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3-1
Solutions Manual College Accounting A Practical Approach 13th
Edition Slater
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College Accounting: A Practical Approach 13th Edition by Jeffrey Slater
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3 Beginning the Accounting Cycle
ANSWERS TO DISCUSSION QUESTIONS AND CRITICAL THINKING/ETHICAL CASE
1. Disagree; the accounting cycle represents a certain period of time a business has to perform the normal
accounting procedures (usually one year).
2. Disagree; it is based on the income statement.
3. The calendar year runs from January 1 to December 31. The fiscal year is any 12 consecutive months. (A fiscal
year could be a calendar year.)
4. Interim statements are financial statements prepared for parts of the fiscal period.
5. Disagree; transactions are first journalized in a book of original entry and then posted to the ledger, the book of
final entry in all accounting systems, including computerized systems
6. The debit(s) and credit(s) parts of recording a transaction are located on the same page of the journal. In the
ledger, they would be on separate pages.
7. The chart of accounts provides all the titles of the accounts that will be used in the debit and credit parts of
recording each transaction in a journal.
8. A compound journal entry is a journal entry that requires three or more accounts.
9. Disagree; it means updating the ledger.
10. False. The side that increases the account is the normal balance.
11. Agree.
12. Cross-referencing updates the PR column in the journal after the ledger account has been updated.
13. Transposition is a rearrangement of digits: 5,132 →5,312
Slide means adding or deleting: zeros: 4,821 →482.10
14. The question in this case is whether Pete should be allowed to copy another company's software. I believe that
there is something wrong with Pete asking his friend if he can copy his software. Software is protected under
copyright laws. Maybe Pete should check with the manufacturer of the software for delayed billing.
3-2
SOLUTIONS TO CONCEPT CHECKS
1. a. 201X f. Initial Investment by Owner
b. Mar. g. $19,400
c. 2 h. $19,400
d. Cash and i. Page 1
Equipment
e. B. Munro, Capital
2. A. Owner investment of cash and equipment
B. Performed services for cash and on account
C. Salary expense incurred but not paid
3.
Cash
111
Balance
Date
PR Dr. Cr. Dr. Cr.
201X
Mar. 6 GJ1 29 29
10 GJ1 90 119
15 GJ2 7 112
18 GJ3 75 187
PR column of cash tells us from which page of journal information came from. The Acct. #111 will be used to cross reference back to the PR column of the Journal to tell it was posted to Acct. #111 in the General Ledger.
3-3
4.
KENNEDY COMPANY TRIAL BALANCE
JULY 31, 201X
Dr. Cr.
Cash 13
Equipment 112
Accounts Payable 43
D. Kennedy, Capital 88
D. Kennedy, Withdrawals 5
Taxi Fees 18
Rent Expense 12
Advertising Expense 7 ___
Totals 149 149
5.
Date Account Titles Dr. Cr.
201X June 10 Telephone Expense 250
Repair Expense 250
A correcting entry may not be needed if the mistake is detected prior to posting.
3-4
SOLUTIONS TO SET A EXERCISES
3A-1.
Date Account Titles and Description PR Dr. Cr.
201X
Apr 1 Cash 110 0 0 0 00
Equipment 12 0 0 0 00
J. Moore, Capital 122 0 0 0 00
Owner investment
3 Building 70 0 0 0 00
Accounts Payable 70 0 0 0 00
Purchase of building on account
12 Truck 12 0 0 0 00
Cash 12 0 0 0 00
Purchase truck for cash
18 Supplies 7 0 0 00
Accounts Payable 7 0 0 00
Purchase of supplies on account
3-5
EXERCISES (CONTINUED) 3A-2.
Date Account Titles and Description PR Dr. Cr.
