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Week One Exercise Assignment<\/h2>\n

Basic Accounting Equations<\/strong><\/p>\n

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1. Recognition of normal balances <\/strong><\/p>\n

The following items appeared in the accounting records of Triguero’s, a retail music store that also sponsors concerts. Classify each of the items as an asset, liability; revenue; or expense from the company’s viewpoint. Also indicate the normal account balance of each item.<\/p>\n

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a.         Amounts paid to a mall for rent.<\/p>\n

b.         Amounts to be paid in 10 days to suppliers.        <\/p>\n

c.         A new fax machine purchased for office use.    <\/p>\n

d.         Land held as an investment.      <\/p>\n

e.         Amounts due from customers.   <\/p>\n

f.          Daily sales of merchandise sold.<\/p>\n

g.         Promotional costs to publicize a concert.<\/p>\n

h.         A long-term loan owed to Citizens Bank.           <\/p>\n

i.          The albums, tapes, and CDs held for sale to customers.  <\/p>\n

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2.Basic journal entries <\/strong><\/p>\n

The following transactions pertain to the Jennifer Royall Company:<\/p>\n

 <\/p>\n\n\n\n\n\n\n\n\n

\n May 1<\/p>\n<\/td>\n	\n Jenni\u00adfer Royall invested cash of $25,000 and land valued at $15,000 into the business.<\/p>\n<\/td>\n<\/tr>\n
\n 5<\/p>\n<\/td>\n	\n Provided $1,000 of services to Jason Ratchford, a client, on account.<\/p>\n<\/td>\n<\/tr>\n
\n 9<\/p>\n<\/td>\n	\n Paid $1,250 of salaries to an employee.<\/p>\n<\/td>\n<\/tr>\n
\n 14<\/p>\n<\/td>\n	\n Acquired a new computer for $4,200, on account.<\/p>\n<\/td>\n<\/tr>\n
\n 20<\/p>\n<\/td>\n	\n Collected $800 from Jason Ratchford for services provided on May 5.<\/p>\n<\/td>\n<\/tr>\n
\n 24<\/p>\n<\/td>\n	\n Borrowed $2,500 from BestBanc by securing a six-month loan.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Prepare journal entries (and explanations) to record the preceding transactions and events.<\/p>\n 3. Balance sheet preparation.  <\/strong>The following data relate to Preston Company as of December 31, 20XX:<\/strong><\/p>\n  <\/p>\n Building                                    $40,000                         Accounts receivable                  $24,000<\/p>\n Cash                                         21,000                           Loan payable                            30,000<\/p>\n J. Preston, Capital                     65,000                           Land                                         21,000<\/p>\n Accounts payable                      ?<\/p>\n  <\/p>\n Prepare a balance sheet as of December 31, 20XX. (See Exhibit 1.1 and 1.4)<\/p>\n  <\/p>\n  <\/p>\n 4. Basic transaction processing<\/strong>.  On November 1 of the current year, Richard Simmons established a sole proprietorship. The following transactions occurred during the month:<\/p>\n  <\/p>\n 1: Simmons invested $32,000 into the business for $32,000 in common stock.<\/p>\n 2: Paid $5,000 to acquire a used minivan.<\/p>\n 3: Purchased $1,800 of office furniture on account.<\/p>\n 4: Performed $2,100 of consulting services on account.<\/p>\n 5: Paid $300 of repair expenses.<\/p>\n 6: Received $800 from clients who were previously billed in item 4.