Académique Documents
Professionnel Documents
Culture Documents
Transaction Analysis
Short Exercises
(5 min.)
S 2-1
(5 min.)
S 2-2
Transaction
67
Chapter 2
Analysis
Bal.
Cash
31,000
2,000
30,000
(5-10 min.)
S 2-3
(5 min.)
S 2-4
3,000
(5-10 min.)
a.
b.
c.
d.
e.
68
S 2-5
Chapter 2
Analysis
Transaction
69
(10 min.)
S 2-6
Journal
DATE
Jul.
70
DEBIT
15 Cash
Note Payable
Borrowed money from the bank.
34,000
22 Accounts Receivable.
Service Revenue.
Performed service on account.
8,500
28 Cash
Accounts Receivable.
Received cash on account.
6,500
29 Utilities Expense.
Accounts Payable..
Received utility bill.
700
31 Salary Expense
Cash
Paid salary expense.
3,100
CREDIT
34,000
8,500
6,500
700
3,100
Chapter 2
Analysis
Transaction
71
(10-15 min.)
S 2-7
Req. 1
Journal
DATE
DEBIT
Supplies..
Accounts Payable
Purchased supplies on account.
2,000
Accounts Payable
Cash
Paid cash on account.
500
Req. 2
Accounts Payable
500
Bal.
Req. 3
72
2,000
1,500
CREDIT
2,000
500
Chapter 2
Analysis
Transaction
73
(10-15 min.)
S 2-8
Req. 1
Journal
DATE
DEBIT
Accounts Receivable..
Service Revenue..
Performed service on account.
5,200
Cash.
Accounts Receivable..
Received cash on account.
2,400
CREDIT
5,200
2,400
Req. 2
Cash
2,400
Bal. 2,400
74
Accounts Receivable
5,200
Bal. 2,800
2,400
Service Revenue
5,200
Bal. 5,200
(10 min.)
S 2-9
Old Boardwalk
Trial Balance
December 31, 2010
ACCOUNT
DEBIT CREDIT
Millions
Cash....
$ 6
Other assets..
13
Accounts payable
$ 1
Other liabilities.
5
Stockholders equity..
3
Revenues...
37
Expenses...
27
___
Total.
$46
$46
Old Boardwalks net income: $10 million ($37 $27)
(10 min.)
1. Total assets
S 2-10
2. Total liabilities
Chapter 2
Analysis
Transaction
75
3. Net income
76
(10 min.)
1. Total debits
S 2-11
2. Total debits
3. Total debits
Chapter 2
Analysis
Transaction
77
78
(10 min.)
H
1. Debit
2. Expense
S 2-12
A.
3. Net income
B.
Always a liability
4. Ledger
C.
Revenues Expenses
5. Posting
D.
Grouping of accounts
6. Normal balance
E.
Assets Liabilities
7. Payable
F.
Record of transactions
8. Journal
G.
Always an asset
9. Receivable
H.
I.
J.
Chapter 2
Analysis
Transaction
79
80
(5 min.)
Cash
Computer Equipment
140,000
100,000
Accounts Payable
Common Stock
100,000
Total debits
S 2-13
140,000
Chapter 2
Analysis
Transaction
81
Exercises
Group A
(10-15 min.)
TO:
Home Office
FROM:
Store Manager
E 2-14A
Cash
Supplies
Equipment
Land
Building
$ 26,000*
8,000
60,000
88,000
123,000
Total assets
$305,000
82
LIABILITIES
Note payable
($88,000 + $123,000) $211,000
STOCKHOLDERS EQUITY
Common stock
94,000
Total liabilities and
________
stockholders equity $305,000
_____
*94,000 8,000 60,000 = 26,000
Cash
94,000
60,000
8,000
26,000
(10-15 min.)
E 2-15A
a.
Chapter 2
Analysis
Transaction
83
(10-20 min.)
E 2-16A
Req. 1
Analysis of Transactions
ASSETS
Date
Cash
Accounts
Medical
+ Receivable + Supplies +
Accounts
Land = Payable +
Mar. 6 42,000
9 (25,000)
25,000
12
16,000
15 Not a transaction of the business.
15-31
3,850
3,850
15-31
(900)
(900)
(200)
31
200
(200)
31 18,000
31 (1,100)
Bal.
35,950
3,850
15,800 25,000
84
LIABILITIES
STOCKHOLDERS EQUITY
Note
Common
Payable +
Stock +
Retained
Earnings
42,000
Type of Stockholders
Equity Transaction
Issued stock
16,000
7,700
(900)
(900)
(200)
(1,100)
14,900
18,000
18,000
42,000
5,700
Service revenue
Salary expense
Rent expense
Utilities expense
80,600
80,600
Chapter 2
Transaction Analysis
85
(continued)
E 2-16A
Req. 2
a. $80,600
b. $3,850
c. $32,900 ($14,900 + $18,000)
d. $47,700 ($80,600 $32,900, or $42,000 + $5,700)
e. $5,700 (Revenue, $7,700 minus total expenses of $2,000,
equals net income, $5,700.)
86
(10-15 min.)
E 2-17A
Journal
DATE
Mar.
12
15
DEBIT
Cash..
Common Stock.
Issued stock to owner.
42,000
Land...
Cash.
Purchased land.
25,000
Medical Supplies
Accounts Payable
Purchased supplies on account.
16,000
42,000
25,000
16,000
15-31 Cash..
3,850
Accounts Receivable
3,850
Service Revenue...
Performed service for cash and on account.
15-31 Salary Expense..
Rent Expense..
Utilities Expense
Cash.
Paid expenses.
900
900
200
31
200
Cash..
Medical Supplies..
Chapter 2
Analysis
CREDIT
Transaction
7,700
2,000
200
87
Sold supplies.
31
Cash..
Note Payable..
Borrowed money.
18,000
31
Accounts Payable.
Cash.
Paid on account.
1,100
(10-20 min.)
18,000
1,100
E 2-18A
Journal
DATE
DEBIT
Apr. 1 Cash
Common Stock...
Issued common stock to owner.
19,100
2 Office Supplies
Accounts Payable..
Purchased office supplies on account.
300
4 Land
Cash..
Paid cash for land.
14,700
6 Cash
Service Revenue
Performed services for cash.
