496199857.

xls How to Use this File

1) Click on the 1) Journal Entries tab.

Analyze the impact the transaction has on the acounting
equation and input the amount of the impacts in
columns A, C, E and F.
Make sure that you input Revenues and Expenses in Column E
Make sure that you record any Investments or Withdrawals in Column F
Notice how the change in the accounting equation changes the journal entry
Select the proper accounts in columns H and I
Incorrect Answers will appear in RED

2) Click on Tab 2) Post to T accounts and notice the impact on the ledger.

3) Click on Tab 3) Unadjusted Trial Balance. The Unadjusted Trial Balance

contains the current balance from each of the T accounts.

4) Click on Tab 4) Financial Statements and notice the impact each journal entry
has had on the Income Statement, Statement of Owner's Equity and the Balance Sheet.

Note: Steps 3 and 4 are generally performed at the end of the period. They are included
here for instructional purposes.

© Kathleen R. O’Donnell
 496199857.xls 1) Journal Entries

Assets = Liabilities + Owner's Equity Journal Entries Assets

Income St. St. of O/E AccountAccount DEBIT CREDIT

a) - Wills began the business with an investment of $25,000 cash and a

building valued at $30,000
$ 25,000 = + $ 55,000 Cash $ 25,000 Assets Increase with Debits

$ 30,000 Building $ 30,000 Assets increase with debits

Journal Entry is correct! Please review impact on the Maury Wills, Capital $ 55,000
remaining tabs $ -

b) - Purchased office supplies on account, $2,100.

$ 2,100 = $ 2,100 + Office Supplies $ 2,100 Assets Increase with Debits
$ -
Journal Entry is correct! Please review impact on the Accounts Payable $ 2,100
remaining tabs $ -

c) - Paid $18,000 for office furniture.

$ (18,000) = + $ -
$ 18,000 Office Furniture $ 18,000 Assets increase with debits

Journal Entry is correct! Please review impact on the Cash $ 18,000

remaining tabs $ -

d) - Paid employee's salary, $2,200.

$ (2,200) = + $ (2,200) Salary Expense $ 2,200 Expenses Reduce Equity with Debits.
$ -
Journal Entry is correct! Please review impact on the Cash $ 2,200
remaining tabs $ -

e) - Performed consulting service on account, $5,100.

$ 5,100 = + $ 5,100 Accounts Receivable $ 5,100 Assets Increase with Debits
$ -
Journal Entry is correct! Please review impact on the Service Revenue $ 5,100
remaining tabs $ -

f) - Paid $800 of the account payable created in transaction b).

$ (800) = $ (800) + Accounts Payable $ 800 Liabilities decrease with debits
$ -
Journal Entry is correct! Please review impact on the Cash $ 800
remaining tabs $ -
g) - Received a $600 bill for advertising expense that will be paid in the
near future.
= $ 600 + $ (600) Advertising Expense $ 600 Expenses Reduce Equity with Debits.
$ -
Journal Entry is correct! Please review impact on the Accounts Payable $ 600
remaining tabs $ -
h) - Performed consulting service for customers and received cash,
$1,600.
$ 1,600 = + $ 1,600 Cash $ 1,600 Assets Increase with Debits
$ -
Journal Entry is correct! Please review impact on the Service Revenue $ 1,600
remaining tabs $ -

© Kathleen R. O’Donnell
 496199857.xls 1) Journal Entries

Assets = Liabilities + Owner's Equity Journal Entries Assets

i) - Received cash on account, $1,200.

$ 1,200 = + Cash $ 1,200 Assets Increase with Debits

$ (1,200) $ -
Journal Entry is correct! Please review impact on the $ -
remaining tabs Accounts Receivable $ 1,200

j-1) - Paid rent on equipment, $700 cash.

$ (700) = + $ (700) Rent Expense $ 700 Expenses Reduce Equity with Debits.
$ -
Journal Entry is correct! Please review impact on the Cash $ 700
remaining tabs $ -

j-2) - Paid utilities, $400 cash.

$ (400) = + $ (400) Utilities Expense $ 400 Expenses Reduce Equity with Debits.
$ -
Journal Entry is correct! Please review impact on the Cash $ 400
remaining tabs $ -

k) - Withdrew $5,000 for personal use.

