Assignment No 1

ACCT-I-2003

Instructor: Asif Bashir

To be Held on 6th Nov FRIDAY

Instructions: All Questions are compulsory

TOPIC

COMLETE ACCIOUNTING CYCLE

Guide Line Manual answer sheet for questions.

Page 12: 1.1 You are to complete the gaps in the following table:Assets Serial # Liabilities Capital

12500 28000 16800 19600 ? ?

1800 4900 ? ? 6300 11650

? ? 12500 16450 192000 39750

a b c d e f

1.2 A You are to complete the gaps in the following table:Assets Serial # Liabilities Capital

55000 ? 36100 119500 88000 ?

16900 17200 ? 15400 ? 49000

? 34400 28500 ? 62000 110000

a b c d e f

1.3 Distinguished from the following list the items that are liabilities from those that are assets: a) Office machinery b) Loan for C Shirley c) Fixtures and fittings d) Motor vehicles e) We owe for goods f) Bank balance 1.4A a) b) c) d) e) f) g) h) Classify the following items into liabilities and assets: Motor vehicles Premises Creditors for goods Stock of goods Debtors Owing to bank Cash in hand Loan from D Jones

i) Machinery. 1.5 State which of the following are shown under the wrong classification for J Whites business: Assets Loan from C Smith Cash in hand Machinery Creditors Premises Motor Vehicles Page 13: 1.6A Which of the following are shown under wrong headings: Assets Liabilities Cash at hand Fixtures Creditors Building Stock of goods Debtors Capital Loan from J graham Machinery Motor vehicles Liabilities Stock of goods Debtors Money owing to bank

1.7 A Smart sets up a new business. Before he actually sells anything, he has bought motor vehicle 2,000, premises 5,000, stock of goods 1,000. He did not pay in full for his stock of goods and still owes 400 in respect of them. He had borrowed 3,000 from D Bevan. After the events just described, and before trading starts, he has 100 cash in hand and 700 cash at bank. You are required to calculate the amount of his capital. 1.8 A T Charles sets up a new business. Before he actually sells anything, he has bought fixtures 2,000, motor vehicles 5,000, stock of goods 3,500. He has paid in full for his fixtures and motor vehicles, he still owes 1,400 for some of the goods. J Preston had lent him 3,000. Charles, after the above,, has 2,800 in the business bank account and 100 cash in hand. You are required to calculate the amount of his capital.

1.9 Draw up a Fosters balance sheet from the following as at 31 December a9X8: Capital 23,750 Debtors 4,950 Motor vehicles 5,700 Creditors 2,450 Fixtures 5,500 Stock of goods 8,800 Cash at hand 1,250 1.10 A Draw up M Kellys balance sheet as at 30 June 19X6 from the following: Capital 15,000 Office machinery 9,000 Creditors 900 Debtors 275 Cash at hand 5,075 1.11 Complete the columns to show the effects of the following transactions: Effect upon Assets Liabilities Capital a) We pay a creditor 70 in cash b) Bought fixtures 200 paying by cheque c) Bought goods on credit 275 d) The proprietor introduces another 500 cash into the firm. e) J Walker lends the firm 200 in cash f) A debtor pay us 50 by cheque. g) We return goods costing 60 to a supplier whose bill we had not paid. h) Bought additional shop premises paying 5,000 by cheque. Page 14: 1.12A Complete the columns to show the effects of the following transactions: Effect upon Assets Liabilities Capital a) Bought a motor van on credit 500. b) Repaid by cash a loan owed to P Smith 1,000. c) Bought goods for 150 paying by cheque.

d) The owner puts a further 5,000 cash into the business. e) A debtor returns to us 80 goods. We agree to make an allowance for them. f) Bought goods on credit 220 g) The owner takes out 100 cash for his personal use. h) We pay a creditor 190 by cheque.

