Vol. 1, Chapter 2 - Accounting for Business Transactions

Accounting for Business Transactions 1 Vol. 1, Chapter 2 - Accounting for Business Transactions Problem 1 Account Normal Balance Cash Debit Accounts R...

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Vol. 1, Chapter 2 - Accounting for Business Transactions Problem 1 Account Cash Accounts Receivable Rent Expense Jacob, Capital Accounts Payable Room Revenue Interest Income Wages Expense Taxes Expense Water Expense Notes Payable Laundry Expense

Normal Balance Debit Debit Debit Credit Credit Credit Credit Debit Debit Debit Credit Debit

Problem 2 3/31 (a)

Cash $6,700.00 1,750.20 8,450.20

(b)

$2,430.00 6,020.20

(c) (d) (e) (f) (g)

2,419.22 3,600.98 – 180.26 3,781.24 5,100.00 8,881.24 – $8,881.24





Transactions (d) and (g) do not affect the cash account. Problem 3 Feb. 1 Feb. 1 Feb. 2 Feb. 3 Feb. 4 Feb. 5

Beginning Balance (–) Check #181 (–) Check #182 (+) Cash Sales Deposit (–) Check #183 (–) Check #184 Cash Account Balance

Accounting for Business Transactions

$ 850.18 – 230.00 – 536.00 2,428.36 – 352.00 – 228.52 $ 1,932.02

1

Problem 4

Accounts Affected Equipment Cash Notes Payable

Normal Balance Debit Debit Credit

Debit or Credit Debit Credit Credit

(b)

Salary Expense Cash

Debit Debit

Debit Credit

(c)

Kati Litchfield, Capital Cash

Credit Debit

Debit Credit

(d)

Supplies Expense Accounts Payable

Debit Credit

Debit Credit

(e)

Accounts Receivable Sales

Debit Credit

Debit Credit

(f)

Marketable Securities Cash

Debit Debit

Debit Credit

(g)

Accounts Payable Cash

Credit Debit

Debit Credit

(h)

Prepaid Rent Cash

Debit Debit

Debit Credit

(a)

Problem 5

$

Wage Expense 2,000 Food Sales $

$

5,500

Rent Expense 700 Beverage Sales $

400

Cost of Food Sales (Expense) $ 1,700 Cost of Beverage Sales (Expense) $ 100

Accounting for Business Transactions

2

Problem 6 Transactions a)

b)

c)

d)

e)

f)

g)

Debit

Food Expense Cash To record food purchases for cash Equipment Accounts Payable, Circus Supply To record the purchase of equipment from Circus Supply Cash Food Sales To record food sales Wages Expense Cash To record wages paid Cash Beverage Sales To record beverage sales Beverage Expense Cash To record the purchase of beverages for cash Accounts Payable, Circus Supply Cash To record payment to Circus Supply on account

Problem 7 Turner Café Trial Balance December 31, 20XX

Cash J. Turner, Capital Food Inventory Prepaid Expenses Accounts Payable Equipment Notes Payable Sales Cost of Food Sold Rent Expense Wages Expense Other Expenses

Accounting for Business Transactions

Debit $ 3,500

Credit $ 10,500

4,500 700 2,100 14,400 7,400 42,000 14,000 2,000 16,000 6,900



$ 62,000

$ 62,000

3

Credit

$ 75 $ 75 $150 $150 $300 $300 $110 $110 $100 $100 $ 12 $ 12 $ 10 $ 10

Problem 8 Tyler Motel Trial Balance Cash Accounts Receivable Inventory Prepaid Insurance Land Buildings Acc. Dep.—Buildings Equipment Acc. Dep.—Equipment Accounts Payable Notes Payable Tyler, Wray, Capital Room Revenue Wages Expense Laundry Expense Advertising Expense Utilities Expense Insurance Expense Property Taxes Expense Interest Expense Depreciation Expense Supplies Expense Maintenance Expense

$

Debit 12,400 40,500 18,300 2,100 150,000 2,400,000

$1,250,000 900,000 235,000 35,000 846,000 32,800 2,350,000 751,000 50,000 36,000 52,000 22,000 20,000 82,000 115,000 33,000 64,500 $ 4,748,800

Problem 9 Debit Accounts Payable Accounts Receivable Building Cash Chuck Franko, Capital Delivery Equipment Interest Expense Interest Payable Land Merchandise Inventory Mortgage Payable Notes Payable Notes Receivable Office Equipment Office Supplies Prepaid Insurance Prepaid Interest Revenue Store Equipment

Accounting for Business Transactions

Credit

Credit $ 2,400

$ 4,500 25,500 2,000 18,300 2,500 200 150 8,200 9,500 6,500 1,200 300 1,600 85 160 15 35,950 5,450

4

$ 4,748,800

Store Supplies Taxes Payable Telephone Expense Truck Repairs Wages Expense Wages Payable

155 250 110 130 4,420 –

75

$ 64,825

$ 64,825

Problem 10 1.

