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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Exercise 2-12
Analyzing and journalizing
expense transactions
A1 P1
Exercise 2-13
Preparing an income
statement
C3 P3
ow
Check Net income, $10,470
Exercise 2-14
Preparing a statement
of owner's equity P3
Check End. Capital, $106,470
D
Exercise 2-15
Preparing a balance sheet P3
Exercise 2-16
Computing net income
A1
Exercise 2-17
Analyzing changes in a
company's equity
P31
Chapter 2 Analyzing and Recording Transactions
Examine the following transactions and identify those that create expenses for Valdez Services. Prepa
general journal entries to record those expense transactions and explain why the other transactions did r
create expenses.
a. The company paid $12,200 cash for payment on a 16-month old liability for office supplies.
b. The company paid $1,233 cash for the just completed two-week salary of the receptionist.
c. The company paid $39,200 cash for equipment purchased.
d. The company paid $870 cash for this month's utilities.
e. Owner (Valdez) withdrew $4,500 cash from the company for personal use.
Carmen Camry operates a consulting firm called Help Today. On August 31, the company's records sh
the following accounts and amounts for the month of August. Use this information to prepare an Augi
income statement for the business.
B
Cash.
Accounts receivable
Office supplies
Land
Office equipment
Accounts payable
C. Camry, Capital, July 31.
$25,360
22,360
5,250
44,000
20,000
10,500
2,000
C. Camry, Withdrawals
Consulting fees earned.
Use the information in Exercise 2-13 to prepare an August statement of owner's equity for Help Toda
(The owner invested $100,000 cash in the company during the first week of August.)
Beginning of the year
End of the year
Rent expense
Salaries expense.
Telephone expense
Miscellaneous expenses.
Owner investment made on August 4
Use the information in Exercise 2-13 (if completed, you can also use your solution to Exercise 2-14)
prepare an August 31 balance sheet for Help Today.
A sole proprietorship had the following assets and liabilities at the beginning and
Window Help
1
2 Equity, December 31, 2012
3 Owner investments during the year
4 Owner withdrawals during the year
5 Net income (loss) for the year
6 Equity, December 31, 2013
7
KHASheet1 / Sheet2 Sheets/
Σ £ 271 E 100%
Assets
$ 60,000
105,000
$
Determine the net income earned or net loss incurred by the business during the year for each of the follo
ing separate cases:
a. Owner made no investments in the business and no withdrawals were made during the year.
b. Owner made no investments in the business but withdrew $1,250 cash per month for personal use.
c. Owner made no withdrawals during the year but did invest an additional $55,000 cash.
d. Owner withdrew $1,250 cash per month for personal use and invested an additional $35,000 cash.
Compute the missing amount for each of the following separate companies a through d.
File Edit View Insert Format Tools Data
DD
AV
Genev
(a)
Liabilities
$20,000
36,000
0 $
110,000
?
22,000
104,000
$ 6,000
27,000
9,550
5,600
860
520
100,000
C
(b)
of this year.
BYUE
D
E
(c) (d)
0 $ 0
?
87,000 210,000
(47,000) (10,000) (55,000)
90,000 (4,000)
85,000 ?
?
110,000
DU"
Transcribed Image Text:80
Exercise 2-12
Analyzing and journalizing
expense transactions
A1 P1
Exercise 2-13
Preparing an income
statement
C3 P3
ow
Check Net income, $10,470
Exercise 2-14
Preparing a statement
of owner's equity P3
Check End. Capital, $106,470
D
Exercise 2-15
Preparing a balance sheet P3
Exercise 2-16
Computing net income
A1
Exercise 2-17
Analyzing changes in a
company's equity
P31
Chapter 2 Analyzing and Recording Transactions
Examine the following transactions and identify those that create expenses for Valdez Services. Prepa
general journal entries to record those expense transactions and explain why the other transactions did r
create expenses.
a. The company paid $12,200 cash for payment on a 16-month old liability for office supplies.
b. The company paid $1,233 cash for the just completed two-week salary of the receptionist.
c. The company paid $39,200 cash for equipment purchased.
d. The company paid $870 cash for this month's utilities.
e. Owner (Valdez) withdrew $4,500 cash from the company for personal use.
Carmen Camry operates a consulting firm called Help Today. On August 31, the company's records sh
the following accounts and amounts for the month of August. Use this information to prepare an Augi
income statement for the business.
B
Cash.
Accounts receivable
Office supplies
Land
Office equipment
Accounts payable
C. Camry, Capital, July 31.
$25,360
22,360
5,250
44,000
20,000
10,500
2,000
C. Camry, Withdrawals
Consulting fees earned.
Use the information in Exercise 2-13 to prepare an August statement of owner's equity for Help Toda
(The owner invested $100,000 cash in the company during the first week of August.)
Beginning of the year
End of the year
Rent expense
Salaries expense.
Telephone expense
Miscellaneous expenses.
Owner investment made on August 4
Use the information in Exercise 2-13 (if completed, you can also use your solution to Exercise 2-14)
prepare an August 31 balance sheet for Help Today.