1.13 C Sangster has the following items in his balance sheet as on 30 April 19X8. Capital 20,900; Creditors 1,600; Fixtures 3,500; motor vehicles 4,200; stock of goods 4,950; Debtors 3,280; Cash at bank 6,450; Cash in hand 120 During the first week of May 19X8: a) He bought extra stock of goods 700 on credit. b) One of the debtors paid him 280 in cash c) He bought extra fixtures by cheque 1,000. You are to draw up a balance sheet as on 7 May 19XB after the above transactions have been completed. 1.14A F Dale has the following assets and liabilities as on 30 Nov 19X9: Creditors 3,950; Equipment 11,500; Motor vehicles 6,290; stock of goods 6,150; Debtors 5,770; Cash at bank 7,280; Cash in hand 40 The capital at that date is to be deduced by you. During the first week of December 19X9, Dale: a) Bought extra equipment on credit for 1,380 b) Bought extra stock by cheque 570 c) Paid creditors by cheque 790 d) Debtors paid us 840 by cheque and 60 by cash e) F Dale put in an extra 250 cash as capital. You are to draw up a balance sheet as on 7 December 19X9 after the above transactions have been completed. Page 22: 2.1 Prepare JOURNAL and Write Entries: a) Bought office machinery on credit from D Isaacs Ltd.

b) The proprietor paid on credit, C Jones, from his private monies outside the firm. c) A debtor, N Fox, paid us in cash. d) Repaid part of loan from P Exeter by cheque e) Returned some of office machinery to D Isaacs Ltd. f) A debtor, N Lyn, pays us by cheque. g) Bought motor van by cash, Page 23 2.2 A Prepare JOURNAL and Write Entries: a) b) c) d) e) f) g) h) i) j) Bought motor lorry for cash. Paid creditor, T Lake, by cheque. Repaid P Logans loan by cash. Sold motor lorry for cash. Bought office machinery on credit from Ultra Ltd. A debtor, a Hill, pays us by cash. A debtor, J Cross, pays us by cheque. Proprietor puts a further amount into the business by cheque. A loan of 200 in cash is received from L Lowe. Paid a creditor, D Lord, by cash.

2.3 Prepare JOURNAL and Write Entries: 19X7 July 1 Started business with 2,500 in the bank July 2 Bought office furniture by cheque 150 July 3 Bought machinery 750 on credit from Planners Ltd. July 5 Bought a motor van paying by cheque 600 July 8 Sold some of the office furniture not sustainable for the firm for 60 on credit to J Walker & Sons. July 15 Paid the amount owing to Planners Ltd 750 by cheque. July 23 Received the amount due from J Walkers and Sons 60 in cash July 31 Bought more machinery by cheque 280 2.4 Prepare JOURNAL and Write Entries: June 1 Started business with 2000 in cash June 2 Paid 1800 of the opening cash into bank account for the business. June 5 Bought office furniture on credit from Betta Built Ltd for 120 June 8 Bought a motor van paying by cheque 950 June 12 Bought works machinery from Evans and Sons on credit 560 June 18 Returned faulty office furniture costing 62 to Betta Built Ltd June 25 Sold some of the works machinery for 75 cash. June 26 Paid amount owing to Betta Built Ltd 58 by cheque

June 28 Took 100 of the bank and put it in the cash till. June 30 J Smith lent us 500 giving us the money by cheque. Page 24 2.5A Prepare JOURNAL and Write Entries: 19X9 June 1 Started business with 5000 in the bank. June 2 Bought motor van paying by cheque 1200 June 5 Bought office fixtures 400 on credit from Young Ltd June 12 Took 100 out of the bank and put it into the cash till. June 15 Bought office fixtures paying by cash 60 June 19 Paid Super Motors a cheque for 800 June 21 A loan of 1000 cash is received from J Jarvis. June 25 Paid 800 of the cash in hand into the bank account. June 30 Bought more office fixtures paying by cheque 300

2.6 A Prepare JOURNAL and Write Entries:. March 1 started with 1000 cash. March 2 Received a loan of 5000 from M Chow by cheque, a bank account being opened and the cheque paid into it. March 3 Bought a machinery for cash 60 March 5 Bought display equipment on credit form Betterview Machines 550 March 8 Took 300 out of the bank and put it into the cash till. March 15 Repaid part of Chows loan by cheque 800 March 17 Paid amount owing to Betterview Machines 550 by cheque. March 24 Repaid amount owing to Betterview Machines 550 by cheque. March 31 Bought additional machinery, this time on credit from D Smith for 500. Page 32 3.1 Complete the following table showing which accounts are to be credited and which are to be debited.