2,700
9 Accounts Payable...
Cash..
Paid cash on account.
200
88
CREDIT
19,100
300
14,700
2,700
200
17 Accounts Receivable.
Service Revenue
Performed service on account.
1,000
23 Cash
Accounts Receivable
Received cash on account.
200
30 Salary Expense
Rent Expense...
Cash..
Paid cash expenses.
1,300
500
Chapter 2
Analysis
1,000
200
Transaction
1,800
89
(20-30 min.)
E 2-19A
Req. 1
Cash
Accounts Receivable
Office Supplies
Apr. 2
Bal.
Land
300
300
Apr.
Bal.
Accounts Payable
Apr. 9
200 Apr.
Bal.
300
100
Apr.
6 2,700
17 1,000
Bal. 3,700
Rent Expense
90
4 14,700
14,700
Common Stock
Service Revenue
Apr. 30
200
500
Apr.
Bal.
Salary Expense
Apr. 30 1,300
Bal.
1,300
19,100
19,100
Bal.
500
Chapter 2
Analysis
Transaction
91
(continued)
E 2-19A
Req. 2
Harris Tree Cellular, Inc.
Trial Balance
April 30, 2010
ACCOUNT
DEBIT
Cash... $ 5,300
Accounts receivable..
800
Office supplies
300
Land... 14,700
Accounts payable..
Common stock
Service revenue..
Salary expense
1,300
Rent expense...
500
Total... $22,900
CREDIT
100
19,100
3,700
$22,900
Req. 3
Total assets ($5,300 + $800 + 300 + $14,700).. $21,100
Total liabilities.
(100)
Total stockholders equity ($19,100 + $1,900)21,000
92
(10-15 min.)
E 2-20A
Journal
DATE
1. Cash..
Common Stock..
Issued common stock.
DEBIT
10,200
2. Cash..
6,900
Note Payable..
Borrowed money; signed note payable.
3. Land..
Cash..
Note Payable..
Purchased land by paying cash
and signing a note payable.
30,000
4. Supplies
Accounts Payable.
Purchased supplies on account.
500
5. Cash..
Supplies...
Sold supplies for cash.
150
6. Equipment
Cash..
5,100
Chapter 2
Analysis
Transaction
CREDIT
10,200
6,900
6,000
24000
500
150
5,100
93
100
94
100
(10-20 min.)
E 2-21A
Req. 1
Deluxe Pool Service, Inc.
Trial Balance
June 30, 2010
ACCOUNT
DEBIT
Cash... $ 8,500
Accounts receivable..
15,900
Land...
29,800
Accounts payable..
Note payable
Common stock
Retained earnings..
Dividends..
6,100
Service revenue..
Salary expense
8,200
Utilities expense.
2,100
Delivery expense
700
Total... $71,300
Chapter 2
Analysis
CREDIT
$ 4,400
10,500
8,400
25,600
22,400
$71,300
Transaction
95
(continued)
E 2-21A
Req. 2
Deluxe Pool Service, Inc.
Income Statement
Month Ended June 30, 2010
Service revenue...
Salary expense
$8,200
Utilities expense..
2,100
Delivery expense.
700
Total expenses.
Net income
96
$22,400
11,000
$11,400
(15-25 min.)
Carver, Inc.
Trial Balance
September 30, 2010
ACCOUNT
DEBIT
Cash... $ 4,900*
Accounts receivable.. 12,700*
Inventory... 16,600
Supplies
200
Land... 52,000
Accounts payable..
Common stock
Sales revenue..
Salary expense
1,700
Insurance expense.
3,000*
Rent expense...
1,100
Utilities expense.
1,400*
Total... $93,600
E 2-22A
CREDIT
$15,100*
48,000*
30,500
_______
$93,600
_____
*Explanations:
Cash: $4,500 + $400 = $4,900
Accounts Receivable: $13,100 $400 = $12,700
Accounts Payable: $11,900 + $3,000 $300 + $500 = $15,100
Common Stock: $47,500 + $500 = $48,000
Insurance Expense: $0 + $3,000 = $3,000
Utilities Expense: $900 + $500 = 1,400
Chapter 2
Analysis
Transaction
97
98
(5-15 min.)
Cash
(a)
Bal.
12,000 (b)
(d)
(e)
(g)
5,800
Accounts Receivable
1,000
2,000
300
2,900
(f)
Bal.
Office Supplies
(c)
Bal.
700
700
300 (c)
Bal.
(a)
Bal.
700
400
(a)
Bal.
2,900
2,900
2,000
2,000
(f)
Bal.
8,100
8,100
Rent Expense
(b)
Bal.
1,000
1,000
Chapter 2
Analysis
20,600
20,600
Service Revenue
Salary Expense
(d)
Bal.
8,600
8,600
Common Stock
Dividends
(g)
Bal.
8,100
8,100
Office Furniture
Accounts Payable
(e)
E 2-23A
Transaction
99
100
(10-20 min.)
E 2-24A
Req. 1
Linda Oxford, Attorney
Trial Balance
May 31, 2010
ACCOUNT
DEBIT
Cash... $ 5,800
Accounts receivable..
8,100
Office supplies
700
Office furniture
8,600
Accounts payable..
Common stock
Dividends..
2,900
Service revenue..
Salary expense
2,000
Rent expense..
1,000
Total... $29,100
CREDIT
400
20,600
8,100
$29,100
Req. 2
The business performed well during May. The result of
operations was net income of $5,100, as shown by the income
statement accounts:
Chapter 2
Analysis
Transaction
101
102
Exercises
Group B
(10-15 min.)
TO:
Home Office
FROM:
Store Manager
E 2-25B
Cash
Supplies
Equipment
Land
Building
$ 15,000*
13,000
62,000
91,000
120,000
Total assets
$301,000
LIABILITIES
Note payable
($91,000 + $120,000) $211,000
STOCKHOLDERS EQUITY
Common stock
90,000
Total liabilities and
________
stockholders equity $301,000
Chapter 2
Analysis
Transaction
103
_____
*90,000 13,000 62,000 = 15,000
Cash
90,000
62,000
13,000
15,000
(10-15 min.)
E 2-26B
104
(10-20 min.)
