Loose Leaf for Financial Accounting: Information for Decisions
9th Edition
ISBN: 9781260158762
Author: John J Wild
Publisher: McGraw-Hill Education
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Question
Chapter 2, Problem 2SP
1.
Summary Introduction
Introduction: Expenses means the
1.
Expert Solution
Answer to Problem 2SP
All the journal entries required are maintained and the ledger of the accounts is maintained with trial balance.
Explanation of Solution
| Date | Particulars | Debit ($) | Credit($) |
| Oct 1. | Cash | 45,000 | |
| Office Equipment | 8,000 | ||
| Computer Equipment | 20,000 | ||
| Common stock | 73,000 | ||
| (Being cash and equipment invested by owner in stock) | |||
| Oct 2 | Prepaid Rent | 3,300 | |
| Cash | 3,300 | ||
| (Being 4 months advance paid) | |||
| Oct 3 | Computer Supplies | 1,420 | |
| Accounts Payable | 1,420 | ||
| (Being supply purchased on credit) | |||
| Oct 5 | Prepaid Insurance | 2,220 | |
| Cash | 2,220 | ||
| (Being 12 month premium paid in advance) | |||
| Oct 6 | 4,800 | ||
| Computer Service Provider | 4,800 | ||
| (Being customer billed for services) | |||
| Oct 8 | Account Payable | 1,420 | |
| Cash | 1,420 | ||
| (Being balance paid due on account payable) | |||
| Oct 12 | Accounts Receivable | 1,400 | |
| Computer Services Revenue | 1,400 | ||
| (Being customer billed for services) | |||
| Oct 15 | Cash | 4,800 | |
| Accounts Receivables | 4,800 | ||
| (Being account receivables collected) | |||
| Oct 17 | Repairs Expense- Computer | 805 | |
| Cash | 805 | ||
| (Being payment made for Computer repairs) | |||
| Oct 20 | Advertising Expenses | 1,728 | |
| Cash | 1,728 | ||
| (Being advertising expenses paid off) | |||
| Oct 22 | Cash | 1,400 | |
| Account Receivables | 1,400 | ||
| (Being Account receivable collected) | |||
| Oct 28 | Accounts Receivables | 5,208 | |
| Computer Services revenue | 5,208 | ||
| (Being customer billed for services) | |||
| Oct 31 | Wages expenses | 875 | |
| Cash | 875 | ||
| (Being Employee paid for part time work) | |||
| Oct 31 | Dividends | 3,600 | |
| Cash | 3,600 | ||
| (Being dividend paid off) | |||
| Nov 1 | Mileage Expenses | 320 | |
| Cash | 320 | ||
| (Being Mileage expenses reimbursed) | |||
| Nov 2 | Cash | 4,633 | |
| Computer Service Revenue | 4,633 | ||
| (Being cash collected from customer) | |||
| Nov 5 | Computer Supplies | 1,125 | |
| Cash | 1,125 | ||
| (Being computer supplies purchased) | |||
| Nov 8 | Accounts Receivables | 5,668 | |
| Computer Service Revenue | 5,668 | ||
| (Being customer billed for services) | |||
| Nov18 | Cash | 2,208 | |
| Accounts receivable | 2,208 | ||
| (Being Accounts receivable collected) | |||
| Nov 22 | Miscellaneous Expenses | 250 | |
| Cash | 250 | ||
| (Being donation recorded) | |||
| Nov 24 | Accounts Receivables | 3,950 | |
| Computer Service Revenue | 3,950 | ||
| (Being customer billed for services) | |||
| Nov 28 | Mileage Expenses | 384 | |
| Cash | 384 | ||
| (Being Mileage expenses reimbursed) | |||
| Nov 30 | Wages expenses | 1,750 | |
| Cash | 1,750 | ||
| (Being Employee paid for part time work) | |||
| Nov 30 | Dividends | 2,000 | |
| Cash | 2,000 | ||
| (Being dividend paid off) | |||
2.
