Question Details

ACCT 105 CHAPTER 2 THE RECORDING PROCESS 156-180  PART 10

BRIEF EXERCISES

BE 156
At June 1, 2015, Coquehcot Industries had an accounts receivable balance of $12,000. During the month, the company performed credit services of $30,000 and collected accounts receivable of $22,000. What is the balance in accounts receivable at June 30, 2015?



BE 157

TNT has the following transactions during April of the current year. Indicate
(a) the effect on the accounting equation and (b) the debit-credit analysis.

	Apr. 1 	Opens a law office, investing $25,000 in cash.
		4 	Pays rent in advance for 6 months, $9,000 cash.
		16 	Receives $8,000 from clients for services provided.
		27 	Pays secretary $2,800 salary.



BE 158

For each of the following accounts indicate the effect of a debit or a credit on the account and the normal balance.  Increase (+), Decrease (-).
	  Debit_		_Credit_		Normal Balance
	1.	Salaries and wages expense.						
	2.	Accounts receivable.						
	3.	Service revenue.						
	4.	Common stock.						
	5.	Dividends.						




BE 159
For each of the following transactions of Neon Garden, identify the account to be debited and the account to be credited.
1.	Purchased 18-month insurance policy for cash.
2.	Paid weekly payroll.
3.	Purchased supplies on account.
4.	Received utility bill to be paid at later date.

BE 160
Journalize the following business transactions in general journal form. Identify each transaction by number. You may omit explanations of the transaction.
1.	Andrew Bird invested $35,000 cash in exchange for stock.
2.	Hired an employee to be paid $400 per week, starting tomorrow.
3.	Paid two years’ rent in advance, $7,440.
4.	Paid the worker- weekly wage.
5.	Recorded revenue earned and received for the week, $1,900.



BE 161
Identify the impact on the accounting equation of the following transactions.
1.	Purchased 36-month insurance policy for cash.
2.	Purchased supplies on account.
3.	Received utility bill to be paid at later date.
4.	Paid utility bill previously accrued.




BE 162
Journalize the following transactions for Xiu Xiu Company for June 2015, the company- first month of operations. You may omit explanations for the transactions.
1.	Purchased equipment on account for $9,000.
2.	Billed customers $5,000 for services performed.
3.	Made payment of $2,300 on account for equipment purchased earlier in month.
4.	Collected $2,900 on customer accounts.


BE 163
The following transactions took place for Xiu Xiu Company during June 2015:
(a)	Purchased equipment on account for $9,000.
(b)	Billed customers $5,000 for services performed.
(c)	Made payment of $2,300 on account for equipment purchased earlier in month.
(d)	Collected $2,900 on customer accounts.

1.	What is the balance in Accounts Payable at June 30, 2015?
2.	What is the balance in Accounts Receivable at June 30, 2015?




BE 164
The transactions of the Liberty Belle Store are recorded in the general journal below. You are to post the journal entries to T-accounts. 

	General Journal
	
	Date	Account Titles		Debit	Credit
	
     2015
Aug.	5	Accounts Receivable	4,400
			Service Revenue		4,400
	
	10	Cash			3,000
			Service Revenue		3,000
	
	19	Rent Expense	1,100
			Cash		1,100
	
	25	Cash			1,400
			Accounts Receivable		1,400
 
BE 164	(cont.)
	General Ledger
	Cash	Accounts Receivable



	Service   Revenue	Rent   Expense










BE 165
Prepare a trial balance from the ledger accounts of Black Diamond Express as of January 31, 2015.

Accounts Payable	$1,100	Rent Expense	$   500
Accounts Receivable	1,700	Service Revenue	3,000
Cash	1,400	Supplies	200
Common stock	2,000	Salaries and Wages Expense	1,300
Dividends	1,000


 

BE 166
Prepare a corrected trial balance for Stereolab Company. All accounts should have a normal balance.

STEROELAB COMPANY
Trial Balance
For the Quarter Ended 3/31/15

	   Debit		  Credit	
Cash	$14,000	
Accounts Receivable		$  23,000
Prepaid Insurance 	2,500	
Equipment 	60,000	
Accounts Payable		15,000
Unearned Service Revenue 	10,000	
Notes Payable		25,000
Common stock		38,000
Dividends		  1,500
Service Revenue		43,000
Salaries and Wages Expense	15,000	
Utilities Expense	  5,000	
Rent Expense	    10,000		
	$116,500	$145,500


 
 