A sole proprietorship had the following assets and liabilities at the beginning and
Window Help
1
2 Equity, December 31, 2012
3 Owner investments during the year
4 Owner withdrawals during the year
5 Net income (loss) for the year
6 Equity, December 31, 2013
7
KHASheet1 / Sheet2 Sheets/
Σ £ 271 E 100%
Assets
$ 60,000
105,000
$
Determine the net income earned or net loss incurred by the business during the year for each of the follo
ing separate cases:
a. Owner made no investments in the business and no withdrawals were made during the year.
b. Owner made no investments in the business but withdrew $1,250 cash per month for personal use.
c. Owner made no withdrawals during the year but did invest an additional $55,000 cash.
d. Owner withdrew $1,250 cash per month for personal use and invested an additional $35,000 cash.
Compute the missing amount for each of the following separate companies a through d.
File Edit View Insert Format Tools Data
DD
AV
Genev
(a)
Liabilities
$20,000
36,000
0 $
110,000
?
22,000
104,000
$ 6,000
27,000
9,550
5,600
860
520
100,000
C
(b)
of this year.
BYUE
D
E
(c) (d)
0 $ 0
?
87,000 210,000
(47,000) (10,000) (55,000)
90,000 (4,000)
85,000 ?
?
110,000
DU

Transcribed Image Text:Chapter 2 Analyzing and Recording Transactions
Groro Co. bills a client $62,000 for services provided and agrees to accept the following three items in full
payment: (1) $10,000 cash, (2) computer equipment worth $80,000, and (3) to assume responsibility for a
$28,000 note payable related to the computer equipment. The entry Groro makes to record this transaction
includes which one or more of the following?
a. $28,000 increase in a liability account
b. $10,000 increase in the Cash account
c. $10,000 increase in a revenue account
2
5
d. $62,000 increase in an asset account
e. $62,000 increase in a revenue account
f. $62,000 increase in an equity account
Prepare general journal entries for the following transactions of a new company called Pose-for-Pics.
Aug. 1
Madison Harris, the owner, invested $6,500 cash and $33,500 of photography equipment in the
company.
The company paid $2,100 cash for an insurance policy covering the next 24 months.
The company purchased office supplies for $880 cash.
20 The company received $3,331 cash in photography fees earned.
31
The company paid $675 cash for August utilities.
Use the information in Exercise 2-7 to prepare an August 31 trial balance for Pose-for-Pics. Begin by
opening these T-accounts: Cash; Office Supplies; Prepaid Insurance; Photography Equipment; M. Harris,
Capital; Photography Fees Earned; and Utilities Expense. Then, post the general journal entries to these
T-accounts (which will serve as the ledger), and prepare the trial balance.
Prepare general journal entries to record the transactions below for Spade Company by using the fol-
lowing accounts: Cash; Accounts Receivable; Office Supplies; Office Equipment; Accounts Payable;
K. Spade, Capital; K. Spade, Withdrawals; Fees Earned; and Rent Expense. Use the letters beside each
transaction to identify entries. After recording the transactions, post them to T-accounts, which serves
as the general ledger for this assignment. Determine the ending balance of each T-account.
a. Kacy Spade, owner, invested $100,750 cash in the company.
b. The company purchased office supplies for $1,250 cash.
c. The company pur
$10,050 of office equipment on credit.
d. The company received $15,500 cash as fees for services provided to a customer.
e. The company paid $10,050 cash to settle the payable for the office equipment purchased in transaction c.
f. The company billed a customer $2,700 as fees for services provided.
g. The company paid $1,225 cash for the monthly rent.
h. The company collected $1,125 cash as partial payment for the account receivable created in transaction f.
i. Kacy Spade withdrew $10,000 cash from the company for personal use.
After recording the transactions of Exercise 2-9 in T-accounts and calculating the balance of each account,
prepare a trial balance. Use May 31, 2013, as its report date.
Examine the following transactions and identify those that create revenues for Valdez Services, a company
owned by Brina Valdez. Prepare general journal entries to record those revenue transactions and explain
why the other transactions did not create revenues.
a. Brina Valdez invests $39,350 cash in the company.
b. The company provided $2,300 of services on credit.
c. The company provided services to a client and immediately received $875 cash.
d. The company received $10,200 cash from a client in payment for services to be provided next year.
e. The company received $3,500 cash from a client in partial payment of an account receivable.
f. The company borrowed $120,000 cash from the bank by signing a promissory note.
Exercise 2-6
Analyzing effects of
transactions on accounts
A1
review
Exercise 2-7
Preparing general journal
entries
P1-
Exercise 2-8
Preparing T-accounts (ledger)
and a trial balance P2
V
low
Exercise 2-9
Recording effects of transactions
in T-accounts
A1
Check Cash ending balance,
$94,850
79
HW ✓
Exercise 2-10
Preparing a trial balance P2
Exercise 2-11
Analyzing and journalizing
revenue transactions
A1 P1 I
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