$ (5,000) = + $ (5,000) Maury Wills, Withdrawals $ 5,000 Withdrawals Reduce Equity with debits
$ -
Journal Entry is correct! Please review impact on the Cash $ 5,000
remaining tabs $ -

© Kathleen R. O’Donnell
 496199857.xls 2) Post to T accounts

Assets = Liabilities = Owner's Equity

Cash Accounts Receivable Accounts Payable Notes Payable Maury Wills, Capital Maury Wills, Withdrawals
a) $ 25,000 $ - $ - $ - $ - $ - $ - $ - $ - $ 55,000 $ - $ -
b) $ - $ - $ - $ - $ - $ 2,100 $ - $ - $ - $ - $ - $ -
c) $ - $ 18,000 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
d) $ - $ 2,200 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
e) $ - $ - $ 5,100 $ - $ - $ - $ - $ - $ - $ - $ - $ -
f) $ - $ 800 $ - $ - $ 800 $ - $ - $ - $ - $ - $ - $ -
g) $ - $ - $ - $ - $ - $ 600 $ - $ - $ - $ - $ - $ -
h) $ 1,600 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
i) $ 1,200 $ - $ - $ 1,200 $ - $ - $ - $ - $ - $ - $ - $ -
j-1) $ - $ 700 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
j-2) $ - $ 400 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
k) $ - $ 5,000 $ - $ - $ - $ - $ - $ - $ - $ - $ 5,000 $ -
$ 700 $ - $ 3,900 $ - $ - $ 1,900 $ - $ - $ - $ 55,000 $ 5,000 $ -

Office Supplies Office Furniture $ - $ - $ - Service Revenue

b) $ 2,100 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
c) $ - $ - $ 18,000 $ - $ - $ - $ - $ - $ - $ - $ - $ -
e) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 5,100
h) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 1,600
$ 2,100 $ - $ 18,000 $ - $ - $ - $ - $ - $ - $ - $ - $ 6,700

Building $ - $ - $ - $ -
a) $ 30,000 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
12/30/99 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
$ 30,000 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
j-2)
$ - $ - Salary Expense Rent Expense
d) $ - $ - $ - $ - $ 2,200 $ - $ - $ -
j-1) $ - $ - $ - $ - $ - $ - $ 700 $ -
12/30/99 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
$ - $ - $ - $ - $ 2,200 $ - $ 700 $ -

© Kathleen R. O’Donnell
 496199857.xls 3) Unadjusted Trial Balance

Wills Environmental Consulting

Unadjusted Trial Balance
06/30/08
Debit Credit
Cash $ 700 $ -
Accounts Receivable $ 3,900 $ -
Office Supplies $ 2,100 $ -
Office Furniture $ 18,000 $ -
Building $ 30,000 $ -
Accounts Payable $ - $ 1,900
Notes Payable $ - $ -
Maury Wills, Capital $ - $ 55,000
Maury Wills, Withdrawals $ 5,000 $ -
Service Revenue $ - $ 6,700
Salary Expense $ 2,200 $ -
Rent Expense $ 700 $ -
Total $ 63,600 $ 63,600

© Kathleen R. O’Donnell
 496199857.xls 4) Financial Statements

Wills Environmental Consulting

Income Statement
For the month ended 06/30/08
Revenues:
Service Revenue $6,700
$0 $0
Total Revenues $6,700

Expenses:
Salary Expense $2,200
Rent Expense $700
Advertising Expense $600
Utilities Expense $400
$0 $0
$0 $0
Total Expenses $3,900
Net Income (Loss) $2,800

Wills Environmental Consulting

Statement of Owner's Equity
For the month ended 06/30/08
Beginning Capital $ -
Add: Investments by Owner $ 55,000
Plus: Net Income $2,800
Less: Withdrawals $ (5,000)
Ending Capital $52,800

Wills Environmental Consulting

Balance Sheet
As of 06/30/08
Assets: Liabilities
Cash $700 Accounts Payable $1,900
Accounts Receivable $3,900 Notes Payable $0
Office Supplies $2,100 $0 $0
Office Furniture $18,000 Total Liabilities $1,900
Building $30,000
$0 Owner's Equity
$0 Maury Wills, Capital $52,800
$0 $0
$0 Total Owner's Equity $52,800
Total Assets $54,700 Total Liabilities & Equity $54,700

© Kathleen R. O’Donnell