Summary Introduction
Introduction: Expenses means the cash outflow from the organization and it is shown on the debit side of the company’s account. As expenses arise when any service or good is purchased, they do not cause a regular outflow of cash. Considering income and revenues refers to the credit balance in the company’s account. Assets of the company always have debit balance as it is owned by the company.
To calculate: Journal entries, trial balance and general ledgers of the accounts.
2.
Expert Solution
Answer to Problem 2SP
All the journal entries required are maintained and the ledger of the accounts is maintained with trial balance.
Explanation of Solution
General Ledger Accounts
| Date | Debit($) | Credit($) | Balance($) |
| Oct 1 | 4500 | 45,000 | |
| Oct 2 | 3,300 | 41,700 | |
| Oct 5 | 2,220 | 39,480 | |
| Oct 8 | 1,420 | 38,060 | |
| Oct 15 | 4,800 | 42,860 | |
| Oct 17 | 805 | 42,055 | |
| Oct 20 | 1,728 | 40,327 | |
| Oct 22 | 1,400 | 41,727 | |
| Oct 31 | 875 | 40,852 | |
| Oct 31 | 3,600 | 37,252 | |
| Nov 1 | 320 | 36,932 | |
| Nov 2 | 4,633 | 41,565 | |
| Nov 5 | 1,125 | 40,440 | |
| Nov 18 | 2,208 | 42,648 | |
| Nov 22 | 250 | 42,398 | |
| Nov 28 | 384 | 42,014 | |
| Nov 30 | 1,750 | 40,264 | |
| Nov 30 | 2,000 | 38,264 |
Account Receivable
| Date | Debit ($) | Credit($) | Balance($) |
| Oct 6 | 4,800 | 4,800 | |
| Oct 12 | 1,400 | 6,200 | |
| Oct 15 | 4,800 | 1,400 | |
| Oct 22 | 1,400 | 0 | |
| Oct 28 | 5,208 | 5,208 | |
| Nov 8 | 5,668 | 10,876 | |
| Nov 18 | 2,208 | 8,668 | |
| Nov 28 | 3,950 | 12,618 |
Computer Supplies
| Date | Debit ($) | Credit($) | Balance($) |
| Oct 3 | 1,420 | 1,420 | |
| Nov 5 | 1,125 | 2,545 |
Prepaid Insurance
| Date | Debit ($) | Credit($) | Balance($) |
| Oct 3 | 2,220 | 2,220 |
Prepaid Rent
| Date | Debit ($) | Credit($) | Balance($) |
| Oct 2 | 3,330 | 3,330 |
Office Equipment
| Date | Debit ($) | Credit($) | Balance($) |
| Oct 1 | 8,000 | 8,000 |
Computer Equipment
| Date | Debit ($) | Credit($) | Balance($) |
| Oct 1 | 20,000 | 20,000 |
Account payable
| Date | Debit ($) | Credit($) | Balance($) |
| Oct 3 | 1,420 | 1,420 | |
| Oct 8 | 1,420 | 0 |
Common Stock
| Date | Debit ($) | Credit($) | Balance($) |
| Oct 1 | 73,000 | 73,000 |
Dividends
| Date | Debit ($) | Credit($) | Balance($) |
| Oct 31 | 3,600 | 3,600 | |
| Nov 30 | 2,000 | 5,600 |
Computer Service Revenue
| Date | Debit ($) | Credit($) | Balance($) |
| Oct 6 | 4,800 | 4,800 | |
| Oct 12 | 1,400 | 6,200 | |
| Oct 28 | 5,208 | 11,408 | |
| Nov 2 | 4,633 | 16,041 | |
| Nov 28 | 5,668 | 21,709 | |
| Nov 24 | 3,950 | 25,659 |
Wages Expense
| Date | Debit ($) | Credit($) | Balance($) |
| Oct 31 | 875 | 875 | |
| Nov 30 | 1,750 | 2,625 |
Advertising Expenses
| Date | Debit ($) | Credit($) | Balance($) |
| Oct 30 | 1,728 | 1,728 |
Mileage Expenses
| Date | Debit ($) | Credit($) | Balance($) |
| Nov 1 | 320 | 320 | |
| Nov 28 | 384 | 704 |
Miscellaneous Expenses
| Date | Debit ($) | Credit($) | Balance($) |
| Nov 22 | 250 | 250 |
Repair expenses-Computer
| Date | Debit ($) | Credit($) | Balance($) |
| Oct 17 | 805 | 805 |
3.
