Professional Documents
Culture Documents
Chapter 2
Problem Set B
Problem 2-1B (90 minutes) Part 1
Nov. 1
Cash............................................................101
Office Equipment.......................................163
K. Shaw, Capital.................................301
30,000
15,000
45,000
Prepaid Rent...............................................131
Cash....................................................101
4,500
4,500
Office Equipment.......................................163
Office Supplies...........................................124
Accounts Payable..............................201
2,500
600
3,100
Cash............................................................101
Services Revenue...............................403
3,400
3,400
12
Accounts Receivable.................................106
Services Revenue...............................403
10,200
10,200
13
Accounts Payable......................................201
Cash....................................................101
3,100
3,100
19
Prepaid Insurance......................................128
Cash....................................................101
1,800
1,800
22
Cash............................................................101
Accounts Receivable.........................106
5,200
5,200
24
Accounts Receivable.................................106
Services Revenue...............................403
Billed client for completed work.
2-1
1,750
1,750
28
K. Shaw, Withdrawals................................302
Cash....................................................101
5,300
5,300
29
Office Supplies...........................................124
Accounts Payable..............................201
249
249
30
Utilities Expense........................................690
Cash....................................................101
Paid monthly utility bill.
2-2
531
531
Date
Nov.
Date
Nov.
Date
Nov.
Date
Nov.
Date
Nov.
Date
Nov.
Explanation
1
2
8
13
19
22
28
30
Cash
PR
G1
G1
G1
G1
G1
G1
G1
G1
Debit
30,000
3,400
5,200
12
22
24
Accounts Receivable
Explanation
PR
Debit
G1
10,200
G1
G1
1,750
4
29
Office Supplies
Explanation
PR
G1
G1
Debit
600
249
19
Prepaid Insurance
Explanation
PR
Debit
G1
1,800
Prepaid Rent
Explanation
PR
G1
Debit
4,500
1
4
Office Equipment
Explanation
PR
G1
G1
Debit
15,000
2,500
4
13
29
Accounts Payable
Explanation
PR
G1
G1
G1
2-3
Debit
3,100
Date
Nov.
Date
Nov.
Date
Nov.
Date
Nov.
K. Shaw, Capital
Explanation
PR
G1
28
K. Shaw, Withdrawals
Explanation
PR
G1
8
12
24
Services Revenue
Explanation
PR
G1
G1
G1
30
Utilities Expense
Explanation
PR
G1
Debit
Debit
5,300
Debit
Debit
531
Part 3
SHAW MANAGEMENT SERVICES
Trial Balance
November 30
Debit
Cash....................................................................... $23,369
Accounts receivable............................................
6,750
Office supplies......................................................
849
Prepaid insurance................................................
1,800
Prepaid rent..........................................................
4,500
Office equipment.................................................. 17,500
Accounts payable.................................................
K. Shaw, Capital...................................................
K. Shaw, Withdrawals..........................................
5,300
Services revenue..................................................
Utilities expense...................................................
531
Totals..................................................................... $60,599
2-4
Credit
$ 249
45,000
15,350
______
$60,599
Part 1
a.
Cash............................................................101
Office Equipment.......................................163
Computer Equipment.................................164
B. Gable, Capital.................................301
45,000
4,500
28,000
77,500
b.
Land............................................................172
Cash....................................................101
Notes Payable.....................................250
24,000
4,800
19,200
c.
Building.......................................................170
Cash....................................................101
21,000
21,000
Purchased building
d.
Prepaid Insurance......................................108
Cash....................................................101
6,600
6,600
e.
Cash............................................................101
Fees Earned........................................402
3,200
3,200
f.
Computer Equipment.................................164
Cash....................................................101
Notes Payable.....................................250
3,500
700
2,800
g.
Accounts Receivable.................................106
Fees Earned........................................402
3,750
3,750
h.
Office Equipment.......................................163
Accounts Payable..............................201
Purchased equipment on credit.
2-5
750
750
i.
Accounts Receivable.................................106
Fees Earned........................................402
Billed client for completed work.
2-6
9,200
9,200
320
320
k.
Cash............................................................101
Accounts Receivable.........................106
4,600
4,600
l.
Wages Expense..........................................601
Cash....................................................101
1,600
1,600
m.
Accounts Payable......................................201
Cash...................................................101
750
750
n.
Repairs Expense........................................604
Cash...................................................101
425
425
o.
B. Gable, Withdrawals...............................302
Cash....................................................101
3,875
3,875
p.
Wages Expense..........................................601
Cash....................................................101
1,600
1,600
q.
Advertising Expense..................................603
Cash....................................................101
Paid for advertising expense.
