ACC557 Week 2 Homework

Exercise 2-6
a.

1.
2.
3.

Increase the asset Cash, increase the liability Notes Payable.

Increase the asset Equipment, decrease the asset Cash.
Increase the asset Supplies, increase the liability Accounts Payable.

b.

1.

Cash ....
Notes Payable .................................................................
Equipment ................................................................................
Cash .................................................................................
Supplies .....................................................................................
Accounts Payable.

2.
3.
450

Exercise 2-9
a.

Aug.

1
10
31
Balance

Cash
5,000 Aug. 12
2,700
850
7,550

Aug. 25
Balance

Accounts Receivable
1,600 Aug. 31
750

Aug. 12

Equipment
5,000

1,000

850

Notes Payable
Aug. 12

4,000

Common Stock
Aug.1

5,000

5,000
5,000
2,500
2,500
450

Service Revenue
Aug.10
25
Balance

(b)

2,700
1,600
4,300

ROBERTA MENDEZ, INVESTMENT BROKER

Trial Balance
August 31, 2014
Debit

Credit
Cash....................................................................................................
Accounts Receivable ..........................................................................
Equipment ..........................................................................................
Notes Payable.....................................................................................
Common Stock...................................................................................
Service Revenue.................................................................................

$ 7,550
750
5,000

$13,300

Exercise 2-11

$ 4,000
5,000
4,300
$13,300

Debit

Credit

Oct.

Oct.

Oct.

Oct.

10

10

20

Cash............................................................................
Common Stock...........................................................
(Issued shares of stock for cash)

5,000

Cash............................................................................
Service Revenue.........................................................
(Received cash for services provided)

650

Cash....................................................................................
Notes Payable.............................................................
(Obtained loan from bank)

3,000

Cash....................................................................................

500

5,000

650

3,000

Accounts Receivable ..................................................

(Received cash in payment of account)
Oct.

20

500

Accounts Receivable ...........................................................

Service Revenue.........................................................
(Billed clients for services provided)

940
940

b.
Sparks Co. Trial Balance
October 31, 2014
Debit
Credit
Cash..............................................................................................
Accounts Receivable ....................................................................
Supplies ........................................................................................
Equipment ...................................................................................
Notes Payable...............................................................................
Accounts Payable .........................................................................
Common Stock.............................................................................
Dividends .....................................................................................
Service Revenue...........................................................................
Salaries and Wages Expense ........................................................
Rent Expense ...............................................................................

$ 8,170
1,240
400
2,000
$ 3,000
500
7,000
300
2,390
500
280
$12,890

$12,890

Problems P2-2A
(a)
.
May 1

Cash ...........................................................................
Common Stock .................................................
(Issued shares of stock for cash)

No entrynot a transaction.

Debit

Credit

20,000
20,000

11

12

17

31

31

Supplies .....................................................................
Accounts Payable .............................................
(Purchased supplies on account)

1,500

Rent Expense.............................................................
Cash ..................................................................
(Paid office rent)

900

Accounts Receivable .................................................

Service Revenue ...............................................
(Billed client for services provided)

2,800

Cash ..........................................................................
Unearned Service Revenue ..............................
(Received cash for future services)

3,500

Cash ..........................................................................
Service Revenue ...............................................
(Received cash for services provided)

1,200

Salaries and Wages Expense .....................................

Cash ..................................................................
(Paid salaries)

2,000

Accounts Payable ($1,500 X 40%) .............................

Cash .................................................................
(Paid creditor on account)

600

1,500

900

2,800

3,500

1,200

2,000

600

(b)
Cash
Date
May 1
7
12

Debit
20,000

Credit
900

3,500

Balance
20,000
19,100
22,600

17
31
31

1,200
2,000
600

23,800
21,800
21,200

Credit

Balance

Accounts Receivable
Date

Debit

May 11

2,800

2,800

Supplies
Date
May

Debit
3

Credit

1,500

Balance
1,500

Accounts Payable
Date

Explanation

May 3
31

Debit

Credit

Balance

1,500

1500
900

Credit

Balance

3,500

3,500

Credit

Balance

20,000

20,000

Credit

Balance

2,800
1,200

2,800
4,000

600

Unearned Service Revenue

Date

Debit

May 12

Common Stock
Date
May

Debit
1

Service Revenue
Date
May 11
17

Debit

Salaries and Wages Expense

Date

Debit

May 31

2,000

Credit

Balance
2,000

Rent Expense
Date

Debit

May 7

(c)

Credit

900

Balance
900

KARA SHIN, INC.