Summary Introduction
Introduction: Expenses means the cash outflow from the organization and it is shown on the debit side of the company’s account. As expenses arise when any service or good is purchased, they do not cause a regular outflow of cash. Considering income and revenues refers to the credit balance in the company’s account. Assets of the company always have debit balance as it is owned by the company. To calculate: Journal entries, trial balance and general ledgers of the accounts.
3.
Expert Solution
Answer to Problem 2SP
All the journal entries required are maintained and the ledger of the accounts is maintained with trial balance.
Explanation of Solution
Trial Balance (As on November 30)
| Particulars | Debit | Credit |
| Cash | $38,264 | |
| Supplies | $2,545 | |
| Equipment | $8,000 | |
| Account Receivable | $12,618 | |
| Rent in Advance | $3,300 | |
| Prepaid Insurance | $2,220 | |
| Computer equipment | $20,000 | |
| Accounts payable | 0 | |
| Common Stock | $73,000 | |
| Dividend Paid | $5,600 | |
| Wage Expenses | $2,625 | |
| Advertisement | $1,728 | |
| Mileage expenses | $704 | |
| Miscellaeous Expenses | $250 | |
| Repair | $805 | |
| Service revenue | $25,659 | |
| Total | $98,659 | $98,659 |
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Chapter 2 Solutions
Loose Leaf for Financial Accounting: Information for Decisions
Ch. 2 - Provide the names of two (a) asset accounts, (b)...Ch. 2 - What is the difference between a note payable and...Ch. 2 - Prob. 3DQCh. 2 - Prob. 4DQCh. 2 - Prob. 5DQCh. 2 - Should a transaction be recorded first in a...Ch. 2 - Prob. 7DQCh. 2 - Why does the recordkeeper prepare a trial balance?Ch. 2 - Prob. 9DQCh. 2 - Prob. 10DQ
Ch. 2 - Prob. 11DQCh. 2 - Prob. 12DQCh. 2 - Prob. 13DQCh. 2 - Prob. 14DQCh. 2 - Prob. 15DQCh. 2 - Review the Apple balance sheet in Appendix A....Ch. 2 - Prob. 17DQCh. 2 - Prob. 18DQCh. 2 - Identify the items from the following list that...Ch. 2 - Prob. 2QSCh. 2 - Prob. 3QSCh. 2 - Prob. 4QSCh. 2 - Prob. 5QSCh. 2 - Prob. 6QSCh. 2 - Prob. 7QSCh. 2 - Prob. 8QSCh. 2 - Prob. 9QSCh. 2 - Prob. 10QSCh. 2 - Prob. 11QSCh. 2 - In a recent year’s financial statements, Home...Ch. 2 - Prob. 13QSCh. 2 - Prob. 1ECh. 2 - Prob. 2ECh. 2 - Enter the number for the item that best completes...Ch. 2 - Prob. 4ECh. 2 - Prob. 5ECh. 2 - Prob. 6ECh. 2 - Prob. 7ECh. 2 - Prob. 8ECh. 2 - Prob. 9ECh. 2 - Prob. 10ECh. 2 - Prepare general journal entries for the following...Ch. 2 - Prob. 12ECh. 2 - Assume the following Taccounts reflect Belle Co.’s...Ch. 2 - Prob. 14ECh. 2 - A corporation had the following assets and...Ch. 2 - Prob. 16ECh. 2 - Use the information in Exercise 216 to prepare an...Ch. 2 - Prob. 18ECh. 2 - Compute the missing amount for each of the...Ch. 2 - Prob. 20ECh. 2 - You are told the column totals in a trial balance...Ch. 2 - a. Calculate the debt ratio and the return on...Ch. 2 - Prob. 23ECh. 2 - Prob. 24ECh. 2 - Prob. 1PSACh. 2 - Prob. 2PSACh. 2 - Prob. 3PSACh. 2 - Prob. 4PSACh. 2 - Prob. 5PSACh. 2 - Prob. 6PSACh. 2 - Prob. 1PSBCh. 2 - Prob. 2PSBCh. 2 - Prob. 3PSBCh. 2 - Nuncio Consulting complete the following...Ch. 2 - Prob. 5PSBCh. 2 - Prob. 6PSBCh. 2 - Prob. 2SPCh. 2 - Prob. 1GLPCh. 2 - Prob. 2GLPCh. 2 - Prob. 3GLPCh. 2 - Prob. 4GLPCh. 2 - Prob. 5GLPCh. 2 - Prob. 6GLPCh. 2 - Prob. 7GLPCh. 2 - Using transactions from the following assignments,...Ch. 2 - Prob. 1FSACh. 2 - Prob. 2FSACh. 2 - Prob. 3FSACh. 2 - Assume that you are a cashier and your manager...Ch. 2 - Prob. 2BTNCh. 2 - Access EDGAR online (SEC.gov) and locate the 2016...Ch. 2 - Prob. 5BTNCh. 2 - Prob. 6BTN
