4
Chapter 2
Exercise 6
ASSETS (a) Bal. (b)
15,000 15,000 (4,000) 4,000 15,000 9,000 24,000 (2,000) 22,000
Bal. (c) Bal. (d) Bal.
=
LIABILITIES
OWNER’S EQUITY
+
15,000 15,000
15,000 9,000 9,000 (2,000) 7,000
=
15,000 +
15,000
Exercise 7 ASSETS = LIABILITIES + (Items Owned) (Amts. Owed)
OWNER’S EQUITY (Owner’s Investment) (Earnings)
Cash
Accounts Payable
Glen Ross, Glen Ross, Capital – Drawing +
Bal.
28,000
8,000
(a)
4,000
(b)
(1,200)
1,200
Rent Exp.
(c)
(200)
200
Utilities Exp.
(d)
(600)
Bal.
30,000
=
30,000
=
Revenues
–
Expenses
Description
20,000 4,000
Service Fees
600 8,000
+
20,000
−
600
+
4,000
−
1,400
30,000
© 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 2
Analyzing Transactions: The Accounting Equation
5
Exercise 8 1. ASSETS (Items Owned)
= LIABILITIES + OWNER’S EQUITY (Amts. Owed) (Owner’s Investment) (Earnings)
(a)
Office Accounts Cash + Equipment = Payable 10,000
(b)
5,500
J. Moore, J. Moore, + Capital – Drawing + Revenues – Expenses 10,000
Description
5,500
(c)
900
(d)
(6,000)
(e)
1,500
(f)
(800)
800
Rent Exp.
(g)
(75)
75
Phone. Exp.
(h)
(100)
(i)
(500)
Bal.
4,925 + 16,425
900
Service Fees
1,500
Service Fees
6,000
(100) 500 11,500 =
5,400
+ 10,000 −
=
500
+
2,400
−
875
16,425
2.
Total assets.................................................................
$ 16,425
Total liabilities...........................................................
$ 5,400
Owner’s equity...........................................................
$ 11,025
Owner’s equity in excess of original investment.......
$ 1,025
Total revenues............................................................
$ 2,400
Total expenses............................................................
$
Net income.................................................................
$ 1,525
875
© 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
6
Chapter 2
Exercise 9
Judith Moore Enterprises Income Statement For Month Ended July 31, 20-Revenue: Service fees
$2,400
Expenses: Rent expense
$800
Phone expense
75
Total expenses
875
Net income
$1,525
Exercise 10
Judith Moore Enterprises Statement of Owner’s Equity For Month Ended July 31, 20-Judith Moore, capital, July 1, 20--
$10,000
Investment in July
10,000$10,000-
Total investment Net income for July Less withdrawals for July Increase in capital Judith Moore, capital, July 31, 20--
$1,525
-
500 1,025 $11,025
© 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 2
Analyzing Transactions: The Accounting Equation
Exercise 11
Judith Moore Enterprises Balance Sheet July 31, 20-ASSETS
LIABILITIES
Cash
$ 4,925
Office equipment
11,500
Accounts payable
$ 5,400
OWNER’S EQUITY
Total assets
$16,425
Judith Moore, capital
11,025
Total liabilities and owner’s equity
$16,425
© 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
7
8
Chapter 2
PROBLEMS Problem 12 ASSETS 1. 2. 3. 4.
=
LIABILITIES
$18,800 $23,400 $21,900 Net income for January = $2,100 Net loss for February = $300
OWNER’S EQUITY
+
$4,700 $7,200 $6,000
$14,100 $16,200 $15,900
Problem 13 1.
Cash (a)
+
ASSETS
= LIABILITIES +
(Items Owned)
(Amts. Owed)
Office Equip.
+
(Owner’s Investment)
(Earnings)
Prepaid Accounts J. Moore, J. Moore, Insur. = Payable + Capital – Drawing + Revenues – Expenses
12,000
(b)
OWNER’S EQUITY
Description
12,000 7,500
7,500
(c)
(800)
800
(d)
700
(e)
(600)
600
Rent Exp.
(f)
(150)
150
Wages Exp.
(g)
(200)
(h)
(3,000)
(i)
(100)
Bal.
7,850 +
700
Cons. Fees
200 (3,000) 100 8,300 + 16,350
200
= =
4,500
+ 12,000
–
100
+
700
–
750
16,350
© 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 2
Analyzing Transactions: The Accounting Equation
Problem 13 (Concluded) 2. Total assets ..................................................................................... Total liabilities ............................................................................... Owner’s equity ............................................................................... Change in owner’s equity from original investment ...................... Total revenues ................................................................................ Total expenses................................................................................ Net income (loss) ...........................................................................
$ 16,350 $ 4,500 $ 11,850 $ (150) $ 700 $ 750 $ (50)
Problem 14
Susan Cole Consulting Services Income Statement For Month Ended October 31, 20— Revenue: Consulting fees
$700)
Expenses: Rent expense
$600
Wages expense
150
Total expenses Net income (loss)
750) $ (50)
© 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
9
10
Chapter 2
Problem 15
Susan Cole Consulting Services Statement of Owner’s Equity For Month Ended October 31, 20-Susan Cole, capital, October 1, 20--
$12,000)
Investment in October
12,000)
Total investment
$12,000)
Less: Net loss for October
$ 50
Withdrawals for October
100
Decrease in capital
(150)
Susan Cole, capital, October 31, 20--
$11,850)
Problem 16
Susan Cole Consulting Services Balance Sheet October 31, 20-ASSETS
Cash
LIABILITIES
$ 7,850
Prepaid insurance
200
Office equipment
8,300
Total assets
$16,350
Accounts payable
$ 4,500
OWNER’S EQUITY
Susan Cole, capital
11,850
Total liabilities and owner’s equity
$16,350
© 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 2
Analyzing Transactions: The Accounting Equation
11
Problem 17 1.
