Financial accounting
Financial accounting
3rd Edition
ISBN: 9780077506902
Author: David J Spieceland Wayne Thomas Don Herrmann
Publisher: Mcgraw-Hill
bartleby

Concept explainers

bartleby

Videos

Question
Book Icon
Chapter 2, Problem 2.9AP

1.

To determine

To Record: Each transaction of RH Expeditions for the month of December.

1.

Expert Solution
Check Mark

Answer to Problem 2.9AP

Journalize the transactions of RH Expeditions for the month of December.

Date Account Title and Explanation Debit($) Credit($)
December 1 1 Rent Expense 900  
Cash   900
    (To record the payment of rent expenses)    
         
December 5 2 Cash 2,800  
Service Revenue   2,800
    (To record the revenues earned)    
         
December 8 3 Cash 10,000  
    Note Payable   10,000
    (To record the purchase of equipment)    
         
December 12 4 Cash 3,500  
Accounts Receivable   3,500
    (To record the receipt of cash from revenues earned)    
         
December 13 5 Cash 20,000  
Common Stock   20,000
    (To record the issuance of common stock)    
         
December 15 6 Salaries Expense 1,200  
Cash   1,200
    (To record the payment of salaries expense)    
         
December 17 7 Advertising Expense 1,000  
Cash   1,000
    (To record the payment of advertising expense)    
         
December 22 8 Accounts Receivable 3,200  
Service Revenue   3,200
    (To record the revenues earned)    
         
December 23   No journal entry    
         
December 26 9 Equipment 28,500  
Cash   28,500
    (To record the purchase of equipment)    
         
December 28 10 Accounts Payable 1,500  
Cash   1,500
    (To record the payment of cash)    
         
December 31 11 Dividends 2,000  
Cash   2,000
    (To record the payment of cash dividends)    

Table (1)

Explanation of Solution

Journal entry:

Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Accounting rules for Journal entries:

  • To record increase balance of account: Debit assets, expenses, losses and credit liabilities, capital, revenue and gains.
  • To record decrease balance of account: Credit assets, expenses, losses and debit liabilities, capital, revenue and gains.

2. and 3.

To determine

To Calculate: The balance of each account by posting each transaction to the appropriate T-accounts.

2. and 3.

Expert Solution
Check Mark

Explanation of Solution

T-account:

An account is referred to as a T-account, because the alignment of the components of the account resembles the capital letter ‘T’. An account consists of the three main components which are as follows:

  • The title of the account
  • The left or debit side
  • The right or credit side

Post the journal entries into T-accounts and determine the balance of each account.

Cash Account

Cash Account
Date Details Debit ($)   Date Details Credit ($)
December 1 Beginning Balance 9,200 December 1 Cash payment for rent 900
December 5 Cash received 2,800 December 15 Cash payment for Salaries 1,200
December 8 Cash borrowed 10,000 December 17 Cash payment for advertising 1,000
December 12 Cash collection 3,500   December 28 Cash payment for Equipment 28,500
December 13 Common stock 20,000   December 28 Cash payment to Accounts payable 1,500
        December 31 Dividends paid 2,000
        December 31 Closing balance 10,400
  Total 45,500     Total 45,500
December 31 Balance 10,400      

Table (2)

Accounts Receivable

Accounts Receivable Account
Date Details Debit ($)   Date Details Credit ($)
December 1 Beginning balance 4,500 December 12 Cash collection from customers 3,500
December 22 Service on account 3,200 December 31 Closing balance 4,200
  Total 7,700 Total 7,700
December 31 Balance 4,200

Table (3)

Prepaid Insurance

Prepaid Insurance Account
Date Details

Debit

($)

  Date Details

Credit

($)

December 1 Beginning balance 400   December 31 Closing balance 400
  Total 400   Total 400
December 31 Balance 400      

Table (4)

Equipment

Equipment Account
Date Details Debit ($)   Date Details Credit ($)
December 1 Beginning balance 24,100 December 31 Closing balance 52,600
December 26 Purchased for cash 28,500    
  Total 52,600 Total 52,600
December 31 Balance 52,600