E 2-27B
Req. 1
Analysis of Transactions
ASSETS
Date
Cash
Accounts
Medical
+ Receivable + Supplies +
Accounts
Land = Payable +
Mar. 6 44,000
9 (31,000)
31,000
12
1,700
15 Not a transaction of the business.
15-31
3,800
3,800
15-31
(800)
(800)
(300)
31
400
(400)
31 16,000
31
(700)
Bal.
30,600
3,800
1,300
LIABILITIES
31,000
STOCKHOLDERS EQUITY
Note
Common
Payable +
Stock +
Retained
Earnings
44,000
Type of Stockholders
Equity Transaction
Issued stock
1,700
7,600
(800)
(800)
(300)
Service revenue
Salary expense
Rent expense
Utilities expense
16,000
(700)
1,000
Chapter 2
16,000
44,000
Transaction Analysis
5,700
105
66,700
106
66,700
(continued)
E2-27B
Req. 2
a. $66,700
b. $3,800
c. $17,000 ($1,000 + $16,000)
d. $49,700 ($66,700 $17,000, or $44,000 + $5,700)
e. $5,700 (Revenue, $7,600 minus total expenses of $1,900,
equals net income, $5,700.)
Chapter 2
Analysis
Transaction
107
108
(10-15 min.)
E 2-28B
Journal
DATE
Mar.
12
15
DEBIT
Cash..
Common Stock.
Issued stock to owner.
44,000
Land...
Cash.
Purchased land.
31,000
Medical Supplies
Accounts Payable
Purchased supplies on account.
1,700
44,000
31,000
1,700
15-31 Cash..
3,800
Accounts Receivable
3,800
Service Revenue...
Performed service for cash and on account.
15-31 Salary Expense..
Rent Expense..
Utilities Expense
Cash.
Paid expenses.
800
800
300
31
400
Cash..
Medical Supplies..
Chapter 2
Analysis
CREDIT
Transaction
7,600
1,900
400
109
Sold supplies.
31
Cash..
Note Payable..
Borrowed money.
16,000
31
Accounts Payable.
Cash.
Paid on account.
700
(10-20 min.)
16,000
700
E 2-29B
Journal
DATE
DEBIT
Apr. 1 Cash
Common Stock...
Issued common stock to owner.
19,600
2 Office Supplies
Accounts Payable..
Purchased office supplies on account.
900
4 Land
Cash..
Paid cash for land.
14,600
6 Cash
Service Revenue
Performed services for cash.
2,500
9 Accounts Payable...
Cash..
Paid cash on account.
200
110
CREDIT
19,600
900
14,600
2,500
200
17 Accounts Receivable.
Service Revenue
Performed service on account.
1,200
23 Cash
Accounts Receivable
Received cash on account.
900
30 Salary Expense
Rent Expense...
Cash..
Paid cash expenses.
1,900
1,400
Chapter 2
Analysis
1,200
900
Transaction
3,300
111
(20-30 min.)
E 2-30B
Req. 1
Cash
Accounts Receivable
Office Supplies
Apr. 2
Bal.
Land
900
900
Apr.
Bal.
Accounts Payable
Apr. 9
200 Apr.
Bal.
4 14,600
14,600
Common Stock
900
700
Service Revenue
Apr.
6 2,500
17 1,200
Bal. 3,700
Rent Expense
Apr. 30 1,400
112
900
Apr.
Bal.
Salary Expense
Apr. 30 1,900
Bal.
1,900
19,600
19,600
Bal.
1,400
Chapter 2
Analysis
Transaction
113
(continued)
E 2-30B
Req. 2
Green Tree Cellular, Inc.
Trial Balance
April 30, 2010
ACCOUNT
DEBIT
Cash... $ 4,900
Accounts receivable..
300
Office supplies
900
Land... 14,600
Accounts payable..
Common stock
Service revenue..
Salary expense
1,900
Rent expense...
1,400
Total... $24,000
CREDIT
700
19,600
3,700
24,000
Req. 3
Total assets ($4,900 + $300 + 900 + $14,600).. $20,700
Total liabilities.
(700)
Total stockholders equity ($19,600 + $400) $20,000
114
Chapter 2
Analysis
Transaction
115
(10-15 min.)
E 2-31B
Journal
DATE
1. Cash..
Common Stock..
Issued common stock.
DEBIT
9,700
2. Cash..
6,700
Note Payable..
Borrowed money; signed note payable.
116
3. Land..
Cash..
Note Payable..
Purchased land by paying cash
and signing a note payable.
30,000
4. Supplies
Accounts Payable.
Purchased supplies on account.
500
5. Cash..
Supplies...
Sold supplies for cash.
80
6. Equipment
Cash..
6,000
CREDIT
9,700
6,700
5,000
25000
500
80
6,000
90
90
Chapter 2
Analysis
Transaction
117
(10-20 min.)
E 2-32B
Req. 1
Grand Pool Service, Inc.
Trial Balance
June 30, 2010
ACCOUNT
DEBIT
Cash...
9,400
Accounts receivable..
15,300
Land...
29,400
Accounts payable..
Note payable
Common stock
Retained earnings..
Dividends..
6,300
Service revenue..
Salary expense
8,200
Utilities expense.
1,600
Delivery expense
200
Total... $70,400
CREDIT
$ 4,500
10,500
8,000
24,600
22,800
$70,400
Req. 2
Grand Pool Service, Inc.
Income Statement
Month Ended June 30, 2010
Service revenue...
Salary expense
$8,200
118
$22,800
Utilities expense..
Delivery expense.
Total expenses.
Net income
1,600
200
10,000
$12,800
(15-25 min.)
Farris, Inc.
Trial Balance
June 30, 2010
ACCOUNT
DEBIT
Cash... $ 4,300*
Accounts receivable.. 13,100*
Inventory... 16,500
Supplies
700
Land... 53,000
Accounts payable..
Common stock
Sales revenue..
Salary expense
2,200
Insurance expense.
3,300*
Rent expense...
600
Utilities expense.
600*
Total... $94,300
E 2-33B
CREDIT
$14,500*
47,900*
31,900
_______
$94,300
_____
*Explanations:
Chapter 2
Analysis
Transaction
119
120
(5-15 min.)
Cash
(a)
Bal.
11,000 (b)
(d)
(e)
(g)
5,200
Accounts Receivable
1,200
2,200
300
2,100
(f)
Bal.