Cash
ASSETS
= LIABILITIES +
(Items Owned)
(Amts. Owed)
OWNER’S EQUITY
(Owner’s Investment)
(Earnings)
Accounts Office Accounts S. Cassady, S. Cassady, + Receivable. + Supplies = Payable + Capital – Drawing + Revenues – Expenses
(a)
10,000
(b)
(200)
200
(c)
(400)
800
(d)
300
(e)
(600)
(f)
(100)
(g)
200
(h)
(200)
(i)
200
(200)
Bal.
9,200 +
200
Description
10,000
400 300
Typing Fees
600
Rent Exp.
100 400
600
Typing Fees
(200)
10,400
+ 1,000
=
=
200
+ 10,000 –
100
+
900
–
600
10,400
© 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
12
Chapter 2
Problem 17 (Concluded) 2.
Stuart Cassady Typing Service Income Statement For Month Ended April 30, 20-Revenue: Typing fees
$900
Expense: Rent expense
600
Net income
$300
Stuart Cassady Typing Service Statement of Owner’s Equity For Month Ended April 30, 20-Stuart Cassady, capital, April 1, 20--
$10,000
Investment in April
10,000-
Total investment
$10,000-
Net income for April
$300
Less withdrawals for April
100
Increase in owner’s equity
200
Stuart Cassady, capital, April 30, 20--
$10,200
Stuart Cassady Typing Service Balance Sheet April 30, 20-ASSETS
Cash Accounts receivable Office supplies
Total assets
LIABILITIES
$ 9,200
Accounts payable
$
200
200 1,000
$10,400
OWNER’S EQUITY
Stuart Cassady, capital
10,200
Total liabilities and owner’s equity
$10,400
© 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 3
The Double-Entry Framework
13
CHAPTER 3 REVIEW QUESTIONS 1. 2. 3. 4. 5. 6.
T account debit credit footing balance debit
7. 8. 9. 10. 11. 12.
credit credit debit credit double-entry accounting trial balance
EXERCISES Exercise 1 Assets debit credit
Liabilities debit credit
Owner’s Capital debit credit
Owner’s Drawing debit credit
Expenses debit credit
Revenues debit credit
Expenses (+) (−)
Revenues (−) (+)
Exercise 2 (a) Debit (b) Credit (c) Credit
(d) Credit (e) Debit (f) Debit
Exercise 3 Assets (+) (−)
Liabilities (−) (+)
Owner’s Capital (−) (+)
Owner’s Drawing (+) (−)
Exercise 4 Cash
Jacque Hamon, Capital
(a) 3,000
Cash
(a) 3,000
Accounts Payable
(e) 200
(e)
200
Cash (b) 1,000
Professional Fees (b) 1,000
(f)
Cash 300
Professional Fees (f) 300
Office Equipment (c) 500
Accounts Payable (c) 500
Cash (g) 1,000
Notes Payable (g) 1,000
Cash (d)
75
(d)
Utilities Expense 75
Cash (h)
50
(h)
Phone Expense 50
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14
Chapter 3
Exercise 5 Assets Debit +
=
Credit –
Liabilities Debit –
Credit +
Cash
Accounts Payable
(a)12,000 (c) 75 (d) 5,000 (e) 3,000
(e) 3,000 (b) 8,000
Office Equipment
Notes Payable
(b) 8,000
+
Owner’s Equity Debit –
Credit +
C. Sung, Capital (a)12,000
(d) 5,000
Prepaid Insurance (c)
75
Exercise 6 1. and 2. Assets Debit +
=
Credit –
Cash Bal. 9,000 (b) (a)
Liabilities
Owner’s Equity
+
Debit Credit – +
Debit –
Accounts Payable 100
Credit +
F. Baar, Capital
Bal. 2,500
Bal. 9,000
500 (c) 1,200
Office Furnishings Bal. 2,500
Drawing
Expenses
Debit Credit + –
Debit +
Credit –
Rent Expense (c) 1,200
Revenues Debit –
Credit +
Counseling Fees (a)
500
Magazine Expense (b)
100
© 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 3
The Double-Entry Framework
15
Exercise 7 1. and 2. Assets Debit +
=
Credit – Cash
Owner’s Equity
+
Credit +
Debit –
Accounts Payable
(a) 20,000 (b) (f)
Liabilities Debit –
500
(i) 2,000 (d) 4,000
1,200 (c) 6,000
Bal.2,000
Credit + B. Estavez, Capital (a) 20,000
21,200 (d) 5,000
(e)
800
(g)
700
(h)
200
(i) 2,000 15,200
Bal. 6,000 Accounts Receivable (f)
600
Drawing
Expenses
Debit
Credit
Debit
Credit
Debit
Credit
+
–
+
–
–
+
B. Estavez, Drawing Office Supplies (b)
Revenues
(h) 200
(g)
Rent Expense 700
Accounting Fees (f) 1,800
500
Office Furniture (c) 6,000
Computer Equipment (d) 9,000
Computer Software (e) 800
© 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.