201X
May 1 Cash 150 0 0 0 00
R. Tarsia, Capital 150 0 0 0 00
Owner investment
5 Equipment 6 0 0 0 00
Cash 6 0 0 0 00
Purchase of equipment for cash
8 Equipment 4 0 0 0 00
Accounts Payable 4 0 0 0 00
Purchase of equipment on account
14 Cash 1 7 0 0 00
Service Revenue 1 7 0 0 00
Collected cash revenue
18 Accounts Receivable 1 5 0 0 00
Service Revenue 1 5 0 0 00
Earned revenue on account
20 R. Tarsia, Withdrawals 1 0 0 00
Cash 1 0 0 00
Owner withdrawal
3-6
EXERCISES (CONTINUED) 3A-3.
Date 201X
Account Titles and Description PR Dr. Cr.
Feb. 6 Cash 111 12 0 0 0 00
A. Kramer, Capital 311 12 0 0 0 00
Cash investment
14 Equipment 121 8 0 0 0 00
Cash 111 5 0 0 0 00
Accounts Payable 211 3 0 0 0 00
Purchase of equipment
CASH
ACCOUNT NO. 111
Date 201X Explanation
Post Ref.
Debit Credit Balance
Debit Credit
Feb. 6 GJ4 12 0 0 0 00 12 0 0 0 00
14 GJ4 5 0 0 0 00 7 0 0 0 00
EQUIPMENT ACCOUNT NO. 121
Date 201X
Explanation Post Ref.
Debit Credit Balance
Debit Credit
Feb. 14 GJ4 8 0 0 0 00 8 0 0 0 00
ACCOUNTS PAYABLE
ACCOUNT NO. 211
Date 201X
Explanation Post Ref.
Debit Credit Balance
Debit Credit
Feb. 14 GJ4 3 0 0 0 00 3 0 0 0 00
A. KRAMER, CAPITAL
ACCOUNT NO. 311
Date 201X
Explanation Post Ref.
Debit Credit
Balance
Debit Credit
Feb. 6 GJ4 12 0 0 0 00 12 0 0 0 00
3-7
EXERCISES (CONTINUED) 3A-4 (a) PAGE 1
Date 201X
Account Titles and Description PR Dr. Cr.
May 1 Cash 111 8 0 0 0 00
J. Lucas, Capital 311 8 0 0 0 00
Owner investment
4 Equipment 121 1 3 0 0 00
Account Payable 211 1 3 0 0 00
Purchase of equipment on account
15 Accounts Receivable 112 2 0 0 0 00
Fees Earned 411 2 0 0 0 00
Services performed on account
18 Cash 111 7 0 0 0 00
Fees Earned 411 7 0 0 0 00
Services performed for cash
24 Salaries Expense 511 1 0 0 0 00
Cash 111 1 0 0 0 00
Salaries paid
28 J. Lucas, Withdrawals 312 2 0 0 00
Cash 111 2 0 0 00
Owner withdrawal
(b) CASH ACCOUNT NO. 111
Date 201X
Explanation Post Ref.
Debit Credit Balance
Debit Credit
May 1 GJ1 8 0 0 0 00 8 0 0 0 00
18 GJ1 7 0 0 0 00 15 0 0 0 00
24 GJ1 1 0 0 0 00 14 0 0 0 00
28 GJ1 2 0 0 00 13 8 0 0 00
3-8
EXERCISES (CONTINUED) ACCOUNTS RECEIVABLE ACCOUNT NO. 112
Date 201X
Explanation Post Ref.
Debit Credit Balance
Debit Credit
May 15 GJ1 2 0 0 0 00 2 0 0 0 00
EQUIPMENT ACCOUNT NO. 121
Date 201X
Explanation Post Ref.
Debit Credit Balance
Debit Credit
May 4 GJ1 1 3 0 0 00 1 3 0 0 00
ACCOUNTS PAYABLE ACCOUNT NO. 211
Date 201X
Explanation Post Ref.
Debit Credit Balance
Debit Credit
May 4 GJ1 1 3 0 0 00 1 3 0 0 00
J. LUCAS, CAPITAL ACCOUNT NO. 311
Date 201X
Explanation Post Ref.
