Acct301 Essentials of Accounting Week 1 Fall B, 2014

Acct301 Essentials of Accounting
Week 1 Assignment (Fall B, 2014)

Exercise 1-9 Using the accounting equation
Determine the missing amount from each of the separate situations given below.
Assets = Liabilities + Equity
A ? = 102,000 + 40,000
B 100,000 = 31,000 + ?
C 163,000 = ? + 62,000

Exercise 1-14 Preparing an income statement
On October 1, Keisha King organized Real Answers, a new consulting firm; On October 3, the owner contributed $72,118 cash. On October 31, the company's records show the following items and amounts.
Cash 10,500 Cash withdrawals by owner 2,000
Accounts receivable 21,000 Consulting fees earned 23,000
Office supplies 22,313 Rent expense 4,140
Land 46,000 Salaries expense 9,200
Office equipment 18,000 Telephone expense 760
Accounts payable 39,375 Miscellaneous expenses 580
Owner investments 72,118

Using the above information prepare an October income statement for the business.

Exercise 1-15 Preparing a statement of owner's equity
On October 1, Keisha King organized Real Answers, a new consulting firm; on October 3, the owner contributed $62,145 cash. On October 31, the company’s records show the following items and amounts.
Cash 8,600 Cash withdrawals by owner 2,000
Accounts receivable 19,000 Consulting fees earned 21,000
Office supplies 18,275 Rent expense 3,780
Land 36,000 Salaries expense 8,400
Office equipment 18,000 Telephone expense 760
Accounts payable 32,250 Miscellaneous expenses 580
Owner investments 62,145

Using the above information prepare an October statement of owner's equity for Real Answers.

Exercise 1-16 Preparing a balance sheet
On October 1, Keisha King organized Real Answers, a new consulting firm; on October 3, the owner contributed $75,153 cash. On October 31, the company’s records show the following items and amounts.
Cash 2,250 Cash withdrawals by owner 3,360
Accounts receivable 15,000 Consulting fees earned 17,000
Office supplies 4,781 Rent expense 3,060
Land 36,000 Salaries expense 6,800
Office equipment 28,000 Telephone expense 660
Accounts payable 8,438 Miscellaneous expenses 680
Owner investments 75,153

Using the above information prepare an October 31 balance sheet for Real Answers.

Problem 1-9A Analyzing effects of transactions
Isabel Lopez started Biz Consulting, a new business, and completed the following transactions during its first year of operations.
a. I. Lopez invests $67,000 cash and office equipment valued at $33,000 in the company.
b. The company purchased a $301,000 building to use as an office. Biz paid $47,000 in cash and signed a note payable promising to pay the $254,000 balance over the next ten years.
c. The company purchased office equipment for $5,400 cash.
d. The company purchased $3,400 of office supplies and $1,200 of office equipment on credit.
e. The company paid a local newspaper $990 cash for printing an announcement of the office’s opening.
f. The company completed a financial plan for a client and billed that client $4,900 for the service.
g. The company designed a financial plan for another client and immediately collected an $8,600 cash fee.
h. Lopez withdrew $1,000 cash from the company for personal use.
i. The company received $3,900 cash as partial payment from the client described in transaction f.
j. The company made a partial payment of $600 cash on the equipment purchased in transaction d.
k. The company paid $2,300 cash for the office secretary’s wages for this period.

Required:
1. Completed the table like the one in Exhibit 2.1. Show effects of the transactions on the accounts of the accounting equation by recording decreases by a "-" in the appropriate columns. Show new balances after each transaction. (Leave no cells blank - be certain to enter "0" wherever required. Amounts to be deducted should be indicated with a minus sign. Omit the "$" sign in your response.)
2. Enter the amount of each transaction on individual items of the accounting equation.
3. Determine the company's net income.

Exercise 2-10 Preparing a trial balance
The transactions of Spade Company:
a. Kacy Spade, owner, invested $10,500 cash in the company.
b. The company purchased office supplies for $305 cash.
c. The company purchased $5,807 of office equipment on credit.
d. The company received $1,239 cash as fees for services provided to a customer.
e. The company paid $5,807 cash to settle the payable for the office equipment purchased in transaction c.
f. The company billed a customer $2,226 as fees for services provided.
g. The company paid $510 cash for the monthly rent.
h. The company collected $935 cash as partial payment for the account receivable created in transaction f.
i. Kacy Spade, withdrew $1,000 cash from the company for personal use.

Prepare the Trial Balance.(The items in the Trial Balance should be grouped as follows: Assets, Liabilities, Equity, Revenues, and Expenses.)

Problem 2-4A Computing net income from equity analysis, preparing a balance sheet, and computing the debt ratio
[The following information applies to the questions displayed below.]
The accounting records of Nettle Distribution show the following assets and liabilities as of December 31, 2012 and 2013.
December 31
2012 2013
Cash 48,908 8,527
Accounts receivable 26,548 20,814
Office supplies 4,188 3,067
Office equipment 128,552 136,932
Trucks 50,304 59,304
Building - 167,693
Land - 41,846
Accounts payable 69,795 34,616
Note payable - 109,539

Late in December 2013, the business purchased a small office building and land for $209,539. It paid $100,000 cash toward the purchase and a $109,539 note payable was signed for the balance. Mr. Nettle had to invest $34,000 cash in the business to enable it to pay the $100,000 cash. Mr. Nettle withdraws $3,100 cash per month for personal use.

Required:
1. Prepare balance sheets for the business as of December 31, 2012 and 2013.
2. By comparing equity amounts from the balance sheets and using the additional information presented in this problem, prepare a calculation to show how much net income was earned by the business during 2013.

Problem 2-6A Recording transactions; posting to ledger; preparing a trial balance
Business transactions completed by Hannah Venedict during the month of September are as follows.
a. Venedict invested $86,000 cash along with office equipment valued at $22,000 in a new sole proprietorship named HV Consulting.
b. The company purchased land valued at $40,000 and a building valued at $155,000. The purchase is paid with $30,000 cash and a long-term note payable for $165,000.
c. The company purchased $1,900 of office supplies on credit.
d. Venedict invested her personal automobile in the company. The automobile has a value of $16,200 and is to be used exclusively in the business.
e. The company purchased $5,500 of additional office equipment on credit.
f. The company paid $1,700 cash salary to an assistant.
g. The company provided services to a client and collected $7,600 cash.
h. The company paid $630 cash for this month's utilities.
i. The company paid $1,900 cash to settle the account payable created in transaction c.
j. The company purchased $20,200 of new office equipment by paying $20,200 cash.
k. The company completed $6,250 of services for a client, who must pay within 30 days.
l. The company paid $1,900 cash salary to an assistant.
m. The company received $3,000 cash in partial payment on the receivable created in transaction k.
n. Venedict withdrew $3,000 cash from the company for personal use.

Required:
1. Prepare general journal entries to record these transactions using the following titles: Cash (101); Accounts Receivable (106); Office Supplies (108); Office Equipment (163); Automobiles (164); Building (170); Land (172); Accounts Payable (201); Notes Payable (250); H. Venedict, Capital (301); H. Venedict, Withdrawals (302); Fees Earned (402); Salaries Expense (601); and Utilities Expense (602)
2. Open the following ledger accounts for the account titles referred in part 1 and post the journal entries from part 1 to the ledger accounts.
3. Prepare a trial balance as of the end of September.(The items in the Trial Balance should be grouped as follows: Assets, Liabilities, Equity, Revenues, and Expenses.)
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