final transaction bank

Assignment No 1

ACCT-I-2003

Section A & B

Instructor: Sahibzada Ahmad Muneeb Bugvi

To be Held on 27th March FRIDAY

8:00 A.M to 12:00 P.MAnd

2:00 P.M to 4:00 P.M

Closing Date: 28 March till 12:00 P.M

Instructions: All Questions are compulsory

TOPIC

Compulsory Library Six Hour Sitting and research of

practical questions exposure of Ch No 1 , 2 , 3

COMLETE ACCIOUNTING CYCLE

Guide Line

Manual answer sheet for questions.

Caution

There will be attendance sheet provided to the Librarian (Mr. NOOR and Mr. Rashid) every student is required to enter his or her TIME IN the library and TIME OUT of the Library on the attendance sheet. The time should not be less than the SIX (6) HOURS.

Research Question

s

1.1 You are to complete the gaps in the following table:

Serial #

Assets Liabilities Capital

£ £ £a 12500 1800 ?b 28000 4900 ?c 16800 ? 12500d 19600 ? 16450e ? 6300 192000f ? 11650 39750

1.2 A You are to complete the gaps in the following table:

Serial #


£ £ £a 55000 16900 ?b ? 17200 34400c 36100 ? 28500d 119500 15400 ?e 88000 ? 62000f ? 49000 110000

1.3 Distinguished from the following list the items that are liabilities from those that are assets:

a) Office machineryb) Loan for C Shirleyc) Fixtures and fittingsd) Motor vehiclese) We owe for goodsf) Bank balance

1.4A Classify the following items into liabilities and assets:a) Motor vehiclesb) Premisesc) Creditors for goodsd) Stock of goodse) Debtorsf) Owing to bankg) Cash in handh) Loan from D Jones

i) Machinery.

1.5 State which of the following are shown under the wrong classification for J White’s business:

Assets Liabilities

Loan from C Smith Stock of goodsCash in hand DebtorsMachinery Money owing to bankCreditorsPremisesMotor Vehicles

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1.6A Which of the following are shown under wrong headings:Assets Liabilities

Cash at hand Loan from J grahamFixtures MachineryCreditors Motor vehiclesBuildingStock of goodsDebtorsCapital

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 Foster’s balance sheet from the following as at 31 December a9X8:

£Capital 23,750Debtors 4,950Motor vehicles 5,700Creditors 2,450Fixtures 5,500 Stock of goods 8,800Cash at hand 1,250

1.10 A Draw up M Kelly’s balance sheet as at 30 June 19X6 from the following:

£Capital 15,000Office machinery 9,000Creditors 900Debtors 275Cash at hand 5,075

1.11 Complete the columns to show the effects of the following transactions:

Effect uponAssets Liabilities

Capitala) We pay a creditor £70 in cashb) Bought fixtures £200 paying by chequec) Bought goods on credit £275d) The proprietor introduces another £500 cash into the firm.e) J Walker lends the firm £200 in cashf) 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 uponAssets Liabilities

CapitalBought a motor van on credit Complete the columns to show the effects of the following transactions:

Effect upon


a) 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 £ 220g) 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 cashc) 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 £1,380b) Bought extra stock by cheque £ 570c) Paid creditors by cheque £ 790d) Debtors paid us £840 by cheque and £60 by cashe) 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.

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 chequee) 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 232.2 A Prepare JOURNAL and Write Entries:

a) Bought motor lorry for cash.b) Paid creditor, T Lake, by cheque.c) Repaid P Logan’s loan by cash.d) Sold motor lorry for cash.e) Bought office machinery on credit from Ultra Ltd.f) A debtor, a Hill, pays us by cash.g) A debtor, J Cross, pays us by cheque.h) Proprietor puts a further amount into the business by cheque.i) A loan of £ 200 in cash is received from L Lowe.j) Paid a creditor, D Lord, by cash.