2-7
800
800
Debit
45,000
Credit
4,800
21,000
6,600
3,200
700
4,600
1,600
750
425
3,875
1,600
800
No. 101
Balance
45,000
40,200
19,200
12,600
15,800
15,100
19,700
18,100
17,350
16,925
13,050
11,450
10,650
Accounts Receivable
No. 106
Date PR Debit
Credit
Balance
(g)
3,750
3,750
(i)
9,200
12,950
(k)
4,600
8,350
Accounts Payable
Date PR Debit
(h)
(j)
(m)
750
No. 201
Credit
Balance
750
750
320
1,070
320
Notes Payable
Date PR Debit
(b)
(f)
No. 250
Credit
Balance
19,200
19,200
2,800
22,000
B. Gable, Capital
Date PR Debit
(a)
No. 301
Credit
Balance
77,500
77,500
B. Gable, Withdrawals
Date PR Debit
Credit
(o)
3,875
No. 302
Balance
3,875
Balance
6,600
Fees Earned
Date PR Debit
(e)
(g)
(i)
Credit
No. 163
Balance
4,500
5,250
Wages Expense
Date PR Debit
(l)
1,600
(p)
1,600
Credit
No. 601
Balance
1,600
3,200
Computer Equipment
Date PR Debit
Credit
(a)
28,000
(f)
3,500
No. 164
Balance
28,000
31,500
No. 602
Balance
320
Building
Date PR
(c)
Credit
No. 170
Balance
21,000
Advertising Expense
Date PR Debit
Credit
(q)
800
No. 603
Balance
800
Credit
No. 172
Balance
24,000
Repairs Expense
Date PR Debit
(n)
425
No. 604
Balance
425
Prepaid Insurance
Date PR
(d)
Debit
6,600
Office Equipment
Date PR Debit
(a)
4,500
(h)
750
Land
Date PR
(b)
Debit
21,000
Debit
24,000
No. 108
Credit
2-8
No. 402
Credit
Balance
3,200
3,200
3,750
6,950
9,200
16,150
Credit
2-9
Credit
320
22,000
77,500
16,150
$115,970
Liabilities
Accounts payable............. $
5,000
Owner's Equity
J. Schmit, Capital.............. 134,500
Total liabilities & equity.... $139,500
SCHMIT CO.
Balance Sheet
December 31, 2011
Assets
Cash................................. $ 10,000
Accounts receivable......
30,000
Office supplies................
12,500
Office equipment............
60,000
Machinery........................
30,500
Building........................... 260,000
Land.................................
65,000
Total assets..................... $468,000
Liabilities
Accounts payable............. $ 15,000
Note payable...................... 260,000
Total liabilities................... 275,000
Owner's Equity
J. Schmit, Capital.............. 193,000
Total liabilities & equity.... $468,000
Part 2
Calculation of 2011 net income:
Equity, December 31, 2011........................................................... $193,000
Equity, December 31, 2010........................................................... (134,500)
Increase in equity in 2011.............................................................
58,500
Deduct additional investment.....................................................
Net increase in 2011 equity, apart from new investment..........
(25,000)
33,500
2-10
Part 3
Debt ratio = $275,000 / $468,000 = 58.76%
Problem 2-4B (90 minutes)
Part 1
Sept.1 Cash..........................................................101
Office Equipment.....................................163
R. Lummus, Capital..........................301
28,000
25,000
Prepaid Rent.............................................131
Cash...................................................101
53,000
10,500
10,500
Office Equipment.....................................163
Office Supplies.........................................124
Accounts Payable............................201
9,000
1,200
Cash..........................................................101
Service Fees Earned........................401
2,600
10,200
2,600
12
Accounts Receivable...............................106
Service Fees Earned........................401
13,400
13,400
13
Accounts Payable....................................201
Cash...................................................101
10,200
10,200
19
Prepaid Insurance....................................128
Cash...................................................101
2-11
5,200
5,200
22
Cash..........................................................101
Accounts Receivable.......................106
7,800
7,800
24
Accounts Receivable..............................106
Service Fees Earned........................401
1,900
1,900
28
R. Lummus, Withdrawals........................302
Cash...................................................101
5,300
5,300
29
Office Supplies.........................................124
Accounts Payable............................201
1,700
Utilities Expense......................................690
Cash...................................................101
460
1,700
30
2-12
460
Date
Sept.
Date
Sept.
Date
Sept.
Date
Sept.
Date
Sept.
Explanation
1
2
8
13
19
22
28
30
Cash
PR
G1
G1
G1
G1
G1
G1
G1
G1
Debit
28,000
2,600
7,800
12
22
24
Accounts Receivable
Explanation
PR
Debit
G1
13,400
G1
G1
1,900
4
29
Office Supplies
Explanation
PR
Debit
G1
1,200
G1
1,700
19
Prepaid Insurance
Explanation
PR
G1
Prepaid Rent
Explanation
PR
G1
1
4
Office Equipment
Explanation
PR
G1
G1
2-13
Debit
5,200
Debit
10,500
Debit
25,000
9,000
Date
Sept.