Trial Balance
May 31, 2014
Debit
Credit
Cash..............................................................................................
Accounts Receivable ....................................................................
Supplies ........................................................................................
Accounts Payable .........................................................................
Unearned Service Revenue ..........................................................
Common Stock.............................................................................
Service Revenue...........................................................................
Salaries and Wages Expense ........................................................
Rent Expense ...............................................................................

Chapter 2 homework screenshot

Exercise 2-6
Your answer is correct.
Elvira Industries had the following transactions.
1.

Borrowed $5,000 from the bank by signing a note.

2.

Paid $2,500 cash for a computer.

$21,200
2,800
1,500
$ 900
3,500
20,000
4,000
2,000
900
$28,400

$28,400

3.

Purchased $450 of supplies on account.

(a) Indicate what accounts are increased and decreased by each transaction.
Debit Analysis

Credit Analysis

1
.

Increase the asset

Cash

Increase the liability

Notes Payable

2
.

Increase the asset

Equipment

Decrease the asset

Cash

3
.

Increase the asset

Supplies

Increase the liability

Accounts Pay

(b) Journalize each transaction. (Credit account titles are automatically indented when
amount is entered. Do not
indent manually.)
No. Account Titles and Explanation
1.

Cash

Debit
5000

Notes Payable

2.

Equipment

Supplies
Accounts Pay

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5000
2500

Cash

3.

Credit

2500
450
450

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Exercise 2-9
Selected transactions from the journal of Roberta Mendez, investment broker, are presented below.
Date

Account Titles and Explanation

Aug.1

Cash

Ref.

Debit

Credit

5,000

Common Stock

5,000

(Investment of cash for stock)

10

Cash

2,700

Service Revenue

2,700

(Received cash for services provided)

12

Equipment

5,000

Cash

1,000

Notes Payable

4,000

(Purchased office equipment for cash and notes payable)

25

Accounts Receivable

1,600

Service Revenue

1,600

(Billed clients for services provided)

31

Cash

850

Accounts Receivable

850

(Receipt of cash on account)

(a)
Your answer is correct.
Post the transactions to T accounts. (Post entries in the order displayed in the problem
statement.)
Cash

Aug. 1

5000

Aug. 10

2700

Aug. 31

850

Bal.

7550

Aug. 12

1000

Accounts Receivable
Aug. 25

1600

Bal.

750

Aug. 31

850

Equipment
Aug. 12

5000

Notes Payable
Aug. 12

4000

Common Stock
Aug. 1

5000

Service Revenue
Aug. 10

2700

Aug. 25

1600

Bal.

4300

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(b)
Your answer is correct.

Prepare a trial balance at August 31, 2014.

ROBERTA MENDEZ, INVESTMENT BROKER
Trial Balance
August 31, 2014
Debit
Cash

7550

Accounts Rec

750

Equipment

5000

Credit
$

Notes Payable

4000

Common Stock

5000

Service Reven

4300

13300

13300

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Exercise 2-11
Presented below is the ledger for Sparks Co.

Cash
No. 101
10/1

5,000 10/4

400

10/10

650 10/12

1,500

10/10

3,000 10/15

280

10/20

500 10/30

300

10/25

2,000 10/31

500

Accounts Receivable
No. 112
10/6

800 10/20

10/20

940

500

Supplies
No. 126
10/4

400
Equipment
No. 157

10/3

2,000 Balance
Notes Payable
No. 200
10/10

3,000

Accounts Payable
No. 201
10/12

1,500 10/3

2,000

Common Stock
No. 311
10/1

5,000

10/25

2,000

Dividends
No. 332
10/30

300
Service Revenue
No. 400
10/6

800

10/10

650

10/20

940

Salaries and Wages Expense

No. 726
10/31

500

Rent Expense
No. 729
10/15

280

(a)
Your answer is correct.
Reproduce the journal entries for the transactions that occurred on October 1, 10, and 20 and
provide explanations for each. (Record entries in the order displayed in the T-Accounts. Credit
account titles are automatically indented when amount is entered. Do not indent
manually.)
Date
Oct. 1

Account Titles and Explanation

Cash

Debit

Credit

5000

Common Stock

5000

(Issued shares of stock for cash)

Oct. 10

Cash

650

Service Reven

650

(Received cash for services provided)

