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Chapter 2 - The Accounting Cycle: During the Period
Exercise 2-13 (LO 2-4)
Corrections
External Transaction
Accounts
Debit
Credit
1.
Pay cash dividends of $800 to
stockholders.
Dividends
800
Cash
800
2.
Provide services on account for
customers, $3,400
Accounts Receivable
3,400
Service Revenue
3,400
Note: Accounts in blue are corrected items.
Accounts in black need no correction.
Chapter 2 - The Accounting Cycle: During the Period
Exercise 2-14 (LO 2-5)
Cash
5,000
Exercise 2-15 (LO 2-5)
Cash
Accounts Receivable
(3)
(6)
3,400
10,200
1,100
1,000
3,700
(4)
(5)
(1)
4,200
8,400
10,200
(3)
10,000
2,400
Chapter 2 - The Accounting Cycle: During the Period
Exercise 2-16 (LO 2-5)
1. Provide services to customers for cash, $20,000.
2. Provide services to customers on account, $5,000.
Exercise 2-17 (LO 2-6)
Sooner Company
Trial Balance
April 30
Accounts
Debit
Credit
Cash
$ 3,900
Accounts Receivable
6,100
Chapter 2 - The Accounting Cycle: During the Period
Exercise 2-18 (LO 2-6)
Cobras Incorporated
Trial Balance
March 31
Accounts
Debit
Credit
Cash
$ 3,500
Accounts Receivable
4,200
Supplies
1,000
Chapter 2 - The Accounting Cycle: During the Period
Exercise 2-19 (LO 2-4, 2-5, 2-6)
Requirement 1
(1) January 1
Debit
Credit
Cash
42,000
Common Stock
42,000
(Issue common stock)
(2) January 5
(4) January 12
No entry
(5) January 18
Cash
13,000
Service Revenue
13,000
(Receive cash for current month’s rent)
2-26 Financial Accounting, 5e
Exercise 2-19 (continued)
Requirement 2
Cash
Common Stock
(1)
(5)
0
42,000
13,000
9,000
9,000
(3)
(7)
0
42,000
(1)
37,000
42,000
Supplies
Accounts Payable
(6)
0
3,000
0
3,000
(6)
3,000
3,000
Chapter 2 - The Accounting Cycle: During the Period
Exercise 2-19 (concluded)
Requirement 3
Green Wave Company
Trial Balance
Accounts
Debit
Credit
Cash
$37,000
Supplies
3,000
Chapter 2 - The Accounting Cycle: During the Period
2-28 Financial Accounting, 5e
Exercise 2-20 (LO 2-4, 2-5, 2-6)
Requirement 1
(1) September 3
Debit
Credit
Accounts Receivable
20,000
Service Revenue
20,000
(Provide painting on account)
(Purchase office supplies on account)
(4) September 15
Salaries Expense
4,200
Cash
4,200
(Pay salaries for the current month)
(5) September 19
Advertising Expense
1,000
Cash
1,000
(Pay advertising for the current month)
(6) September 22
Chapter 2 - The Accounting Cycle: During the Period
Exercise 2-20 (continued)
Requirement 2
Accounts Receivable
Service Revenue
Beg.
(1)
1,700
20,000
15,000
(7)
0
20,000
Beg.
(1)
6,700
20,000
Supplies
Accounts Payable
Beg.
(3)
500
3,500
1,200
3,500
Beg.
(3)
4,000
4,700
Salaries Expense
Advertising Expense
Beg.
(4)
0
4,200
Beg.
(5)
0
1,000
4,200
1,000
Chapter 2 - The Accounting Cycle: During the Period
2-30 Financial Accounting, 5e
Exercise 2-20 (concluded)
Requirement 3
Boilermaker House Painting Company
Trial Balance
Accounts
Debit
Credit
Cash
$35,500
Accounts Receivable
6,700
Supplies
4,000
Chapter 2 - The Accounting Cycle: During the Period
PROBLEMS: SET A
Problem 2-1A (LO 2-2)
Transaction
Assets
=
Liabilities
+
Stockholders’
Equity
1. Issue common stock in
exchange for cash.