Debit Credit Balance
Debit Credit
May 1 GJ1 8 0 0 0 00 8 0 0 0 00
J. LUCAS, WITHDRAWALS ACCOUNT NO. 312
Date 201X
Explanation Post Ref.
Debit Credit Balance
Debit Credit
May 28 GJ1 2 0 0 00 2 0 0 00
FEES EARNED ACCOUNT NO. 411
Date 201X
Explanation Post Ref.
Debit Credit Balance
Debit Credit
May 15 GJ1 2 0 0 0 00 2 0 0 0 00
18 GJ1 7 0 0 0 00 9 0 0 0 00
3-9
EXERCISES (CONTINUED) SALARIES EXPENSE ACCOUNT NO. 511
Date 201X
Explanation Post Ref.
Debit Credit Balance
Debit Credit
May 24 GJ1 1 0 0 0 00 1 0 0 0 00
(c)
LUCAS COMPANY
TRIAL BALANCE
MAY 31, 201X
Dr. Cr.
Cash 13 8 0 0 00
Accounts Receivable 2 0 0 0 00
Equipment 1 3 0 0 00
Accounts Payable 1 3 0 0 00
J. Lucas, Capital 8 0 0 0 00
J. Lucas, Withdrawals 2 0 0 00
Fees Earned 9 0 0 0 00
Salaries Expense 1 0 0 0 00
Totals 18 3 0 0 00 18 3 0 0 00
3A-5
SALT LAKE CO. TRIAL BALANCE
OCTOBER 31, 201X
Dr. Cr.
Cash 20 0 0 0 00
Accounts Receivable 1 2 0 0 00
Accounts Payable 3 9 0 0 00
A. Salt Lake, Capital 12 2 5 0 00
A. Salt Lake, Withdrawals 9 5 0 00
Services Earned 8 0 0 0 00
Concessions Earned 2 5 0 0 00
Rent Expense 4 0 0 00
Salaries Expense 2 2 0 0 00
Miscellaneous Expense 1 9 0 0 00
Totals 26 6 5 0 00 26 6 5 0 00
3-10
EXERCISES (CONTINUED)
3A-6. Since the journal entry has not yet been posted, Mark Sullivan should put a line through the current amount of the journal entry, the $800, and enter the correct amount of $1,200 along with his initials.
3-11
SOLUTIONS TO SET B EXERCISES
3B-1.
Date Account Titles and Description PR Dr. Cr.
201X
Apr. 1 Cash 100 0 0 0 00
Equipment 18 0 0 0 00
J. Dimon, Capital 118 0 0 0 00
Owner investment
3 Building 40 0 0 0 00
Accounts Payable 40 0 0 0 00
Purchase of building on account
12 Truck 11 0 0 0 00
Cash 11 0 0 0 00
Purchase truck for cash
18 Supplies 5 0 0 00
Accounts Payable 5 0 0 00
Purchase of supplies on account
3-12
EXERCISES (CONTINUED) 3B-2.
Date Account Titles and Description PR Dr. Cr.
201X
Apr. 1 Cash 80 0 0 0 00
R. Savareses, Capital 80 0 0 0 00
Owner investment
5 Equipment 15 0 0 0 00
Cash 15 0 0 0 00
Purchase of equipment for cash
8 Equipment 5 0 0 0 00
Accounts Payable 5 0 0 0 00
Purchase of equipment on account
14 Cash 1 3 0 0 00
Service Revenue 1 3 0 0 00
Collected cash revenue
18 Accounts Receivable 7 5 0 00
Service Revenue 7 5 0 00
Earned revenue on account
20 R. Savareses, Withdrawals 5 0 0 00
Cash 5 0 0 00
Owner withdrawal
3-13
EXERCISES (CONTINUED) 3B-3.
Date 201X
Account Titles and Description PR Dr. Cr.