2.3 Prepare JOURNAL and Write Entries:19X7July 1 Started business with £2,500 in the bankJuly 2 Bought office furniture by cheque £150July 3 Bought machinery £750 on credit from Planners Ltd.July 5 Bought a motor van paying by cheque £600July 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 cashJuly 31 Bought more machinery by cheque £280


June 1 Started business with £2000 in cashJune 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 £120June 8 Bought a motor van paying by cheque £950June 12 Bought works machinery from Evans and Sons on credit £560June 18 Returned faulty office furniture costing £62 to Betta Built LtdJune 25 Sold some of the works machinery for £75 cash.June 26 Paid amount owing to Betta Built Ltd £58 by chequeJune 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:

19X9June 1 Started business with £5000 in the bank.June 2 Bought motor van paying by cheque £1200June 5 Bought office fixtures £400 on credit from Young LtdJune 12 Took £100 out of the bank and put it into the cash till.June 15 Bought office fixtures paying by cash £60June 19 Paid Super Motors a cheque for £800June 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 £60March 5 Bought display equipment on credit form Betterview Machines £550March 8 Took £300 out of the bank and put it into the cash till.March 15 Repaid part of Chow’s loan by cheque £800March 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.

Serial #

Account to be debited

Account to be credited

a Goods bought on credit from J Reid

b Goods Sold on credit to B Perkins

c Motor vans bought on credit from H Thomas

d Goods sold, a cheque being received immediately

e Goods sold for cash

f Goods we returned to H Hardy

g Machinery sold for cash

h Goods returned to us by J Nelson

i Goods bought on credit from D Simpson

j Goods we returned to H Forbes

3.2A Complete the following table

Serial #

Account to be debited

Account to be credited

a Goods bought on credit from T Morgan

b Goods returned to us by J Thomas

c Machinery returned to L Jones Ltd

d Goods bought for cash

e Motor van bought on credit from D Davies Ltd

f Goods returned to us by I Prince

g D Picton paid us his account by cheque

h Goods bought by cheque

i We paid creditor, B Henry, by cheque

j Goods sold on credit to J Mullings.


19X8July 1 Started business with £500 cash,July 3 Bought goods for cash £85July 7 Bought goods on credit £116 from E MorganJuly 10 Sold goods for cash £42July 14 Returned goods to E Morgan £28July 18 Bought goods in credit £98 from A MosesJuly 21 Returned goods to A Moses £19July 24 Sold goods to a Knight £55 on creditJuly 25 Paid E Morgan’s account by cash £88July 31 A Knight paid us his account in cash £55

Page 33


19X6Aug 1 Started business with £1000 cashAug 2 Paid £900 of the opening cash into the bankAug 4 Bought goods on credit £78 from S HolmesAug 5 Bought a motor van by a cheque £500Aug 7 Bought goods for cash £55Aug 10 Sold goods on credit £98 to D Moore.Aug 12 Returned goods to S Holmes £18Aug 19 Sod goods for cash £28Aug 22 Bought fixtures on credit from Kingston Equipment Co £150Aug 24 D Watson lent us £100 paying us the money by chequeAug 29 We paid S Holmes his account by cheque £60Aug 31 We paid Kingston Equipment Co by cheque £150

3.5 Prepare JOURNAL and Write Entries:.

19X7July 1 Started business with £10000 in the bankJuly 2 T Cooper lent us £400 in cashJuly 3 Bought goods on credit from F Jones £840 and S Charles £3600July 4 Sold goods for cash £200July 6 Took £250 of the cash and paid it into the bank.July 8 Sold goods on credit to C Moody £180July 10 Sold goods on credit to J Newman £220July 11 Bought goods on credit from F Jones £370July 12 C Moody returned goods to us £40July 14 Sold goods on credit to H Morgan £190 and J Peat £320July 15 We returned goods to F Jones £140July 17 Bought motor ban on credit from Manchester Motors £2600July 18 Bought office furniture on credit from Faster Supplies Ltd £600July 19 We returned goods to S Charles £110July 20 Bought goods for cash £220July 24 Goods sold for cash £70July 25 Paid money owing to F Jones by cheque £1070July 26 Goods returned to us by H Morgan £30July 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 chequeJuly 31 Bought office furniture for cash £100.

