Essay on Acc 205 Week1

1960 Words Jul 13th, 2013 8 Pages
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 of each item.

a. The albums, tapes, and CDs held for sale to customers. * Asset; Normal account balance is debit b. A long-term loan owed to Citizens Bank. * Liability; Normal account balance is credit c. Promotional costs to publicize a concert. * Expense; Normal account balance is debit d. Daily sales of merchandise sold, * Revenue; Normal account
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8: Received a $150 electric bill, to be paid next month.
9: Parker withdrew $600 from the business.
10: Received $250 in cash from clients for consulting services rendered.

a. Arrange the following asset, liability, and owner’s equity elements of the accounting equation: Cash, Accounts Receivable, Office Furniture, Van, Accounts Payable, Common Stock/Dividends, and Revenues/Expenses. (See Exhibit 1.5)
b. Record each transaction on a separate line. After all transactions have been recorded, compute the balance in each of the preceding items.

| Assets | Liability | Owner’s Equity | DescriptionInvestmentBuy van w/cashFurniture on accountServices on accountRepairs Collected amountPay on accountPay electric billWithdrawalCollected amountEnding Balance | Cash$ 19,000- (9,000)- (300)+ 800- (500)- (150) - (600) + 2509,500 | AccountsReceivable+ $ 2,100- (800)- (250)1,050 | OfficeFurniture+ $1,8001,800 | Van + $9,0009,000 | AccountsPayable+ $1,800- (500)1,300 | CommonStock/Dividends$ 19,00019,000 | Revenues/Expenses+ $ 2,100- 300- 150-6001,050 |

$ 21,350 $ 1,300 $ 20,050 Total Assets Total Liability Total Equity
c. Answer the following questions for Parker.
(1) How much does the company owe to its creditors at month-end? On which financial statement(s) would this information be found? The company owes its creditors $0. This information can be found on

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