Asia Pacific College

SHS - ABM
Earl T. Escareal (Lecturer)

Fundamentals of Accounting, Business & Management

Final Output & Practice Set C

Solve and present the final answer as well as the appropriate solutions to the following problems.
Utilize Microsoft Office applications to assist you in processing and presenting the appropriate
information. Make sure to also defend and properly cite your sources for non-computational
responses.

1. On June 1, Donna Banhil established Solo Services, a voice consulting service. Enter the
following transactions for June in the table below using + and - to indicate increases or
decreases:

Transactions

a. Donna Banhil invested $15,000 in cash to open the business

b. Paid $1,500 for June's rent
c. Paid $4,500 for rent in advance, for the next three months (July-September)
d. Purchased office supplies for $800 on credit
e. Performed voice consulting services and immediately received $1,200 from clients.
f. Gave voice lessons to charge account clients and earned $9,000
g. Paid $100 cash for the supplies purchased earlier in the month
h. Received $1,000 in cash from credit clients billed earlier in the month

Can you think of what transactions the business may encounter once they begin
operations? What are and how can they deal with these?
2. The accounts with identification letters for Orly Delivery Services are listed below.

During the current month, the company completed the transactions listed below. Indicate
the appropriate journal entry that needs to be recorded for each transaction by providing
the account letter and amount. Some entries may need more than one debit and/or more
than one credit. The first transaction is completed as an example.

What industry is the business in and can you give examples of those already competing in
it? Is it still viable to enter into such and why?
3. On December 31, the Income Summary account of Coulter Company has a credit balance
of $20,000 after revenue of $89,000 and expenses of $69,000 were closed to the account.
Joseph Coulter, Drawing has a debit balance of $3,000 and Joseph Coulter, Capital has a
credit balance of $45,000. Record the journal entries necessary to complete closing the
accounts.

How much income did the company earn? Do you believe that the business would be
profitable in the next few periods? Why? What are the tell-tale signs or limitations of the
given information?
4. Read the description of the following transactions that are recorded during the accounting
period for Drummond Consulting Services. Determine the account to be debited and the
account to be credited.

a. Purchased merchandise with terms of net 30 days.

b. Returned some damaged merchandise to a supplier and received a credit memorandum.
c. Issued a check to a supplier as a payment on account.
d. Received an allowance for some merchandise that was slightly damaged but can be
sold at a reduced price. Received a credit memorandum.
e. Purchased merchandise with terms of 2/10, n/30. The supplier's invoice includes a
freight charge.

Most of the transactions here are related to purchases. Is this all the relevant transactions
that can be encountered in purchasing? If yes, what other transactions do you think this
kind of business may have? Cite examples and explain.
5. One of the customer accounts from the accounts receivable ledger for Rogers Flooring is
shown below. Explain each of the entries that have been posted to this customer's
subsidiary ledger account.

Do you think that there is a good relationship between the business and its customer or
could one be developed if ever there wasn’t any? Why? Also, how can it be done if there
wasn’t any in the first place?
6. The cash receipts journal for Able Company is shown below. Show how the amounts
would be posted to the general ledger accounts.

What do you think could be other transactions that the company may encounter and
receive cash in return? Explain why and how it happens.
7. Record the following transactions for the month of June 2016 on a cash payments
journal. Total, prove, and rule the cash payments journal as of June 30.

Similar to the receipt of such, what could be other matters that would require the
expenditure of cash for the company? Why and how does it happen?
8. On July 31, 2016, after one month of operation, the general ledger of Dakota Consulting
contained the following accounts and balances. The firm adjusts losses from
uncollectible accounts only at the end of the fiscal year. Monthly adjustments are listed
below. Prepare the Trial Balance, Adjusting Entries, and Adjusted Trial Balance.

Do you believe the figures show a good position for the company? Why do you think so
and what are the tell-tale signs or limitations of the given information?
9. On December 31, 2016, the Income Statement section of the worksheet is shown below.
The balance of Ally Logan's drawing account is $16,000. Record the necessary closing
entries on a general journal. Present the following information as well in an appropriate
Income Statement format.

How are the company’s finances? Would you be interested in investing into this kind of
business? Explain how and why you came to such a conclusion.
10. The adjusted trial balance data given below is from the Morgan Company's worksheet for
the year ended December 31, 2016. Prepare a proper income statement for the year
ended December 31, 2016. The expense accounts numbered 611-615 represent selling
expenses, and those numbered 621-631 represent general and administrative expenses.

What’s your take on the company’s performance? Would you be satisfied with such and
why? What would you do in their place?
11. The adjusted trial balance data given below is from Cameron White Company's
worksheet for the year ended December 31, 2016. The balance of the Notes Payable
account consists of notes that are due within a year. The mortgage extends for more than
a year. Prepare a proper balance sheet as of December 31, 2016. The ending capital for
the period from the statement of owner's equity is $56,150.

What’s your take on the company’s current status? Would you also be satisfied with such
and why? What would you do in their place?