Transactions October 2 October 3 October 3 October 4 October 4 October 5

To record the investment of cash and equipment by the owner To pay the rent for November in advance To record the purchase of food and beverages (to be sold this period) on account To record the sale of food and beverages for cash and on account To record the wage expense incurred but not yet paid Payment of cash from an account receivable

2. Cash $ 12,000 $ 1,000 500 100 $ 11,600 Prepaid Rent $ 1,000 $ 1,000

Food Sales $ $

Equipment $ 10,000 $ 10,000

Accts. Pay., Bixbie Food $ 2,500 $ 2,500

600 600

Beverage Expense $ 500 $ 500

Beverage Sales $ 100 $ 100 Wages Expense $ 195 $ 195

Mary Ramaker, Capital $ 22,000 $ 22,000

Accounts Receivable $ 200 $ 100 $ 100

Food Expense $ 2,000 $ 2,000 Wages Payable $ 195 $ 195

Problem 11 June 1 June 6 June 6 June 8 June 12 June 15

Beginning Balance (+) 3 Meals Total Cost (+) Tip from 3 Meals (15%) (–) Pay Down Account (+) Breakfast (+) 2 Lunches

Accounting for Business Transactions

$ 480.00 34.00 5.10 – 300.00 12.42 24.15

5

(1)

June 15 June 21 June 28 June 28 June 28

(+) Tip from 2 Lunches (20%) (–) Pay Down Account (+) Anniversary Dinner (+) Service Charge (15%) (+) Sales Tax (6%) Ending Account Balance (1) (2) (3) (4)

4.83 – 100.00 480.00 72.00 33.12 $ 745.62

(2)

(3) (4)

34.00 × .15 = 5.10 24.15 × .20 = 4.83 480.00 × .15 = 72.00 480.00 – 72.00 = 552.00 × .06 = 33.12

Problem 12 1. and 2. Cash $ a

Marketable Securities

1,500

$

5,000

10

$

5,000

$

200 b

Accts. Rec., Erica Lee $

20

$

– 10

$

10 a

100 d 5 e 20 f h

310 $

$ b

1,495

Accts. Rec., Monica Ray 15 5 $ 20

$ $

Office Supplies 2,250 2,250

$ $

Furniture 1,000 1,000

Equipment 2,000 2,000

$ $

Notes Pay., Mineral State Bank $ 1,500 $ 1,500

$ $

Cleaning Supplies 500 500

Accts. Pay., Stacie Supply, Inc. $ 400 250 $ 650

Stephanie Smith, Capital $ 2,085 $ 2,085

Food Sales $

$

Beverage Sales $ Accounting for Business Transactions

7,000

Food Expense 10,000

$ 6

$

Beverage Expense 2,000

25,000 4 250 25,254

1g 60 h 7,061

$

$

Wages Expense 8,000 20 8,020

$ $

Insurance Expense 500 500

$ f

c

250 10,250

$

$

Utilities Expense 1,000 100 $ 1,100 $

d

Office Supplies Expense $ 100 $ 100

$ b $

$ e $

3.

Stephanie's Steakhouse Trial Balance July 1, 20X1

Cash Marketable Securities Accounts Receivable, Erica Lee Accounts Receivable, Monica Ray Office Supplies Cleaning Supplies Furniture Equipment Accounts Payable, Stacie Supply Inc. Notes Payable, Mineral State Bank Stephanie Smith, Capital Food Sales Beverage Sales Food Expense Beverage Expense Wages Expense Utilities Expense Rent Expense Insurance Expense Office Supplies Expense Advertising Expense

Accounting for Business Transactions

Debit $ 1,495 5,000 10 20 2,250 500 1,000 2,000

Credit

$

650 1,500 2,085 25,254 7,061

10,250 2,000 8,020 1,100 2,200 500 100 105



$ 36,550

$ 36,550

7

2,000

Rent Expense 2,000 200 2,200 Advertising Expense 100 5 105

Problem 13 Cash 5,000 (a)

