Basic accounting equations

1040 WordsSep 14, 20135 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. Amounts paid to a mall for rent. b. Amounts to be paid in 10 days to suppliers. c. A new fax machine purchased for office use. d. Land held as an investment. e. Amounts due from customers. f. Daily sales of merchandise sold. g. Promotional costs to publicize a concert. h. A long-term loan owed to Citizens Bank. i. The albums, tapes, and CDs held…show more content…
3/31 Paid $600 for March wages 3/31 Processed a $600 cash withdrawal (dividend) from the business for Joanne Burton Instructions a. Determine the impact of each of the preceding transactions on Burton’s assets, liabilities, and owner’s equity. See exhibit 1.5. Use the following format: Assets = Liabilities + Owner’s Equity Cash, Accounts Receivable, Land, Equipment Accounts Payable (+)Common Stock (+) Revenues (-) Dividends (-) Expenses a. Record each transaction on a separate line. Calculate balances only after the last transaction has been recorded. b. Prepare an income statement, a statement of retained earnings, and a balance sheet, (See Exhibit 1.2, 1.3 and 1.4) 6. Entry and trial balance preparation. Lee Adkins is a portrait artist. The following schedule represents Lee’s combined chart of accounts and trial balance as of May 31. Account number Account name Debit Credit 110 Cash $ 2,700 120 Accounts Receivable 12,100 130 Equipment and Supplies 2,800 140 Studio 45,000 210 Accounts Payable $2,600 310 Lee Adkins, Capital 57,400 320 Lee Adkins, Drawing 30,000 410 Professional Fee Revenue 39,000 510 Advertising Expense 2,300 520 Salaries Expense 2,100 540 Utilities Expense 2,000 $99,000 $99,000 The general ledger also revealed account no. 530, Legal and
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