Nov. 6 Cash 111 52 0 0 0 00
A. Kingston, Capital 311 52 0 0 0 00
Cash investment
14 Equipment 121 3 0 0 0 00
Cash 111 1 0 0 0 00
Accounts Payable 211 2 0 0 0 00
Purchase of equipment
CASH
ACCOUNT NO. 111
Date 201X Explanation
Post Ref.
Debit Credit Balance
Debit Credit
Nov. 6 GJ4 52 0 0 0 00 52 0 0 0 00
14 GJ4 1 0 0 0 00 51 0 0 0 00
EQUIPMENT ACCOUNT NO. 121
Date 201X
Explanation Post Ref.
Debit Credit Balance
Debit Credit
Nov. 14 GJ4 3 0 0 0 00 3 0 0 0 00
ACCOUNTS PAYABLE
ACCOUNT NO. 211
Date 201X
Explanation Post Ref.
Debit Credit Balance
Debit Credit
Nov. 14 GJ4 2 0 0 0 00 2 0 0 0 00
A. KINGSTON, CAPITAL
ACCOUNT NO. 311
Date 201X
Explanation Post Ref.
Debit Credit Balance
Debit Credit
Nov. 6 GJ4 52 0 0 0 00 52 0 0 0 00
3-14
EXERCISES (CONTINUED) 3B-4. (a) PAGE 1
Date 201X
Account Titles and Description PR Dr. Cr.
Dec. 1 Cash 111 52 0 0 0 00
J. Lowe, Capital 311 52 0 0 0 00
Owner investment
4 Equipment 121 2 0 0 0 00
Account Payable 211 2 0 0 0 00
Purchase of equipment on account
15 Accounts Receivable 112 14 0 0 0 00
Fees Earned 411 14 0 0 0 00
Services performed on account
18 Cash 111 4 0 0 0 00
Fees Earned 411 4 0 0 0 00
Services performed for cash
24 Salaries Expense 511 1 8 0 0 00
Cash 111 1 8 0 0 00
Salaries paid
28 J. Lowe, Withdrawals 312 1 0 0 0 00
Cash 111 1 0 0 0 00
Owner withdrawal
(b) CASH ACCOUNT NO. 111
Date 201X
Explanation Post Ref.
Debit Credit Balance
Debit Credit
Dec. 1 GJ1 52 0 0 0 00 52 0 0 0 00
18 GJ1 4 0 0 0 00 56 0 0 0 00
24 GJ1 1 8 0 0 00 54 2 0 0 00
28 GJ1 1 0 0 0 00 53 2 0 0 00
3-15
EXERCISES (CONTINUED) ACCOUNTS RECEIVABLE ACCOUNT NO. 112
Date 201X
Explanation Post Ref.
Debit Credit Balance
Debit Credit
Dec. 15 GJ1 14 0 0 0 00 14 0 0 0 00
EQUIPMENT ACCOUNT NO. 121
Date 201X
Explanation Post Ref.
Debit Credit Balance
Debit Credit
Dec. 4 GJ1 2 0 0 0 00 2 0 0 0 00
ACCOUNTS PAYABLE ACCOUNT NO. 211
Date 201X
Explanation Post Ref.
Debit Credit Balance
Debit Credit
Dec. 4 GJ1 2 0 0 0 00 2 0 0 0 00
J. LOWE, CAPITAL ACCOUNT NO. 311
Date 201X
Explanation
Post Ref.
Debit Credit Balance
Debit Credit
Dec. 1 GJ1 52 0 0 0 00 52 0 0 0 00
J. LOWE, WITHDRAWALS ACCOUNT NO. 312
Date 201X
Explanation
Post Ref.
Debit Credit Balance
Debit Credit
Dec. 28 GJ1 1 0 0 0 00 1 0 0 0 00
FEES EARNED ACCOUNT NO. 411
Date 201X
Explanation Post Ref.
Debit Credit Balance
Debit Credit
Dec. 15 GJ1 14 0 0 0 00 14 0 0 0 00
18 GJ1 4 0 0 0 00 18 0 0 0 00
3-16
EXERCISES (CONTINUED) SALARIES EXPENSE ACCOUNT NO. 511
Date 201X
Explanation Post Ref.