Office Supplies
(c)
Bal.
700
700
300 (c)
Bal.
(a)
Bal.
700
400
(a)
Bal.
2,100
2,100
2,200
2,200
(f)
Bal.
8,300
8,300
Rent Expense
(b)
Bal.
1,200
1,200
Chapter 2
Analysis
20,100
20,100
Service Revenue
Salary Expense
(d)
Bal.
9,100
9,100
Common Stock
Dividends
(g)
Bal.
8,300
8,300
Office Furniture
Accounts Payable
(e)
E 2-34B
Transaction
121
(10-20 min.)
E 2-35B
Req. 1
Linda Conway, Attorney
Trial Balance
January 31, 2010
ACCOUNT
DEBIT
Cash... $ 5,200
Accounts receivable..
8,300
Office supplies
700
Office furniture
9,100
Accounts payable..
Common stock
Dividends..
2,100
Service revenue..
Salary expense
2,200
Rent expense..
1,200
Total... $28,800
122
CREDIT
400
20,100
8,300
$28,800
Req. 2
The business performed well during January. The result of
operations was net income of $4,900, as shown by the income
statement accounts:
Service revenue. $ 8,300
Salary expense.. $2,200
Rent expense. 1,200
Total expenses..
(3,400)
Net income.. $ 4,900
Chapter 2
Analysis
Transaction
123
Serial Exercise
(20-30 min.)
E 2-36
Reqs. 1 and 3
Cash
Mar. 2
9
Bal.
7,000 Mar. 2
1,200
3
12
4,900
Accounts Receivable
600
2,400
300
Mar. 18
Supplies
Mar. 5
Equipment
500
Mar. 3
Furniture
Mar. 4
2,400
Accounts Payable
7,500
Mar. 4
5
Bal.
Common Stock
Mar. 2
Dividends
7,000
Service Revenue
124
2,100
Rent Expense
7,500
500
8,000
Mar. 9
18
Bal.
1,200
2,100
3,300
Mar. 2
600
Utilities Expense
Mar. 12
300
(continued)
E 2-36
Req. 2
Journal
DATE
DEBIT
Mar. 2 Cash..
Common Stock..
7,000
2 Rent Expense.
Cash.
600
3 Equipment...
Cash.
2,400
4 Furniture..
Accounts Payable.
7,500
5 Supplies...
Accounts Payable.
500
Chapter 2
Analysis
Transaction
CREDIT
7,000
600
2,400
7,500
500
125
126
9 Cash..
Service Revenue...
1,200
12 Utilities Expense
Cash.
300
18 Accounts Receivable
Service Revenue...
2,100
1,200
300
2,100
(continued)
E 2-36
Req. 3
Jerome Smith, Certified Public Accountant, P.C.
Trial Balance
March 18, 2010
ACCOUNT
DEBIT
CREDIT
Cash... $ 4,900
Accounts receivable..
2,100
Supplies
500
Equipment
2,400
Furniture...
7,500
Accounts payable..
$ 8,000
Common stock
7,000
Dividends..
Service revenue..
3,300
Rent expense..
600
Utilities expense.
300
Salary expense
Total...
$18,300
$18,300
Chapter 2
Analysis
Transaction
127
Challenge Exercises
(20-40 min.)
E 2-37
11,000
83,000 Oct. payments
6,000
X = $88,000
28,000
47,000 Oct. collections
26,000
$28,000 + $47,000 X
128
X = $49,000
= $26,000
X = $49,000
Notes Payable
Sept. 30 Bal.
15,000
March
March
X = 16,000 payments on notes X new borrowing 24,000
Mar. 31 Bal.
23,000
$15,000 + $24,000 X = $23,000
X = $16,000
Chapter 2
Analysis
Transaction
129
(20-30 min.)
E 2-38
Req. 1
Circle 360, Inc.
Trial Balance
October 31, 2010
Cash...
Accounts receivable..
Land...
Accounts payable..
Note payable
Common stock
Retained earnings..
Service revenue..
Salary expense
Advertising expense.
Totals.
$ 4,400
6,800
34,000
$ 6,300
5,400
20,700
7,800
9,000
3,200
1,000 _______
$49,400 $49,200
Out of balance
by $200
Chapter 2
Analysis
Transaction
131
(continued)
E 2-38
Req. 2
a. Total assets
b. Total liabilities
c. Net income
_____
* $6,800 $200 = $6,600 (Req. 1)
132
(10-15 min.)
Nashua Co.:
Income statement
Medical expense..
Balance sheet
Cash
Accounts payable
Ditka Hospital:
Income statement
Service revenue..
Balance sheet
Cash
Accounts receivable..
E 2-39
September
$46,000
October
$ -0-
Sept. 30
$57,000
46,000
Oct. 31
$23,000*
12,000**
September
$46,000
October
$ -0-
Sept. 30
$ -046,000
Oct 31
$34,000
12,000**
Explanation:
Nashuas expense is Ditkas revenue.
Nashuas cash payment is Ditkas cash receipt.
Nashuas account payable is Ditkas account receivable.
__________
*$57,000 $34,000 = $23,000
**$46,000 $34,000 = $12,000
Chapter 2
Analysis
Transaction
133
Quiz
Q2-40
Q2-41
Q2-42
Q2-43
Q2-44
Q2-45
Q2-46
Q2-47
Q2-48
Q2-49
Q2-50
Q2-51
Q2-52
Q2-53
Q2-54
Q2-55
Q2-56
Q2-57
Q2-58
Q2-59
134
d
d
d
d
c
a
d
d
c
a
d
d
b
a
b
c
d
a
a
c
Problems
Group A
(15-30 min.)
P 2-60A
Dear Rhonda,
This trial balance lists the accounts of the company, along
with their balances at December 31, 2010. The trial balance
provides the data for computing total assets, total liabilities,
and net income or net loss.
Amusement Specialties
a. Total assets
b. Total liabilities
c. Net income
$61,000 $8,000)
Transaction
135
136
(45-60 min.)
P 2-61A
Req. 1
Analysis of Transactions
ASSETS
Cash
Bal.
a)
b)
c)
d)
e)
f)
g)
h)
Bal.