Seria l# a b c d e f g h i j

Accou nt to be debit ed Goods bought on credit from J Reid Goods Sold on credit to B Perkins Motor vans bought on credit from H Thomas Goods sold, a cheque being received immediately Goods sold for cash Goods we returned to H Hardy Machinery sold for cash Goods returned to us by J Nelson Goods bought on credit from D Simpson Goods we returned to H Forbes

Accou nt to be credit ed

3.2A Complete the following table Accou nt to be debit ed Goods bought on credit from T Morgan Goods returned to us by J Thomas Machinery returned to L Jones Ltd Goods bought for cash Motor van bought on credit from D Davies Ltd Goods returned to us by I Prince D Picton paid us his account by cheque Accou nt to be credit ed

Seria l# a b c d e f g

h i j

Goods bought by cheque We paid creditor, B Henry, by cheque Goods sold on credit to J Mullings.

3.3 Prepare JOURNAL and Write Entries: 19X8 July 1 Started business with 500 cash, July 3 Bought goods for cash 85 July 7 Bought goods on credit 116 from E Morgan July 10 Sold goods for cash 42 July 14 Returned goods to E Morgan 28 July 18 Bought goods in credit 98 from A Moses July 21 Returned goods to A Moses 19 July 24 Sold goods to a Knight 55 on credit July 25 Paid E Morgans account by cash 88 July 31 A Knight paid us his account in cash 55 Page 33 3.4A Prepare JOURNAL and Write Entries: 19X6 Aug 1 Started business with 1000 cash Aug 2 Paid 900 of the opening cash into the bank Aug 4 Bought goods on credit 78 from S Holmes Aug 5 Bought a motor van by a cheque 500 Aug 7 Bought goods for cash 55 Aug 10 Sold goods on credit 98 to D Moore. Aug 12 Returned goods to S Holmes 18 Aug 19 Sod goods for cash 28 Aug 22 Bought fixtures on credit from Kingston Equipment Co 150 Aug 24 D Watson lent us 100 paying us the money by cheque Aug 29 We paid S Holmes his account by cheque 60 Aug 31 We paid Kingston Equipment Co by cheque 150 3.5 Prepare JOURNAL and Write Entries:. 19X7 July 1 July 2 July 3 July 4 July 6 July 8 Started business with 10000 in the bank T Cooper lent us 400 in cash Bought goods on credit from F Jones 840 and S Charles 3600 Sold goods for cash 200 Took 250 of the cash and paid it into the bank. Sold goods on credit to C Moody 180

July 10 Sold goods on credit to J Newman 220 July 11 Bought goods on credit from F Jones 370 July 12 C Moody returned goods to us 40 July 14 Sold goods on credit to H Morgan 190 and J Peat 320 July 15 We returned goods to F Jones 140 July 17 Bought motor ban on credit from Manchester Motors 2600 July 18 Bought office furniture on credit from Faster Supplies Ltd 600 July 19 We returned goods to S Charles 110 July 20 Bought goods for cash 220 July 24 Goods sold for cash 70 July 25 Paid money owing to F Jones by cheque 1070 July 26 Goods returned to us by H Morgan 30 July 27 Returned some of the office furniture costing 160 to Faster Supplies Ltd. July 28 E Sangster put a further 500 into the business in the form of cash. July 29 Paid Manchester Motors 2600 by cheque July 31 Bought office furniture for cash 100. Page 34 3.6A Prepare JOURNAL and Write Entries: May 1 Started up the business with 2000 in the bank May 2 Bought goods on credit from C Shaw 900 May 3 Bought goods on credit from F Hughes 250 May 5 Sold goods for cash 180 May 6 We returned goods to C Shaw 40 May 8 Bought goods on credit from F Hughes 190 May 10 Sold goods for cash 210 May 18 Took 300 of the cash and paid it to the bank May21 Bought machinery b cheque 550 May 22 Sold goods on credit to L Moore 220 May 23 G Wood returned goods to us 140 May 25 L Moore returned goods to us 10 May 28 We returned goods to F Hughes 30 May 29 We paid Shaw by cheque 860 May 31 Bought machinery on credit from D Lee 270

Page 40: 4.1 Prepare JOURNAL and Write Entries:

19X7 May 1 Started business with 2000 in the bank. May 2 Purchased goods 175 on credit from M Mills. May 3 Bought fixtures and fittings 150 paying by cheqe. May 5 Sold goods for cash 275 May 6 Bought goods on credit 114 from S Waites. May 10 Paid rent by cash 15 May 12 Bought stationary 27, paying in cash May 18 Goods returned to M Mills 23 May 21 Let off part of the premises receiving rent by cheque 5 May 23 Sold goods on credit to U Henry for 77 May 24 Bought a motor van paying by cheque 300 May 30 Paid the months wages by cash 117 May 31 The proprietor took cash for himself 44. Page 41 4.2 Prepare JOURNAL and Write Entries: 19X8 March March March March March March March March March March March March March March March March