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- Inner Resources Company started its business on April 1, 2019. The following transactions occurred during the month of April. Prepare the journal entries in the journal on Page 1. A. The owners invested $8,500 from their personal account to the business account. B. Paid rent $650 with check #101. C. Initiated a petty cash fund $550 check #102. D. Received $750 cash for services rendered. E. Purchased office supplies for $180 with check #103. F. Purchased computer equipment $8,500, paid $1,600 with check #104 and will pay the remainder in 30 days. G. Received $1,200 cash for services rendered. H. Paid wages $560, check #105. I. Petty cash reimbursement office supplies $200, Maintenance Expense $140, Miscellaneous Expense $65. Cash on Hand $93. Check #106. J. Increased Petty Cash by $100, check #107.arrow_forwardKelly Pitney began her consulting business, Kelly Consulting, on April 1, 2019. The accounting cycle for Kelly Consulting for April, including financial statements, was illustrated in this chapter. During May, Kelly Consulting entered into the following transactions: Instructions 1. The chart of accounts for Kelly Consulting is shown in Exhibit 9, and the post-closingtrial balance as of April 30, 2019, is shown in Exhibit 17. For each account in the post-closing trial balance, enter the balance in the appropriate Balance column of a four-column account. Date the balances May 1, 2019, and place a check mark () in the Posting Reference column. Journalize each of the May transactions in a twocolumn journal starting on Page 5 of the journal and using Kelly Consultings chart of accounts. (Do not insert the account numbers in the journal at this time.) 2. Post the journal to a ledger of four-column accounts. 3. Prepare an unadjusted trial balance. 4. At the end of May, the following adjustment data were assembled. Analyze and use these data to complete parts (5) and (6). a. Insurance expired during May is 275. b. Supplies on hand on May 31 are 715. c. Depreciation of office equipment for May is 330. d. Accrued receptionist salary on May 31 is 325. e. Rent expired during May is 1,600. f. Unearned fees on May 31 are 3,210. 5. (Optional) Enter the unadjusted trial balance on an end-of-period spreadsheet and complete the spreadsheet. 6. Journalize and post the adjusting entries. Record the adjusting entries on Page 7 of the journal. 7. Prepare an adjusted trial balance. 8. Prepare an income statement, a statement of owners equity, and a balance sheet. 9. Prepare and post the closing entries. Record the closing entries on Page 8 of the journal. Indicate closed accounts by inserting a line in both Balance columns opposite the closing entry. 10. Prepare a post-closing trial balance.arrow_forwardThe transactions completed by PS Music during June 2018 were described at the end of Chapter 1. The following transactions were completed during July, the second month of the businesss operations: July 1. Peyton Smith made an additional investment in PS Musk in exchange for common stock by depositing 5,000 in PS Music s checking account. 