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Answer for Lesson2

By Warren Cox,2014-06-16 15:56
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Answer for Lesson2

Exercise 2-1:

    Kind of Account Increase Decrease Normal balance Asset Debit Credit Debit Liability Credit Debit Credit Owners capital Credit Debit Credit Owners Withdrawals Debit Credit Debit Revenue Credit Debit Credit Expense Debit Credit Debit

Exercise 2-2:

    a.

    Cash J. J. Wright, Capital

     (a) 3,500 (a) 3,500 b.

    Office Supplies Cash

     (a) 3,500 (b) 90 (b) 90 c.

    Office Equipment Accounts Payable

     (c) 2,800 (c) 2,800 d.

    Cash Service revenue (a) 3,500 (b) 90 (d) 500 (d) 500

    e.

    Accounts Payable Cash

    (c) 2,800 (a) 3,500 (b) 90 (e) 2,800

    (d) 500 (e) 2,800 f.

    Accounts Receivable Service revenue

     (d) 500 (f) 400

    (f) 400 g.

    Utility Expense Cash

     (a) 3,500 (b) 90 (g) 60

    (d) 500 (e) 2,800

    (g) 60 h.

    Cash Accounts Receivable

    (a) 3,500 (b) 90 (f) 400 (h) 200 (d) 500 (e) 2,800

    (g) 60 (h) 200

Exercise 2-3:

    N.E. Time

    Trial Balance

    December 31, 20xx

    Acct. No. Account Title Debit Credit 101 Cash $ 1,250 106 Accounts receivable 200 124 Supplies 90 163 Equipment 2,800 301 J. J. Wright, Capital $3,500 401 Service revenue 900 620 Utilities expense 60

     Totals $4,400 $4,400

Problem 2-1:

    a.

    Cash April Stewart, Capital

     (a) 50,000 (a) 70,000

    Office Equipment

     (a) 20,000

    b.

    Land Cash

     (a) 50,000 (b) 60,000 (b) 43,500

    Building Long-Term Notes Payable

     (b)230,000 (b)246,500 c.

    Office Supplies Accounts Payable

     (c) 480 (c) 480 d.

    Automobiles April Stewart, Capital

     (d) 17,200 (d) 17,200 e.

    Office Equipment Accounts Payable (a) 20,000 (c) 480

     (e) 2,500 (e) 2,500 f.

    Office Salaries Expense Cash

     (a) 50,000 (b) 43,500 (f) 800

    (f) 800 g.

    Cash Advertising Fees Earned

    (b) 43,500 (g) 3,500 (a) 50,000

    (f) 800 (g) 3,500

    h.

    Cash Advertising Expense

    (b) 43,500 (h) 450 (a) 50,000

    (g) 3,500 (f) 800

    (h) 450

    i.

    Cash Accounts Payable

    (b) 43,500 (c) 480 (i) 480 (a) 50,000

    (g) 3,500 (g) 800 (e) 2,500

    (h) 450

    (i) 480

    j.

    Office Equipment Cash (a) 20,000 (b) 43,500 (j) 200 (a) 50,000

    (e) 2,500 (g) 3,500 (j) 800

    (k) 450 (j) 1,200

    (i) 480

    (j) 1,000 k.

    Accounts Receivable Marketing Research Fees Earned

     (k) 1,300 (k) 1,300 l.

    Office Salaries Expense Cash (f) 800 (b) 43,500 (a) 50,000

    (g) 3,500 (l) 800 (l) 800

    (m) 450

    (i) 480

    (j) 1,000

    (l) 800 m.

    Cash Accounts Receivable

    (b) 43,500 (k) 1300 (m) 1,300 (a) 50,000

    (g) 3,500 (n) 800

    (o) 450 (m) 1,300

    (i) 480

    (k) 1,000

    (l) 800

    n.