Table (5)

Land

Land Account
Date Details Debit ($)   Date Details Credit ($)
December 1 Beginning balance 170,000 December 31 Closing balance 170,000
  Total 170,000 Total 170,000
December 31 Balance 170,000

Table (6)

Accounts Payable

Accounts Payable Account
Date Details Debit ($)   Date Details Credit ($)
December 28 Cash paid 1,500 December 1 Beginning balance 3,300
December 31 Closing balance 1,800    
  Total 3,300   Total 3,300
        December 31 Balance 1,800

Table (7)

Notes Payable

Notes Payable Account
Date Details Debit ($)   Date Details Credit ($)
December 31 Closing balance 60,000 December 1 Beginning balance 50,000
    December 2 Cash borrowed 10,000
  Total 60,000   Total 60,000
    December 31 Balance 60,000

Table (8)

Common Stock

Common Stock Account
Date Details Debit ($)   Date Details Credit ($)
December 31 Closing balance 140,000 December 1 Beginning balance 120,000
      December 1 Cash 20,000
  Total 140,000   Total 140,000
        December 31 Balance 140,000

Table (9)

Retained earnings

Retained earnings Account
Date Details Debit ($)   Date Details Credit ($)
December 31 Closing balance 14,100 December 1 Beginning balance 14,100
  Total 14,100   Total 14,100
        September 30 Balance 14,100

Table (10)

Dividends

Dividends Account
Date Details

Debit

($)

  Date Details

Credit

($)

December 1 Beginning balance 5,000 July 31 Closing Balance 7,000
December 31 Dividends paid 2,000    
  Total 7,000   Total 7,000

Table (11)

Service revenue

Service revenue
Date Details Debit ($)   Date Details Credit ($)
December 31 Closing balance 81,000 December 1 Beginning balance 75,000
    December 5 Cash 2,800
    December 22 Accounts receivable 3,200
  Total 81,000   Total 81,000
        December 31 Balance 81,000

Table (12)

Advertising Expense

Advertising Expense Account
Date Details Debit ($)   Date Details Credit ($)
December 1 Beginning balance 11,000 December 31 Closing balance 12,000
December 17 Cash 1,000    
Total   12,000 Total   12,000
December 31 Balance 12,000

Table (13)

Salaries Expense

Salaries Expense Account
Date Details Debit ($)   Date Details Credit ($)
December 1 Beginning balance 28,300 December 31 Closing balance 29,500
December 15 Cash 1,200      
  Total 29,500 Total 29,500
December 31 Balance 29,500

Table (14)

Rent Expense

Rent Expense Account
Date Details Debit ($)   Date Details Credit ($)
December 1 Beginning balance 9,900 December 31 Closing balance 10,800
December 1 Cash 900    
Total   10,800 Total   10,800
December 31 Balance 10,800

Table (15)

4.

To determine

To Prepare: A trial balance as of December.

4.

Expert Solution
Check Mark

Explanation of Solution

Trial balance:

A trial balance is the summary of all the ledger accounts. Debit balances are listed in left column and credit balances are listed in right column of the trial balance. The totals of debit and credit column should be equal. The trial balance is usually prepared to check the accuracy of ledger accounts balances, before the preparation of financial statements.

Prepare the trial balance of RH Expeditions for the month of December.

