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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
$10,900 debit to the
Owner,
80
Exercise 2-21 (15 minutes)
Overstated, Understated, or Correctly-Stated
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
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
Accounts Receivable
Acct. No. 106
Date
Explanation
PR
Debit
Credit
Balance
Office Supplies
Acct. No. 124
Date
Explanation
PR
Debit
Credit
Balance
Prepaid Insurance
Acct. No. 128
Date
Explanation
PR
Debit
Credit
Balance
84
Problem 2-1A (Continued)
Accounts Payable
Acct. No. 201
Date
Explanation
PR
Debit
Credit
Balance
K. Tanner, Capital
Acct. No. 301
Date
Explanation
PR
Debit
Credit
Balance
K. Tanner, Withdrawals
Acct. No. 302
Date
Explanation
PR
Debit
Credit
Balance
Services Revenue
Acct. No. 403
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
(n)
925
36,125
(o)
9,480
26,645
J. Aracel, Capital No. 301
Accounts Receivable No. 106
J. Aracel, Withdrawals No. 302
Date
PR
Debit
Credit
Balance
Date
PR
Debit
Credit
Balance
Date
PR
Debit
Credit
Balance
Prepaid Insurance No. 108
(e)
6,200
6,200
Drafting Equipment No. 164
Equipment Rental Expense No. 602
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
Accounts Receivable
Acct. No. 106
Date
Explanation
PR
Debit
Credit
Balance
Mar.
9
G1
7,500
7,500
Office Supplies
Acct. No. 124
Date
Explanation
PR
Debit
Credit
Balance
Mar.
3
G1
1,200
1,200
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
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
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
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
Notes Payable No. 250
(n)
2,800
12,665
Date
PR
Debit
Credit
Balance
(b)
170,000
170,000
Accounts Receivable No. 106
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
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