1. Instead of continuing to share office space with a local real estate agency, Peyton decided to rent office space near a local music store. Paid rent for July, 1,750. 1. Paid a premium of 2,700 for a comprehensive insurance policy covering liability, theft, and fire. The policy covers a one-year period. 2. Received 1,000 on account. 3. On behalf of PS Music, Peyton signed a contract with a local radio station, KXMD, to provide guest spots for the next three months. The contract requires PS Music to provide a guest disc jockey for 80 hours per month for a monthly fee of 3,600. Any additional hours beyond 80 will be billed to KXMD at 40 per hour. In accordance with the contract, Peyton received 7,200 from KXMD as an advance payment for the first two months. 3. Paid 250 on account. 4. Paid an attorney 900 for reviewing the July 3 contract with KXMD. (Record as Miscellaneous Expense.) 5. Purchased office equipment on account from Office Mart, 7,500. 8. Paid for a newspaper advertisement, 200. 11. Received 1,000 for serving as a disc jockey for a party. 13. Paid 700 to a local audio electronics store for rental of digital recording equipment. 14. Paid wages of 1,200 to receptionist and part-time assistant. Enter the following transactions on lage 2 of the two-column journal: 16. Received 2,000 for serving as a disc jockey for a wedding reception. 18. Purchased supplies on account, 850. 21. Paid 620 to Upload Music for use of its current music demos in making various music sets. 22. Paid 800 to a local radio station to advertise the services of PS Music twice daily for the remainder of July. 23. Served as disc jockey for a party for 2,500. Received 750, with the remainder due August 4, 2018. 27. Paid electric bill, 915. 28. Paid wages of 1,200 to receptionist and part-time assistant. 29. Paid miscellaneous expenses, 540. 30. Served as a disc jockey for a charity ball for 1,500. Received 500, with the remainder due on August 9, 2018. 31. Received 3,000 for serving as a disc jockey for a party. July 31. Paid 1,400 royalties (music expense) to National Music Clearing for use of various artists music during July. 31. Paid dividends, 1,250. PS Musics chart of accounts and the balance of accounts as of July 1, 2018 (all normal balances), are as follows: 11 Cash 3,920 41 Fees Earned 6,200 12 Accounts Receivable 1,000 50 Wages Expense 400 14 Supplies 170 51 Office Rent Expense 800 15 Prepaid Insurance 52 Equipment Rent Expense 675 17 Office Equipment 53 Utilities Expense 300 21 Accounts Payable 250 54 Music Expense 1,590 23 Unearned Revenue 55 Advertising Expense 500 31 Common Stock 4,000 56 Supplies Expense 180 33 Dividends 500 59 Miscellaneous Expense 415 Instructions 1. Enter the July 1, 2018, account balances in the appropriate balance column of a four-column account. Write Balance in the Item column, and place a check mark () in the Posting Reference column. {Hint: Verify the equality of the debit and credit balances in the ledger before proceeding with the next instruction.) 2. Analyze and journalize each transaction in a two-column journal beginning on Page 1, omitting journal entry explanations. 3. Post the journal to the ledger, extending the account balance to the appropriate balance column after each posting. 4. Prepare an unadjusted trial balance as of July 31, 2018.arrow_forward
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