Accounting Principles weygandt 11th edition solutions manual

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Accounting Principles Weygandt 11th Edition Solutions Manual Accounting Principles Weygandt 11th Edition Solutions Manual Click here to download the solutions manual INSTANTLY!!!  This is a sample chapter CHAPTER 2 The Recording Process ASSIGNMENT CLASSIFICATIONTABLE Learning Objectives Questions Brief Exercises Do It! Exercises A Problems B Problems 1. Explain what an account is and how it helps in the recording process. 1 1 2. Define debits and credits and explain their use in recording business transactions. 2, 3, 4, 5, 6, 7, 8, 9, 21 1, 2, 5 1 2, 4, 6, 7, 14 1A, 2A, 3A, 5A 1B, 2B, 3B, 5B 3. Identify the basic steps in the recording process. 10, 19 4 6, 7 4. Explain what a journal is and how it helps in the recording process. 11, 12, 13, 14, 16 3, 6 2 3, 5, 6, 7 10, 11, 12 1A, 2A, 3A, 5A 1B, 2B, 3B, 5B 5. Explain what a ledger is and how it helps in the recording process. 17 8 6. Explain what posting is and how it helps in the recording process. 15 7, 8 3 9, 12 2A, 3A, 5A 2B, 3B, 5B 7. Prepare a trial balance and explain its purposes. 18, 20 9, 10 4 9, 10, 11, 13, 14 2A, 3A, 4A, 5A 2B, 3B, 4B, 5B
2. Accounting Principles Weygandt 11th Edition Solutions Manual Accounting Principles Weygandt 11th Edition Solutions Manual ASSIGNMENT CHARACTERISTICSTABLE Problem Number Description Difficulty Level Time Allotted (min.) 1A Journalize a series of transactions. Simple 20–30 2A Journalize transactions, post, and prepare a trial balance. Simple 30–40 3A Journalize transactions, post, and prepare a trial balance. Moderate 40–50 4A Prepare a correct trial balance. Moderate 30–40 5A Journalize transactions, post, and prepare a trial balance. Moderate 40–50 1B Journalize a series of transactions. Simple 20–30 2B Journalize transactions, post, and prepare a trial balance. Simple 30–40 3B Journalize transactions, post, and prepare a trial balance. Moderate 40–50 4B Prepare a correct trial balance. Moderate 30–40 5B Journalize transactions, post, and prepare a trial balance. Moderate 40–50
3. Accounting Principles Weygandt 11th Edition Solutions Manual Accounting Principles Weygandt 11th Edition Solutions Manual WEYGANDT ACCOUNTING PRINCIPLES 11E CHAPTER 2 THE RECORDING PROCESS Number LO BT Difficulty Time (min.) BE1 2 C Simple 6–8 BE2 2 C Simple 4–6 BE3 4 AP Simple 4–6 BE4 3 C Moderate 4–6 BE5 2 C Simple 6–8 BE6 4 AP Simple 4–6 BE7 6 AP Simple 4–6 BE8 6 AP Simple 4–6 BE9 7 AP Simple 4–6 BE10 7 AN Moderate 6–8 DI1 2 C Simple 3–5 DI2 4 AP Simple 3–5 DI3 6 AP Simple 2–4 DI4 7 AP Simple 6–8 EX1 1 K Simple 2–4 EX2 2 C Simple 10–15 EX3 4 AP Simple 8–10 EX4 2 C Simple 6–8 EX5 4 AP Simple 6–8 EX6 2–4 AP Simple 6–8 EX7 2–4 AP Simple 8–10 EX8 5 K Simple 2–4 EX9 6, 7 AP Simple 10–12 EX10 4, 7 AP Moderate 10–12 EX11 4, 7 AP Moderate 12–15 EX12 4, 6 AP Moderate 12–15 EX13 7 AN Moderate 6–8 EX14 2, 7 AP Simple 8–10
4. Accounting Principles Weygandt 11th Edition Solutions Manual Accounting Principles Weygandt 11th Edition Solutions Manual THE RECORDING PROCESS (Continued) Click here to download the solutions manual INSTANTLY!!! http://www.solutionsmanualtestbank.com/products/2013/05/26/accounting- principles-weygandt-11th-edition-solutions-manual Number LO BT Difficulty Time (min.) P1A 2, 4 AP Simple 20–30 P2A 2, 4, 6, 7 AP Simple 30–40 P3A 2, 4, 6, 7 AP Moderate 40–50 P4A 7 AN Moderate 30–40 P5A 2, 4, 6, 7 AP Moderate 40–50 P1B 2, 4 AP Simple 20–30 P2B 2, 4, 6, 7 AP Simple 30–40 P3B 2, 4, 6, 7 AP Moderate 40–50 P4B 7 AN Moderate 30–40 P5B 2, 4, 6, 7 AP Moderate 40–50 BYP1 2 C Simple 8–10 BYP2 2, 4 AN Simple 8–10 BYP3 BYP4 — — AP AP, S Simple Simple 15–20 15–20 BYP5 6, 7 AP, S Moderate 20–30 BYP6 3, 6 S Simple 10–15 BYP7 7 AN, E Moderate 10–15 BYP8 BYP9 BYP10 — — — E E E Moderate Moderate Moderate 10–15 15–20 15–20
5. Accounting Principles Weygandt 11th Edition Solutions Manual BLOOM’STAXONOMYTABLE Copyright©2013JohnWiley&Sons,Inc.Weygandt,AccountingPrinciples,11/e,SolutionsManual(ForInstructorUseOnly)2-5 Correlation Chart between Bloom’s Taxonomy, Learning Objectives and End-of-Chapter Exercises and Problems Learning Objective Knowledge Comprehension Application Analysis Synthesis Evaluation 1. Explain what an account is and how it helps in the recording process. Q2-1 E2-1 2. Define debits and credits and explain their use in recording business transactions. Q2–21 Q2-2 Q2-3 Q2-4 Q2-5 Q2-6 Q2-7 Q2-8 Q2-9 BE2-1 BE2-2 BE2-5 DI2-1 E2-2 E2-4 E2-6 E2-7 E2-14 P2-1A P2-2A P2-3A P2-5A P2-1B P2-2B P2-3B P2-5B 3. Identify the basic steps in the recording process. Q2-10 Q2-19 BE2-4 E2-6 E2-7 4. Explain what a journal is and how it helps in the recording process. Q2-12 Q2-11 Q2-13 Q2-14 Q2-16 BE2-3 BE2-6 DI2-2 E2-3 E2-5 E2-6 E2-7 E2-10 E2-11 E2-12 P2-1A P2-2A P2-3A P2-5A P2-1B P2-2B P2-3B P2-5B 5. Explain what a ledger is and how it helps in the recording process. E2-8 Q2-17 6. Explain what posting is and how it helps in the recording process. Q2-15 BE2-7 BE2-8 DI2-3 E2-9 E2-12 P2-2A P2-3A P2-5A P2-2B P2-3B P2-5B 7. Prepare a trial balance and explain its purposes. Q2-18 Q2-20 BE2-9 DI2-4 E2-9 E2-10 E2-11 E2-14 P2-2A P2-3A P2-5A P2-2B P2-3B P2-5B BE2-10 E2-13 P2-4A P2-4B Broadening Your Perspective Financial Reporting Decision Making Across the Organization Real-World Focus Comparative Analysis Ethics Case Communication DecisionMaking Across the Organization Real-World Focus All About You Ethics Case Considering P, P and P
6. Accounting Principles Weygandt 11th Edition Solutions Manual Accounting Principles Weygandt 11th Edition Solutions Manual ANSWERS TO QUESTIONS 1. A T account has the following parts: (a) the title, (b)the left or debit side, and (c) the right or credit side. 2. Disagree. The terms debit and credit mean left and right respectively. 3. Heath is incorrect. The double-entry system merely records the dual effect of a transaction on the accounting equation. A transaction is not recorded twice; it is recorded once, with a dual effect. 4. Erica is incorrect. A debit balance only means that debit amounts exceed credit amounts in an account. Conversely, a credit balance only means that credit amounts are greater than debit amounts in an account. Thus, a debit or credit balance is neither favorable nor unfavorable. 5. (a) Asset accounts are increased by debits and decreased by credits. (b) Liability accounts are decreased by debits and increased by credits. (c) Revenues and owner’s capital are increased by credits and decreased by debits. Expenses and owner’s drawing are increased by debits and decreased by credits. 6. (a) Accounts Receivable—debit balance. (b) Cash—debit balance. (c) Owner’s Drawings—debit balance. (d) Accounts Payable—credit balance. (e) Service Revenue—credit balance. (f) Salaries and Wages Expense—debit balance. (g) Owner’s Capital—credit balance. 7. (a) Accounts Receivable—asset—debit balance. (b) Accounts Payable—liability—credit balance (c) Equipment—asset—debit balance. (d) Owner’s Drawings—owner’s equity—debit balance. (e) Supplies—asset—debit balance. 8. (a) Debit Supplies and credit Accounts Payable. (b) Debit Cash and credit Notes Payable. (c) Debit Salaries and Wages Expense and credit Cash. 9. (1) Cash—both debit and credit entries. (2) Accounts Receivable—both debit and credit entries. (3) Owner’s Drawings—debit entries only. (4) Accounts Payable—both debit and credit entries. (5) Salaries and Wages Expense—debit entries only. (6) Service Revenue—credit entries only. 10. The basic steps in the recording process are: (1) Analyze each transaction for its effect on the accounts. (2) Enter the transaction information in a journal.
7. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank (3) Transfer the journal information to the appropriate accounts in the ledger.
8. Accounting Principles Weygandt 11th Edition Solutions Manual Accounting Principles Weygandt 11th Edition Solutions Manual Questions Chapter 2 (Continued) 11. The advantages of using the journal in the recording process are: (1) It discloses in one place the complete effects of a transaction. (2) It provides a chronological record of all transactions. (3) It helps to prevent or locate errors because the debit and credit amounts for each entry can be easily compared. 12. (a) The debit should be entered first. (b) The credit should be indented. 13. When three or more accounts are required in one journal entry, the entry is referred to as a compound entry. An example of a compound entry is the purchase of equipment, part of which is paid for with cash and the remainder is on account. 14. (a) No, debits and credits should not be recorded directly in the ledger. (b) The advantages of using the journal are: 1. It discloses in one place the complete effects of a transaction. 2. It provides a chronological record of all transactions. 3. It helps to prevent or locate errors because the debit and credit amounts for each entry can be easily compared. 15. The advantage of the last step in the posting process is to indicate that the item has been posted. 16. (a) Cash................................................................................................ 9,000 Owner’s Capital...................................................................... 9,000 (Invested cash in the business) (b) Prepaid Insurance........................................................................... 800 Cash....................................................................................... 800 (Paid one-year insurance policy) (c) Supplies........................................................................................... 2,000 Accounts Payable .................................................................. 2,000 (Purchased supplies on account) (d) Cash................................................................................................ 7,500 Service Revenue.................................................................... 7,500 (Received cash for services performed) 17. (a) The entire group of accounts maintained by a company, including all the asset, liability, and owner’s equity accounts, is referred to collectively as the ledger. (b) A chart of accounts is a list of accounts and the account numbers that identify their location in the ledger. The chart of accounts is important, particularly for a company that has a large number of accounts, because it helps organize the accounts and define the level of detail that a company desires in its accounting system.
9. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank Questions Chapter 2 (Continued) 18. A trial balance is a list of accounts and their balances at a given time. The primary purpose of a trial balance is to prove (check) that the debits equal the credits after posting. A trial balance also facilitates the discovery of errors in journalizing and posting. In addition, it is useful in preparing financial statements. 19. No, Victor is not correct. The proper sequence is as follows: (b) Business transaction occurs. (c) Information entered in the journal. (a) Debits and credits posted to the ledger. (e) Trial balance is prepared. (d) Financial statements are prepared. 20. (a) The trial balance would balance. (b) The trial balance would not balance. 21. The normal balances are Cash debit, Accounts Payable credit, and Interest Expense debit.
10. Accounting Principles Weygandt 11th Edition Solutions Manual Accounting Principles Weygandt 11th Edition Solutions Manual SOLUTIONS TO BRIEF EXERCISES BRIEF EXERCISE 2-1 (a) Debit Effect (b) Credit Effect (c) Normal Balance 1. Accounts Payable Decrease Increase Credit 2. Advertising Expense Increase Decrease Debit 3. Service Revenue Decrease Increase Credit 4. Accounts Receivable Increase Decrease Debit 5. Owner’s Capital Decrease Increase Credit 6. Owner’s Drawings Increase Decrease Debit BRIEF EXERCISE 2-2 AccountDebited AccountCredited June 1 Cash Owner’s Capital 2 Equipment Accounts Payable 3 Rent Expense Cash 12 Accounts Receivable Service Revenue BRIEF EXERCISE 2-3 June 1 Cash ......................................................................... 5,000 Owner’s Capital .............................................. 5,000 2 Equipment............................................................... 2,100 Accounts Payable .......................................... 2,100 3 Rent Expense.......................................................... 800 Cash ................................................................. 800 12 Accounts Receivable............................................. 300
11. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank Service Revenue............................................. 300
12. Accounting Principles Weygandt 11th Edition Solutions Manual Accounting Principles Weygandt 11th Edition Solutions Manual BRIEF EXERCISE 2-4 The basic steps in the recording processare: 1. Analyzeeachtransaction.In this step,business documentsareexamined to determine the effects of the transaction on the accounts. 2. Enter each transaction in a journal. This step is called journalizing and it results in making a chronological record of the transactions. 3. Transfer journal information to ledger accounts. This step is called posting. Posting makes it possible to accumulate the effects of journalized transactions on individual accounts. BRIEF EXERCISE 2-5 (a) Effect on Accounting Equation (b) Debit-Credit Analysis Aug. 1 The asset Cash is increased; the owner’s equity account Owner’s Capital is increased. Debits increase assets: debit Cash $8,000. Credits increase owner’s equity: credit Owner’s Capital $8,000. 4 The asset Prepaid Insurance is increased; the asset Cash is decreased. Debits increase assets: debit Prepaid Insurance $1,800. Credits decrease assets: credit Cash $1,800. 16 The asset Cash is increased; the revenue Service Revenue is increased. Debits increase assets: debit Cash $3,400. Credits increase revenues: credit Service Revenue $3,400. 27 The expense Salaries and Wages Expense is increased; the asset Cash is decreased. Debits increase expenses: debit Salaries and Wages Expense $1,000. Credits decrease assets: credit Cash $1,000.
13. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank BRIEF EXERCISE 2-6 Aug. 1 Cash.......................................................................... 8,000 Owner’s Capital............................................... 8,000 4 Prepaid Insurance................................................... 1,800 Cash.................................................................. 1,800 16 Cash.......................................................................... 3,400 Service Revenue............................................. 3,400 27 Salaries and Wages Expense................................ 1,000 Cash.................................................................. 1,000 BRIEF EXERCISE 2-7 Cash Service Revenue 5/12 2,400 5/5 4,100 5/15 3,000 5/15 3,000 Ending Bal. 5,400 Ending Bal. 7,100 Accounts Receivable 5/5 4,100 5/12 2,400 Ending Bal. 1,700 BRIEF EXERCISE 2-8 Cash Date Explanation Ref. Debit Credit Balance May 12 J1 2,400 2,400 15 J1 3,000 5,400
14. Accounting Principles Weygandt 11th Edition Solutions Manual Accounting Principles Weygandt 11th Edition Solutions Manual BRIEF EXERCISE 2-8 (Continued) Accounts Receivable Date Explanation Ref. Debit Credit Balance May 5 J1 4,100 4,100 12 J1 2,400 1,700 Service Revenue Date Explanation Ref. Debit Credit Balance May 5 J1 4,100 4,100 15 J1 3,000 7,100 BRIEF EXERCISE 2-9 DEROCHE COMPANY Trial Balance June 30, 2014 Debit Credit Cash................................................................................. $ 5,800 Accounts Receivable.................................................... 3,000 Equipment....................................................................... 17,000 Accounts Payable.......................................................... $ 9,000 Owner’s Capital.............................................................. 15,000 Owner’s Drawings......................................................... 1,200 Service Revenue............................................................ 10,000 Salaries and Wages Expense ...................................... 6,000 Rent Expense................................................................. 1,000 $34,000 $34,000
15. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank BRIEF EXERCISE 2-10 HUEWITT COMPANY Trial Balance December 31, 2014 Debit Credit Cash ................................................................................ $10,800 Prepaid Insurance......................................................... 3,500 Accounts Payable ......................................................... $ 3,000 Unearned Service Revenue ......................................... 2,200 Owner’s Capital ............................................................. 9,000 Owner’s Drawings......................................................... 4,500 Service Revenue............................................................ 25,600 Salaries and Wages Expense ...................................... 18,600 Rent Expense................................................................. 2,400 $39,800 $39,800 SOLUTIONS FOR DO IT! REVIEW EXERCISES DO IT! 2-1 Ivan would likely need the following accounts in which to record the transactionsnecessary to ready his photography studio for opening day: Cash (debit balance) Equipment(debit balance) Supplies (debitbalance) Accounts Payable (creditbalance) Notes Payable (creditbalance) Owner’s Capital(creditbalance) DO IT! 2-2 Each transactionthatis recordedis entered in the generaljournal.Thethree activities would be recorded as follows: 1. Cash ......................................................................... ......................................................................... 6,300 Owner’s Capital ................................... 6,300 2. Supplies ......................................................... 1,100 Cash ...................................................... 400
16. Accounting Principles Weygandt 11th Edition Solutions Manual Accounting Principles Weygandt 11th Edition Solutions Manual Accounts Payable................................ 700 3. No entry because no transaction has occurred.
17. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank DO IT! 2-3 Cash 4/1 1,600 4/16 700 4/3 3,400 4/20 300 4/30 4,000 DO IT! 2-4 RECHA COMPANY Trial Balance December 31, 2014 Debit Credit Cash ................................................................................ $ 6,000 Accounts Receivable.................................................... 8,000 Supplies.......................................................................... 6,000 Equipment...................................................................... 80,000 Notes Payable................................................................ $ 20,000 Accounts Payable ......................................................... 11,000 Salaries and Wages Payable ....................................... 3,000 Owner’s Capital ............................................................. 28,000 Owner’s Drawings......................................................... 8,000 Service Revenue............................................................ 88,000 Rent Expense................................................................. 4,000 Salaries and Wages Expense ...................................... 38,000 $150,000 $150,000
18. Accounting Principles Weygandt 11th Edition Solutions Manual Accounting Principles Weygandt 11th Edition Solutions Manual SOLUTIONS TO EXERCISES EXERCISE 2-1 1. False. An account is an accounting record of a specific asset, liability, or owner’s equity item. 2. False. An accountshowsincreasesanddecreasesin the item itrelatesto. 3. False. Each asset, liability, and owner’s equity item has a separate account. 4. False. An account has a left, or debit side, and a right, or credit side. 5. True.
19. EXERCISE2-2 2-16Copyright©2013JohnWiley&Sons,Inc.Weygandt,AccountingPrinciples,11/e,SolutionsManual(ForInstructorUseOnly) Account Debited Account Credited Transaction (a) Basic Type (b) Specific Account (c) Effect (d) Normal Balance (a) Basic Type (b) Specific Account (c) Effect (d) Normal Balance Jan. 2 Asset Cash Increase Debit Owner’s Equity Owner’s Capital Increase Credit 3 Asset Equipment Increase Debit Asset Cash Decrease Debit 9 Asset Supplies Increase Debit Liability Accounts Payable Increase Credit 11 Asset Accounts Receivable Increase Debit Owner’s Equity Service Revenue Increase Credit 16 Owner’s Equity Advertising Expense Increase Debit Asset Cash Decrease Debit 20 Asset Cash Increase Debit Asset Accounts Receivable Decrease Debit 23 Liability Accounts Payable Decrease Credit Asset Cash Decrease Debit 28 Owner’s Equity Owner’s Drawings Increase Debit Asset Cash Decrease Debit
20. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank EXERCISE 2-3 General Journal J1 Date AccountTitles and Explanation Ref. Debit Credit Jan. 2 Cash.................................................... 10,000 Owner’s Capital......................... 10,000 3 Equipment.......................................... 4,000 Cash............................................ 4,000 9 Supplies.............................................. 500 Accounts Payable..................... 500 11 Accounts Receivable........................ 2,100 Service Revenue ....................... 2,100 16 Advertising Expense........................ 350 Cash............................................ 350 20 Cash.................................................... 700 Accounts Receivable................ 700 23 Accounts Payable............................. 300 Cash............................................ 300 28 Owner’s Drawings............................. 1,000 Cash............................................ 1,000 EXERCISE 2-4 Oct. 1 Debits increaseassets: debitCash $15,000. Credits increase owner’sequity: creditOwner’s Capital$15,000. 2 No transaction. 3 Debits increaseassets: debitEquipment$1,900. Credits increase liabilities: creditAccounts Payable $1,900.
21. Copyright © 2013 John Wiley & Sons, Inc. Weygandt, Accounting Principles, 11/e, Solutions Manual (For Instructor Use Only) 2-21 EXERCISE 2-4 (Continued) Oct. 6 Debits increaseassets: debitAccounts Receivable $3,600. Credits increase revenues: creditService Revenue $3,600. 27 Debits decreaseliabilities: debit Accounts Payable $1,100. Credits decrease assets: creditCash $1,100. 30 Debits increaseexpenses: debitSalaries and Wages Expense $2,500. Credits decrease assets: creditCash $2,500. EXERCISE 2-5 General Journal Date AccountTitles and Explanation Ref. Debits Credit Oct. 1 Cash ............................................................. ............................................................. 15,000 Owner’s Capital ....................... 15,000 2 No entry. 3 Equipment.......................................... 1,900 Accounts Payable ................... 1,900 6 Accounts Receivable ....................... 3,600 Service Revenue...................... 3,600 27 Accounts Payable............................. 1,100 Cash .......................................... 1,100 30 Salaries and Wages Expense.......... 2,500 Cash .......................................... 2,500
22. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank EXERCISE 2-6 (a) 1. Increase the assetCash,increasethe liability Notes Payable. 2. Increase the asset Equipment, decrease the asset Cash. 3. Increasethe assetSupplies,increasethe liabilityAccountsPayable. (b) 1. Cash..................................................................... 5,000 Notes Payable............................................. 5,000 2. Equipment........................................................... 3,100 Cash.............................................................. 3,100 3. Supplies .............................................................. 850 Accounts Payable....................................... 850 EXERCISE 2-7 (a) Assets = Liabilities + Owner’s Equity 1. + + (Investment) 2. – – (Expense) 3. + + (Revenue) 4. – – (Drawings) (b) 1. Cash..................................................................... 4,000 Owner’s Capital........................................... 4,000 2. Rent Expense..................................................... 950 Cash.............................................................. 950 3. Accounts Receivable ........................................ 5,200 Service Revenue......................................... 5,200 4. Owner’s Drawings ............................................. 750 Cash.............................................................. 750 EXERCISE 2-8 1. False. The general ledger contains all the asset, liability, and owner’s equity accounts. 2. True. 3. False. The accounts in the general ledger are arranged in financial statement order: first the assets, then the liabilities, owner’s capital, owner’s drawings, revenues, and expenses. 4. True. 5. False. The general ledger is not a book of original entry; transactions are first recorded in the general journal, then in the general ledger.