    Cash April Stewart, Withdrawals

    (b) 43,500 (n) 1800 (a) 50,000

    (h) 3,500 (p) 800

(m) 1,300 (q) 450

    (i) 480

    (l) 1,000

    (m) 800

    (n) 1,800

    Stewart Advertising

    Trial Balance

    December 31, 20xx

    Account Title Debit Credit Cash $ 5,970 Supplies 480 Equipment 23,500 Automobiles 17,200 Building 230,000 Land 60,000 Accounts payable $ 2,500 Long-Term Notes Payable 246,500 April Stewart, capital 87,200 April Stewart, Withdrawals 1,800 Advertising Fees Earned 3,500 Marketing Research Fees Earned 1,300 Office Salaries Expense 1,600 Advertising Expense 450 Totals $341,000 $341,000

Problem 2-2:

    a.

    Cash Alan Meaken, Capital

     (a) 20,000 (a) 68,000

    Office Equipment

     (a) 3,000

    Surveying Equipment

     (a) 45,000

    b.

    Land Cash

     (a) 20,000 (b) 19,000 (b) 3,800

    Long-Term Notes Payable

     (b) 15,200

    c.

    Building Cash

     (a) 20,000 (b) 3,800 (c) 8,000

    (c) 8,000 d.

    Prepaid Insurance Cash

     (a) 20,000 (b) 3,800 (d) 4,800

    (c) 800

    (d) 4,800 e.

    Cash Surveying Fees Earned

    (b) 3,800 (e) 800 (a) 20,000

    (c) 8,000 (e) 800

    (d) 4,800

    f.

    Office Equipment Cash (a) 3,000 (a) 20,000 (b) 3,800

    (e) 800 (c) 8,000 (f) 3,700

    (d) 4,800

    (f) 700

    Long-Term Notes Payable

    (b) 15,200

    (f) 3,000

    g.

    Accounts Receivable Surveying Fees Earned

     (e) 800 (g) 2,100

    (g) 2,100 h.

    Office Equipment Accounts Payable (a) 3,000 (h) 250 (f) 3,700

    (h) 250

    i.

    Accounts Receivable Surveying Fees Earned (g) 2,100 (e) 800

    (g) 2,100 (i) 3,150

    (i) 3,150 j.

    Machinery Rental Expense Accounts Payable

     (h) 250 (j) 150

    (j) 150 k.

    Cash Accounts Receivable (a) 20,000 (b) 3,800 (g) 2,100 (k) 2,100 (e) 800 (c) 8,000 (i) 3,150

    (e) 4,800 (k) 2,100

    (f) 700

    l.

    Wages Expense Cash

     (b) 3,800 (l) 840 (a) 20,000

    (f) 800 (f) 800

    (k) 2,100 (i) 4,800

    (f) 700

    (l) 840

    m.

    Accounts Payable Cash

    (h) 250 (a) 20,000 (b) 3,800 (m) 250

    (j) 150 (e) 800 (c) 8,000

    (k) 2,100 (g) 4,800

    (f) 700

    (m) 250

    n.

    Repairs Expense, Surveying Cash

    Equipment

     (a) 20,000 (b) 3,800 (n) 350

    (e) 800 (c) 8,000

    (k) 2,100 (h) 4,800

    (f) 700

    (m) 250

    (n) 350

    o.

    Alan Meaken, Withdrawals Cash

     (a) 20,000 (b) 3,800 (o) 260

    (e) 800 (c) 8,000

    (k) 2,100 (i) 4,800

    (f) 700

    (m) 250

    (n) 350

    (o) 260

    p.

    Wages Expense Cash (l) 840 (a) 20,000 (b) 3,800

    (e) 800 (c) 8,000 (p) 880

    (k) 2,100 (j) 4,800

    (f) 700

    (m) 250

    (n) 350

    (o) 260

    (p) 880

    q.