EXERCISES
Ex. 167
The chart of accounts used by Notwist Copy Company is listed below. You are to indicate the proper accounts to be debited and credited for the following transactions by writing the account number(s) in the appropriate boxes.
CHART OF ACCOUNTS
	101	Cash	209	Unearned Service Revenue
	112	Accounts Receivable	311	Common Stock
	125	Supplies	332	Dividends
	157	Equipment	400	Service Revenue
	200	Notes Payable	610	Advertising Expense
	201	Accounts Payable	729	Rent Expense
———————————————————————————————————————————
	Number(s)	Number(s)
	of account(s)	of account(s)
	debited	credited
	1.	The company issues stock in exchange for $70,000 cash.
———————————————————————————————————————————
	2.	Purchased three pieces of equipment for $160,000, paying $50,000 cash and signing a 5-year, 10% note for the remainder.
———————————————————————————————————————————
	3.	Purchased $5,000 supplies on credit.
———————————————————————————————————————————
	4.	Cash revenue amounted to $7,000.
———————————————————————————————————————————
	5.	Paid $500 cash for radio advertising.
———————————————————————————————————————————
	6.	Paid $800 on account for supplies purchased in transaction 3.
———————————————————————————————————————————
	7.	The company paid dividends of $2,100.
———————————————————————————————————————————
	8.	Paid $1,200 cash for rent for the current month.
———————————————————————————————————————————
	9.	Received $2,000 cash advance from a customer for future copying.
———————————————————————————————————————————
	10.	Billed a customer for $575 for photocopy work done.
———————————————————————————————————————————


 
Ex. 168
Under a double-entry system, show how the entry in each statement is entered in the ledger by using debit or credit to indicate the increase or decrease in the affected account.

	        Debit or Credit	

	1.	An increase in Salaries and Wages Expense.		

	2.	A decrease in Accounts Payable.		

	3.	An increase in Prepaid Insurance.		

	4.	An increase in Common Stock.		

	5.	A decrease in Supplies.		

	6.	An increase in Dividends.		

	7.	An increase in Service Revenue.		

	8.	A decrease in Accounts Receivable.		

	9.	An increase in Rent Expense.		

	10.	A decrease in Equipment.		


Ex. 169
Selected transactions for Good Home, a property management company, in its first month of business, are as follows:

Jan. 	2 	Issued stock to investors for $15,000 cash.
	3 	Purchased used car for $5,200 cash for use in business.
	9 	Purchased supplies on account for $500.
	11 	Billed customers $2,100 for services performed.
	16 	Paid $450 cash for advertising.
	20 	Received $1,300 cash from customers billed on January 11.
	23 	Paid creditor $300 cash on balance owed.
	28 	Paid dividends of $2,000.

Instructions
For each transaction indicate the following.
(a) The basic type of account debited and credited (asset (A), liability (L), stockholders’ equity (SE)).
(b) The specific account debited and credited (cash, rent expense, service revenue, etc.).
(c) Whether the specific account is increased (incr.) or decreased (decr).
(d) The normal balance of the specific account.

Use the following format, in which the January 2 transaction is given as an example.

	Account Debited 	Account Credited
	(a) 	(b) 	(c) 	(d) 	(a) 	(b) 	(c) 	(d)
	Basic 	Specific 	Normal 	Basic 	Specific 	Normal
Date 	Type 	Account 	Effect 	Balance 	Type 	Account 	Effect 	Balance
Jan. 2 	A 	Cash 	Incr.	 Debit 	SE 	Common 	Incr.	Credit
	 	Stock



Ex. 170
For the accounts listed below, indicate if the normal balance of the account is a debit or credit.
		     Normal Balance
	Accounts	      Debit or Credit	

	1.	Service Revenue		

	2.	Rent Expense		

	3.	Accounts Receivable		

	4.	Accounts Payable		

	5.	Retained Earnings		

	6.	Supplies		

	7.	Insurance Expense		

	8.	Dividends		

	9.	Buildings		

	10.	Notes Payable		

Ex. 171
For each of the following accounts, indicate the effects of (a) a debit and (b) the normal account balance. 	1.	Notes Payable 	2.	Prepaid Insurance 	3.	Salaries and Wages Expense 	4.	Service Revenue 	5.	Equipment 	6.	Common Stock 



Ex. 172
During an accounting period, a business has numerous transactions affecting each of the following accounts. State for each account whether it is likely to have (a) debit entries only, (b) credit entries only, or (c) both debit and credit entries.

