Acc 205 week one exercise assignment is absolutely free. Everyone needs a feebie every now and then. So, if your stuck on week one of Accounting 205 here are the answers.
Acc 205 week one exercise assignment is absolutely free. Everyone needs a feebie every now and then. So, if your stuck on week one of Accounting 205 here are the answers.
Acc 205 week one exercise assignment is absolutely free. Everyone needs a feebie every now and then. So, if your stuck on week one of Accounting 205 here are the answers.
Rachel Landrum ACC205: Principles of Accounting I (BAG1417B) Instructor: Carolyn Woods April 27, 2014
BASIC ACCOUNTING 2 Week One Exercise Assignment Basic Accounting Equations
1. Recognition of normal balances The following items appeared in the accounting records of Triguero's, a retail music store that also sponsors concerts. Classify each of the items as an asset, liability; revenue; or expense from the company's viewpoint. Also indicate the normal account balance of each item.
a. Amounts paid to a mall for rent. (Expense, normal debit balance) b. Amounts to be paid in 10 days to suppliers. (Liability, normal credit balance) c. A new fax machine purchased for office use. (Asset, normal debit balance) d. Land held as an investment. (Asset, normal debit balance) e. Amounts due from customers. (Asset, normal debit balance) f. Daily sales of merchandise sold. (Revenue, normal credit balance) g. Promotional costs to publicize a concert. (Expense, normal debit balance) h. A long-term loan owed to Citizens Bank. (Liability, normal credit balance) i. The albums, tapes, and CDs held for sale to customers. (Asset, normal debit balance)
2. Basic journal entries The following transactions pertain to the Jennifer Royall Company:
May 1 Jennifer Royall invested cash of $25,000 and land valued at $15,000 into the business. Cash $25,000 (debit) Land $15,000 (debit) Owners equity $40,000 (credit) 5 Provided $1,000 of services to Jason Ratchford, a client, on account. Accounts receivable $1,000 (debit) Revenue $1,000 (credit) (Services on Account) 9 Paid $1,250 of salaries to an employee. BASIC ACCOUNTING 3 Cash $1,250 (credit) Wage expense $1,250 (debit) (paid wages to employee 5/9) 14 Acquired a new computer for $4,200, on account. Computer equipment $4,200 (debit) Accounts payable $4,200 (credit) (purchased new computer on account) 20 Collected $800 from Jason Ratchford for services provided on May 5. Cash $800 (debit) Accounts receivable $800 (credit) (collected money on account for services on May 5 from Jason Ratchford) 24 Borrowed $2,500 from BestBanc by securing a six-month loan. Cash $2,500 (debit) Accounts payable $2,500 (credit) (Secured a six month loan for $2,500 at BestBanc) Prepare journal entries (and explanations) to record the preceding transactions and events. 3. Balance sheet preparation. The following data relate to Preston Company as of December 31, 20XX:
Building $40,000 Accounts receivable $24,000 Cash 21,000 Loan payable 30,000 J. Preston, Capital 65,000 Land 21,000 Accounts payable ? (11,000)
Prepare a balance sheet as of December 31, 20XX. (See Exhibit 1.1 and 1.4)
Practice 3 Balance Sheet
Current assets: 2007 2008
Cash
21,000.00
-
Investments
-
-
Inventories BASIC ACCOUNTING 4 - -
Accounts receivable
24,000.00
-
Pre-paid expenses
-
-
Other
-
-
Total current assets
45,000.00
-
Fixed assets: 2007 2008
Building
40,000.00
-
Land
21,000.00
-
Equity and other investments
-
-
Less accumulated depreciation
-
-
Total fixed assets
61,000.00
-
Other assets: 2007 2008
Goodwill
-
Total other assets
-
-
Total assets 106,000.00 -
Liabilities and owner's equity
Current liabilities: 2007 2008
Accounts payable
11,000.00
-
Accrued wages
-
-
Accrued compensation
-
-
Income taxes payable
-
-
-
-
Other
-
-
Total current liabilities
11,000.00
-
Long-term liabilities: 2007 2008
Loan payable BASIC ACCOUNTING 5 30,000.00 -
Total long-term liabilities
30,000.00
-
Owner's equity: 2007 2008
J. Preston, Capital
65,000.00
-
Accumulated retained earnings
-
-
Total owner's equity
65,000.00
-
Total liabilities and owner's equity 106,000.00 -
4. Basic transaction processing. On November 1 of the current year, Richard Simmons established a sole proprietorship. The following transactions occurred during the month:
1: Simmons invested $32,000 into the business for $32,000 in common stock. 2: Paid $5,000 to acquire a used minivan. 3: Purchased $1,800 of office furniture on account. 4: Performed $2,100 of consulting services on account. 5: Paid $300 of repair expenses. 6: Received $800 from clients who were previously billed in item 4. 7: Paid $500 on account to the supplier of office furniture in item 3. 8: Received a $150 electric bill, to be paid next month. 9: Simmons withdrew $800 from the business. 10: Received $250 in cash from clients for consulting services rendered.
