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Accounting Principals 1

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Question;Week One Exercise Assignment;Basic Accounting Equations;1. Basic concepts.Jean's Marine Supply specializes in the sale of boating equipment and;acces?sories. Identify the items that follow as an asset (A), liability (L);revenue (R), or expense (E) from the firm's viewpoint.;a.;The inventory of boating supplies owned by the;company.;b.;Monthly rental charges paid for store space.;c.;A loan owed to Citizens Bank.;d.;New computer equipment purchased to handle;daily record keeping.;e.;Daily sales made to;customers.;f.;Amounts due from customers.;g.;Land owned by the company to be used as a;future store site.;h.;Weekly salaries paid to salespeople.;2.;Basic computations. The following selected balances were extracted;from the accounting records of Rossi;Enterprises on December 31, 20X3;Accounts;Payable $3,200 Interest Expense $2,500;Accounts;Receivable 14,800 Land 18,000;Auto;Expense 1,900 Loan Payable 40,000;Building;30,000 Tax Expense 3,300;Cash;7,400 Utilities Expense 4,100;Fee;Revenue;56,900 Wage Expense 37,500;a.;Determine Rossi?s total assets as of December 31.;b.;Determine the company?s total liabilities as of December 31.;c.;Compute 20X3 net income or loss.;3. Balance sheet preparation. The;following data relate to Preston Company as of December 31, 19XX;Building $44,000 Accounts;receivable $24,000;Cash 17,000 Loan payable 30,000;J. Preston, Owners Equity 65,000 Land 21,000;Accounts payable?;Prepare a balance sheet as of;December 31, 19XX. (See Exhibit 1.1 and 1.4);4. Basic transaction processing. On November 1 of the current year, Richard;Parker established a sole proprietorship. The following transactions occurred;during the month;1;Parker invested $19,000 into the business.;2;Paid $9,000 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;Parker withdrew $600 from the business.;10;Received $250 in cash from clients for consulting services rendered.;Instructions;a. Arrange the following;asset, liability, and owner?s equity elements of the account?ing equation;Cash, Accounts Receivable, Office;Furniture, Van, Accounts Payable, Investments/Withdrawals, and;Revenues/Expenses. (See Exhibit 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 Parker.;(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.;5. Transaction analysis and statement;preparation. The transactions that follow;relate;to Burton Enterprises for March 20X1, the company?s first month of activity.;3/1;Joanne Burton, the owner invested $20,000 into the business.;3/4: Performed;$2,400 of services on account.;3/7: Acquired a;small parcel of land by paying $6,000 cash.;3/12: Received $700;from a client, who was billed previously on March 4.;3/15: Paid $800 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 the next;2 weeks, (Accounts Payable).;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 $75, with United billing Burton for the amount due.;3/31: Paid $900 for;March wages.;3/31: Processed a;$600 cash withdrawal from the business for Joanne Burton.;Instructions;a. Determine the;impact of each of the preceding transactions on Burton?s assets;liabilities, and;owner?s equity. See exhibit 1.5. Use the following format;Assets;= Liabilities;+ Owner?s Equity;Cash, Accounts;Receivable, Land, Equipment;Accounts Payable (+)Investments;(+) Revenues;(-) Withdrawals (-) Expenses;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 owner?s equity, and a balance sheet, (See Exhibit;1.1, 1.3 and 1.4);6. 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.;The albums, tapes, and CDs held for sale to;customers.;b.;A long-term loan owed to Citizens Bank.;c.;Promotional costs to publicize a concert.;d.;Daily receipts for merchandise sold;e.;Amounts due from customers;f.;Land held as an investment;g.;A new fax machine purchased for office use.;h.;Amounts to be paid in 10 days to suppliers;i.;Amounts paid to a mall for rent.;7.Basic journal;entries;The following transactions pertain to the Jennifer Royall;Company;Apr. 1;Jenni?fer Royall invested;cash of $15,000 and land valued at $10,000 from into the business.;5;Provided $1,200 of services;to Jason Ratchford, a client, on account.;9;Paid $250 of salaries to an;employee.;14;Acquired a new computer for;$3,200, on account.;20;Collected $800 from Jason;Ratchford for services provided on April 5.;24;Borrowed $7,500 from;BestBanc by securing a six-month loan.;Prepare journal entries (and explanations) to record the;preceding transactions and events.;8.Trial balance;preparation. Brighton, a sole proprietorship;began operation on March 1 of the current year. The following account balances;were extracted from the general led?ger on March 31, all accounts have normal;balances.;Accounts;Payable;$ 12,000;Interest;Expense;$ 300;Accounts Receivable;8,800;Land;?;Advertising;Expense;5,700;Loan;Payable;26,000;Bob;Brighton, Owners Equity;30,000;Salaries;Expense;11,100;Cash;22,500;Utilities;Expense;700;Fees;Earned 18,900;a.;Determine the cost of the company?s land by preparing a trial balance.;(Remember, the trial balance debits must equal the credits, see Exhibit 2.9);b. Determine the firm?s net income for the period ending;March 31.;9.Entry and trial;balance preparation. Lee Adkins is a;portrait artist. The following schedule represents Lee?s combined chart of;accounts and trial balance as of May 31.;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, Owners Equity;57,400;320;Lee;Adkins, Drawing;30,000;410;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 $7,500 on account from customers.;6/7;Sold 25% of the equipment and supplies to a young artist for;$700 for cash;6/10;Received a $500 bill from the accountant for preparing last;quarter?s financial statements.;6/15;Paid $2,100 to creditors on account.;6/27;Adkins withdrew $1,000 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 company?s;general journal. (See Exhibit 2.6);b. Open running balance;ledger ?T? accounts by entering account titles, account num?bers, 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);10.;Journal entry preparation.On January 1 of the;current year, Peter Houston invested $100,000 cash into his company MuniServ.;Shortly thereafter, the company ac?quired selected assets of a bankrupt;competitor. The acquisition included land ($15,000), 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 $20,000 (an account payable) by;February 15.;During January, the company had additional cash outlays;for the follow?ing items;Purchases of store;equipment;$4,600;Loan payment;500;Salaries expense;2,300;Advertising expense;700;The January utilities bill of $200 was;received on January 31 and will be paid on February 10. MuniServ rendered;services to clients on account amounting to $9,400 and $3,700 had been received;in settlement.;Instructions;a. Present;journal entries that reflect MuniServ's January transactions, starting with the;$100,000 investment. (See exhibit 2.6);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);c. Prepare;a trail balance as of January 31. (See exhibit 2.9)

 

Paper#44793 | Written in 18-Jul-2015

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