    Permits Expense Cash

     (a) 20,000 (b) 3,800 (q) 150

    (e) 800 (c) 8,000

    (k) 2,100 (k) 4,800

    (f) 700

    (m) 250

    (n) 350

    (o) 260

    (p) 880

    (q) 150

    Alan Meaken, Surveyor

    Trial Balance

    December 31, 20xx

    Account Title Debit Credit

    Cash $ 2,870

    Accounts receivable 3,150

    Prepaid Insurance 4,800

    Office Equipment 6,950

    Surveying Equipment 45,000

    Building 8,000

    Land 19,000

    Accounts payable $ 150

    Long-Term Notes Payable 18,200

    Alan Meaken, Capital 68,000

    Alan Meaken, Withdrawals 260

    Service revenue 6,050

    Wages Expense 1,720

    Machinery Rental Expense 150

    Permits Expense 150

    Repairs Expense, Surveying Equipment 350

    Totals $92,400 $92,400

Problem 2-2:

     Journal page 1

    Post. Date Account titles and explanation Debit Credit Ref.

    Apr. 1. Cash 25,000

     Drafting Supplies 700

     Drafting Equipment 18,500

     Mike Leaman, Capital 44,200

     The investment of the owner

     1. Prepaid Rent 3,100

     Cash 3,100

     Prepaid two months' rent

     3. Prepaid Insurance 2,400

     Cash 2,400

     Paid the insurance premium

     4. Drafting Equipment 680

     Drafting Supplies 90

     Accounts Payable 770

     Purchases on credit

     9. Cash 4,000

     Engineering Fees Earned 4,000

     The cash revenue of this month

     15. Salaries Expense 960

     Cash 960

     Paid the draftsman's salary in cash

     16. Accounts Receivable 7,800

     Engineering Fees Earned 7,800

     The credit revenue of the month

     18. Drafting Supplies 40

     Accounts Payable 40

     Purchased drafting supplies on credit

     19.. Accounts Payable 770

     Cash 770

     Repaid Accounts Payable

     26. Cash 7,800

     Accounts Receivable 7,800

     Received cash

     27. Mike Leaman, Withdrawals 2,000

     Cash 2,000

     Mike Leaman withdrew

     28. Accounts Payable 40

     Cash 40

     Repaid Accounts Payable

     29. Accounts Receivable 1,400

     Engineering Fees Earned 1,400

     The credit revenue of the month

     30. Salaries Expense 960

     Cash 960

     Paid the draftsman's salary

     30. Utilities Expense 170

     Cash 170

     Paid the April utility bill

     30. Blueprinting Expense 110

     Cash 110

     Paid the blueprinting expenses

c.

    Cash

    Date Explanation PR Debit Credit Balance 20xx

    Apr. 1 G1 25,000 25,000

     1 G1 3,100 21,900

     3 G1 2,400 19,500

     9 G1 4,000 23,500

     15 G1 960 22,540

     19 G1 770 21,770

     26 G1 7,800 29,570

     27 G1 2,000 27,570

     28 G1 40 27,530

     30 G1 960 26,570

     30 G1 170 26,400

     30 G1 110 26,290

    Accounts Receivable

    Date Explanation PR Debit Credit Balance

    20xx

    Apr. 16 G1 7,800 7,800

     26 G1 7,800 0

     29 G1 1,400 1,400

    Drafting Supplies

    Date Explanation PR Debit Credit Balance 20xx

    Apr. 1 G1 700 700

     4 G1 90 790

     18 G1 40 830

    Prepaid Insurance

    Date Explanation PR Debit Credit Balance 20xx Apr. 3 G1 2,400 2,400

    Prepaid Rent

    Date Explanation PR Debit Credit Balance 20xx Apr. 1 G1 3,100 3,100

    Office and Drafting Equipment

    Date Explanation PR Debit Credit Balance 20xx Apr. 1 G1 18,500 18,500

     4 G1 680 19,180

    Accounts Payable

    Date Explanation PR Debit Credit Balance 20xx Apr. 4 G1 770 770

     18 G1 40 810

     19 G1 770 40

     28 G1 40 0

    Mike Leaman, Capital

    Date Explanation PR Debit Credit Balance 20xx Apr. 1 G1 44,200 44,200

    Mike Leaman, Withdrawals

    Date Explanation PR Debit Credit Balance 20xx Apr. 27 G1 2,000 2,000

    Engineering Fees Earned

    Date Explanation PR Debit Credit Balance 20xx Apr. 9 G1 4,000 4,000

     16 G1 7,800 11,800

     29 G1 1,400 13,200

    Salaries Expense

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