<\/p>\n 7: Paid $500 on account to the supplier of office furniture in item 3.<\/p>\n 8: Received a $150 electric bill, to be paid next month.<\/p>\n 9: Simmons withdrew $800 from the business.<\/p>\n 10: Received $250 in cash from clients for consulting services rendered.<\/p>\n  <\/p>\n Instructions<\/p>\n a. Arrange the following asset, liability, and owner\u2019s equity elements of the account\u00ading equation: Cash,   Accounts Receivable, Office Furniture, Van, Accounts Payable, Common Stock\/Dividends, and Revenues\/Expenses. (See Exhibit 1.5)<\/p>\n b. Record each transaction on a separate line. After all transactions have been recorded, compute the balance in each of the preceding items.<\/p>\n c. Answer the following questions for Simmons.<\/p>\n (1) How much does the company owe to its creditors at month-end? On which financial statement(s) would this information be found?<\/p>\n (2) Did the company have a \u201cgood\u201d month from an accounting viewpoint? Briefly explain.<\/p>\n  <\/p>\n  <\/p>\n 5. Transaction analysis and statement preparation<\/strong>. The transactions that follow<\/p>\n relate to Burton Enterprises for March 20X1, the company\u2019s first month of activity.<\/p>\n  <\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n \n 3\/1<\/p>\n<\/td>\n \n Joanne Burton, the owner, invested $20,000 cash into the business.<\/p>\n<\/td>\n<\/tr>\n \n 3\/4<\/p>\n<\/td>\n \n Performed $2,400 of services on account.<\/p>\n<\/td>\n<\/tr>\n \n 3\/7<\/p>\n<\/td>\n \n Acquired a small parcel of land by paying $6,000 cash<\/p>\n<\/td>\n<\/tr>\n \n 3\/12<\/p>\n<\/td>\n \n Received $500 from a client who was billed previously on March 4.<\/p>\n<\/td>\n<\/tr>\n \n 3\/15<\/p>\n<\/td>\n \n Paid $200 to the Journal Herald for advertising expense.<\/p>\n<\/td>\n<\/tr>\n \n 3\/18<\/p>\n<\/td>\n \n Acquired 9,000 of equipment from Park Central Outfitters by Paying<\/p>\n<\/td>\n<\/tr>\n  <\/td>\n \n $7,000 down and agreeing to remit the balance owed within two weeks (A\/P).<\/p>\n<\/td>\n<\/tr>\n \n 3\/22<\/p>\n<\/td>\n \n Received $300 cash from clients for services.<\/p>\n<\/td>\n<\/tr>\n \n 3\/24<\/p>\n<\/td>\n \n Paid $1,500 on account to Park Central Outfitters in partial settlement of<\/p>\n<\/td>\n<\/tr>\n  <\/td>\n \n the balance due from the transaction on March 18.<\/p>\n<\/td>\n<\/tr>\n \n 3\/28<\/p>\n<\/td>\n \n Rented a car from United Car Rental for use on March 28.  Total charges<\/p>\n<\/td>\n<\/tr>\n  <\/td>\n \n amounted to $125, with United billing Burton for the  amount due.<\/p>\n<\/td>\n<\/tr>\n \n 3\/31<\/p>\n<\/td>\n \n Paid $600 for March wages<\/p>\n<\/td>\n<\/tr>\n \n 3\/31<\/p>\n<\/td>\n \n  <\/p>\n Processed a $600 cash withdrawal (dividend) from the business for Joanne Burton<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n  <\/p>\n  <\/p>\n Instructions<\/p>\n a. Determine the impact of each of the preceding transactions on Burton\u2019s assets,<\/p>\n liabilities, and owner\u2019s equity. See exhibit 1.5. Use the following format:<\/p>\n  <\/p>\n Assets                                                                         = Liabilities                      + Owner\u2019s Equity<\/p>\n Cash, Accounts Receivable, Land, Equipment       Accounts Payable       (+)Common Stock (+) Revenues<\/p>\n             (-) Dividends  (-) Expenses<\/p>\n  <\/p>\n a. Record each transaction on a separate line. Calculate balances only after the last transaction has been recorded.