Instructions a. Arrange the following asset, liability, and owners equity elements of the accounting equation: Cash, Accounts Receivable, Office Furniture, Van, Accounts Payable, Common Stock/Dividends, and Revenues/Expenses. (See Exhibit 1.5) b. Record each transaction on a separate line. After all transactions have been recorded, compute the balance in each of the preceding items. c. Answer the following questions for Simmons. BASIC ACCOUNTING 6 (1) How much does the company owe to its creditors at month-end? On which financial statement(s) would this information be found? (2) Did the company have a good month from an accounting viewpoint? Briefly explain.
C) 1. Current liabilities equal $1,450 and would appear on the balance sheet. 2. Since revenue-expenses= net profit and since revenue is more than expenses by $450 and cash is positive this would qualify as a good month because the business made money.
5. Transaction analysis and statement preparation. The transactions that follow relate to Burton Enterprises for March 20X1, the companys first month of activity.
3/1 Joanne Burton, the owner, invested $20,000 cash into the business. 3/4 Performed $2,400 of services on account. BASIC ACCOUNTING 7 3/7 Acquired a small parcel of land by paying $6,000 cash 3/12 Received $500 from a client who was billed previously on March 4. 3/15 Paid $200 to the Journal Herald for advertising expense. 3/18 Acquired 9,000 of equipment from Park Central Outfitters by Paying
$7,000 down and agreeing to remit the balance owed within two weeks (A/P). 3/22 Received $300 cash from clients for services. 3/24 Paid $1,500 on account to Park Central Outfitters in partial settlement of
the balance due from the transaction on March 18. 3/28 Rented a car from United Car Rental for use on March 28. Total charges
amounted to $125, with United billing Burton for the amount due. 3/31 Paid $600 for March wages 3/31
Processed a $600 cash withdrawal (dividend) from the business for Joanne Burton
Instructions a. Determine the impact of each of the preceding transactions on Burtons assets, liabilities, and owners equity. See exhibit 1.5. Use the following format:
a. Record each transaction on a separate line. Calculate balances only after the last transaction has been recorded. b. Prepare an income statement, a statement of retained earnings, and a balance sheet, (See Exhibit 1.2, 1.3 and 1.4) Assets =Liabilities + Owners Equity Cash Acct. Rec. Land Equipment Acct. Payable Common Stock Dividends Revenue Exp. 3/1 20,000 20,000 3/4 2400 2400 3/7 -6,000 6,000 3/12 500 -500 3/15 -200 -200 3/18 -7,000 9,000 2,000 BASIC ACCOUNTING 8 3/22 300 300 3/24 -1,500 -1,500 3/28 125 -125 3/31 -600 -600 3/31 -600 -600 Total 4,900 1,900 6,000 9,000 625 19,400 1,775
Burton Enterprises Income Statement For the Period Ending March 20X1 Revenue 2700 Expense Advertising expense 200 Auto expense 125 Wage Expense 600 Total Expense 925 Total Net Income 1775
Barton Enterprises Statement of Retained Earnings For Period Ending March 20X1
Beginning Retained Earnings (3/1/20X1) $0 Add: Net Income $1775 Subtotal $1775
Barton Enterprises BASIC ACCOUNTING 9 Balance Sheet March 31, 20X1 Assets Cash 4,900 Acct. Rec. 1,900 Land 6,000 Equipment 9,000 Total Assets 21,800
Liabilities Accts. Pay 625 Total Liabilities 625
Owners Equity Common Stock 20,000 Retained Earnings 1,175 Total Owners equity 21,175 Total Liabilities and Owners Equity 21,800
6. Entry and trial balance preparation. Lee Adkins is a portrait artist. The following schedule represents Lees combined chart of accounts and trial balance as of May 31.
BASIC ACCOUNTING 10 Account number Account name Debit Credit 110 Cash $ 2,700 120 Accounts Receivable 12,100 130 Equipment and Supplies 2,800 140 Studio 45,000 210 Accounts Payable $2,600 310 Lee Adkins, Capital 57,400 320 Lee Adkins, Drawing 30,000 410 Professional Fee Revenue 39,000 510 Advertising Expense 2,300 520 Salaries Expense 2,100 540 Utilities Expense 2,000 $99,000 $99,000
The general ledger also revealed account no. 530, Legal and Accounting Expense. The following transactions occurred during June: 6/2 Collected $3,000 on account from customers 6/7 Sold 25% of the equipment and supplies to a young artist for $700 cash 6/10
Received a $300 invoice from the accountant for preparing last quarter's financial Statements. 6/15 Paid $1,900 to creditors on account.