Accounts
+ Receivable + Supplies +
1,150
9,200
6,700
(4,500)
1,350
700
(700)
2,900
(1,100)
(1,000)
(1,500)
9,650
Accounts
= Payable +
Land
11,900
____
600
7,600
STOCKHOLDERS EQUITY
Common
Stock +
Retained
Earnings
4,400
9,200
2,400
6,700
Type of Stockholders
Equity Transaction
Issued stock
Service revenue
(4,500)
600
600
____
3,550
LIABILITIES
11,900
3,700
Chapter 2
13,600
Transaction Analysis
2,900
(1,100)
(1,000)
(1,500)
8,400
Service revenue
Rent expense
Advertising expense
Dividends
137
$25,700
138
$25,700
(continued)
P 2-61A
Req. 2
Mason Resources, Inc.
Income Statement
Month Ended May 31, 2010
Revenues:
Service revenue ($6,700 + $2,900)...
Expenses:
Rent expense
Advertising expense...
Total expenses.
Net income.
$9,600
$1,100
1,000
2,100
$7,500
Req. 3
Mason Resources, Inc.
Statement of Retained Earnings
Month Ended May 31, 2010
Retained earnings, May 1, 2010..............
Add: Net income..
Less: Dividends.
Retained earnings, May 31, 2010..
Chapter 2
Analysis
$ 2,400
7,500
9,900
(1,500)
$ 8,400
Transaction
139
(continued)
P 2-61A
Req. 4
Mason Resources, Inc.
Balance Sheet
May 31, 2010
ASSETS
LIABILITIES
Cash.
$9,650 Accounts payable $ 3,700
Accounts receivable
3,550
STOCKHOLDERS
Supplies..
600
EQUITY
Land.
11,900 Common stock.
13,600
Retained earnings
8,400
Total stockholders equity.
22,000
Total liabilities and
Total assets $25,700
stockholders' equity.. $25,700
140
(30-40 min.)
P 2-62A
Req. 1
Journal
ACCOUNT TITLES
DEBIT
a.
Cash.
Common Stock.
9,200
b.
Cash.
Service Revenue..
6,700
c.
Accounts Payable
Cash
4,500
d.
Supplies..
Accounts Payable
600
e.
Cash.
Accounts Receivable..
700
f.
Accounts Receivable..
Service Revenue..
2,900
g.
Rent Expense
Advertising Expense...
Cash
1,100
1,000
Chapter 2
Analysis
Transaction
CREDIT
9,200
6,700
4,500
600
700
2,900
2,100
141
h.
142
Dividends...
Cash
1,500
1,500
(continued)
P 2-62A
Reqs. 2 and 3
Cash
Accounts
Receivable
1,150 4,500
9,200 2,100
6,700 1,500
700
9,650
1,350
2,900
3,550
Accounts
Payable
Common
Stock
4,500 7,600
600
3,700
Service
Revenue
6,700
2,900
9,600
700
Supplies
600
Rent Expense
1,100
11,900
Retained
Earnings
4,400
9,200
13,600
2,400
Dividends
1,500
Advertising
Expense
1,000
Chapter 2
Analysis
Land
Transaction
143
144
(40-50 min.)
P 2-63A
Req. 1
Classification of Transactions
Nov. 4
10
11
12
18
21
25
30
Chapter 2
Analysis
Transaction
145
(continued)
P 2-63A
Req. 2
Analysis of Transactions
ASSETS
Date
LIABILITIES
Accounts
Office
Accounts
Cash + Receivable+ Supplies + Equipment = Payable +
Nov. 4*
5
57,000
6
(600)
7 (12,000)
10*
11*
12*
18
21
(4,000)
25
(1,300)
30
(1,900)
Bal.
37,200
146
20,000
3,500
Common
Stock +
20,000
Issued stock
8,000
3,500
(4,000)
___
600
STOCKHOLDERS EQUITY
57,000
600
3,500
4,000
57,000
(1,300)
(1,900)
300
Service revenue
Rent expense
Dividends
$61,300
$61,300
_____
Chapter 2
Transaction Analysis
147
(continued)
P 2-63A
Req. 3
Journal
DATE
Nov.
DEBIT
5 Cash.. 57,000
Common Stock..
Issued stock to owner.
6 Supplies...
Cash.
Purchased supplies.
600
148
18 Accounts Receivable
Service Revenue...
Performed service on account.
3,500
21 Accounts Payable.
Cash.
Paid on account.
4,000
25 Rent Expense.
1,300
CREDIT
57,000
600
12,000
8,000
3,500
4,000
Cash.
Paid rent.
30 Dividends.
Cash.
Paid dividend.
Chapter 2
Analysis
1,300
1,900
Transaction
1,900
149
(15-20 min.)
P 2-64A
Req. 1
Journal
DATE
Dec.
ACCOUNT TITLES
DEBIT
CREDIT
1 Cash.. 26,000
Common Stock..
26,000
5 Rent Expense.
Cash..
1,100
9 Land.. 38,500
Cash..
Notes Payable....
150
10 Supplies
Accounts
Payable.
1,700
19 Accounts Payable.
Cash..
600
1,100
8,500
30,000
1,700
600
22 Cash.. 20,000
Notes Payable....
20,000
31 Cash.. 12,000
Accounts Receivable... 8,000
Service Revenue
20,000
31 Salary Expense..
Advertising Expense
Utilities Expense....
Cash..
2,400
1,500
1,400
31 Dividends.
Cash..
6,500
Chapter 2
Analysis
Transaction
5,300
6,500
151
(continued)
Req. 2
Cash
26,000
20,000
12,000
1,100
8,500
600
5,300
6,500
36,000
Accounts Payable
600
1,700
1,100
Notes Payable
30,000
20,000
50,000
Req. 3
Cash: $36,000
152
P 2-64A
Chapter 2
Analysis
Transaction
153
(50-60 min.)
P 2-65A
Req. 1
Journal
DATE
Jan.
154
ACCOUNT TITLES
DEBIT
2 Cash 39,000
Common Stock
3 Supplies.
Equipment.
Accounts Payable...
200
3,100
4 Cash
Service
Revenue.
1,600
7 Land
Cash...
27,000
11 Accounts Receivable..
Service Revenue.
900
16 Accounts Payable
Cash
3,100
17 Utilities Expense..
Cash
170
CREDIT
39,000
3,300
1,600
27,000
900
3,100
170
18 Cash
Accounts Receivable.
