Prob. 2.

2
a.
b.
c.
d.
e.
f.

Purchased equipment for cash at a cost of $ 3,200

Collected cash worth $900 coming from its account receivable
Purchased equipment worth $13,500 for cash at $3,500 and $10,000, on account
Paid cash worth $ 14,500 coming from its account payable
P. Youngblood invested on Horizon Moving Company for $15,000, cash on hand.
Purchased equipment worth $2,100, on account

Prob. 3.4
2a. The asset, Account Receivable, was increased. Increases in assets are recorded by
debits. Debit Account Receivable, $5,620.
b. Repair service is unearned revenue. Revenues are recorded by credits. Credit Repair
Service Revenue, $5,620.
3a. The asset, cash, was increased. Increases in assets are recorded by debits. Debit
cash, $2,830.
b. The repair Service is a revenue. Revenues are recorded by credits. Credit Repair
Service Revenue, $2,830.
4a. Advertising Expenses, if increased, are recorded by debits. Debit Advertising
Expenses, $165.
b. Account Payable is a liability. If increased, it will be recorded by credits. Credit
Account Payable, $165.
5a. The asset, cash (in the form of check) was increased. Increases in assets are
recorded by debits. Debit cash, $5,620.
b. The asset, Account receivable was decreased. Decreases in assets are recorded by
credits. Credit Account Receivable, $5,620.
6a. The asset, cash was increased. Increases in assets are recorded by debits. Debit
cash, $400.
b. Unearned Repair Service is a form of Revenue. Increase in revenues are recorded by
credits. Credit Unearned Revenue, $1,490.
7a. Accrued expense is a liability. Decrease of liabilities are recorded by debits. Debit
Accrued expense, $165.
b. The asset, cash (in the form of check) was decreased. Decreases in assets are
recorded by credits. Credit cash, $165.

8a. Drawings are recorded by debits, once increased. Debit B. Garwood, drawings,
$7,600.
b. The asset, cash, was decreased. Decreases in assets are recorded by credits. Credit
Cash, $7,600.

Prob. 3.5
A.
June 1

Cash

$60,000
Pat Campbell, Capital

June 2

June 4

Aircraft

$60,000
$220,000

Cash

$40,000

Note Payable

$180,000

Rent Expense

$2,500

Cash
June 15

Account Receivable

$2,500
$8,320

Crop Dusting Revenue

June 15

Salaries Expense

$8,320
$5,880

Cash
June 18

Maintenance Expense

$5,880
$1,890

Cash
June 25

Cash

$1,890
$4,910

Account Receivable
June 30

Account Receivable

$4,910
$16,450

Crop Dusting Revenue

June 30

Salaries Expense

$16,450
$6,000

Cash
June 30

Fuel Expense

$6,000
$2,510

Account Payable
June 30

Pat Campbell, Drawing

Cash

$2,510
$2,000
$2,000

C.
Campbell Crop Dusting
Trial Balance
June 30, 2001

Dr

Cash
Account Receivable

($8,000)
$16,450

Account Payable
Drawing

Cr

(2,510)
2,000

Crop-Dusting Revenue

(16,450)

Fuel Expense

2,510

Salaries Expense

6,000

$26,960

($26,960)

D.
Total ASSETS : $8,450
Total LIABILITIES : $2,510
Total Owners Equity : $5,940

Yes. These amounts will be used since there will be another adjustment to be done
so that we can easily close the accounts as we report them again on the adjusted
trial balance.

Exer. 4.3

Aug. 31

Prepaid Rent

$300,000

Cash

$300,000

To record prepayment of rent

Aug. 31

Cash

$320,000

Unearned ticket revenue

$320,000

To record unearned revenue from the ticket sales

Exer. 4.4

A.
Dec. 31

Salaries Expense

$17,800

Accrued Expenses

$17,800

To record payroll accrual for amount owed employees

Dec. 31

Accounts Receivable

$18,900

Legal Fees Earned

To record accrual legal fees revenue

B. $17, 800
C. $42, 000

$18,900

ASSETS

CASH

ACCOUNTS RECEIVABLE

June 1 $60,000

June 15 $8,320
June 2 $40,000
June 4 $2,500

June 25 $4,910
June 30 $16,450

June 15 $5,880
June 18 $1,890
June 25 $4,910
June 30 $6,000
June 30 $2,000

AIRCRAFT
June 2 $220,000

LIABILITIES

ACCOUNT PAYABLE

NOTE PAYABLE

June 30 $2,510

June 2 $180,000

OWNERS EQUITY

CAPITAL

DRAWING
June 1 $60,000

June 30 $2,000

REVENUES AND EXPENSES

CROP-DUSTING REVENUE
June 15 $8,320

RENT EXPENSE
June 4 $2,500

June 30 $16,450

SALARIES EXPENSE
June 15 $5,880
June 30 $6,000

FUEL EXPENSE
June 30 $2,510

MAINTENANCE EXPENSE
June 18 $1,890

PROBLEM SET #1
SUBMITTED BY:
ENCARNACION, Monique Angelica P.