Exercise 2-23 (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
PROBLEM SET A
Problem 2-1A (90 minutes)
Part 1
April 1 Cash……………………………………………………. 101 80,000
13 Accounts Payable ……………………………….. 201 11,600
Billed client for completed work.
28 Dividends ……………………………………………. 319 5,500
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
9,000
71,000
6
G1
4,000
75,000
G1
11,600
63,400
G1
2,400
61,000
G1
4,400
65,400
G1
5,500
59,900
G1
59,465
Accounts Receivable
Acct. No. 106
Date
Explanation
PR
Debit
Credit
Balance
April
9
G1
6,000
6,000
G1
4,400
1,600
G1
2,890
4,490
Office Supplies
Acct. No. 124
Date
Explanation
PR
Debit
Credit
Balance
April
3
G1
3,600
3,600
G1
4,200
Prepaid Insurance
Acct. No. 128
Date
Explanation
PR
Debit
Credit
Balance
April
G1
2,400
2,400
Acct. No. 131
Date
Explanation
PR
Debit
Credit
Balance
April
2
G1
9,000
9,000
Acct. No. 163
Date
Explanation
PR
Debit
Credit
Balance
April
1
G1
26,000
26,000
3
G1
8,000
34,000
Problem 2-1A (Continued)
Accounts Payable
Acct. No. 201
Date
Explanation
PR
Debit
Credit
Balance
April
Common Stock
Acct. No. 307
Date
Explanation
PR
Debit
Credit
Balance
Dividends
Acct. No. 319
Date
Explanation
PR
Debit
Credit
Balance
April
Services Revenue
Acct. No. 403
Date
Explanation
PR
Debit
Credit
Balance
Utilities Expense
Acct. No. 690
Date
Explanation
PR
Debit
Credit
Balance
Problem 2-1A (Continued)
Part 3
LINKWORKS
Trial Balance
April 30
Debit Credit
Cash …………………………………………………………….. $ 59,465
Accounts receivable …………………………………….. 4,490
Problem 2-2A (90 minutes)
Part 1
d. Prepaid Insurance ……………………………….. 108 3,000
Problem 2-2A (Part 1 Continued)
i. Accounts Receivable …………………………... 106 22,000
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)
(j)
1,333
2,483
(c)
1,333
(d)
Date
PR
Debit
Credit
Balance
(k)
(b)
(n)
Date
PR
Debit
Credit
Balance
(q)
(a)
Accounts Receivable No. 106
Dividends No. 319
Date
PR
Debit
Credit
Balance
Date
PR
Debit
Credit
Balance
(g)
(o)
9,480
Date
PR
Debit
Credit
Balance
(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)
(j)
1,333
Building No. 170
Date
PR
Debit
Credit
Balance
Date
PR
Debit
Credit
Balance
(c)
(q)
2,500
Repairs Expense No. 604
(b)
(n)
Problem 2-2A (Concluded)
Part 3
ARACEL ENGINEERING
Trial Balance
June 30
Debit Credit
Cash ……………………………………………………. $ 22,945
Accounts receivable ……………………………. 29,000
Problem 2-3A (90 minutes)
Part 1
Mar. 1 Cash……………………………………………………. 101 150,000
Office Equipment …………………………………. 163 22,000
19 Prepaid Insurance …………………………..…… 128 5,000
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
12
G1
4,200
143,800
19
G1
5,000
138,800
22
G1
3,500
142,300
29
G1
5,100
137,200
31
G1
136,700
Accounts Receivable
Acct. No. 106
Date
Explanation
PR
Debit
Credit
Balance
Mar.
9
G1
7,500
7,500
22
G1
3,500
4,000
25
G1
3,820
7,820
Acct. No. 124
Date
Explanation
PR
Debit
Credit
Balance
Mar.
3
G1
1,200
1,200
30
G1
1,800
Prepaid Insurance
Acct. No. 128
Date
Explanation
PR
Debit
Credit
Balance
Mar.
19
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
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
G1
4,200
G1
Common Stock
Acct. No. 307
Date
Explanation
PR
Debit
Credit
Balance
Mar.
1
G1
Dividends
Acct. No. 319
Date
Explanation
PR
Debit
Credit
Balance
Mar.
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
G1
3,820
Acct. No. 690
Date
Explanation
PR
Debit
Credit
Balance
Mar.
G1
Problem 2-3A (Concluded)
Part 3
VENTURE CONSULTANTS
Trial Balance
March 31
Debit Credit
Cash ……………………………………………………………. $136,700
Problem 2-4A (90 minutes)
Part 1
a. Cash …………………………………………………. 101 60,000
c. Office Supplies …………………………………. 108 2,000
e. Office Equipment ………………………………. 163 5,600
Problem 2-4A (Part 1 Continued)
i. Accounts Payable …………………………….. 201 2,000
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
(b)
30,000
Accounts Payable No. 201
Date
PR
Debit
Credit
Balance
(h)
35,565
(c)
2,000
2,000
7,600
13,265
(i)
2,000
5,600
11,465
(m)
4,000
Notes Payable No. 250
Date
PR
Debit
Credit
Balance
(b)
Accounts Receivable No. 106
Date
PR
Debit
Credit
Balance
(k)
6,250
6,250
Common Stock No. 307
(m)
Date
PR
Debit
Credit
Balance
85,000
(d)
Date
PR
Debit
Credit
Balance
Dividends No. 319
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
14,250
Automobiles No. 164
Salaries Expense No. 601
Date
PR
Debit
Credit
Balance
Date
PR
Debit
Credit
Balance
(d)
16,500
16,500
(f)
1,800
1,800
(l)
1,800
3,600
Building No. 170
Date
PR
Debit
Credit
Balance
Date
PR
Debit
Credit
Balance
(h)
Problem 2-4A (Concluded)
Part 3
HV CONSULTING
Trial Balance
September 30
Debit Credit
Cash …………………………………………………… $ 12,665
Accounts receivable ……………………………. 2,250
Problem 2-5A (90 minutes)
Part 1
NETTLE DISTRIBUTION
Balance Sheet
December 31, 2015
Assets Liabilities
Cash …………………………. $ 64,300 Accounts payable ……………. $ 3,500
NETTLE DISTRIBUTION
Balance Sheet
December 31, 2016
Assets Liabilities
Cash …………………………. $ 15,640 Accounts payable …………….. $ 33,500
Part 2
Computation of 2016 net income:
Equity, December 31, 2015 ……………………………………………………
$282,200
$ 22,290
Problem 2-6A (35 minutes)
Part 1
MIN ENGINEERING
Trial Balance
May 31
Debit Credit
Part 2: Likely transactions (following order of trial balance).
Part 3
Report of Cash Received and Paid
Cash received
Owner investment ……………………………… $18,000
PROBLEM SET B
Problem 2-1B (90 minutes)
Part 1
Sept. 1 Cash …………………………………………………. 101 38,000
8 Cash …………………………………………………. 101 3,280