1 Started business with the cash 1500 2 Bought goods on credit from A Hanson 296 3 Paid rent by cash 28 4 Paid 1000 of the cash of the firm into a bank account. 5 Sold goods on credit to E Linton 54 7 Bought stationary 15 paying by cheque 11 Cash sales 49 14 Goods returned by us to a Hanson 17 17 Sold goods on credit to S Morgan 29 20 Paid for repairs to the building by cash 18 22 E Linton returned goods to us 14 27 Paid Hanson by cheque 279 28 Cash purchases 125 29 Bought a motor van paying by cheque 395 30 Paid motor expenses in cash 15 31 Bought fixtures 120 on credit from A Webster.

4.3A Prepare JOURNAL and Write Entries: July 1 Started business with 8000 in the bank July 2 Bought stationary by cheque 30 July 3 Bought goods on credit from I Walsh 900 July 4 Sold goods for cash 180 July 5 Paid insurance by cash 40 July 7 Bought machinery on credit from H Morgan 500

July July July July July July July July July July

8 Paid for machinery expenses by cheque 50 10 Sold goods on credit to D Small 320 11 Returned goods to I Walsh 70 14 Paid wages by cash 70 17 Paid rent by cheque 100 20 Received cheque 200 from D Small. 21 Paid H Morgan by cheque 500 23 Bought stationary on credit from Express Ltd 80 25 Sold goods in credit to N Thomas 230 31 Paid Express Ltd by cheque 80

4.4A Prepare JOURNAL and Write Entries: Feb 1 started business with 3000 in the bank and 500 cash. Feb 2 Bought goods on credit: T Small 250; C Todd 190; V Ryan 180 Feb 3 Bought goods for cash 230 Feb 4 paid rent in cash 10 Feb 5 Bought stationary paying by cheque 49 Feb 6 Sold goods on credit: C Crooks 140; R Rogers 100; B Grant 240 Feb 7 Paid wages in cash 80 Feb 10 We returned goods to C Todd 60 Feb 11 Paid rent in cash 10 Feb 13 R Rogers returns goods to us 20 Feb 15 Sold goods on credit to: J Burns 90; J Smart 130; N Thorn 170 Feb 16 Paid rates by cheque 130 Feb 18 Paid insurance in cash 40 Feb 19 Paid rent by cheque 10 Feb 20 Bought motor van on credit from C White 600 Feb 21 Paid motor expenses in cash 6 Feb 23 Paid wages in cash 90 Feb 24 Received part of amount owing from B Grant by cheque 200 Feb 28 Received refund of rates 10 by cheque. Feb 28 Paid by cheque: T Small 250; C Todd 130; C White 600.

1. MM-1B-2(52) Recording the Effects of Transactions

The items making up the balance sheet of Travel Connection at December 31 are listed below in tabular form similar to the illustration of the accounting equation on page 25. Owner 's Equity

Assets Account s Receiva Automob ble iles $58,400 $9,000

=

Liabilities

Balan ces

Cash $9,50 0

Office Notes Accoun D.Hall Equipmen Paya ts Capita t ble Payable l $20,0 $35,50 $3,800 00 $25,200 0

During a short period after December 31. Travel Connection had the following transactions: 1. Bought office equipment at a cost of $5,700. Paid Cost. 2. Collected $ 4,000 of accounts receivable. 3. Paid $7,200 of accounts receivable 4. Borrowed $10,000 from a bank. Signed a note payable for that amount. 5. Purchased an automobile for $15,500. Paid $3,000 cash and signed a note payable for the balance of $12,500 Instructions: a. Solve the question through ACCOUNTING EQUATION. 2. MM 1B-2 (52) Recording the Effects of Transactions Water Wise Landscaping was organized on September 1 of the currant year and had the following account balance at December 31, listed in tabular form: Owner 's Assets = Liabilities Equity J.Gree Office Notes Accoun n Buildin Equipmen Paya ts Capita Cash land g t ble Payable l $14,8 32,00 00 50,000 45,000 22,500 0 25,300 75,000