Chapter 2
Analysis
450
Transaction
450
155
(continued)
P 2-65A
Req. 1
Journal
DATE
ACCOUNT TITLES
DEBIT
190
29 Cash..
Service Revenue
1,400
31 Salary Expense..
Cash..
2,400
31 Dividends.
Cash..
3,000
156
CREDIT
190
1,400
2,400
3,000
(continued)
P 2-65A
Req. 2
Cash
Accounts Receivable
3,000
6,590
Jan. 11
Bal.
Jan. 3
Bal.
200
200
Land
3,100
3,100
Jan. 7
Bal.
Accounts Payable
Jan. 16 3,100 Jan. 3
Bal.
450
Supplies
Equipment
Jan. 3
Bal.
900 Jan. 18
450
27,000
27,000
Common Stock
3,300
200
Jan. 2 39,000
Bal.
39,000
Dividends
Jan. 31 3,000
3,000
Service Revenue
Jan. 4
11
Salary Expense
1,600
900
Jan. 31 2,400
Bal.
2,400
Chapter 2
Analysis
Transaction
157
29
Bal.
1,400
3,900
Utilities Expense
Jan. 17
22
Bal.
158
170
190
360
(continued)
P 2-65A
Req. 3
Simmons Heating and Air Conditioning, Inc.
Trial Balance
January 31, 2009
ACCOUNT
DEBIT
CREDIT
Cash... $ 6,590
Accounts receivable..
450
Supplies
200
Equipment
3,100
Land...
27,000
Accounts payable..
$ 200
Common stock
39,000
Dividends..
3,000
Service revenue..
3,900
Salary expense
2,400
Utilities expense.
360
Total... $43,100
$43,100
Req. 4
Total resources (assets)
Analysis
Transaction
159
160
(40-50 min.)
P 2-66A
Reqs. 1 and 2
Cash
(a)
(b)
(f)
(j)
Bal.
28,000
37,300
1,600
1,200
30,600
(c)
(e)
(h)
(k)
Accounts Receivable
33,000
2,500
100
1,900
(g)
Bal.
Supplies
(d)
Bal.
500
500
(c)
Bal.
33,000
33,000
Accounts Payable
52,000
52,000
(h)
Note Payable
(b)
Bal.
100 (d)
(i)
Bal.
500
800
1,200
Common Stock
37,300
37,300
(a)
Bal.
Chapter 2
Analysis
1,200
Music Equipment
Building
(a)
Bal.
3,200 (j)
2,000
Transaction
80,000
80,000
161
Service Revenue
(f)
(g)
Bal.
162
1,600
3,200
4,800
(continued)
Salary Expense
(e)
Bal.
2,500
2,500
Rent Expense
(k)
Bal.
Advertising Expense
(k)
Bal.
700
700
1,200
1,200
Utilities Expense
(i)
Bal.
800
800
Chapter 2
Analysis
P 2-66A
Transaction
163
(continued)
P 2-66A
Req. 3
Stein Services Corporation
Trial Balance
November 30, 2010
ACCOUNT
DEBIT
Cash... $ 30,600
Accounts receivable..
2,000
Supplies
500
Music equipment...............
33,000
Building.
52,000
Accounts payable..
Note payable
Common stock
Service revenue..
Salary expense
2,500
Rent expense...
1,200
Advertising expense..
700
Utilities expense.
800
Total... $123,300
164
CREDIT
1,200
37,300
80,000
4,800
$123,300
Problems
Group B
(15-30 min.)
P 2-67B
Dear Friend,
This trial balance lists the accounts of the company, along
with their balances at December 31, 2010 The trial balance
provides the data to prepare a balance sheet and an income
statement.
Transaction
165
166
(45-60 min.)
P 2-68B
Req. 1
Analysis of Transactions
ASSETS
Cash
Bal.
a)
b)
c)
d)
e)
f)
g)
i)
Bal.
1,450
8,600
6,500
(4,700)
200
(900)
(800)
(2,300)
8,050
Accounts
+ Receivable + Supplies +
1,650
LIABILITIES
Accounts
= Payable +
Land
11,500
7,800
Common
Stock +
Retained
Earnings
4,000
8,600
2,800
(200)
2,700
4,150
6,500
Type of Stockholders
Equity Transaction
Issued stock
Service revenue
(4,700)
600
600
___
600
STOCKHOLDERS EQUITY
11,500
3,700
Chapter 2
12,600
Transaction Analysis
2,700
(900)
(800)
(2,300)
8,000
Service revenue
Rent expense
Advertising expense
Dividends
167
$24,300
168
$24,300
(continued)
P 2-68B
Req. 2
Rodriguez Resources, Inc.
Income Statement
Month Ended May 31, 2010
Revenues:
Service revenue ($6,500 + $2,700).
Expenses:
Rent expense...
Advertising expense..
Total expenses
Net income
9,200
$900
800
1,700
$7,500
Req. 3
Rodriguez Resources, Inc.
Statement of Retained Earnings
Month Ended May 31, 2010
Retained earnings, May 1, 2010
Add: Net income
Less: Dividends..
Retained earnings, May 31, 2010.
Chapter 2
Analysis
$2,800
7,500
10,300
(2,300)
$8,000
Transaction
169
(continued)
P 2-68B
Req. 4
Rodriguez Resources, Inc.
Balance Sheet
May 31, 2010
ASSETS
Cash.
Accounts receivable
Supplies..
Land.
$8,050
4,150
600
11,500
Total assets...
$24,300
170
LIABILITIES
Accounts payable. $ 3,700
STOCKHOLDERS
EQUITY
Common stock..
12,600
Retained earnings....
8,000
Total stockholders equity.
20,800
Total liabilities and
stockholders' equity... $24,300
(30-40 min.)
P 2-69B
Req. 1
Journal
ACCOUNT TITLES AND EXPLANATION
a. Cash.
Common Stock.
8,600
b. Cash
Service Revenue..
6,500
c. Accounts Payable ..
Cash
4,700
d. Supplies
Accounts Payable..
600
e. Cash.
Accounts Receivable.
200
f.
Accounts Receivable..
Service Revenue..
2,700
g. Rent Expense
Advertising Expense..