<\/p>\n b. Prepare an income statement, a statement of retained earnings, and a balance sheet, (See Exhibit 1.2, 1.3 and 1.4)<\/p>\n  <\/p>\n  <\/p>\n 6. Entry and trial balance preparation<\/strong>. Lee Adkins is a portrait artist. The following schedule represents Lee\u2019s combined chart of accounts and trial balance as of May 31.<\/p>\n  <\/p>\n Account number            Account name                                                   Debit                            Credit<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n \n 110<\/p>\n<\/td>\n \n Cash<\/p>\n<\/td>\n \n $ 2,700<\/p>\n<\/td>\n \n  <\/p>\n<\/td>\n<\/tr>\n \n 120<\/p>\n<\/td>\n \n Accounts Receivable<\/p>\n<\/td>\n \n 12,100<\/p>\n<\/td>\n \n  <\/p>\n<\/td>\n<\/tr>\n \n 130<\/p>\n<\/td>\n \n Equipment and Supplies<\/p>\n<\/td>\n \n 2,800<\/p>\n<\/td>\n \n  <\/p>\n<\/td>\n<\/tr>\n \n 140<\/p>\n<\/td>\n \n Studio<\/p>\n<\/td>\n \n 45,000<\/p>\n<\/td>\n \n  <\/p>\n<\/td>\n<\/tr>\n \n 210<\/p>\n<\/td>\n \n Accounts Payable<\/p>\n<\/td>\n \n  <\/p>\n<\/td>\n \n $2,600<\/p>\n<\/td>\n<\/tr>\n \n 310<\/p>\n<\/td>\n \n Lee Adkins, Capital<\/p>\n<\/td>\n \n  <\/p>\n<\/td>\n \n 57,400<\/p>\n<\/td>\n<\/tr>\n \n 320<\/p>\n<\/td>\n \n Lee Adkins, Drawing<\/p>\n<\/td>\n \n 30,000<\/p>\n<\/td>\n \n  <\/p>\n<\/td>\n<\/tr>\n \n 410<\/p>\n<\/td>\n \n Professional Fee Revenue<\/p>\n<\/td>\n \n  <\/p>\n<\/td>\n \n 39,000<\/p>\n<\/td>\n<\/tr>\n \n 510<\/p>\n<\/td>\n \n Advertising Expense<\/p>\n<\/td>\n \n 2,300<\/p>\n<\/td>\n \n  <\/p>\n<\/td>\n<\/tr>\n \n 520<\/p>\n<\/td>\n \n Salaries Expense<\/p>\n<\/td>\n \n 2,100<\/p>\n<\/td>\n \n  <\/p>\n<\/td>\n<\/tr>\n \n 540<\/p>\n<\/td>\n \n Utilities Expense<\/p>\n<\/td>\n \n 2,000<\/p>\n<\/td>\n \n  <\/p>\n<\/td>\n<\/tr>\n \n  <\/p>\n<\/td>\n \n $99,000<\/p>\n<\/td>\n \n $99,000<\/p>\n<\/td>\n<\/tr>\n  <\/td>\n  <\/td>\n  <\/td>\n  <\/td>\n  <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n  <\/p>\n The general ledger also revealed account no. 530, Legal and Accounting Expense. The following transactions occurred during June:<\/p>\n\n\n\n\n\n\n\n\n\n\n \n  <\/p>\n<\/td>\n \n 6\/2<\/p>\n<\/td>\n \n Collected $3,000 on account from customers<\/p>\n<\/td>\n<\/tr>\n \n  <\/p>\n<\/td>\n \n 6\/7<\/p>\n<\/td>\n \n Sold 25% of the equipment and supplies to a young artist for $700 cash<\/p>\n<\/td>\n<\/tr>\n \n  <\/p>\n<\/td>\n \n 6\/10<\/p>\n<\/td>\n \n  <\/p>\n Received a $300 invoice from the accountant for preparing last quarter’s financial Statements.<\/p>\n<\/td>\n<\/tr>\n \n  <\/p>\n<\/td>\n \n 6\/15<\/p>\n<\/td>\n \n Paid $1,900 to creditors on account.<\/p>\n<\/td>\n  <\/td>\n<\/tr>\n \n  <\/p>\n<\/td>\n \n 6\/27<\/p>\n<\/td>\n \n Adkins withdrew $2,000 cash for personal use.<\/p>\n<\/td>\n<\/tr>\n \n  <\/p>\n<\/td>\n \n 6\/30<\/p>\n<\/td>\n \n Billed a customer $3,000 for a portrait painted this month.<\/p>\n<\/td>\n<\/tr>\n \n  <\/p>\n<\/td>\n \n  <\/p>\n<\/td>\n \n  <\/p>\n<\/td>\n<\/tr>\n  <\/td>\n  <\/td>\n  <\/td>\n  <\/td>\n  <\/td>\n  <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n a. Record the necessary journal entries for June on page 2 of the company\u2019s general journal. (See Exhibit 2.6)<\/p>\n b. Open running balance ledger \u201cT\u201d accounts by entering account titles, account num\u00adbers, and May 31 balances. (See exhibit 2.3 and 2.4)<\/p>\n c. Post the journal entries to the \u201cT\u201d accounts.