		(1)	Advertising Expense			(6)	Dividends
		(2)	Service Revenue			(7)	Cash
		(3)	Accounts Payable			(8)	Salaries and Wages Expense
		(4)	Accounts Receivable			(9)	Notes Payable
		(5)	Common Stock			(10)	Insurance Expense






Ex. 173
Eight transactions are recorded in the following T-accounts:
	CASH	ACCOUNTS RECEIVABLE
(1)	25,000	(2)	3,500	(5)	27,500	(7)	22,500
(7)	22,500	(3)	1,950
		(4)	5,100
		(6)	8,000
		(8)	3,300

	SUPPLIES		EQUIPMENT
(3)	1,950			(2)	13,500

	COMMON STOCK		SERVICE REVENUE
		(1)	25,000			(5)	27,500

	ACCOUNTS PAYABLE		DIVIDENDS
(6)	8,000	(2)	10,000	(8)	3,300

	SALARIES AND WAGES EXPENSE
(4)	5,100



Ex. 173	(cont.)
Indicate for each debit and each credit:  (a) whether an asset, liability, stockholders’ equity, revenue, or expense account was affected and (b) whether the account was increased (+) or (-) decreased. Answers should be presented in the following chart form:
	Account Debited	Account Credited
Transaction	  (a)            (b)	  (a)              (b)
	No.	Type	Effect	Type	Effect
———————————————————————————————————————————
 (1)	(Example)	Asset	+	Stockholders’ 
				equity	+
———————————————————————————————————————————
 (2)
———————————————————————————————————————————
 (3)
———————————————————————————————————————————
 (4)
———————————————————————————————————————————
 (5)
———————————————————————————————————————————
 (6)
———————————————————————————————————————————
 (7)
———————————————————————————————————————————
 (8)
———————————————————————————————————————————

Ex. 174
For each of the following accounts indicate (a) the type of account (Asset, Liability, Stockholders’ Equity, Revenue, Expense), (b) the debit and credit effects, and (c) the normal account balance.

Example
0.	Cash	a.	Asset account
		b.	Debit increases, credit decreases
		c.	Normal balance - debit

				Accounts				
1.	Accounts Payable	5.	Service Revenue
2.	Accounts Receivable	6.	Insurance Expense
3.	Common Stock	7.	Notes Payable
4.	Dividends	8.	Equipment


Ex. 175
For each transaction given, enter in the tabulation given below a "D" for debit and a "C" for credit to reflect the increases and decreases of the assets, liabilities, and stockholders’ equity accounts. In some cases there may be a "D" and a "C" in the same box.

Transactions:
	1.	Invests cash in exchange for stock.
	2.	Pays insurance in advance for six months.
	3.	Pays secretary's salary.
	4.	Purchases supplies on account.
	5.	Pays electricity bill.
	6.	Borrows money from local bank.
	7.	Makes payment on account.
	8.	Receives cash due from customers.
Ex. 175	(cont.)
	9.	Provides services on account.
	10.	The company pays a dividends.

	Transaction #
	1	2	3	4	5	6	7	8	9	10
Assets										
Liabilities										
Common stock										
Dividends										
Revenues										
Expenses										



Ex. 176
Journalize the following business transactions in general journal form. Identify each transaction by number. You may omit explanations of the transactions.
	1.	The company issues stock in exchange for $40,000 cash
	2.	Purchased $400 of supplies on credit.
	3.	Purchased equipment for $8,000, paying $2,000 in cash and signed a 30-day, $6,000, note payable.
	4.	Real estate commissions billed to clients amount to $4,000.
	5.	Paid $700 in cash for the current month's rent.
	6.	Paid $200 cash on account for supplies purchased in transaction 2.
	7.	Received a bill for $600 for advertising for the current month.
	8.	Paid $2,200 cash for office salaries and wages.
	9.	The company paid dividends of $1,500.
	10.	Received a check for $3,000 from a client in payment on account for commissions billed in transaction 4.

Ex. 177
Identify the accounts to be debited and credited for each of the following transactions.
1.	Invested $8,000 cash in the business in exchange for stock. 2.	Purchased supplies on account for $1,000. 3.	Billed customers $2,000 for services performed. 4.	Paid salaries of $1,200. 
Ex. 178
Transactions for Tom Petty Company for the month of October are presented below. Journalize each transaction and identify each transaction by number. You may omit journal explanations.
1.	Invested $40,000 cash in the business in exchange for stock.
2.	Purchased land costing $28,000 for cash.
3.	Purchased equipment costing $15,000 for $3,000 cash and the remainder on credit.
4.	Purchased supplies on account for $800.
5.	Paid $1,000 for a one-year insurance policy.
6.	Received $3,000 cash for services performed.
7.	Received $4,000 for services previously performed on account.
8.	Paid wages to employees for $2,500.
9.	Paid dividends of $2,000.


Ex. 179
Match the basic step in the recording process described by each of the following statements.

A.	Analyze each transaction B.	Enter each transaction in a journal C.	Transfer journal information to ledger accounts

____ 1.	This step is called posting.
____ 2.	Business documents are examined to determine the effects of transactions on the accounts.
____ 3.	This step is called journalizing.




Ex. 180
Prepare journal entries for each of the following transactions.
1.	Performed services for customers on account $8,000.
2.	Purchased $20,000 of equipment on account.
3.	Received $3,000 from customers in transaction 1.
4.	The company paid dividends of $2,000.