Balan ces

Early in January, the company carried out the following transactions: 1. The owner J. Green deposited $ 20,000 in personal funds into the bank account of the business. 2. Purchased land and a small office building for a total price of $ 80,000, of which $30,000 was the value of the land and $ 50,000 was the value of the building. Paid $20,000 in cash and signed a note payable for the remaining $ 60,000. 3. Bought a Xerox copying machine on credit for $ 9500. 4. Obtained a loan from Gulf Coast Bank in the amount of $ 18,000. Signed a note payable. 5. Paid the $ 9500 account payable originating in transaction 3. Instructions: Solve the question through ACCOUNTING EQUATION. 3. MM 2-2 (89) Double Entry and the Accounting Equation A number of transactions are described below in terms of the balance sheet accounts debited and credited: 1. Debit Cash, credit Account Receivable. 2. Debit Accounts Payable, credit Cash. 3. Debit Cash, credit Tom Hill, Capital. 4. Debit Equipment, credit Account Payable. 5. Debit land, credit Cash and Notes Payable. 6. Debit Accounts Payable, credit Equipment. Instructions: a. Indicate the effects of each transactions upon the elements of the accounting equation, using the code letters I for increase, D for the decrease, and NE for the no effect. Organize your answer in tabular form using the column heading shown below. The answer for transaction 1 is provided as an exampleTransactio n 1 Assets = NE Liabilities + NE Owner's Equity NE

b. Write a one sentenced description of each transaction. 4. MM 2A-1 (93)

Elizabeth Carver, a certified public accountant, resigned from her position with a large CPA firm in order to begin he own public accounting practice. The business transactions during the September while new venture was being organized are listed below: Sept 1. Carver opened a bank checking account in the name of her firm, Elizabeth Carver, Certified Accounting, by depository # 32,000 which she had saved over a period of years. Sept 10. Purchased a small office building located on a large lot for a total price of $ 91,200 of which $ 48,000 was applicable to the land and $43,200 to the building. A cash payment of $ 18,240 ease made and a note payable was issued for the balance of the purchase price. Sept 15. Purchased a microcomputer system from Computer Stores, Inc. ,for $ 4,680 cash. Sept 19. Purchased office furniture, filing cabinets, and a typewriter from Davidson Office Supply Company at a cost of $ 3,960. A cash down payment of $72 0 was made, the balance to be paid in three equal installments due September 28, October 28 and November 28. The purchase wan on open account and did not require signing of promissory note. Sept 26. A $ 140 monitor in the microcomputer system purchased in September 15 stopped working. The monitor was returned to Computer Stores, Inc. which promised to refund the $140 within 5 days. Sept 28. Paid Davidson Office Supply Company $ 1080 cash as the first instalment due on the account payable for office equipment. Sept 30. Received $14 0cash from Computer Stores Inc. in full settlement of the account receivable created on Sept 26

Instructions: Write Journal Entries. 5 MM 2A-5 (95) Preparing a journal Entries, posting to ledger. Ann Ryan, a licensed real state broker, on October 1 began the organization of her own business, to be known as Ryan Land Company. The following events occurred during the October: . Ann Ryan opened a bank account Oct 2 Ann Rayn opened a bank account in the name of business by depository # personal savings of $35,000

Oct 6. Purchased land and a small office building at total price of $ 98,500 of which $ 64,000 was applicable to the land and $34,500 to the building. The terms of the purchased required s cash payment of $29,500 and the issuance of note payable for $69,000. Oct 15. Sold one quarter of land at its cost of $16,000 to a neighboring business. Village Medical Clinic, which wanted to expand its parking lot. No down payment was required. Village Medical Clinic issued a note promising payment required of the $16,000 in a series if five monthly installments of $3,200 each, beginning October 30. As the land was sold at the same price per square foot as Ryan Land Company had paid to acquire it, no gain or loss results on this transaction. Oct 20 Purchased office equipment on credit from Buffington Company in the amount of $ 6,280 Oct 30. Paid $3,440 as partial settlement of the liability to Buffington Company. Oct 31. Received the first $ 3,200 monthly installment on the note receivable from Village Medical Clinic.

The account titles and the account numbers to be used are: Cash______________________ 1 Office equipment _____________ 26 Notes receivable_____________ 5 Notes payable________________ 30 Land______________________ 21 Accounts payable_____________ 32 Building____________________ 23 Ann Ryan, capital______________ 50 Instructions: a. Prepare journal entries for the month of October. b. Post to ledger accounts 6. MM 2A-6 (96) Preparing Journal Entries, posting,. After playing several seasons of professional football, George, Harris has saved enough money to start a business, to be called Number One Auto Rental. The transactions during March while the new business was being organized are listed below: Mar. 1 George invested $140,000 cash in the business by making a deposit in a bank account in the name of the new company.