Oct. 10

Cash

3000

Notes Payable

3000

(Obtained loan from bank)

Oct. 20

Cash

500

Accounts Rec

500

(Received cash in payment of account)

Oct. 20

Accounts Rec
Service Reven

(Billed clients for services provided)

940
940

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(b)
Your answer is correct.
Determine the October 31 balance for each of the accounts above, and prepare a trial balance at
October 31, 2014.
SPARKS CO.
Trial Balance
October 31, 2014
Debit
Cash

8170

Accounts Rec

1240

Supplies

400

Equipment

2000

Credit
$

Notes Payable

3000

Accounts Pay

500

Common Stock

7000

Dividends

300

Service Reven

2390

Salaries and W

500

Rent Expense

280

12890

12890

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Attempts: 1 of 3 used

Problem 2-2A
Kara Shin is a licensed CPA. During the first month of operations of her business, Kara Shin, Inc., the
following events and transactions occurred.
May 1 Stockholders invested $20,000 cash in exchange for common stock.
2 Hired a secretary-receptionist at a salary of $2,000 per month.
3 Purchased $1,500 of supplies on account from Hartig Supply Company.
7 Paid office rent of $900 cash for the month.
11 Completed a tax assignment and billed client $2,800 for services provided.
12 Received $3,500 advance on a management consulting engagement.
17 Received cash of $1,200 for services completed for Lucille Co.
31 Paid secretary-receptionist $2,000 salary for the month.
31 Paid 40% of balance due Hartig Supply Company.
Kara uses the following chart of accounts: No. 101 Cash, No. 112 Accounts Receivable, No. 126
Supplies, No. 201 Accounts Payable, No. 209 Unearned Service Revenue, No. 311 Common Stock,
No. 400 Service Revenue, No. 726 Salaries and Wages Expense, and No. 729 Rent Expense.

(a)
Your answer is correct.
Journalize the transactions. (Record entries in the order displayed in the problem statement.
If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.
Credit account titles are automatically indented when amount is entered. Do not indent
manually.)
Date
May 1

Account Titles and Explanation

Cash

20000

Common Stock
May 2

No Entry

20000
0

No Entry
May 3

Supplies

0
1500

Accounts Pay
May 7

Rent Expense

1500
900

Cash
May 11

Accounts Rec

900
2800

Service Reven
May 12

Cash

2800
3500

Unearned Ser
May 17

Cash

3500
1200

Service Reven
May 31

Salaries and W

1200
2000

Cash
May 31

Accounts Pay
Cash

Credit

Debit

2000
600
600

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(b)
Your answer is correct.

Cash
Date

Explanation Ref

Debit

Credit

Post to the ledger

accounts. (Post the
entries into ledger
No. 101 in the order
displayed in Part
Balance
1.)

May 1

J1

May 7

J1

May 12

J1

3500

22600

May 17

J1

1200

23800

May 31

J1

2000

21800

May 31

J1

600

21200

20000

20000
900

19100

Accounts Receivable
Date

No. 112

Explanation Ref
J1

May 11

Debit

Credit

2800

Balance
2800

Supplies
Date

No. 126
Explanation Ref
J1

May 3

Debit

Credit

1500

Balance
1500

Accounts Payable
Date

No. 201

Explanation Ref

May 3

J1

May 31

J1

Debit

Credit
1500

600

Explanation Ref

1500
900

Unearned Service Revenue

Date

Balance

No. 209
Debit

Credit

Balance

J1

May 12

3500

3500

Common Stock
Date

Explanation Ref

Debit

J1

May 1

Credit
20000

Balance
20000

Service Revenue
Date

No. 400

Explanation Ref

Debit

Credit

Balance

May 11

J1

2800

2800

May 17

J1

1200

4000

Salaries and Wages Expense

Date

No. 726

Explanation Ref
J1

May 31

Debit

Credit

2000

Balance
2000

Rent Expense
Date

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No. 729
Explanation Ref
J1

May 7

Debit

Credit

900

900

Attempts: 3 of 3 used

(c)
Your answer is correct.
Prepare a trial balance on May 31, 2014.
KARA SHIN, INC.
Trial Balance
May 31, 2014
Debit

Balance

Credit

Cash

21200

Accounts Rec

2800

Supplies

1500

Accounts Pay

900

Unearned Ser

3500

Common Stock

20000

Service Reven

4000

Salaries and W

2000

Rent Expense

900

28400

28400

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Attempts: 2 of 3 used