RH Expeditions
Trial Balance
December 31
Accounts Debit ($) Credit ($)
Cash 10,400  
Accounts Receivable 4,200  
Prepaid Insurance 400  
Equipment 52,600  
Land 170,000  
Accounts Payable   1,800
Notes Payable   60,000
Common Stock   140,000
Retained Earnings   14,100
Dividends 7,000  
Service revenue   81,000
Advertising Expense 12,000
Salaries Expense 29,500  
Rent Expense 10,800  
Total 296,900 296,900

Table (16)

Conclusion

Hence, the trial balance is prepared, and the debit column and credit column of the trial balance are agreed, both having balance of $296,900.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Chapter 2 Solutions

Financial accounting

Ch. 2 - 11.What is a journal? What is a journal entry?Ch. 2 - Prob. 12RQCh. 2 - Prob. 13RQCh. 2 - Prob. 14RQCh. 2 - 15.Describe the events that correspond to the...Ch. 2 - 16.What does a T-account represent? What is the...Ch. 2 - Prob. 17RQCh. 2 - Prob. 18RQCh. 2 - Prob. 19RQCh. 2 - 20.If total debits equal total credits in the...Ch. 2 - List steps in the measurement process (LO21) Below...Ch. 2 - Balance the accounting equation (LO22) Using the...Ch. 2 - Suppose a local company has the following balance...Ch. 2 - Analyze the Impact of transactions on the...Ch. 2 - Understand the effect of debits and credits on...Ch. 2 - Prob. 2.6BECh. 2 - Record transactions (LO24) The following...Ch. 2 - Prob. 2.8BECh. 2 - Analyze T-accounts (LO25) Consider the following...Ch. 2 - Prob. 2.10BECh. 2 - Prob. 2.11BECh. 2 - Correct a trial balance (LO26) Your study partner...Ch. 2 - Listed below are several terms and phrases...Ch. 2 - Prob. 2.2ECh. 2 - Analyze the Impact of transactions on the...Ch. 2 - Analyze the Impact of transactions on the...Ch. 2 - Understand the components of retained earnings...Ch. 2 - Indicate the debit or credit balance of accounts...Ch. 2 - Associate debits and credits with external...Ch. 2 - Prob. 2.8ECh. 2 - Identify transactions (LO24) Below are recorded...Ch. 2 - Prob. 2.10ECh. 2 - Record transactions (LO24) Bearcat Construction...Ch. 2 - Correct recorded transactions (LO24) Below are...Ch. 2 - Correct recorded transactions (LO24) Below are...Ch. 2 - Prob. 2.14ECh. 2 - Post transactions to T-accounts (LO25) Consider...Ch. 2 - Identify transaction (LO25) Below are T-accounts....Ch. 2 - Prob. 2.17ECh. 2 - Prepare o trial balance (LO26) Below is the...Ch. 2 - Prob. 2.19ECh. 2 - Prob. 2.20ECh. 2 - Below is a list of activities for Jayhawk...Ch. 2 - Prob. 2.2APCh. 2 - Prob. 2.3APCh. 2 - Prob. 2.4APCh. 2 - Refer to the transactions described in P24A. Keep...Ch. 2 - Prob. 2.6APCh. 2 - Prob. 2.7APCh. 2 - Prob. 2.8APCh. 2 - Prob. 2.9APCh. 2 - Analyze the impact of transactions on the...Ch. 2 - Prob. 2.2BPCh. 2 - Prob. 2.3BPCh. 2 - Record transactions (LO24) Flip Side of P25B Eli...Ch. 2 - Prob. 2.5BPCh. 2 - Prob. 2.6BPCh. 2 - Prob. 2.7BPCh. 2 - Prob. 2.8BPCh. 2 - Prob. 2.9BPCh. 2 - Prob. 2.1APCPCh. 2 - Prob. 2.2APFACh. 2 - Prob. 2.3APFACh. 2 - Prob. 2.4APCACh. 2 - Prob. 2.5APECh. 2 - Prob. 2.6APIRCh. 2 - Prob. 2.7APWC
Knowledge Booster
Background pattern image
Accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
Text book image
FINANCIAL ACCOUNTING
Accounting
ISBN:9781259964947
Author:Libby
Publisher:MCG
Text book image
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Text book image
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Text book image
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Text book image
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Text book image
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education
The ACCOUNTING EQUATION For BEGINNERS; Author: Accounting Stuff;https://www.youtube.com/watch?v=56xscQ4viWE;License: Standard Youtube License