Mar. 3 The new company purchased land and building at a cost of $ 120,000 pf which $72,000 was regarded as applicable to the land and $48,000 to the building. The transaction involved a cash payment of $41,500 and the issuance of a note payable for $ 78,500. Mar. 5 Purchased 20 new automobiles at $8,600 each from Fleet Sales Company. Period $40,000 cash and agreed to pay $32,000 by March 31 and the remaining balance by April 15. The liability is viewed as an account payable. Mar 7 Sold an automobile at cost to Harriss father in law. Howard Facey, who paid $2,400 in cash and agreed to pay the balance within 30 days. Mar 8 One of the automobiles was found to be defective and was returned to Fleet Sales company. The amount payable tot his creditor was thereby reduced by $8,600. Mar 20 Purchased office equipment at a cost of $4,000 cash. Mar 31. Issued a check for $32,000 in partial payment of the liability to Fleet Sales Company. The accounts titles and the account numbers used by the company are as follows: Cash___________ ______10 22 Accounts Receivable_____ 11 31 Land_________________ 16 32 Buildings______________ 17 Capital________ 50 Office equipment_________ 20 Instructions: a. Journalize the March transactions. b. Post a ledger accounts. 7. MM 2B-1 (97) Recording transaction in a Journal. In May, James Colby, a physician, decided to open his medical practice, During May, the new business engaged in the following transactions. May 4. Colby opened a bank account in the name of his medical practice, James Coldy, M.D., by depositing $36,000 cash. May 16. . Purchased small medical office. The purchased price was $95,400, which included land valued at $50,000 and a building valued $45,400 A cash down payment was made for $21,000 and a note payable was issued for the balance of the purchase price. Automobiles_______________ Notes payable______________ Accounts payable____________ George Harris,

May 19. Purchased office furniture on account from Modern Office Company, $2,340. May 22. Purchased medical supplies for cash from Denton Labs, $1,630. May 23. Returned to Denton Labs $225 of the medical supplies purchased yesterday as these items were not exactly what Colby had ordered. Denton Lab agreed to refund the $225 within 10 days. May 30. Made an $1,170 partial payment on the account payable to Modern Office Company. May 31. Received the $225 refund from Denton Labs for the supplies on May 23. Instructions: Prepare journal entries to record the above transactions. Select the appropriate account titles from the following chart of accounts. Cash Accounts receivable Medical supplies 8. MM 2B-5 (99) Journal Entries Beach Property Management was started on November 1 by Rosa Garcia to provide management services for the owners of apartment buildings. The organizational period extended throughout November and included the transactions listed below: Nov 1. Garcia opened a bank account in the name of the business with a deposit of $25,000 cash. Nov.4 Purchased land and an office building for a price of $140,000 of which $75,000 was considered applicable to the land and $65.000 attributable to the building. A cash down payment of $20,000 was made and a note payable for $120,000 was issued for the balance of the purchase price. Nov 7 Purchased office equipment on credit from Harvard office equipment, $5850. Nov 9 A typewriter (cost $490), which was part of the November 7 purchase of office equipment, proved defective and was returned for credit to Harvard Office Equipment. Nov 17. Sold one third of the land acquired on Nov 4 to Ace Parking Lots ata price of $25,000. This price is equal to Beach Propertys cost for this portion of the land, so there is no gain or loss on this transaction. Beach received a $5,000 each, beginning on November 30 (ignore interest) Nov 28 Paid $1,600 in partial settlement if the liability to Harvard Office Equipment. Land Building Office furniture Notes Payable Accounts payable James Colby, capital

Nov 30. Received cash of $5,000 as partial collection of the note receivable from Ace Parking Lots. The account titles and accounts numbers to be used are: Cash _______________ 1 Office equipment _____________ 25 Notes receivable_______ 5 Notes payable________________ 31 Land _______________ 21 Accounts payable______________ 32 Building _____________ 23 Rosa Garcia, capital_____________ 51 Instructions: a. Prepare Journal entries for the month of November

10. MM 3A-1 (145) Preparing journal entries Bay Plumbers performs repair work on both a cash and credit basis. Credit customers are required to pay within 30 days from date of billing. The ledger accounts used by the company include: Cash Accounts Receivable Tools Notes payable Accounts payable David Cohen, drawing Repair service revenue Advertising expense Rent expense Salaries expense