6/27 Adkins withdrew $2,000 cash for personal use. 6/30 Billed a customer $3,000 for a portrait painted this month.
a. Record the necessary journal entries for June on page 2 of the companys general journal. (See Exhibit 2.6) b. Open running balance ledger T accounts by entering account titles, account numbers, and May 31 balances. (See exhibit 2.3 and 2.4) c. Post the journal entries to the T accounts. d. Prepare a trial balance as of June 30. (See exhibit 2.9)
Adkins Studio General Journal page 2 BASIC ACCOUNTING 11 Date 20XX Account Title and explanation Ref number Debit Credit 6/2
6/7
6/10
6/15
6/27
6/30
Cash Account Rec. Received cash on Accounts from customers Cash Equipment and Supplies Sold equip and supplies Cash Accounts Payable Received accounting services bill Accounts Payable Cash Paid creditors Lee Adkins, Drawing Cash Owner withdrew cash Accounts Receivable Professional Fee Revenue Billed customer for portrait 110 120
110 Cash $ 2,500 120 Accounts Receivable 12,100 BASIC ACCOUNTING 14 130 Equipment and Supplies 2,100 140 Studio 45,000 210 Accounts Payable $1,000 310 Lee Adkins, Capital 57,400 320 Lee Adkins, Drawing 32,000 410 Professional Fee Revenue 42,000 510 Advertising Expense 2,300 520 Salaries Expense 2,100 530 Legal and Accounting 300 540 Utilities Expense 2,000 $100,400 $100,400
7. Journal entry preparation. On January 1 of the current year, Peter Houston invested $80,000 cash into his company MuniServ. The cash was obtained from an owner investment by Peter Houston of $50,000 and a $30,000 bank loan. Shortly thereafter, the company acquired selected assets of a bankrupt competitor. The acquisition included land ($10,000), a building ($40,000), and vehicles ($10,000). MuniServ paid $45,000 at the time of the transaction and agreed to remit the remaining balance due of $15,000 (an account payable) by February 15.
During January, the company had additional cash outlays for the following items:
Purchases of store equipment $4,600 Note payment 500 Salaries expense 2,300 Advertising expense 700
The January utility bill of $200 was received on January 31 and will be paid next month. MuniServ rendered services to clients on account amounting to $9,400. All customers have been billed; by month end, $3,700 had been received in settlement of account balances.
Instructions BASIC ACCOUNTING 15 a. Present journal entries that reflect MuniServ's January transactions, including the $80,000 raised from the owner investment and loan. (See exhibit 2.6) MuniServ General Journal January 20XX Cash Notes Payable Peter Huston, Capital Invested money using capital and loan Land Building Vehicles Acquired assets Cash Accounts Payable Paid for part of acquisition got billed for rest of payment due 2/15 Store Equipment Cash Purchased store equipment Notes Payable Cash Paid note Salaries Exp. Cash Paid Salaries Advertising Exp. Cash Paid for Advertising Utility Expense Accounts payable Billed for Utility $80,000
10,000 40,000 10,000
4,600
500
2,300
700
200
30,000 50,000
45,000 15,000
4,600
500
2,300
700
200
BASIC ACCOUNTING 16 Accounts Receivable Revenue Rendered Services to clients on account Cash Account Receivables Received settlement on account balances 9,400
3,700
9,400
3,700
b. Compute the total debits, total credits, and ending balance that would be found in the company's Cash account. (Post to T Accounts, see exhibit 2.3 and 2.4)
MuniServ General Ledger Cash Account Date Description Debit Credit Balance 1/1/20XX Investment $80,000 $80,000 1/X/20XX Purchase Assets 45,000 35,000 1/X/20XX Purchased Store equipment 4,600 30,400 1/X/20XX Paid note 500 29,900 1/X/20XX Paid salaries 2,300 27,600 1/X/20XX Paid for advertising 700 26,900 1/X/20XX Received money on accounts 3,700 30,600 Total 83,700 53,100
c. Determine the amount that would be shown on the January 31 trial balance for Accounts Payable. Is the balance a debit or a credit?
MuniServ Trial Balance January 31, 20XX
Account Name Debit Credit Cash $30,600 BASIC ACCOUNTING 17 Accounts Receivable 5,700 Land 10,000 Building 40,000 Vehicle 10,000 Equipment 4,600 Accounts Payable 15,200 Note Payable 29,500 Peter Houston, Capital 50,000 Service Revenue 9,400 Salaries Expense 2,300 Advertising Expense 700 Utilities Expense 200 Total 104,100 104,100