Cash
900
800
Chapter 2
Analysis
DEBIT
Transaction
CREDIT
8,600
6,500
4,700
600
200
2,700
1,700
171
i.
172
Dividends...
Cash
2,300
2,300
(continued)
P 2-69B
Reqs. 2 and 3
Cash
1,450 4,700
8,600
900
6,500
800
200 2,300
Accounts
Receivable
1,650
2,700
4,150
200
Supplies
600
Land
11,500
8,050
Accounts
Payable
Common
Stock
4,700 7,800
600
3,700
Service
Revenue
6,500
2,700
9,200
Retained
Earnings
4,000
8,600
12,600
Rent Expense
900
2,800
2,300
Advertising
Expense
800
Chapter 2
Analysis
Dividends
Transaction
173
174
(40-50 min.)
P 2-70B
Req. 1
Classification of Transactions
Nov
10
11
12
18
21
25
30
Chapter 2
Analysis
Transaction
175
(continued)
P 2-70B
Req. 2
Analysis of Transactions
ASSETS
Cash
+
Date
Nov. 4*
5
59,000
6
(500)
7 (12,000)
10*
11*
12*
18
21
(4,250)
25
(500)
30
(1,700)
Bal.
40,050
176
= LIABILITIES
Accounts
Office
Accounts
Receivable + Supplies + Equipment= Payable +
STOCKHOLDERS EQUITY
Common
Retained
Stock + Earnings
59,000
500
20,500
3,000
3,000
20,500
Issued stock
8,500
3,000
(4,250)
___
500
Type of Stockholders
Equity Transaction
4,250
59,000
Service revenue
$64,050
$64,050
_____
Chapter 2
Transaction Analysis
177
(continued)
P 2-70B
Req. 3
Journal
DATE
Nov.
DEBIT
CREDIT
5 Cash.. 59,000
Common Stock..
Issued stock to owner.
59,000
7 Supplies...
Cash.
Purchased supplies.
500
178
23 Accounts Receivable
Service Revenue...
Performed service on account.
3,000
29 Accounts Payable.
Cash.
Paid on account.
4,250
30 Rent Expense.
500
500
12,000
8,500
3,000
4,250
Cash.
Paid rent.
31 Dividends.
Cash.
Paid dividend.
Chapter 2
Transaction Analysis
500
1,700
1,700
179
(15-20 min.)
Req. 1
DATE
Dec
Journal
ACCOUNT TITLES
DEBIT
CREDIT
1 Cash.. 28,000
Common Stock..
28,000
5 Rent Expense.
Cash
2,000
9 Land.. 44,500
Cash.
Notes Payable
180
P 2-71B
10 Supplies...
Accounts Payable.
1,700
19 Accounts Payable.
Cash.
800
2,000
11,500
33,000
1,700
800
22 Cash. 18,500
Notes Payable..
18,500
31 Cash. 14,500
Accounts Receivable..
4,500
Service Revenue.
19,000
31 Salary Expense..
Advertising Expense
Cash.
2,100
1,000
30 Dividends
Cash.
2,000
(continued)
3,100
2,000
P 2-71B
Req. 2
Cash
28,000
18,500
14,500
2,000
11,500
800
2,100
1,000
2,000
41,600
Accounts Payable
800
Notes Payable
Chapter 2
Transaction Analysis
1,700
900
33,000
18,500
181
51,500
Req. 3
Cash: $41,600
Total amount owed: $52,400 ($900 + $51,500)
182
(50-60 min.)
P 2-72B
Req. 1
Journal
DATE
Jan.
ACCOUNT TITLES
DEBIT
2 Cash. 33,000
Common Stock.
3 Supplies..
Equipment..
Accounts Payable
400
2,900
4 Cash.
Service
Revenue..
1,700
7 Land.
Cash
22,000
11 Accounts Receivable..
Service Revenue..
1,100
16 Accounts Payable
Cash
2,900
17 Utilities Expense..
Cash
130
Chapter 2
Transaction Analysis
CREDIT
33,000
3.300
1,700
22,000
1,100
2,900
1300
183
18 Cash.
Accounts Receivable..
184
550
550
(continued)
P 2-72B
Req. 1
Journal
DATE
ACCOUNT TITLES
DEBIT
150
29 Cash
Service Revenue.
1,100
31 Salary Expense
Cash...
2,300
31 Dividends..
Cash...
2,900
Chapter 2
Transaction Analysis
CREDIT
150
1,100
2,300
2,900
185
(continued)
P 2-72B
Req. 2
Cash
Accounts Receivable
2,900
5,970
Jan. 11
Bal.
Sept. 3
Bal.
2,900
2,900
186
2,900
Jan. 7
Bal.
Jan.3
Bal.
400
400
Land
Accounts Payable
Jan. 16
550
Supplies
Equipment
Jan. 3
Bal.
1,100 Jan. 18
550
22,000
22,000
Common Stock
3,300
400
Jan. 2
Bal.
33,000
33,000
Dividends
Jan. 31
Bal.
Service Revenue
2,900
2,900
Jan. 4
11
29
Bal.
Chapter 2
Transaction Analysis
1,700
1,100
1,100
3,900
187
(continued)
Req. 2
Salary Expense
Jan. 31
Bal.
2,300
2,300
Utilities Expense
Jan. 17
22
Bal.
188
130
150
280
P 2-72B
(continued)
P 2-72B
Req. 3
OShea Plumbing, Inc.
Trial Balance
January 31, 2009
ACCOUNT
DEBIT
Cash... $ 5,970
Accounts receivable..
550
Supplies
400
Equipment...
2,900
Land...
22,000
Accounts payable..
Common stock
Dividends..
2,900
Service revenue..
Salary expense
2,300
Utilities expense.
280
Total... $37,300
CREDIT
400
33,000
3,900
$37,300
Req. 4
Total resources (assets)
Transaction Analysis
189
190
(40-50 min.)
P 2-73B
Reqs. 1 and 2
Cash
(a)
(b)
(f)
(j)
Bal.
32,000
35,800
1,700
1,600
34,700
Accounts Receivable
(c)
(e)
(h)
(k)
32,000
2,300
100
2,000
(g)
Bal.
Supplies
(d)
Bal.
200
200
(c)
Bal.