Debit Credit Balance
Debit Credit
Dec. 24 GJ1 1 8 0 0 00 1 8 0 0 00
(c.)
LOWE COMPANY
TRIAL BALANCE
DECEMBER 31, 201X
Dr. Cr.
Cash 53 2 0 0 00
Accounts Receivable 14 0 0 0 00
Equipment 2 0 0 0 00
Accounts Payable 2 0 0 0 00
J. Lowe, Capital 52 0 0 0 00
J. Lowe, Withdrawals 1 0 0 0 00
Fees Earned 18 0 0 0 00
Salaries Expense 1 8 0 0 00
Totals 72 0 0 0 00 72 0 0 0 00
3B-5
SUNG CO. TRIAL BALANCE
AUGUST 31, 201X
Dr. Cr.
Cash 10 0 0 0 00
Accounts Receivable 3 7 0 0 00
Accounts Payable 5 2 0 0 00
A. Sung, Capital 4 7 5 0 00
A. Sung, Withdrawals 5 5 0 00
Services Earned 6 6 0 0 00
Concessions Earned 1 4 0 0 00
Rent Expense 8 0 0 00
Salaries Expense 1 8 0 0 00
Miscellaneous Expense 1 1 0 0 00
Totals 17 9 5 0 00 17 9 5 0 00
3-17
EXERCISES (CONCLUDED)
3B-6. Since the transaction has not yet been posted, Morris Sanford should put a line through the current amount of the journal entry, the $9.00, and change it to $1,000 along with his initials.
3-18
SOLUTIONS TO SET A PROBLEMS
PROBLEM 3A-1
JASON’S CLEANING SERVICE
GENERAL JOURNAL PAGE 1
Date 201X
Account Titles and Description PR Dr. Cr.
Oct. 1 Prepaid Rent 9 0 0 0 00
Cash 9 0 0 0 00
Rent paid in advance
6 Cleaning Equipment 7 0 0 0 00
Accounts Payable 7 0 0 0 00
Purchased equipment on account
12 Cleaning Supplies 6 0 0 00
Cash 6 0 0 00
Paid cash for supplies
14 Cash 1 2 0 0 00
Cleaning Fees Earned 1 2 0 0 00
Earned fee and received cash
20 Jason Lang, Withdrawals 5 0 0 00
Cash 5 0 0 00
Owner withdrawal
21 Advertising Expense 4 5 0 00
Accounts Payable 4 5 0 00
Received advertising bill
25 Electrical Expense 7 0 00
Cash 7 0 00
Paid electrical expense
28 Salaries Expense 1 0 0 0 00
Cash 1 0 0 0 00
Paid salaries
3-19
PROBLEM 3A-1 (CONCLUDED)
JASON'S CLEANING SERVICE GENERAL JOURNAL
PAGE 2
Date 201X
Account Titles and Description PR Dr. Cr.
Oct. 29 Accounts Receivable 2 3 0 0 00
Cleaning Fees Earned 2 3 0 0 00
Earned fee on account
30 Accounts Payable 3 5 0 0 00
Cash 3 5 0 0 00
Paid on account
3-20
PROBLEM 3A-2
(a, b)
BRENDA’S ART STUDIO GENERAL JOURNAL
PAGE 1
Date 201X
Account Titles and Description PR Dr. Cr.