Date
Sept.
Date
Sept.
Date
Sept.
4
13
29
Accounts Payable
Explanation
PR
G1
G1
G1
R. Lummus, Capital
Explanation
PR
G1
28
R. Lummus, Withdrawals
Explanation
PR
Debit
G1
5,300
8
12
24
30
Utilities Expense
Explanation
PR
G1
2-14
Debit
10,200
Debit
Debit
460
$ 6,740
Accounts receivable............................................
7,500
Office supplies......................................................
2,900
Prepaid insurance................................................
5,200
Prepaid rent..........................................................
10,500
Office equipment..................................................
34,000
Credit
Accounts payable.................................................
$ 1,700
R. Lummus, Capital.............................................
53,000
R. Lummus, Withdrawals.....................................
5,300
17,900
460
______
$72,600
2-15
Cash............................................................101
Office Equipment.......................................163
C. Cooke, Capital..............................301
80,000
30,000
110,000
b.
Land............................................................172 30,000
Building.......................................................170 170,000
Cash....................................................101
Notes Payable.....................................250
40,000
160,000
c.
Office Supplies...........................................108
Accounts Payable..............................201
2,400
2,400
d.
Automobiles...............................................164
C. Cooke, Capital................................301
18,000
18,000
e.
Office Equipment.......................................163
Accounts Payable..............................201
6,000
6,000
f.
Salaries Expense........................................601
Cash....................................................101
1,500
1,500
g.
Cash............................................................101
Fees Earned........................................402
6,000
6,000
h.
Utilities Expense........................................602
Cash....................................................101
Paid cash for utilities.
2-16
800
800
Accounts Payable......................................201
Cash....................................................101
2,400
2,400
j.
Office Equipment.......................................163
Cash....................................................101
20,000
20,000
k.
Accounts Receivable.................................106
Fees Earned........................................402
5,200
5,200
l.
Salaries Expense........................................601
Cash....................................................101
1,500
1,500
m.
Cash............................................................101
Accounts Receivable.......................106
3,800
3,800
n.
C. Cooke, Withdrawals..............................302
Cash...................................................101
Cash withdrawn for personal use.
2-17
6,400
6,400
Debit
80,000
Credit
40,000
1,500
6,000
800
2,400
20,000
1,500
3,800
6,400
No. 101
Balance
80,000
40,000
38,500
44,500
43,700
41,300
21,300
19,800
23,600
17,200
Land
Date PR
(b)
Accounts Receivable
No. 106
Date PR Debit
Credit
Balance
(k)
5,200
5,200
(m)
3,800
1,400
Office Supplies
Date PR Debit
(c)
2,400
Credit
Office Equipment
Date PR
(a)
(e)
(j)
Debit
30,000
6,000
20,000
Automobiles
Date PR Debit
(d)
18,000
Building
Date PR
(b)
Debit
170,000
No. 108
Balance
2,400
Balance
30,000
36,000
56,000
Credit
No. 164
Balance
18,000
Credit
No. 170
Balance
170,000
Credit
Accounts Payable
Date PR Debit
(c)
(e)
(i)
2,400
No. 201
Credit
Balance
2,400
2,400
6,000
8,400
6,000
Notes Payable
Date PR Debit
(b)
No. 250
Credit
Balance
160,000 160,000
C. Cooke, Capital
Date PR Debit
(a)
(d)
No. 301
Credit
Balance
110,000 110,000
18,000 128,000
C. Cooke, Withdrawals
Date PR Debit
Credit
(n)
6,400
No. 163
Credit
Debit
30,000
Fees Earned
Date PR Debit
(g)
(k)
Salaries Expense
Date PR Debit
(f)
1,500
(l)
1,500
Date PR
(h)
Debit
800
No. 302
Balance
6,400
No. 402
Credit
Balance
6,000
6,000
5,200
11,200
Credit
Utilities Expense
2-18
No. 172
Balance
30,000
No. 601
Balance
1,500
3,000
No. 602
Credit
Balance
800
2-19
Credit
$ 6,000
160,000
128,000
11,200
$305,200
Debit
$12,485
560
1,500
11,450
Cash ......................................................................
Office supplies .....................................................
Prepaid rent .........................................................
Office equipment .................................................
Accounts payable.................................................
M. Gould, Capital .................................................
M. Gould, Withdrawals ........................................
6,200
Consulting fees earned .......................................
Operating expenses ............................................
5,655
Totals .................................................................... $37,850
Credit
$11,450
10,000
16,400
$37,850
2-20
2-21
$26,400
13,915
$12,485