
Trial Balance
April 30
Debit Credit
Problem 2-2A (90 minutes)
Part 1
a. Cash……………………………………………………. 101 100,000
87
Problem 2-2A (Part 1 Continued)
i. Accounts Receivable …………………………... 106 22,000
88
Problem 2-2A (Continued)
Part 2
Cash No. 101
Accounts Payable No. 201
Date
PR
Debit
Credit
Balance
Date
PR
Debit
Credit
Balance
(a)
100,000
100,000
(h)
1,150
1,150
(b)
93,700
(j)
1,333
2,483
(c)
55,000
38,700
(m)
1,333
(d)
35,700
(e)
41,900
Notes Payable No. 250
Date
PR
Debit
Credit
Balance
(k)
39,400
(b)
38,200
(m)
37,050
(n)
925
36,125
(o)
9,480
26,645
J. Aracel, Capital No. 301
Date
PR
Debit
Credit
Balance
(q)
22,945
(a)
Accounts Receivable No. 106
J. Aracel, Withdrawals No. 302
Date
PR
Debit
Credit
Balance
Date
PR
Debit
Credit
Balance
(g)
14,000
(o)
9,480
36,000
Engineering Fees Earned No. 402
Date
PR
Debit
Credit
Balance
Prepaid Insurance No. 108
(e)
6,200
6,200
Date
PR
Debit
Credit
Balance
(g)
(d)
(i)
Date
PR
Debit
Credit
Balance
Date
PR
Debit
Credit
Balance
(a)
(l)
1,200
(h)
(p)
2,400
Drafting Equipment No. 164
Equipment Rental Expense No. 602
Date
PR
Debit
Credit
Balance
Date
PR
Debit
Credit
Balance
(a)
60,000
(j)
1,333
80,000
Building No. 170
Date
PR
Debit
Credit
Balance
Date
PR
Debit
Credit
Balance
(c)
55,000
(q)
2,500
Repairs Expense No. 604
Date
PR
Debit
Credit
Balance
Date
PR
Debit
Credit
Balance
89
Problem 2-2A (Concluded)
Part 3
ARACEL ENGINEERING
Trial Balance
June 30
Debit Credit
Cash ……………………………………………………. $ 22,945
90
Problem 2-3A (90 minutes)
Part 1
Mar. 1 Cash……………………………………………………. 101 150,000
Office Equipment …………………………………. 163 22,000
9 Accounts Receivable …………………………... 106 7,500
Services Revenue …………………………. 403 7,500
Billed client for completed work.
91
Problem 2-3A (Continued)
Part 2
Cash
Acct. No. 101
Date
Explanation
PR
Debit
Credit
Balance
Mar.
1
G1
150,000
150,000
2
G1
6,000
144,000
6
G1
4,000
148,000
G1
4,200
143,800
G1
5,000
138,800
G1
3,500
142,300
G1
5,100
137,200
G1
136,700
Accounts Receivable
Acct. No. 106
Date
Explanation
PR
Debit
Credit
Balance
Mar.
9
G1
7,500
7,500
G1
3,500
4,000
G1
3,820
7,820
Office Supplies
Acct. No. 124
Date
Explanation
PR
Debit
Credit
Balance
Mar.
3
G1
1,200
1,200
G1
1,800
Acct. No. 128
Date
Explanation
PR
Debit
Credit
Balance
Mar.
G1
5,000
5,000
Acct. No. 131
Date
Explanation
PR
Debit
Credit
Balance
Mar.
2
G1
6,000
6,000
Acct. No. 163
Date
Explanation
PR
Debit
Credit
Balance
Mar.
1
G1
3
G1
3,000
92
Problem 2-3A (Continued)
Part 2 (Continued)
Accounts Payable
Acct. No. 201
Date
Explanation
PR
Debit
Credit
Balance
Mar.
3
G1
4,200
4,200
12
G1
4,200
30
G1
D. Brooks, Capital
Acct. No. 301
Date
Explanation
PR
Debit
Credit
Balance
Mar.
1
G1
D. Brooks, Withdrawals
Acct. No. 302
Date
Explanation
PR
Debit
Credit
Balance
Mar.
29
G1
5,100
5,100
Services Revenue
Acct. No. 403
Date
Explanation
PR
Debit
Credit
Balance
Mar.
6
G1
4,000
4,000
9
G1
7,500
25
G1
3,820
Acct. No. 690
Date
Explanation
PR
Debit
Credit
Balance
Mar.
31
G1
Problem 2-3A (Concluded)
Part 3
VENTURE CONSULTANTS
Trial Balance
Problem 2-4A (90 minutes)
Part 1
a. Cash …………………………………………………. 101 60,000
Office Equipment ………………………………. 163 25,000
H. Venedict, Capital …………………….. 301 85,000
d. Automobiles ……………………………………… 164 16,500
H. Venedict, Capital ……………………. 301 16,500
Owner contributed automobile to business.
e. Office Equipment …………………………..….. 163 5,600
Accounts Payable ………………………. 201 5,600
Problem 2-4A (Part 1 Continued)
i. Accounts Payable …………………………….. 201 2,000
Cash ………………………………………….. 101 2,000
Paid cash on account.
j. Office Equipment …………………………..….. 163 20,300
(h)
Problem 2-4A (Continued)
Part 2
Cash No. 101
Land No. 172
Date
PR
Debit
Credit
Balance
Date
PR
Debit
Credit
Balance
(a)
60,000
60,000
(b)
40,000
40,000
30,000
30,000
Accounts Payable No. 201
(g)
36,200
Date
Debit
Credit
Balance
35,565
(c)
2,000
2,000
(e)
7,600
20,300
13,265
(i)
2,000
5,600
11,465
(m)
Notes Payable No. 250
(n)
2,800
12,665
Date
PR
Debit
Credit
Balance
(b)
170,000
170,000
Accounts Receivable No. 106
Date
PR
Debit
Credit
Balance
H. Venedict, Capital No. 301
(m)
4,000
Date
PR
Debit
Credit
Balance
(a)
85,000
Date
PR
Debit
Credit
Balance
H. Venedict, Withdrawals No. 302
Office Equipment No. 163
Date
PR
Debit
Credit
Balance
Date
PR
Debit
Credit
Balance
(n)
2,800
2,800
(a)
25,000
25,000
Fees Earned No. 402
Date
PR
Debit
Credit
Balance
(g)
8,000
(k)
14,250
Automobiles No. 164
Salaries Expense No. 601
Date
PR
Debit
Credit
Balance
Date
PR
Debit
Credit
Balance
16,500
16,500
1,800
1,800
(l)
1,800
3,600
Building No. 170
Date
PR
Debit
Credit
Balance
Utilities Expense No. 602
(b)
160,000
160,000
Date
PR
Debit
Credit
Balance
Problem 2-4A (Concluded)
Part 3
HV CONSULTING
Trial Balance
September 30
Problem 2-5A (90 minutes)
Part 1
NETTLE DISTRIBUTION
Balance Sheet
December 31, 2016
Assets Liabilities
Cash …………………………. $ 15,640 Accounts payable …………….. $ 33,500
Accounts receivable …. 19,100 Note payable …………………….. 40,000
Office supplies ………….. 1,960 Total liabilities ………………….. 73,500
Trucks ………………………. 157,000
Thus, net income = ($22,000 + $19,000 – $35,000) = $ 6,000
* Computation of 2017 equity increase:
Equity, December 31, 2016 ……………………………………………………….…………………………………..
$282,200
Equity, December 31, 2017 ……………………………………………………….…………………………………..
(304,200)
Increase in equity during 2017 ………………………………………………………………………………………
$ 22,000