32,000
32,000
Accounts Payable
52,000
52,000
(h)
Note Payable
(b)
Bal.
1,600
Music Equipment
Building
(a)
Bal.
2,800 (j)
1,200
100 (d)
(i)
Bal.
200
900
1,000
Common Stock
35,800
35,800
(a)
Bal.
84,000
84,000
Service Revenue
Chapter 2
Transaction Analysis
191
(f)
(g)
Bal.
192
1,700
2,800
4,500
(continued)
Salary Expense
(e)
Bal.
Advertising Expense
2,300
(i)
2,300
(k)
Bal.
Rent Expense
(k)
Bal.
P 2-73B
900
800
1,700
Utilities Expense
1,200
1,200
Chapter 2
Transaction Analysis
193
(continued)
P 2-73B
Req. 3
Silver Entertainment Corporation
Trial Balance
March 31, 2010
ACCOUNT
DEBIT
CREDIT
Cash $ 34,700
Accounts receivable...
1,200
Supplies.
200
Music equipment.....
32,000
Building..
52,000
Accounts payable
$ 1,000
Note payable.
35,800
Common stock.
84,000
Service revenue
4,500
Salary expense.
2,300
Advertising expense...
1,700
Rent expense
1,200
Utilities expense.. _______
_______
Total. $125,300
$125,300
194
Decision Cases
(40-50 min.) Decision Case 1
Reqs. 1 and 2
Cash
(a)
(b)
(h)
(i)
5,000
5,000
2,500
1,200
Bal.
6,400
Accounts Receivable
(c)
(d)
(f)
(f)
(j)
1,300
1,800
2,000
1,200
1,000
(g)
Bal.
Supplies
(c)
1,300
(e)
1,000 (e)
Bal.
1,200
Furniture
Accounts Payable
(j)
7,000 (i)
5,800
4,400
Notes Payable
4,400
3,400
(b)
5,000
Common Stock
(a)
5,000
Service Revenue
(g)
Chapter 2
Salary Expense
7,000
(f)
Transaction Analysis
2,000
195
(h)
Bal.
2,500
9,500
Advertising Expense
(d)
196
1,800
Rent Expense
(f)
1,200
Chapter 2
Transaction Analysis
CREDIT
$ 3,400
5,000
5,000
9,500
$22,900
197
$9,500
$2,000
1,800
1,200
5,000
$4,400
198
$42,000
22,000
6,000
5,000
33,000
Net income
$ 9,000
ASSETS
Cash..
Food inventory...
Furniture...
Total assets.
_____
Chapter 2
Transaction Analysis
199
200
Ethical Issue 1
1. The ethical issue is whether these alternatives of
financing the business are proper from an economic,
legal, and ethical standpoint.
2. The stakeholders are Scruffy Murphy, the bank, potential
new creditors, and the friend who may become a
stockholder.
Option 1:
Cash. 100,000
Common Stock
100,000
Option 2:
Land. 100,000
Common Stock
100,000
100,000
Transaction Analysis
202
Ethical Issue 2
Part A.
1. The ethical issue is whether you should question your
grade, which is higher than you expected. Your choices are (a)
discuss the grade with the professor; and (b) do not discuss
the grade with the professor.
2, 3. Stakeholders are you, the professor, the other students in
the class, and the university. The possible consequences to
you of discussing the grade with the professor is that it may
lead to the discovery that the professor made a mistake in
calculating the grade, which may lead to a downward
adjustment. While this could possibly have adverse economic
consequences (i.e., perhaps loss of scholarship if the is
substantially lowered), it is unlikely that a letter-grade drop in
one course would have such an impact on grade point
average as to cause loss of a scholarship. There is no legal
consequence to reporting a grade that is too high. The ethical
consequence is generally positive on all concerned, as it
leads to clarification of the true grade.
Chapter 2
Transaction Analysis
203
Part B.
1. The ethical issue in this case is whether you should
question your grade, which is now lower than you expected.
Your choices are (a) discuss the grade with the professor; and
(b) do not discuss the grade with the professor.
2, 3. Like part a, the stakeholders are you, the professor, the
other students in the class, and the university. The possible
consequences to you of discussing the grade with the
professor is that it may lead to the discovery that the
professor made a mistake in calculating the grade, which may
lead to an upward adjustment. This could have positive
economic consequences (i.e., perhaps keeping a scholarship).
Like part a, the ethical consequence of this action is generally
positive on all concerned, as it leads to clarification of the true
grade.
4. Most students would probably respond take it to the
professor. But shouldnt we be just as concerned about
204
Part C.
Both course grades and financial statements report results
that people use in order to make decisions that can carry both
positive and negative consequences. In both situations, it is
important that the user receive relevant information, and that
the information faithfully represent facts as they actually
occurred.
Cash
2,539 (c) 15,095
3,428 (a)
Chapter 2
705
Inventories
1,200
14,896
205
(f)
59 (g)
247
103
(i)
827
1,399
2,769
Net Sales
(Revenue)
Other Assets
(i)
103 (h)
(a)
59
(d
19,166
Cost of Sales
Operating Expenses
(e)
3,428
247
206
14,896
Req. 2
(Millions)
19,166
19,166
a.
b.
Cash.....
Accounts receivable, net...
19,044
c.
Inventories..
Cash.
15,095
d.
Cost of Sales..
Inventories.
14,896
e.
Operating Expenses.
Cash.
3,428
f.
Cash..
Non-operating income....
59
g.
247
h.
i.
Other assets...
Cash
103
Chapter 2
Transaction Analysis
19,044
15,095
14,896
3,428
59
247
103
207
Net sales
Cost of sales..
Gross Profit..
Operating (expenses).
Income from operations..
Non-operating income, net...
Income before income taxes ....
Provision for income taxes
208
(Millions)
$19,166
14,896
$4,270
(3,428)
842
59
901
(247)
Chapter 2
Transaction Analysis
(9)
$645
209
(Millions)
$
59
5,437
(X)
50
Chapter 2
Transaction Analysis
211
2007
$5,437
($313)
(5.4%)
2006
$5,750
$97
1.7%
2005
$5,653
$51
($200)
(79.7%)
$251
($13)
(4.9%)
$264
212
Group Projects
Student responses will vary.
Chapter 2
Transaction Analysis
213