Increase
=
No effect
+
Increase
5. Pay employee salaries
for the current month.
Decrease
=
No effect
+
Decrease
6. Provide services to
customers for cash.
Increase
=
No effect
+
Increase
10. Receive cash from
customers in (4)
above.
No effect*
=
No effect
+
No effect
Chapter 2 - The Accounting Cycle: During the Period
2-32 Financial Accounting, 5e
Problem 2-2A (LO 2-2)
Transaction
Assets
=
Liabilities
+
Stockholders’
Equity
1. Provide services to
customers on account,
$1,600.
+$1,600
=
$0
+
+$1,600
2. Pay $400 for current
month’s rent.
−$400
=
$0
+
−$400
6. Receive cash of $1,000
from customers in (1)
above.
+$1,000
−$1,000
=
$0
+
$0
7. Obtain a loan from the bank
for $7,000.
+$7,000
=
+$7,000
+
$0
8. Receive a bill of $200 for
Chapter 2 - The Accounting Cycle: During the Period
Problem 2-3A (LO 2-3)
Accounts
Type of Account
Normal Balance
(Debit or Credit)
1. Salaries Payable
Liability
Credit
2. Common Stock
Stockholders’ equity
Credit
3. Prepaid Rent
Asset
Debit
9. Salaries Expense
Expense
Debit
Chapter 2 - The Accounting Cycle: During the Period
Problem 2-4A (LO 2-4)
Transactions for Jake’s Lawn Maintenance Company
July 3
Debit
Credit
Accounts Receivable
500
Service Revenue
500
(Provide services on account)
July 14
Notes Receivable
600
Cash
600
(Loan cash by accepting note receivable)
July 18
Advertising Expense
110
July 31
Cash
600
Notes Receivable
600
(Receive cash on note receivable)
Chapter 2 - The Accounting Cycle: During the Period
Problem 2-5A (LO 2-2, 2-4)
Transactions for Luke’s Repair Shop
July 3
Debit
Credit
Repairs and Maintenance Expense
500
Accounts Payable
500
Cash
600
Notes Payable
600
(Borrow by signing note payable)
July 18
No entry for Luke.
Cash
300
(Pay salaries to employees)
July 31
Notes Payable
600
Cash
600
(Pay note payable)
Chapter 2 - The Accounting Cycle: During the Period
2-36 Financial Accounting, 5e
Problem 2-5A (concluded)
Jake’s Lawn Maintenance Company
Luke’s Repair Shop
Assets
=
Liabilities
+
Stockholders’
Equity
Assets
=
Liabilities
+
Stockholders’
Equity
July 3
+$500
=
$0
+
+$500
$0
=
+$500
+
−$500
Chapter 2 - The Accounting Cycle: During the Period
Problem 2-6A (LO 2-6)
Bruins Company
Trial Balance
November 30
Accounts
Debit
Credit
Cash
$ 40,000
Accounts Receivable
50,000
Supplies
1,100
Dividends
1,100
Service Revenue
65,000
Salaries Expense
30,000
Rent Expense
12,000
Chapter 2 - The Accounting Cycle: During the Period
Problem 2-7A (LO 2-4, 2-5, 2-6)
Requirement 1
Entries are numbered for posting.
(1)
March 1
Debit
Credit
Cash
3,000
Common Stock
3,000
(Issue common stock)
(5)
March 15
Cash
800
Service Revenue
800
(Provide services for cash)
(6)
March 19
Cash
700
Deferred Revenue
700
(Receive cash in advance from customer)
Problem 2-7A (continued)
Requirements 2 and 3
Cash
Supplies
Equipment
(1) 3,000
600 (3)
(4) 130
(2) 2,700
Notes Payable
Common Stock
Dividends
2,700 (2)
3,000 (1)
(9) 150
2,700
3,000
150
Chapter 2 - The Accounting Cycle: During the Period
2-40 Financial Accounting, 5e
Problem 2-7A (concluded)
Requirement 4
Ute Sewing Shop
Trial Balance
March 31
Accounts
Debit
Credit
Cash
$3,655
Supplies
130