23. Copyright © 2013 John Wiley & Sons, Inc. Weygandt, Accounting Principles, 11/e, Solutions Manual (For Instructor Use Only) 2-23 EXERCISE 2-9 (a) Cash Aug. 1 5,000 Aug. 12 3,000 10 2,400 31 900 Bal. 5,300 Accounts Receivable Aug. 25 1,700 Aug. 31 900 Bal. 800 Equipment Aug. 12 5,000 Notes Payable Aug. 12 2,000 Owner’s Capital Aug. 1 5,000 Service Revenue Aug. 10 2,400 25 1,700 Bal. 4,100 (b) TRISHA SPOOR, INVESTMENT BROKER TrialBalance August 31, 2014 Debit Credit Cash ............................................................................ $ 5,300 Accounts Receivable................................................ 800 Equipment.................................................................. 5,000 Notes Payable............................................................ $ 2,000 Owner’s Capital ......................................................... 5,000 Service Revenue........................................................ 4,100 $11,100 $11,100
24. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank EXERCISE 2-10 (a) GeneralJournal Date AccountTitles and Explanation Ref. Debit Credit Apr. 1 Cash .......................................................... Owner’s Capital.............................. (Owner’s investmentof cash in business) 12,000 12,000 12 Cash .......................................................... Service Revenue............................ (Received cash for servicesperformed) 900 900 15 Salaries and Wages Expense ........... Cash................................................. (Paid salaries to date) 1,300 1,300 25 Accounts Payable .............................. Cash................................................. (Paid creditors on account) 1,500 1,500 29 Cash .......................................................... Accounts Receivable .................... (Received cash in payment of account) 400 400 30 Cash .......................................................... Unearned Service Revenue.......... (Received cash for future services) 1,000 1,000
25. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank EXERCISE 2-10 (Continued) (b) ZIMMERLANDSCAPING COMPANY TrialBalance April 30, 2014 Debit Credit Cash .............................................................................. $11,500 Accounts Receivable.................................................. 2,800 Supplies........................................................................ 1,800 Accounts Payable ....................................................... $ 300 Unearned Service Revenue ....................................... 1,000 Owner’s Capital ........................................................... 12,000 Service Revenue.......................................................... 4,100 Salaries and Wages Expense .................................... 1,300 $17,400 $17,400 EXERCISE 2-11 (a) Oct.1 Cash................................................................. 3,000 Owner’s Capital....................................... 3,000 (Owner’s investmentof cash in business) 10 Cash................................................................. 500 Service Revenue..................................... 500 (Received cash for services performed) 10 Cash................................................................. 4,000 Notes Payable......................................... 4,000 (Obtained loan from bank) 20 Cash................................................................. 500 Accounts Receivable............................. 500 (Received cash in paymentof account) 20 Accounts Receivable .................................... 940 Service Revenue..................................... 940 (Billed clients for services performed)
26. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank EXERCISE 2-11 (Continued) (b) HARBACH CO. TrialBalance October 31,2014 Debit Credit Cash......................................................................... $ 7,050 Accounts Receivable............................................ 1,240 Supplies.................................................................. 400 Equipment............................................................... 2,000 Notes Payable........................................................ $ 4,000 Accounts Payable.................................................. 500 Owner’s Capital...................................................... 5,000 Owner’s Drawings................................................. 300 Service Revenue.................................................... 2,240 Salaries and Wages Expense .............................. 500 Rent Expense......................................................... 250 $11,740 $11,740 EXERCISE 2-12 (a) General Journal J1 Date AccountTitles and Explanation Ref. Debit Credit Sept. 1 Cash................................................... Owner’s Capital........................ 101 301 10,000 10,000 5 Equipment......................................... Cash........................................... Accounts Payable.................... 157 101 201 12,000 4,000 8,000 25 Accounts Payable............................ Cash........................................... 201 101 3,000 3,000 30 Owner’s Drawings ........................... Cash........................................... 306 101 700 700
27. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank EXERCISE 2-12 (Continued) (b) Cash No. 101 Date Explanation Ref. Debit Credit Balance Sept. 1 J1 10,000 10,000 5 J1 4,000 6,000 25 J1 3,000 3,000 30 J1 700 2,300 Equipment No. 157 Date Explanation Ref. Debit Credit Balance Sept. 5 J1 12,000 12,000 Accounts Payable No. 201 Date Explanation Ref. Debit Credit Balance Sept. 5 J1 8,000 8,000 25 J1 3,000 5,000 Owner’s Capital No. 301 Date Explanation Ref. Debit Credit Balance Sept. 1 J1 10,000 10,000 Owner’s Drawings No. 306 Date Explanation Ref. Debit Credit Balance Sept. 30 J1 700 700
28. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank EXERCISE 2-13 Error (a) In Balance (b) Difference (c) Larger Column 1. No $525 Debit 2. Yes — — 3. Yes — — 4. No 415 Credit 5. Yes — — 6. No 18 Credit EXERCISE 2-14 LONGORIA DELIVERY SERVICE Trial Balance July 31, 2014 Debit Credit Cash ($78,821 – Debit total withoutCash $66,340)....................................................................... $12,481 Accounts Receivable.................................................... 7,642 Prepaid Insurance ......................................................... 1,968 Equipment....................................................................... 49,360 Notes Payable................................................................ $17,000 Accounts Payable.......................................................... 8,396 Salaries and Wages Payable........................................ 815 Owner’s Capital.............................................................. 42,000 Owner’s Drawings......................................................... 700 Service Revenue............................................................ 10,610 Salaries and Wages Expense ...................................... 4,428 Maintenance and Repairs Expense ............................ 961 Gasoline Expense.......................................................... 758 Utilities Expense............................................................ 523 $78,821 $78,821
29. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank SOLUTIONS TO PROBLEMS PROBLEM 2-1A J1 Date AccountTitles and Explanation Ref. Debit Credit Mar. 1 Cash.......................................................... 20,000 Owner’s Capital.............................. 20,000 (Owner’s investmentof cash in business) 3 Land.......................................................... 12,000 Buildings.................................................. 2,000 Equipment................................................ 1,000 Cash................................................. 15,000 (PurchasedSable’s Golf Land) 5 Advertising Expense.............................. 700 Cash................................................. 700 (Paid for advertising) 6 Prepaid Insurance .................................. 600 Cash................................................. 600 (Paid for one-year insurance policy) 10
Equipment................................................ 1,050 Accounts Payable.......................... 1,050 (Purchased equipmenton account) 18 Cash.......................................................... 1,100 Service Revenue............................ 1,100 (Received cash for services performed) 19 Cash.......................................................... 1,500 Unearned Service Revenue.......... 1,500 (Received cash for coupon books sold)
30. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank PROBLEM 2-1A(Continued) Date AccountTitles and Explanation Ref. Debit Credit Mar. 25 Owner’s Drawings ............................. Cash............................................. (Withdrew cash for personal use) 800 800 30 Salaries and Wages Expense........... Cash............................................. (Paid salaries) 250 250 30 Accounts Payable.............................. Cash............................................. (Paid creditoron account) 1,050 1,050 31 Cash..................................................... Service Revenue........................ (Received cash for services performed) 2,100 2,100
31. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank PROBLEM 2-2A (a) J1 Date AccountTitles and Explanation Ref. Debit Credit Apr. 1 Cash.......................................................... 101 20,000 Owner’s Capital.............................. 301 20,000 (Owner’s investmentof cash in business) 1 No entry—nota transaction. 2 Rent Expense.......................................... 729 1,100 Cash................................................. 101 1,100 (Paid monthly office rent) 3 Supplies................................................... 126 4,000 Accounts Payable.......................... 201 4,000 (Purchasedsupplieson accountfrom Smile Company) 10 Accounts Receivable............................. 112 5,100 Service Revenue............................ 400 5,100 (Billed clients for services performed) 11 Cash.......................................................... 101 1,000 Unearned Service Revenue.......... 209 1,000 (Received cash for future service) 20 Cash.......................................................... 101 2,100 Service Revenue............................ 400 2,100 (Received cash for services performed) 30 Salaries and Wages Expense ............... 726 2,800 Cash................................................. 101 2,800
32. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank (Paid monthly salary)
33. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank PROBLEM 2-2A(Continued) Date AccountTitles and Explanation Ref. Debits Credit Apr. 30 Accounts Payable............................... 201 2,400 Cash ............................................. 101 2,400 (Paid Smile Company on account) (b) Cash No. 101 Date Explanation Ref. Debit Credit Balance Apr. 1 J1 20,000 20,000 2 J1 1,100 18,900 11 J1 1,000 19,900 20 J1 2,100 22,000 30 J1 2,800 19,200 30 J1 2,400 16,800 Accounts Receivable No. 112 Date Explanation Ref. Debit Credit Balance Apr. 10 J1 5,100 5,100 Supplies No. 126 Date Explanation Ref. Debit Credit Balance Apr. 3 J1 4,000 4,000 Accounts Payable No. 201 Date Explanation Ref. Debit Credit Balance Apr. 3 J1 4,000 4,000 30 J1 2,400 1,600 Unearned Service Revenue No. 209 Date Explanation Ref. Debit Credit Balance Apr. 11 J1 1,000 1,000
34. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank PROBLEM 2-2A(Continued) Owner’s Capital No. 301 Date Explanation Ref. Debit Credit Balance Apr. 1 J1 20,000 20,000 Service Revenue No. 400 Date Explanation Ref. Debit Credit Balance Apr. 10 J1 5,100 5,100 20 J1 2,100 7,200 Salaries and Wages Expense No. 726 Date Explanation Ref. Debit Credit Balance Apr. 30 J1 2,800 2,800 Rent Expense No. 729 Date Explanation Ref. Debit Credit Balance Apr. 2 J1 1,100 1,100 (c) BRIDGETTE KEYES,DENTIST TrialBalance April 30, 2014 Debit Credit Cash......................................................................... $16,800 Accounts Receivable............................................ 5,100 Supplies.................................................................. 4,000 Accounts Payable.................................................. $ 1,600 Unearned Service Revenue.................................. 1,000 Owner’s Capital...................................................... 20,000 Service Revenue.................................................... 7,200 Salaries and Wages Expense .............................. 2,800 Rent Expense......................................................... 1,100 $29,800 $29,800
35. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank PROBLEM 2-3A (a) Trans. AccountTitles and Explanation Debit Credit 1. Cash ............................................................. ............................................................. 40,000 Owner’s Capital........................ 40,000 2. No entry—Nota transaction. 3. Prepaid Rent...................................... 24,000 Cash........................................... 24,000 4. Equipment.......................................... 30,000 Cash........................................... 10,000 Accounts Payable.................... 20,000 5. Prepaid Insurance............................. 1,800 Cash........................................... 1,800 6. Supplies.............................................. 500 Cash........................................... 500 7. Supplies.............................................. 1,500 Accounts Payable.................... 1,500 8. Cash ............................................................. ............................................................. 8,000 Accounts Receivable........................ 12,000 Service Revenue...................... 20,000 9. Accounts Payable............................. 400 Cash........................................... 400
36. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank 10. Cash ............................................................. ............................................................. 3,000 Accounts Receivable .............. 3,000 11. Utilities Expense................................ 350 Accounts Payable.................... 350
37. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank PROBLEM 2-3A(Continued) Trans. AccountTitles and Explanation Debit Credit 12. Salaries and Wages Expense ....... 6,100 Cash.......................................... 6,100 (b) Cash (1) 40,000 (3) 24,000 (4) 10,000 (5) 1,800 (6) 500 (8) 8,000 (9) 400 (10) 3,000 (12) 6,100 8,200 Accounts Receivable (8) 12,000 (10) 3,000 9,000 Supplies (6) 500 (7) 1,500 2,000 Prepaid Insurance (5) 1,800 1,800 Prepaid Rent (3) 24,000 24,000 Equipment (4) 30,000 30,000 Accounts Payable (4) 20,000 (7) 1,500 (9) 400 (11) 350 21,450 Owner’s Capital (1) 40,000 40,000 Service Revenue (8) 20,000 20,000 Salaries and Wages Expense (12) 6,100 6,100 Utilities Expense (11) 350 350
38. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank PROBLEM 2-3A(Continued) (c) SANTA ANA SERVICES TrialBalance May 31, 2014 Debit Credit Cash.................................................................... $ 8,200 Accounts Receivable....................................... 9,000 Supplies............................................................. 2,000 Prepaid Insurance ............................................ 1,800 Prepaid Rent...................................................... 24,000 Equipment.......................................................... 30,000 Accounts Payable............................................. $21,450 Owner’s Capital................................................. 40,000 Service Revenue............................................... 20,000 Salaries and Wages Expense ......................... 6,100 Utilities Expense............................................... 350 $81,450 $81,450
39. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank PROBLEM 2-4A MARIUS SANTIAGO CO. Trial Balance June 30, 2014 Debit Credit Cash ($3,340 + $270)..................................................... $ 3,610 Accounts Receivable ($2,812 – $270)......................... 2,542 Supplies ($1,200 – $710)............................................... 490 Equipment ($2,600 + $710)........................................... 3,310 Accounts Payable ($3,666 – $306 – $360).................. $ 3,000 Unearned Service Revenue ......................................... 1,100 Owner’s Capital ............................................................. 8,000 Owner’s Drawings ($800 + $600)................................. 1,400 Service Revenue ($2,480 + $882)................................ 3,362 Salaries and Wages Expense ($3,200 + $700 – $600)................................................ 3,300 Utilities Expense............................................................ 810 $15,462 $15,462
40. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank PROBLEM 2-5A (a) & (c) Cash No. 101 Date Explanation Ref. Debit Credit Balance Mar.1 Balance  3,000 2 J1 1,500 1,500 9 J1 4,000 5,500 10 J1 4,100 1,400 12 J1 800 600 20 J1 5,000 5,600 20 J1 2,000 3,600 31 J1 3,100 500 31 J1 450 950 31 J1 9,000 9,950 Accounts Receivable No. 112 Date Explanation Ref. Debit Credit Balance Mar.31 J1 450 450 Land No. 140 Date Explanation Ref. Debit Credit Balance Mar.1 Balance  24,000 Buildings No. 145 Date Explanation Ref. Debit Credit Balance Mar.1 Balance  10,000 Equipment No. 157 Date Explanation Ref. Debit Credit Balance Mar.1 Balance  10,000
41. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank PROBLEM 2-5A(Continued) Accounts Payable No. 201 Date Explanation Ref. Debit Credit Balance Mar. 1 Balance  7,000 2 J1 2,000 9,000 10 J1 4,100 4,900 Owner’s Capital No. 301 Date Explanation Ref. Debit Credit Balance Mar. 1 Balance  40,000 Service Revenue No. 400 Date Explanation Ref. Debit Credit Balance Mar. 9 J1 4,000 4,000 20 J1 5,000 9,000 31 J1 9,000 18,000 Rent Revenue No. 429 Date Explanation Ref. Debit Credit Balance Mar.31 J1 900 900 Advertising Expense No. 610 Date Explanation Ref. Debit Credit Balance Mar.12 J1 800 800 Salaries and Wages Expense No. 726 Date Explanation Ref. Debit Credit Balance Mar.31 J1 3,100 3,100
42. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank PROBLEM 2-5A(Continued) Rent Expense No. 729 Date Explanation Ref. Debit Credit Balance Mar. 2 J1 3,500 3,500 20 J1 2,000 5,500 (b) J1 Date AccountTitles and Explanation Ref. Debit Credit Mar. 2 Rent Expense.......................................... 729 3,500 Accounts Payable......................... 201 2,000 Cash................................................ 101 1,500 (Rented films for cash and on account) 3 No entry. 9 Cash ................................................................... ................................................................... 101 4,000 Service Revenue ........................... 400 4,000 (Received cash for services performed) 10 Accounts Payable ($2,000 + $2,100)....... 201 4,100 Cash................................................ 101 4,100 (Paid creditorson account) 11 No entry. 12 Advertising Expense.............................. 610 800 Cash................................................ 101 800 (Paid advertising expense) 20 Cash ................................................................... ................................................................... 101 5,000 Service Revenue ........................... 400 5,000 (Received cash for services performed)
43. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank 20 Rent Expense.......................................... 729 2,000 Cash................................................ 101 2,000 (Paid film rental)
44. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank PROBLEM 2-5A(Continued) Date AccountTitles and Explanation Ref. Debit Credit Mar.31 Salaries and Wages Expense................ 726 3,100 Cash................................................ 101 3,100 (Paid salaries expense) 31 Cash ................................................................... ................................................................... 101 450 Accounts Receivable ............................. 112 450 Rent Revenue................................ 429 900 (15% X $6,000) (Received cash and balance on accountfor rent revenue) 31 Cash ................................................................... ................................................................... 101 9,000 Service Revenue ........................... 400 9,000 (Received cash for services performed) (d) LUNT THEATER TrialBalance March31,2014 Debit Credit Cash..................................................................... $ 9,950 Accounts Receivable......................................... 450 Land ..................................................................... 24,000 Buildings ............................................................. 10,000 Equipment........................................................... 10,000 Accounts Payable.............................................. $ 4,900 Owner’s Capital.................................................. 40,000 Service Revenue................................................. 18,000 Rent Revenue ..................................................... 900 Advertising Expense ......................................... 800
45. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank Salaries and Wages Expense........................... 3,100 Rent Expense .................................................... 5,500 $63,800 $63,800
46. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank PROBLEM 2-1B J1 Date AccountTitles and Explanation Ref. Debit Credit Apr. 1 Cash ......................................................... 35,000 Owner’s Capital.............................. 35,000 (Owner’s investmentof cash in business) 4 Land.......................................................... 27,000 Cash................................................. 27,000 (Purchased landfor cash) 8 Advertising Expense.............................. 1,800 Accounts Payable.......................... 1,800 (Incurred advertising expense on account) 11 Salaries and Wages Expense ............... 1,500 Cash................................................. 1,500 (Paid salaries) 12 No entry—Nota transaction. 13 Prepaid Insurance.................................. 1,650 Cash................................................. 1,650 (Paid for one-year insurancepolicy) 17 Owner’s Drawings.................................. 1,000 Cash................................................. 1,000 (Withdrew cash for personal use) 20 Cash ......................................................... 6,800 Service Revenue ............................ 6,800 (Received cash for services performed)
47. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank PROBLEM 2-1B(Continued) Date AccountTitles and Explanation Ref. Debit Credit Apr. 25 Cash ................................................................. ................................................................. Unearned Service Revenue............ (Received cash for future services) 2,500 2,500 30 Cash ................................................................. ................................................................. Service Revenue............................ (Received cash for services performed) 8,900 8,900 30 Accounts Payable................................. Cash................................................. (Paid creditoron account) 900 900
48. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank PROBLEM 2-2B (a) J1 Date AccountTitles and Explanation Ref. Debit Credit May 1 Cash ................................................................... ................................................................... 101 20,000 Owner’s Capital.............................. 301 20,000 (Owner’s investmentof cash in business) 2 No entry—nota transaction. 3 Supplies................................................... 126 2,500 Accounts Payable.......................... 201 2,500 (Purchased supplies on account) 7 Rent Expense.......................................... 729 900 Cash................................................. 101 900 (Paid office rent) 11 Accounts Receivable............................. 112 3,200 Service Revenue ............................ 400 3,200 (Billed client for services performed) 12 Cash .......................................................... 101 3,500 Unearned Service Revenue.......... 209 3,500 (Received cash for future services) 17 Cash .......................................................... 101 1,200 Service Revenue ............................ 400 1,200 (Received cash for services performed) 31 Salaries and Wages Expense ............... 726 2,000
49. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank Cash................................................. 101 2,000 (Paid salaries)
50. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank PROBLEM 2-2B(Continued) Date AccountTitles and Explanation Ref. Debit Credit May 31 Accounts Payable ($2,500 X 60%)......... Cash................................................ (Paid creditor on account) 201 101 1,500 1,500 (b) Cash No. 101 Date Explanation Ref. Debit Credit Balance May 1 J1 20,000 20,000 7 J1 900 19,100 12 J1 3,500 22,600 17 J1 1,200 23,800 31 J1 2,000 21,800 31 J1 1,500 20,300 Accounts Receivable No. 112 Date Explanation Ref. Debit Credit Balance May11 J1 3,200 3,200 Supplies No. 126 Date Explanation Ref. Debit Credit Balance May 3 J1 2,500 2,500 Accounts Payable No. 201 Date Explanation Ref. Debit Credit Balance May 3 J1 2,500 2,500 31 J1 1,500 1,000 Unearned Service Revenue No. 209 Date Explanation Ref. Debit Credit Balance May 12 J1 3,500 3,500
51. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank PROBLEM 2-2B(Continued) Owner’s Capital No. 301 Date Explanation Ref. Debit Credit Balance May 1 J1 20,000 20,000 Service Revenue No. 400 Date Explanation Ref. Debit Credit Balance May11 17 J1 J1 3,200 1,200 3,200 4,400 Salaries and Wages Expense No. 726 Date Explanation Ref. Debit Credit Balance May31 J1 2,000 2,000 Rent Expense No. 729 Date Explanation Ref. Debit Credit Balance May 7 J1 900 900 (c) IRIS BECK,CPA TrialBalance May 31, 2014 Debit Credit Cash ........................................................................ $20,300 Accounts Receivable............................................ 3,200 Supplies.................................................................. 2,500 Accounts Payable ................................................. $ 1,000 Unearned Service Revenue ................................. 3,500 Owner’s Capital ..................................................... 20,000 Service Revenue.................................................... 4,400 Salaries and Wages Expense .............................. 2,000 Rent Expense......................................................... 900 $28,900 $28,900
52. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank PROBLEM 2-3B (a) & (c) Cash Balance 8,000 (1) 1,000 (3) 2,000 (4) 14,000 (5) 15,000 (7) 6,000 (8) 3,500 (9) 3,000 3,500 Accounts Receivable Balance 15,000 (4) 14,000 (7) 9,000 10,000 Supplies Balance 13,000 (2) 4,200 (6) 4,000 13,200 Prepaid Rent Balance 3,000 3,000 Equipment Balance 20,000 20,000 Accounts Payable Balance 19,000 (2) 4,200 (5) 15,000 8,200 Owner’s Capital Balance 40,000 40,000 Owner’s Drawings (9) 3,000 3,000 Service Revenue (7) 15,000 15,000 Advertising Expense (1) 1,000 1,000 Miscellaneous Expense (3) 2,000 2,000 Supplies Expense (6) 4,000 4,000 Salaries and Wages Expense (8) 3,500 3,500
53. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank PROBLEM 2-3B(Continued) (b) Trans. AccountTitles and Explanation Debit Credit 1. Advertising Expense................................ 1,000 Cash .................................................. 1,000 2. Supplies...................................................... 4,200 Accounts Payable ........................... 4,200 3. Miscellaneous Expense........................... 2,000 Cash .................................................. 2,000 4. Cash............................................................ 14,000 Accounts Receivable...................... 14,000 5. Accounts Payable..................................... 15,000 Cash .................................................. 15,000 6. Supplies Expense..................................... 4,000 Supplies............................................ 4,000 7. Cash............................................................ 6,000 Accounts Receivable................................ 9,000 Service Revenue.............................. 15,000 8. Salaries and Wages Expense.................. 3,500 Cash .................................................. 3,500 9. Owner’s Drawings..................................... 3,000 Cash .................................................. 3,000
54. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank PROBLEM 2-3B(Continued) (d) VIAN REPAIR SERVICE TrialBalance January 31,2014 Debit Credit Cash......................................................................... $ 3,500 Accounts Receivable............................................ 10,000 Supplies.................................................................. 17,200 Prepaid Rent........................................................... 3,000 Equipment............................................................... 20,000 Accounts Payable.................................................. $ 8,200 Owner’s Capital...................................................... 40,000 Owner’s Drawings................................................. 3,000 Service Revenue.................................................... 15,000 Advertising Expense............................................. 1,000 Miscellaneous Expense........................................ 2,000 Salaries and Wages Expense .............................. 3,500 $63,200 $63,200
55. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank PROBLEM 2-4B SEAN DEVINE COMPANY Trial Balance May 31, 2014 Debit Credit Cash ($5,850 + $520 – $486) .......................................... $ 5,884 Accounts Receivable ($2,570 – $210)........................... 2,360 Prepaid Insurance ($700 + $100)................................... 800 Supplies ($0 + $520)........................................................ 520 Equipment ($8,000 – $520)............................................. 7,480 Accounts Payable ($4,500 – $100 + $520 – $210)....... $ 4,710 Unearned Service Revenue ........................................... 650 Owner’s Capital ($11,700 + $1,000)............................... 12,700 Owner’s Drawings ($0 + $1,000).................................... 1,000 Service Revenue.............................................................. 6,960 Salaries and Wages Expense ($4,200 + $200)............. 4,400 Advertising Expense ($1,100 + $486)........................... 1,586 Utilities Expense ($890 + $100) ..................................... 990 $25,020 $25,020
56. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank PROBLEM 2-5B (a) & (c) Cash No. 101 Date Explanation Ref. Debit Credit Balance Apr. 1 Balance  4,000 2 J1 1,100 2,900 9 J1 2,800 5,700 10 J1 3,000 2,700 12 J1 500 2,200 25 J1 5,200 7,400 29 J1 2,000 5,400 30 J1 85 5,485 30 J1 1,200 4,285 Accounts Receivable No. 112 Date Explanation Ref. Debit Credit Balance Apr. 30 J1 85 85 Prepaid Rent No. 136 Date Explanation Ref. Debit Credit Balance Apr. 30 J1 1,200 1,200 Land No. 140 Date Explanation Ref. Debit Credit Balance Apr. 1 Balance  10,000 Buildings No. 145 Date Explanation Ref. Debit Credit Balance Apr. 1 Balance  8,000
57. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank PROBLEM 2-5B(Continued) Equipment No. 157 Date Explanation Ref. Debit Credit Balance Apr. 1 Balance  6,000 Accounts Payable No. 201 Date Explanation Ref. Debit Credit Balance Apr. 1 Balance  2,000 10 J1 1,000 1,000 20 J1 1,000 2,000 Mortgage Payable No. 275 Date Explanation Ref. Debit Credit Balance Apr. 1 Balance  8,000 10 J1 2,000 6,000 Owner’s Capital No. 301 Date Explanation Ref. Debit Credit Balance Apr. 1 Balance  18,000 Service Revenue No. 400 Date Explanation Ref. Debit Credit Balance Apr. 9 J1 2,800 2,800 25 J1 5,200 8,000 Rent Revenue No. 429 Date Explanation Ref. Debit Credit Balance Apr.30 J1 170 170
58. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank PROBLEM 2-5B(Continued) Advertising Expense No. 610 Date Explanation Ref. Debit Credit Balance Apr. 12 J1 500 500 Salaries and Wages Expense No. 726 Date Explanation Ref. Debit Credit Balance Apr. 29 J1 2,000 2,000 Rent Expense No. 729 Date Explanation Ref. Debit Credit Balance Apr. 2 J1 1,100 1,100 20 J1 1,000 2,100 (b) J1 Date AccountTitles and Explanation Ref. Debit Credit Apr. 2 Rent Expense....................................... Cash............................................. (Paid film rental) 729 101 1,100 1,100 3 No entry—nota transaction. 9 Cash ...................................................... Service Revenue ........................ (Received cash for services performed) 101 400 2,800 2,800 10 Mortgage Payable................................ Accounts Payable ............................... Cash............................................. (Made payments on mortgageand accounts payable) 275 201 101 2,000 1,000 3,000
59. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank PROBLEM 2-5B(Continued) Date AccountTitles and Explanation Ref. Debit Credit Apr. 11 No entry—nota transaction. 12 Advertising Expense............................ Cash............................................... (Paid advertisingexpenses) 610 101 500 500 20 Rent Expense ........................................ Accounts Payable........................ (Rented film on account) 729 201 1,000 1,000 25 Cash ................................................................. ................................................................. Service Revenue.......................... (Received cash for services performed) 101 400 5,200 5,200 29 Salaries and Wages Expense.............. Cash............................................... (Paid salariesexpense) 726 101 2,000 2,000 30 Cash ................................................................. ................................................................. Accounts Receivable............................ Rent Revenue............................... (17% X $1,000) (Received cash and balance on accountfor rentrevenue) 101 112 429 85 85 170 30 Prepaid Rent.......................................... Cash............................................... (Paid cash for future film rentals) 136 101 1,200 1,200
60. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank PROBLEM 2-5B(Continued) (d) CLASSIC THEATER TrialBalance April 30, 2014 Debit Credit Cash......................................................................... $ 4,285 Accounts Receivable............................................ 85 Prepaid Rent........................................................... 1,200 Land......................................................................... 10,000 Buildings................................................................. 8,000 Equipment............................................................... 6,000 Accounts Payable.................................................. $ 2,000 Mortgage Payable.................................................. 6,000 Owner’s Capital...................................................... 18,000 Service Revenue.................................................... 8,000 Rent Revenue......................................................... 170 Advertising Expense............................................. 500 Salaries and Wages Expense .............................. 2,000 Rent Expense......................................................... 2,100 $34,170 $34,170
61. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank CCC2 CONTINUING COOKIE CHRONICLE (a) GENERAL JOURNAL J1 AccountTitles and Explanation Debit Credit Nov. 8 No entry required for cashing U.S. Savings Bonds—this is a personal transaction. 8 Cash ............................................................ 500 Owner’s Capital..................................... 500 11 Advertising Expense................................. 65 Cash........................................................ 65 13 Supplies...................................................... 125 Cash........................................................ 125 14 Equipment.................................................. 300 Owner’s Capital..................................... 300 16 Cash ............................................................ 2,000 Notes Payable....................................... 2,000 17 Equipment.................................................. 900 Cash........................................................ 900 20 Cash ............................................................ 125 Service Revenue................................... 125 25 Cash ............................................................ 30 Unearned Service Revenue................. 30 30 Prepaid Insurance..................................... 1,320 Cash........................................................ 1,320
62. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank CCC2 (Continued) (b) Cash Date Explanation Ref. Debits Credits Balance Nov. 8 J1 500 500 11 J1 65 435 13 J1 125 310 16 J1 2,000 2,310 17 J1 900 1,410 20 J1 125 1,535 25 J1 30 1,565 30 J1 1,320 245 Supplies Date Explanation Ref. Debits Credits Balance Nov. 13 J1 125 125 Prepaid Insurance Date Explanation Ref. Debits Credits Balance Nov. 30 J1 1,320 1,320 Equipment Date Explanation Ref. Debits Credits Balance Nov. 14 J1 300 300 17 J1 900 1,200 Unearned Service Revenue Date Explanation Ref. Debits Credits Balance Nov. 25 J1 30 30
63. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank CCC2 (Continued) (b) (Continued) Notes Payable Date Explanation Ref. Debits Credits Balance Nov. 16 J1 2,000 2,000 Owner’s Capital Date Explanation Ref. Debits Credits Balance Nov. 8 J1 500 500 14 J1 300 800 Service Revenue Date Explanation Ref. Debits Credits Balance Nov. 20 J1 125 125 Advertising Expense Date Explanation Ref. Debits Credits Balance Nov. 11 J1 65 65
64. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank CCC2 (Continued) (c) COOKIE CREATIONS Trial Balance November 30, 2013 Debit Credit Cash ............................................................................... $ 245 Supplies......................................................................... 125 Prepaid Insurance........................................................ 1,320 Equipment..................................................................... 1,200 Unearned Service Revenue ........................................ $ 30 Notes Payable............................................................... 2,000 Owner’s Capital ............................................................ 800 Service Revenue........................................................... 125 Advertising Expense.................................................... 65 $2,955 $2,955 Note to instructors: Because the notes payable is not due for 24 months, it follows Unearned Service Revenue in the accounts and the trial balance.
65. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank BYP 2-1 FINANCIAL REPORTING PROBLEM (a) Account (1) Increase Side (1) Decrease Side (2) Normal Balance Accounts Payable Credit Debit Credit Accounts Receivable Debit Credit Debit Property, Plant, and Equipment Debit Credit Debit Cash and Cash Equivalents Debit Credit Debit Research and Development Expense Debit Credit Debit Inventories Debit Credit Debit (b) 1. Cash is increased. 2. Cash is decreased. 3. Cash is decreasedor Accounts Payable is increased. (c) 1. Cash is decreased. 2. Cash is decreasedor Notes or MortgagePayable is increased.
66. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank BYP 2-2 COMPARATIVEANALYSIS PROBLEM Amazon Wal-Mart (a) 1. Interest Expense: debit 1. Net Sales Revenues: credit 2. Cash and Cash Equivalents: debit 2. Inventories: debit 3. Accounts Payable: credit 3. Cost of Sales: debit (b) The following other accounts are ordinarily involved: 1. Increase in Accounts Receivable: Service Revenue or Sales Revenue is increased (credited). 2. Increase in Interest Expense: Cash is decreased (credited). 3. Decrease in Salaries and Wages Payable: Cash is decreased (credited). 4. Increase in Service Revenue: Cash or Accounts Receivable is increased (debited).
67. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank BYP 2-3 REAL-WORLD FOCUS The answer is dependent upon the company selected by the student.
68. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank BYP 2-4 REAL-WORLD FOCUS (a) The reason the Green Bay Packers’ issue an annual report is because they are a publicly owned,nonprofitcompany.Theyissue the reportto the more than 100,000shareholders who hold shares.None of the other teams are publicly owned, so they have no obligation to make their financial information available except to their small group of owners. (b) At the time that the article was written the ownersof the NFL teams and the players’labor union were negotiating a new contract.Knowing how profitable the NFL teams are would be usefulinformation for the players to know so that they would have a better sense of how much the teams could afford to play. The Packers are obviously a “small market” team, they are not necessarily representative of teams in general. However, the Packers’ annual report does give the players some sense of the profitability of other teams. (c) Since some ofthe costofthe stadium thatthe Packers playin is covered by taxpayers, the county and state government has an interest in the team’s finances. (d) The Packers’ revenues increased during recent years. However, because the cost of players’ salaries increased at a faster rate than revenues, the Packers’ operating profit actually declined.
69. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank BYP 2-5 DECISIONMAKING ACROSS THE ORGANIZATION (a) May 1 Correct. 5 Correct. 7 Cash............................................................ 300 Unearned Service Revenue.............. 300 14 Equipment.................................................. 800 Cash..................................................... 800 15 Owner’s Drawings..................................... 400 Cash..................................................... 400 20 Cash............................................................ 184 Service Revenue................................ 184 30 Correct. 31 Supplies...................................................... 1,700 Accounts Payable.............................. 1,700 (b) The errors in the entries of May 14 and 20 would prevent the trial balance from balancing. (c) Net income as reported.............................................. $ 4,500 Add: 5/15, Salaries expense (Owner’s Drawings)...................................... 400 4,900 Less: 5/7, Boarding revenue unearned................... 300 Correct net income...................................................... $ 4,600 (d) Cash as reported......................................................... $12,475 Add: 5/20, Transposition error ................................ $ 36 5/31, Purchase on account............................. 1,700 1,736 $14,211
70. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank BYP 2-6 COMMUNICATIONACTIVITY Date: May 25, 2014 To: Accounting Instructor From: Student In the first transaction, bills totaling $6,000 were sent to customers for services performed. Therefore, the asset Accounts Receivable is increased $6,000and the revenueService Revenue is increased $6,000.Debitsincrease assets and credits increase revenues, so the journal entry is: Accounts Receivable................................................................ 6,000 Service Revenue................................................................ 6,000 (Billed customers for services performed) The $6,000 amount is then posted to the debit side of the general ledger account Accounts Receivable and to the credit side of the general ledger account Service Revenue. In the secondtransaction,$2,000waspaidin salariesto employees.Therefore, the expenseSalariesand Wages Expense is increased $2,000 and the asset Cash is decreased $2,000. Debits increase expenses and credits decrease assets, so the journal entry is: Salaries and Wages Expense .................................................. 2,000 Cash..................................................................................... 2,000 (Salaries and wagespaid) The $2,000 amount is then posted to the debit side of the general ledger account Salaries and Wages Expense and to the credit side of the general ledger account Cash.
71. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank BYP 2-7 ETHICS CASE (a) The stakeholders in this situation are:  Meredith Ward, assistant chief accountant.  Users of the company’s financial statements.  The Frazier Company. (b) By adding $1,000 to the Equipmentaccount,that accounttotal is inten- tionally misstated. By not locating the error causing the imbalance, some other account may also be misstated by $1,000. If the amount of $1,000 is determined to be immaterial, and the intent is not to commit fraud (cover up an embezzlement or other misappropriation of assets), Meredith’s action might not be considered unethical in the preparation of interim financial statements. However, if Meredith is violating a companyaccounting policy by her action,then she is acting unethically. (c) Meredith’s alternatives are: 1. Miss the deadline but find the error causing the imbalance. 2. Tellher supervisorof the imbalance and suffer the consequences. 3. Do as she did and locate the error later, making the adjustment in the next quarter.
72. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank BYP 2-8 ALL ABOUT YOU The decision whether to fire Mr. Edmondson was the responsibility of Radio Shack’s board of directors, which is elected by the company’s shareholders to oversee management. The board initially announced its supportfor the CEO.After further investigation,the boardencouragedMr. Edmondson to resign,which he did. In contrast,when Bausch & Lomb’s CEO offered to resign in a similar situation,the company’sboardrefused to accepthis resignation.Board members stated thatthey felthe was still the best person for the position. Radio Shack saysthatalthough it did a referencecheckatthe time of Mr. Edmondson’s hiring, it did not check his educational credentials. Under the Sarbanes-Oxley Act, companies must now perform thorough background checks as part of a check of internal controls. The bottom line: Your résumé must be a fair and accurate depiction of your past.
73. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank BYP 2-9 ALL ABOUT YOU (a) Students’ responses to this question will vary. It is important that the steps that they identify be as specific as possible, and clearly directed toward achieving their goal. You may wish to ask a follow-up question asking them to explain how each step willassistthem in achievingtheir goal. (b) There are many sites on the Internet that provide information about preparing a résumé. For example, you can find extensive resources at: http://www.rileyguide.com/resprep.html. Many schools also have re- sources in their placement centers or writing labs. The Writing Center at RensselaerPolytechnic Instituteprovidesuseful,concise informationon its website at http://www.ccp.rpi.edu/resources/careers-and-graduate- school/resumes. A wide variety of sample résumés can be found. For example, Monster.com provides samples for a wide variety of professions and situations at http://www.career-advice.monster.com/ resumes-cover-letters/careers.aspx. (c) It is important to provide accurate and complete documentation of all relevant training, education, and employment experiences so as to provide assurance to the potential employer, and also to enable that employer to do follow-up work.If you say you have certain skills, such as computer skills, try to substantiate the claim with recognized proof of proficiency. Make sure that all addresses and phone numbers are accurate and up-to-date. Also, ensure that the people you use as references have a copy of your résumé and cover letter, and that they are informed that you are interviewing so they know to expect a call. (d) See the sample résumés provided in the websites above for various format options. You might also mention to students that there are electronic résumé templates available on the Internet.
74. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank BYP 2-10 CONSIDERING PEOPLE,PLANET AND PROFIT (a) The existence ofthree differentforms of certification would mostlikely create confusion for coffee purchasers.It would difficult to know what aspects of the coffee growing process each certification covered. Similarly, if there were multiple groups that certified financial statements,each with differentcriteria,itwould be difficultfor financial statement users to know what each certification promised. (b) The Starbucks certification appears to be the most common in that area.Ithas the advantage ofhaving a directlink to the Starbuckscoffee market. Although it does not guarantee that Starbucks will buy its coffee, it is a requirement that must be met before Starbucks will buy somebody’s coffee. Note that the article states that the Starbucks certification “incorporates elements of social responsibility and environmentalleadership,butquality of coffee is the first criteria.”The Smithsonian Bird Friendly is considered to have the strictest requirements and, as a result, appears to be the least common. (c) The certifications havemultiple objectivesincludingorganic farmingas a means to protectbird species,biodiversity and wildlife habitat.Some included requirements are to improve workers’living conditions,such as providing running water in worker housing, child labor regulations and education requirements. As mentioned above, the Starbucks certification has the potential financial benefit of making Starbucks a potential customer, which can stabilize farmers’ earnings. Certificationscanalso be financially beneficialbecause companiescan benefitfrom the positive public relations effects of either producing or buying coffee produced using sustainable practices.
75. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank IFRS EXERCISES IFRS 2-1 In deciding whether the U.S. should adopt IFRS, the SEC should consider the following.  Whether IFRS is sufficiently developed and consistent in application  Whether the IASB is sufficiently independent  Whether IFRS is established for the benefit to investors  The issues involved in educating investors about IFRS  The impact of a switch to IFRS on U.S. laws and regulations  The impact on companies including changes to their accounting systems, contractual arrangements, corporate governance, and litigation  The issues involved in educating accountants, so they can prepare statements under IFRS
76. Accounting Tools for Business Decision Making Kimmel 4th Edition Test Bank IFRS 2-2 INTERNATIONAL FINANCIAL REPORTING PROBLEM Account Financial Statement Position in Financial Statement Other administrative expenses Consolidated Income statement After gross profit and before operating profit Cash at bank Consolidated Balance Sheet Current assets Borrowings and overdrafts Consolidated Balance Sheet Currentand Non- current liabilities Finance costs Consolidated Income Statement After Operatingprofit and before Profit from continuing operations before taxation.
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