Page 34


May 1 Started up the business with £2000 in the bankMay 2 Bought goods on credit from C Shaw £900May 3 Bought goods on credit from F Hughes £250May 5 Sold goods for cash £180May 6 We returned goods to C Shaw £40May 8 Bought goods on credit from F Hughes £190May 10 Sold goods for cash £210May 18 Took £300 of the cash and paid it to the bankMay21 Bought machinery b cheque £550May 22 Sold goods on credit to L Moore £220May 23 G Wood returned goods to us £140May 25 L Moore returned goods to us £10May 28 We returned goods to F Hughes £30May 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:

19X7May 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 £275May 6 Bought goods on credit £114 from S Waites.May 10 Paid rent by cash £ 15May 12 Bought stationary £27, paying in cashMay 18 Goods returned to M Mills £23May 21 Let off part of the premises receiving rent by cheque £5May 23 Sold goods on credit to U Henry for £77May 24 Bought a motor van paying by cheque £300May 30 Paid the month’s wages by cash £117May 31 The proprietor took cash for himself £44.

Page 414.2 Prepare JOURNAL and Write Entries:

19X8March 1 Started business with the cash £1500March 2 Bought goods on credit from A Hanson £296March 3 Paid rent by cash £28March 4 Paid £1000 of the cash of the firm into a bank account.March 5 Sold goods on credit to E Linton £54March 7 Bought stationary £15 paying by chequeMarch 11 Cash sales £49March 14 Goods returned by us to a Hanson £17March 17 Sold goods on credit to S Morgan £29March 20 Paid for repairs to the building by cash £18March 22 E Linton returned goods to us £14March 27 Paid Hanson by cheque £279March 28 Cash purchases £125March 29 Bought a motor van paying by cheque £395March 30 Paid motor expenses in cash £15March 31 Bought fixtures £120 on credit from A Webster.

4.3A Prepare JOURNAL and Write Entries:July 1 Started business with £8000 in the bankJuly 2 Bought stationary by cheque £30July 3 Bought goods on credit from I Walsh £900July 4 Sold goods for cash £180July 5 Paid insurance by cash £40July 7 Bought machinery on credit from H Morgan £500July 8 Paid for machinery expenses by cheque £50July 10 Sold goods on credit to D Small £320July 11 Returned goods to I Walsh £70July 14 Paid wages by cash £70July 17 Paid rent by cheque £100July 20 Received cheque £200 from D Small.July 21 Paid H Morgan by cheque £500July 23 Bought stationary on credit from Express Ltd £80July 25 Sold goods in credit to N Thomas £230July 31 Paid Express Ltd by cheque £80


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 £180Feb 3 Bought goods for cash £230Feb 4 paid rent in cash £10Feb 5 Bought stationary paying by cheque £49Feb 6 Sold goods on credit: C Crooks £140; R Rogers £100; B Grant £240Feb 7 Paid wages in cash £80Feb 10 We returned goods to C Todd £60Feb 11 Paid rent in cash £10Feb 13 R Rogers returns goods to us £20Feb 15 Sold goods on credit to: J Burns £90; J Smart £130; N Thorn £170Feb 16 Paid rates by cheque £130Feb 18 Paid insurance in cash £40Feb 19 Paid rent by cheque £10Feb 20 Bought motor van on credit from C White £600Feb 21 Paid motor expenses in cash £6Feb 23 Paid wages in cash £90Feb 24 Received part of amount owing from B Grant by cheque £200Feb 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 TransactionsThe 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.

Assets = Liabilities

Owner's Equity

Cash

Accounts Receivable

Automobiles

Office Equipment

Notes Payable

Accounts Payable

D.Hall Capital

Balances

$9,500 $58,400 $9,000 $3,800

$20,000 $25,200

$35,500

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 receivable4. 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 TransactionsWater Wise Landscaping was organized on September 1 of the currant year and had the following account balance at December 31, listed in tabular form:

Assets = Liabilities

Owner's Equity

Cash landBuilding

Office Equipment

Notes Payable

Accounts Payable

J.Green Capital

Balances

$14,800 50,000 45,000 22,500

32,000 25,300 75,000

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 EquationA 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 example

Transaction Assets = Liabilities + Owner's Equity

1 NE NE 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 and preparing a Trail Balance.

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 _____________ 26Notes receivable_____________ 5 Notes payable________________ 30Land______________________ 21 Accounts payable_____________ 32Building____________________ 23 Ann Ryan, capital______________ 50

Instructions:

a. Prepare journal entries for the month of October.b. Post to ledger accountsc. Prepare a trial balance at October 31,19__.