Among the September transactions were the following: Sept. 1 Performed repair work for the Arden Hardware, a credit customer. Sent bill for $1,322. Sept 2 Paid rent for September, $750 Sept. 3 Purchased tools with the estimated life of 10 years for $1,275 cash. Sept 10 Performed repairs for Harris drugs and collected in full the charge of $565. Sept. 15. Newspaper advertising to appear in Sept 18 was arranged at a cost of $275. Received bill from Tribune requiring payment within 30 days. Sept. 18 Received payment in full of the $1,322 account receivable from Arden Hardware for our services on Sept. 1

Sept 20 David Cohen, owner of Bay Plumbers, withdrew $1,100 cash from the business for personal use. Sept 30 Paid salaries of $3,425 to employees for services rendered during September. Instructions: Prepare a journal entry (including explanation) for each of the above transaction.

11. MM 3A-3 (147) Preparing journal entries, posting. In June 1994, Chris Scott organized a crop dusting business. The company, a sole proprietorship, called Scott Crop Dusting, began operations immediately. Transactions during the month of June were as follows: June 1 Scott deposited $60,000 cash in a bank account in the name of the business. June 2 Purchased a crop dusting aircraft from Utility Aircraft for $225,000. Made a $45,000 cash down payment and issued a note payable for $180,000 June 4 Paid Woodrow Airport $2,500 to rent office and hanger space for a month. June 15 Billed customers $8,320 for crop dusting services rendered during the first half of June June 15 Paid $5,880 salaries to employees for services rendered during the first half of June. June 18 Paid Hannigans Hanger $1890 for maintenance and repair services. June 25 Collected $4.910 of the amounts billed to customers on June 15. June 30 Billed customers $16,450 for crop dusting services rendered during the second half of June. June 30 Received a fuel bill from Henrys feed and Fuel for $2,510 of aircraft fuel purchased during June. This amount is due by July 10. June 30 Scott withdrew $2,000 cash from the business for personal use. The account titles and numbers used by the Scott Crop Dusting were: Cash_______________________1 43 Chris Scott, drawing_____________

Accounts Receivable__________ 5 Crop-dusting revenue____________ 51 Aircraft_____________________ 15 Maintain ace expense_____________ 61 Notes payable________________ 31 Fuel expense____________________ 62 Accounts payable_____________ 32 Salaries expense_________________ 63 Chris Scott, capital____________ 41 Rent expenses___________________ 64 Instructions: a. Prepare journal entries. b. Post to ledger accounts 12. MM 3A-7 (149) Complete Accounting Cycle: April Stein, M.D., after completing her medical education, established her own practice on May 1. The following transactions occurred during the first month. May 1 Stein opened a bank account in the name of practice, April Stein, M.D., by making a deposit of $ 12,000 May 1 Paid office rent for May $1,700 May 2 Purchased office equipment for cash $7,200 May 3 Purchased medical instruments from Niles Instruments, Inc. , at a cost of $9,000. A cash down payment of $1,000 was made and a note payable was issues for the remaining $8,000. May 4 Retained by Brandon Construction to be on call for emergency service at a monthly fee of $400. The fee for May was collected in cash. May 15 Excluding the retainer of May 4, fees earned during the first 15 days if the month amounted to $1,600, of which $600 was in cash and $1,000 was in accounts receivable. May 15 Paid Mary Hester, R.N., has salary for the first half of May $1.000. May 16 Dr. Stein withdrew $975 for the personnel use. May 27 Treated Michael Tracy for minor injuries received in an accident during employment at Brandon Construction. No charge was made as these services were covered by Brandons payment on May 4 May 31 Excluding the treatment of Cynthia Knight on May 27, fees earned during the last half of month May 31 Received a bill from McGraw Medical Supplies in the amount of $640 representing the amount of medical supplies used during May.

May 31 Paid utilities for the month, $300. Other Information: Dr Stein estimated the useful life of medical instruments at three years and of office equipment at five years. The account titles to be used and the account numbers are as follows: Cash______________________10 April Stein, drawing__________41 Accounts Receivable__________ 13 Income summary____________ 45 Medical Instruments__________ 20 Fees earned_________________ 49 Accumulated depreciation: Medical supplies expenses______ 50 Medical instruments________ 21 Rent expenses_______________ 52 Office equipment____________ 22 Salaries expense______________ 53 Accumulated depreciation: Utilities expense______________ 53 Office equipment___________ 23 Depreciation expenses: Notes payable_______________ 30 medical instruments________ 54 Accounts payable_____________ 31 Depreciation expense: April Stein, Capital____________ 40 Office equipment__________ 55 Instructions: a. Journalize the above instructions. b. Post to ledger accounts 13. MM 3B-1 (151) Preparing Journal Entries Air Wolfe provides transportation by helicopter for skiers, backpackers, and others to remote mountains areas. Among the ledger accounts used by the company are the following: Cash Accounts payable Amy Wolfe, capital Amy Wolfe, drawing Passenger fare revenue Advertising expense: Fuel expense Rent expense Repair & maintenance expense Salaries expense