<\/p>\n d. Prepare a trial balance as of June 30. (See exhibit 2.9)<\/p>\n  <\/strong><\/p>\n  <\/strong><\/p>\n  <\/strong><\/p>\n 7. Journal entry preparation. <\/strong>On January 1 of the current year, Peter Houston invested $80,000 cash into his company MuniServ. The cash was obtained from an owner investment by Peter Houston of $50,000 and a $30,000 bank loan. Shortly thereafter, the company ac\u00adquired selected assets of a bankrupt competitor. The acquisition included land ($10,000), a building ($40,000), and vehicles ($10,000). MuniServ paid $45,000 at the time of the transaction and agreed to remit the remaining balance due of $15,000 (an account payable) by February 15.<\/p>\n  <\/p>\n             During January, the company had additional cash outlays for the follow\u00ading items:<\/p>\n  <\/p>\n\n\n\n\n\n\n\n \n Purchases of store equipment<\/p>\n<\/td>\n \n $4,600<\/p>\n<\/td>\n<\/tr>\n \n Note payment<\/p>\n<\/td>\n \n 500<\/p>\n<\/td>\n<\/tr>\n \n Salaries expense<\/p>\n<\/td>\n \n 2,300<\/p>\n<\/td>\n<\/tr>\n \n Advertising expense<\/p>\n<\/td>\n \n 700<\/p>\n<\/td>\n<\/tr>\n \n  <\/p>\n<\/td>\n \n  <\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n The January utility bill of $200 was received on January 31 and will be paid next month. MuniServ rendered services to clients on account amounting to $9,400.  All customers have been billed; by month end, $3,700 had been received in settlement of account balances.<\/p>\n  <\/p>\n  <\/p>\n  <\/p>\n Instructions<\/em><\/p>\n \n Present journal entries that reflect MuniServ’s January transactions, including the $80,000 raised from the owner investment and loan. (See exhibit 2.6)<\/li>\n Compute the total debits, total credits, and ending balance that would be found in the company’s Cash account. (Post to \u201cT\u201d Accounts, see exhibit 2.3 and 2.4)<\/li>\n<\/ol>\n c.       Determine the amount that would be shown on the January 31 trial balance for Accounts<\/p>\n Payable. Is the balance a debit or a credit?<\/p>\n  <\/p>\n  <\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":" Week One Exercise Assignment Basic Accounting Equations       1. Recognition of normal balances The following items appeared in the accounting records of Triguero’s, a retail music store that also sponsors concerts. Classify each of the items as an asset, liability; revenue; or expense from the company’s viewpoint. Also indicate the normal account balance […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_joinchat":[]},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/posts\/71891"}],"collection":[{"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/comments?post=71891"}],"version-history":[{"count":0,"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/posts\/71891\/revisions"}],"wp:attachment":[{"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/media?parent=71891"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/categories?post=71891"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/qualityassignments.net\/wp-json\/wp\/v2\/tags?post=71891"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}