6. MM 2A-6 (96)

Preparing Journal Entries, posting, and preparing a trial balance.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 Harris’s 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 Automobiles_______________ 22Accounts Receivable_____ 11 Notes payable______________ 31Land_________________ 16 Accounts payable____________ 32Buildings______________ 17 George Harris, Capital________ 50Office equipment_________ 20

Instructions:a. Journalize the March transactions.b. Post a ledger accounts.c. Prepare trial balance at March 31, 19__.

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.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 Land Notes PayableAccounts receivable Building Accounts payableMedical supplies Office furniture James Colby, capital

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 Property’s 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.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 _____________ 25Notes receivable_______ 5 Notes payable________________ 31Land _______________ 21 Accounts payable______________ 32Building _____________ 23 Rosa Garcia, capital_____________ 51

Instructions:a. Prepare Journal entries for the month of November

9. MM 2B-6 (99)The accounting Cycle, a comprehensive problem

Community TV was organized in February 1994 to operate as a local television station. The account titles and numbers used by the business are listed below:

Cash_________________ 11 Telecasting equipment_______________ 24Account receivable______ 15 Film library________________________ 25Supplies______________ 19 Notes payable______________________ 31Land ________________ 21 Accounts Payable___________________ 32

Building _____________ 22 James Ward, capital__________________ 51 Transmitter___________ 23

The transactions for February are as follows:Feb 1 James Ward deposited $400,000 cash in a bank checking account in the name of the business, Commercial TV.Feb 3. Community TV purchased the land, buildings, and telecasting equipment previously used by a local television station which had gone bankrupt. The total purchase price was $300,000 of which $100,000 was attributable to the land, $90,000 to the building, and the remainder to the television equipment. The terms of purchased required a cash payment of $200,000 and the issuance of a note payable for the balance.Feb 5. Purchased a transmitter at a cost of $225,000 from AC Manufacturing Company, making a cash down payment of $75,000. The balance, in the form of a note payable, was to paid in monthly installments of $12,500, beginning February 15 (interest expense is to be ignored).Feb 9. Purchased a film library are a cost of $40,000 from Modern Film Productions, making a down payment of $15,000 cash, with the balance on account payable in 30 days.Feb 12 Bought supplies costing $3500, paying cash.Feb 15 Paid $12,500 to AC manufacturing as the first monthly payment on the note payable created on Feb 5 (Interest expense to be ignored)Feb 25. Sold part of the film library to City College; cost was $9,000 and the selling price also was $9,000. City College agreed to pay the full amount in 30 days.

Instructions:a. Prepare journal entries for the month of February.b. Post to ledger accountsc. Prepare a trial balance at February 28,1994d. Prepare a balance sheet at February 28,1994.

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 David Cohen, drawingAccounts Receivable Repair service revenue

Tools Advertising expenseNotes payable Rent expenseAccounts payable 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, $750Sept. 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. 1Sept 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 and preparing trail balance.

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 $180,000June 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 Hannigan’s 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 Henry’s 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 Chris Scott, drawing_____________ 43Accounts Receivable__________ 5 Crop-dusting revenue____________ 51Aircraft_____________________ 15 Maintain ace expense_____________ 61Notes payable________________ 31 Fuel expense____________________ 62Accounts payable_____________ 32 Salaries expense_________________ 63Chris Scott, capital____________ 41 Rent expenses___________________ 64

Instructions:

a. Prepare journal entries.b. Post to ledger accountsc. Prepare a trial balance at June 30,1994.