Some of the January transactions of Air Wolfe are listed below: Jan. 3 Paid $1,600 rent for the building for January.

Jan 4. Placed advertising in local newspapers for publication during January. The agreed price of $520 was payable within 10 days after the end of the month. Jan 15. Cash receipts from passengers for the first half of January amounted to $9,470 Jan 16. Amy Wolfe, the owner, withdrew $ 3,000 cash for personal use. Jan 16 Paid salaries to employees for services for the first half of January, $ 5,265. Jan 29 Received a bill for fuel used from Western Oil Company, amounting to $ 1,930 and payable be February 10 Jan 31 Paid $1,642 to Stevens Aircraft for repair and maintenance work during January. Instructions: Prepare a journal entry (including an explanation) for each of the above transaction.

14. MM 3B-2 (151) Analyzing Transactions and Preparing Journal Entries. Garwood Marine is a boat repair yard. During August its transactions included the following: 1. On August 1, paid rent for the month of August $4,000. 2. On August 3, at request of Kiwi Insurance, Inc., made repairs on boat of Michael Fay. Sent bill for $4,680 for services rendered to Kiwi insurance, Inc. (Credit Repair Service Revenue) 3. On August 9, made repairs to boat of Dennis Conner and collected in full the charge of $1,575. 4. On August 14, placed advertisement in Yachting World to be published in issue of August at cost of $95, payment to be made within 30 days. 5. On August 25, received a check for $4,680 from Kiwi Insurance, Inc., representing collection of the receivable of August 3. 6. On August 30, sent check to Yachting World in payment of the liability incurred on August 14. 7. In August 31, Barbara Garwood, owner of Garwood Marine, withdrew $3,500 form the business for personal use. Instructions: a. Write an analysis of each transaction. An example of the type of analysis desired is as follows for transaction 1 above.

1 (a) Rent is an operating expense. Expenses are recorded by debits. Debit Rent Expense, $4,000. 1. (b) The asset Cash was decreased. Decrease in assets are recorded by credits. Credit Cash, $4,000. b. Prepare a journal entry (including explanation) for each of the above transactions. 15. MM 3B-3 (152) Preparing Journal Entries, posting and preparing a Trial Balance Metro Park was originated on March 1 for the purpose of operating an automobile parking lot. Included in the companys ledger are the following ledger accounts and their identification numbers. Cash____________________ 11 Tony Poletti, drawing____________ 42 Land____________________ 21 Parking fees earned______________ 51 Notes payable_____________ 31 Advertising expense______________ 61 Accounts payable___________ 32 Utilities expense_________________ 63 Tony Poletti, capital_________41 Salaries expense_________________ 65 The business was organized and operations were began during the month of March. Transactions during March were as follows: Mar 1. Tony poletti deposited $ 50,000 cash in a bank account in the name of the business. Mar 5 Purchased land for $160,000, of which $40,000 was paid in a cash. A short term note payable was issued for the balance of $120,000. Mar 6 An arrangement was made with the Century Club agreed to pay $1,200 monthly, payable in advance. Cash was collected for the month of March. Mar 7 Arranged with Times Printing Company for a regular advertisement in the Times at a monthly cost of $390. Paid for advertising during March by check $390 Mar 15 Parking receipts for the first half of the month were $1,836, exclusive of the monthly fee from Century Club. Mar 31 Received bill for light and power from Pacific Power Company in the amount of &78, to be paid by April 10. Mar 31 Paid $2,720 to employees for services rendered during the month (Payroll taxes are to be ignored) Mar 31 Parking receipts for the second half of the month amounted to $5,338.

Mar 31 Poletti withdrew $2,000 for personal use, Mar 31 Paid $5,000 cash on the note payable incurred with the purchase of land. (You are to ignore any interest on the note) Instructions: a. Journalize the March transactions. b. Post to ledger accounts.