1,500 1,500 1,100 1,100
1,800 1,200 700 1,300
3,300 2,700 1,800 2,400
900
Revenues
from Services
Cash
Expenses
Chapter 2, E 15.
Cash
Sale
Cash
Purchase
Post.
Ref. Debit Credit
a. 8,600
3,200
c. 2,200
2,200
Purchased repair supplies on
credit
f. 800
800
Paid $800 of the amount purchased
on credit in transaction c
Date Description
General Journal
Repair Equipment
Chapter 2, E 16.
Cash
Common Stock
Cash
Accounts Payable
Accounts Payable
Repair Supplies
May 1 2,400
2,400
2 6,000
6,000
Purchased marketable securities
5 200,000
400,000
120,000
Cash
Building
(Note to the instructor: A full discussion might be held at this point on what
should be done to the Merchandise Inventory account.)
Accounts Payable
Merchandise Inventory
Land
Chapter 2, E 17.
Cash
Marketable Securities
Page 10
Post.
Ref. Debit Credit
14 144 12,000
111 4,000
212 8,000
Ref. Debit Debit Credit
13 16,000
14 J10 12,000
28 J10 6,000
Equipment
Cash
Credit
Date
Balance
Post.
Account No. 144
Date
Dec.
General Journal
Description
Equipment
Chapter 2, E 18.
Cash
Accounts Payable
Balance
Account No. 111
General Ledger
4,000
6,000
Item
Dec.
( $102,000 + ) ÷ 2
Chapter 2, E 19.
Revenue
$80,000
Financial ratio calculated
2012 = $88,000
Average Total Assets
=
Asset Turnover
3,250 4,400
13,350
+=
Expenses Revenues
+–+
+Stockholders’ Equity
– Common
Stock
Retained
Earnings
Dividends
LiabilitiesAssets =
Chapter 2, P 1.
$21,660
Accounting equation without Cash:
Cash
Equipment
Supplies
Wages
Expense
$28,540
Debit Credit
a. Paid for supplies purchased on credit last month. 7 1
f. Purchased equipment on account. 5 7
g. Received a bill for repairs. 13 7
h. Returned part of the equipment purchased in f for a
credit. 7 5
i. Received payments from customers previously billed. 1 2
Chapter 2, P 2.
f. 4,080 j. 2,760 e. 660
2,760 c. 380 4,080 2,760
10,000 a. 7,200 h. 660 e. 660
960 g. 760 g. 1,720
10,960 Bal. 7,960 660 2,380
Bal. 1,720
Computers
a.
Cash
Chapter 2, P 3.
Accounts Receivable Supplies
T accounts set up
Transactions recorded in the accounts
1.
2.
11,400 b. 520
j.
Office Equipment
Bal.
Common Stock
g.
a.
Accounts Payable
Dividends Tuition Revenue
$10,860
1,320
660
10,960
7,960
$34,400 $34,400
4. User Insight: Transactions f and j examined
Supplies
Office Equipment
Accounts Receivable
Best Secretarial Training, Inc.
Computers
Trial Balance
(Today’s Date)
Cash
Trial balance prepared3.
The revenues were $4,080, and only $2,760 of cash was received from those rev-
Chapter 2, P 3. (Continued)
Oct. 21 1,340 Oct. 27 600
12 960 4 1,200 Bal. 740
Oct. 3 2,800 Oct. 17 500 Oct. 7 1,000
Bal. 500
Accounts Payable
Dividends
Cleaning Equipment
Common Stock
2,8003 Oct.Oct. 1 12,000
2.
Chapter 2, P 4.
Accounts Receivable
T accounts set up
Transactions recorded in the accounts
1.
Cash
$ 8,200
740
1,000
Cash
Cleaning Supplies
Mori Upholstery Cleaning, Inc.
Chapter 2, P 4. (Continued)
Trial balance prepared3.
Trial Balance
October 31, 2011
Accounts Receivable
4. User Insight: Accounting issues discussed
On the other hand, the purchase of repairs is classified as stockholders’ equity,
the recognition point for the purchase of supplies rather than October 2, when
the supplies were ordered, because it is on October 7 when title to the supplies
The supplies purchased on October 7 are classified as an asset, Supplies, be-
cause the supplies are not used immediately but will be used up in the future.
Chapter 2, P 4. (Continued)
October 7 and 9 are the recognition points for these transactions. October 7 is
Page 17
Post.
Ref. Debit Credit
2 511 270
111 270
4 115 85
212 85
Purchased supplies on account
5 512 40
111 40
Reimbursed bus driver for gas
6
Accounts Payable
No entry
Cash
Supplies
Feb.
2011
Rent Expense
Cash
General Journal
(Requirements 1, 2, 4, and 5 follow)
3. Transactions entered in the general journal
Date Description
Gas and Oil Expense
Page 18
Post.
Ref. Debit Credit
11 212 85
111 85
19 514 145
111 145
Paid this month’s utility bill
22 111 500
113 500
Recorded receipt of payment on
account from customers
Utilities Expense
Feb.
2011
Date Description
Accounts Payable
Chapter 2, P 5. (Continued)
General Journal
Cash
Accounts Receivable
Cash
Cash
Ref. Debit Credit Debit Credit
31 1,870
2 J17 270 1,600
3 J17 650 2,250
5 J17 40 2,210
Ref. Debit Credit Debit Credit
31 1,700
Ledger accounts set up1.
2011
Jan.
2. Amounts from January 31 trial balance entered
Post.
4. Entries from journal posted to ledger accounts
Feb.
2011
Account No. 111
Balance
Item
Chapter 2, P 5. (Continued)
Balance
Account No. 113
Post.
Accounts Receivable
BalanceJan.
Cash
Date
Item
Balance
Date
Ref. Debit Credit Debit Credit
Ref. Debit Credit Debit Credit
31 17,400
Ref. Debit Credit Debit Credit
27 J18 325 2,085
Post.
Item
Accounts Payable
Chapter 2, P 5. (Continued)
Item
Account No. 141Equipment
Post.
Post. Balance
Buses Account No. 143
Date
Balance
BalanceJan.
Account No. 211
Date
Balance
Notes Payable
Post.
Item
ItemDate
2011
Balance
Account No. 212
Date
Ref. Debit Credit Debit Credit
31 4,000
Ref. Debit Credit Debit Credit
2 J17 270 270
27 J18 325 365
Date
Dividends
Post.
Account No. 312Retained Earnings
Account No. 511
Post.
Account No. 313
Chapter 2, P 5. (Continued)
Common Stock
2011
Account No. 311
Jan.
Balance
Balance
Balance
Date
Post.
Item
Balance
Rent Expense
Feb.
Item
2011
Gas and Oil Expense Account No. 512
$ 1,940
700
85
2,330
17,400
Balance
Chapter 2, P 5. (Continued)
Account No. 513
Post.
5.
Acorn Nursery School Corporation
Trial Balance
February 28, 2011
Wages Expense
Trial balance prepared
Equipment
Buses
Cash
Accounts Receivable
Supplies
6.
Chapter 2, P 5. (Continued)
User Insight: Transactions for February 3, 9, 10, and 22 examined
Revenues were earned on February 3 ($650) and February 10 ($700) for a total
of $1,350. Cash was received from sales on February 3 ($650) and on account
480
5,000
Telephone
Expense
Loans
Payable
Accounts
Receivable
35,000
=Assets
Chapter 2, P 6.
–
Common
Stock
Dividends Retained
Earnings
Revenues
Expenses
Liabilities +–+
+Stockholders’ Equity