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 $ 12,000May 1 Paid office rent for May $1,700May 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 Brandon’s payment on May 4May 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__________41Accounts Receivable__________ 13 Income summary____________ 45Medical Instruments__________ 20 Fees earned_________________ 49Accumulated depreciation: Medical supplies expenses______ 50 Medical instruments________ 21 Rent expenses_______________ 52Office equipment____________ 22 Salaries expense______________ 53Accumulated depreciation: Utilities expense______________ 53 Office equipment___________ 23 Depreciation expenses:Notes payable_______________ 30 medical instruments________ 54Accounts payable_____________ 31 Depreciation expense:April Stein, Capital____________ 40 Office equipment__________ 55

Instructions:a. Journalize the above instructions.b. Post to ledger accounts c. Prepare a trial balance at May 31,19__.d. Prepare an income statement and a balance sheet

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 Advertising expense:Accounts payable Fuel expenseAmy Wolfe, capital Rent expenseAmy Wolfe, drawing Repair & maintenance expensePassenger fare revenue 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 $9,470Jan 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 10Jan 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 company’s ledger are the following ledger accounts and their identification numbers.Cash____________________ 11 Tony Poletti, drawing____________ 42Land____________________ 21 Parking fees earned______________ 51Notes payable_____________ 31 Advertising expense______________ 61Accounts payable___________ 32 Utilities expense_________________ 63Tony 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 $390Mar 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.c. Prepare a trial journal at March 31.

16. MM 3B-7 (155)The accounting cycle; a comprehensive analysis

On November 1,19__, Ken Ryan organized Continental Moving Company. The transactions occurring during the first month of operations were as follows:

Nov 1. Ryan deposited $400,000 cash in a bank account in the name of the business,Nov 2. Purchased land for $170,000 and building for $360,000, paying #130,000 cash and signing a $400,000 note payable to Secure Mortgage Company bearing interest at 9%.Nov 3. Purchased six trucks form Willis motors at a total cost of $432,000. A cash down payment of $200,000 was made, and a note payable was issued for the balance of the purchase price. (This note is due in 60 days and does not call for the payments of interest)

Nov 6. Purchased office equipment for cash , $ 24,000Nov 6. Moved furniture for Mr. and Mrs. Don Fitch from New York to Los Angeles for $8,650. Collected $4,850 in cash, balance to be paid within 30 days (credit Moving Service Revenue).Nov.9 Moved furniture for various clients for $32,350. Collected $18,350 in cash, balance to be paid within 30 days.Nov. 15 Paid salaries to employees for the first half month, $17,400Nov 25 Moved furniture for various clients for a total of $27000. Cash collected in full.Nov 30 Salaries paid for the second half of November amounted to $13,250.Nov 30 Received a gasoline bill for the month of November from L:ucier Oil Company in the amount of $17,500 to be paid by December 10.Nov. 30 Received blill of $1,250 for repair work on trucks during November by Newport Repair Company. Payment is due within 30 days.Nov. 30 Paid $5,000 to secure Mortgage Company. This $5,000 payment included $3,000 interest expense for November and a $2,000 reduction in the balance of the note pasyable issued on November 2Nov. 30 Ryan withdrew $4000 cash from the business for his personal use.Estimated useful life of the building is 20 years, trucks 4 years, and office equipment 10 years. The account titles to be used and the account numbers are as follows:

Cash ______________________ 1 Ken Ryan, capital______________ 40Accounts Receivable__________ 3 Ken Ryan, drawing_____________ 41Land______________________ 11 Income summary_______________ 50Building____________________12 Moving service revenue__________ 60Accumulated depreciation: Salaries expense________________ 70 Building__________________ 13 Gasoline expense_______________ 71Trucks ____________________ 15 Repairs & maintenance expense____ 72Accumulated depreciation: trucks_ 16 Interest expense_________________73Office equipment____________ 18 Depreciation expense: building______ 74Accumulated depreciation: office Depreciation expense: trucks________75

Equipment________________19 Depreciation expense: office Notes payable_______________ 30 equipment___________________76Accounts payable_____________ 31

Instructions:a. Prepare journal entriesb. Post to ledger accounts c. Prepare a trial balance at November 30, 19__.d. Prepare an income statement and a balance sheet

final transaction bank

Documents

cash c

goods stock of goods

cash b

assets liabilities cash

bank cash

cash f

following assets

extra stock of goods