Food and Beverage Inventory 1,200 (f) 400 (f) 1,600

800 ( c) 150 (d) 450 (e) 80 (g)

Furniture 5,000 (a) 5,000

2,400 (h) 5,920 Equipment 50,000 (a) 800 ( c) 50,800

Land 100,000 (a) 100,000 Accounts Payable

Building 450,000 (a) 450,000

400 (b) 1,200 (f) 400 (f) 2,000

B. Wilson, Capital 5,000 (a) 5,000 (a) 50,000 (a) 100,000 (a) 450,000 (a) 610,000

Food and Beverage Sales 2,400 (h) 2,400 Operating Supplies Expenses 400 (b) 400

Advertising Expenses 150 (d) 150

Utilities Expenses 80 (g) 80

Wages Expenses 450 (e) 450 Problem 14 1. and 2. Cash a

Furniture

$ 2,000

a $

200 c 30 50 250 10 100

i

Equipment

$

2,000

a

$

2,000

c

d e f g h

$

3,000 200

$

3,200

900 $ 2,260 Building

Accounting for Business Transactions

Accts. Pay., Edgar's Food Supply, Inc.

8

Paul Olivia, Capital

a

$ 8,000 $ 8,000

h

$

Food Sales

$

50

$

50

$

500

$

500

$

15,000 a



$

15,000

$

500

100

Beverage Sales

Advertising Expense

750 i

$

150 i d

$

30

$

750

$

150

$

30

Wages Expense f

$

250

$

250

Food Expense b

600 b

$

Utilities Expense e

$

Cooking Supplies Expense g

$

10

$

10

Beverage Expense b

$

100

$

100

3. Trial Balance Cash Furniture Equipment Building Accounts Payable Paul Olivia, Capital Food Sales Beverage Sales Advertising Expense Utilities Expense Wages Expense Cooking Supplies Expense Food Expense Beverage Expense

Debit $ 2,260 2,000 3,200 8,000

Credit

$ 500 15,000 750 150 30 50 250 10 500 100



$16,400

$16,400

Problem 15 1. Transactions a) Prepaid Rent Cash To record prepayment of September rent b) Cash Room Sales To record cash sales for August c) Accounts Receivable Room Sales To record room sales on account d) Cleaning Supplies Cash To record purchase of cleaning supplies for cash

Accounting for Business Transactions

9

Debit $ 1,000

Credit $ 1,000

$15,000 $15,000 $

$

250 $

250

$

290

290

e)

Office Supplies Accounts Payable (Bing’s Office Supplies) To record the purchase of office supplies on account Cash Jack Wicks, Capital To record new investment by the owner Accounts Payable (Bing’s) Cash To record payment to Bing’s Office Supply Hut on account Cash Rental Income To record additional revenue from vending machines Wages Expense Cash To record the payment of wages with cash

f)

g)

h)

i)

$

150 $

150

$ 1,000 $ 1,000 $

$

50 $

50

$

75

75

$ 5,700 $ 5,700

2. and 3. $ b

Cash 3,120 $ 15,000

1,000 a b

Accounts Receivable $ 200 250 $ 450

Prepaid Rent 1,000 1,000

a$ $

290 d f

1,000

h

75 – $ 12,155

50 g

$ d $

5,700 i

Cleaning Supplies 30 290 320

e

Office Supplies $ 100 150 $ 250

Accts. Pay. (Bing’s) $ g

$

50 $

Notes Pay. (Mineral State Bank) $ 400 $ 400

Rental Income (Revenue) $ 75 h i $ 75

Accounting for Business Transactions

Jack Wicks, Capital $ 3,000 1,000 f $ 4,000 Wages Expense $ 5,700 $ 5,700

10

Room Sales $ $

50 150 e – 150

15,000 b 250 c 15,250

4. Rodeside Motel Trial Balance August 31, 20X3 Debit $ 12,155 450 1,000 320 250

Cash Accounts Receivable Prepaid Rent Cleaning Supplies Office Supplies Accounts Payable (Bing's) Notes Payable Jack Wicks, Capital Room Sales Rental Income Wages Expense

Accounting for Business Transactions

Credit

$

11

5,700

150 400 4,000 15,250 75 –

$ 19,875

$ 19,875