June 1 Cash 111 52 0 0 0 00
B. Rennicke, Capital 311 52 0 0 0 00
Owner investment
1 Prepaid Rent 114 2 0 0 0 00
Cash 111 2 0 0 0 00
Rent paid in advance
3 Equipment 131 2 0 0 0 00
Accounts Payable 211 2 0 0 0 00
Purchase of equipment on account
5 Cash 111 10 0 0 0 00
Art Fees Earned 411 10 0 0 0 00
Fee earned for cash
8 Art Supplies 121 5 0 0 00
Cash 111 5 0 0 00
Purchase of supplies for cash
9 Accounts Receivable 112 2 5 0 0 00
Art Fees Earned 411 2 5 0 0 00
Fee earned on account
10 Salaries Expense 521 1 3 0 0 00
Cash 111 1 3 0 0 00
Salaries paid
15 B. Rennicke, Withdrawals 312 2 0 0 00
Cash 111 2 0 0 00
Owner withdrawal
28 Electrical Expense 511 8 0 00
Cash 111 8 0 00
Paid electric bill
3-21
PROBLEM 3A-2 (CONTINUED)
Date Accounts and Explanation Debit Credit
June 29 Telephone Expense 531 2 2 0 00
Cash 111 2 2 0 00
Paid telephone bill
GENERAL LEDGER OF BRENDA’S ART STUDIO
CASH ACCOUNT NO. 111
Date 201X
Explanation Post Ref.
Debit Credit Balance
Debit Credit
June 1 GJ1 52 0 0 0 00 52 0 0 0 00
1 GJ1 2 0 0 0 00 50 0 0 0 00
5 GJ1 10 0 0 0 00 60 0 0 0 00
8 GJ1 5 0 0 00 59 5 0 0 00
10 GJ1 1 3 0 0 00 58 2 0 0 00
15 GJ1 2 0 0 00 58 0 0 0 00
28 GJ1 8 0 00 57 9 2 0 00
29 GJ1 2 2 0 00 57 7 0 0 00
ACCOUNTS RECEIVABLE ACCOUNT NO. 112
Date 201X
Explanation Post Ref.
Debit Credit Balance
Debit Credit
June 9 GJ1 2 5 0 0 00 2 5 0 0 00
PREPAID RENT ACCOUNT NO. 114
Date 201X
Explanation Post Ref.
Debit Credit Balance
Debit Credit
June 1 GJ1 2 0 0 0 00 2 0 0 0 00
ART SUPPLIES ACCOUNT NO. 121
Date 201X
Explanation Post Ref.
Debit Credit Balance
Debit Credit
June 8 GJ1 5 0 0 00 5 0 0 00
3-22
PROBLEM 3A-2 (CONTINUED)
EQUIPMENT ACCOUNT NO. 131
Date 201X
Explanation Post Ref.
Debit Credit Balance
Debit Credit
June 3 GJ1 2 0 0 0 00 2 0 0 0 00
ACCOUNTS PAYABLE ACCOUNT NO. 211
Date 201X
Explanation Post Ref.
Debit Credit Balance
Debit Credit
June 3 GJ1 2 0 0 0 00 2 0 0 0 00
B. RENNICKE, CAPITAL ACCOUNT NO. 311
Date 201X
Explanation Post Ref.
Debit Credit Balance
Debit Credit
June 1 GJ1 52 0 0 0 00 52 0 0 0 00
B. RENNICKE, WITHDRAWALS
ACCOUNT NO. 312
Date 201X
Explanation Post Ref.
Debit Credit Balance
Debit Credit
June 15 GJ1 2 0 0 00 2 0 0 00
ART FEES EARNED ACCOUNT NO. 411
Date 201X
Explanation Post Ref.
Debit Credit Balance
Debit Credit
June 5 GJ1 10 0 0 0 00 10 0 0 0 00
9 GJ1 2 5 0 0 00 12 5 0 0 00
3-23
PROBLEM 3A-2 (CONCLUDED)
ELECTRICAL EXPENSE ACCOUNT NO. 511
Date 201X
Explanation Post Ref.
Debit Credit Balance
Debit Credit
June 28 GJ1 8 0 00 8 0 00
SALARIES EXPENSE ACCOUNT NO. 521
Date 201X
Explanation Post Ref.
Debit Credit Balance
Debit Credit
June 10 GJ1 1 3 0 0 00 1 3 0 0 00
TELEPHONE EXPENSE ACCOUNT NO. 531
Date 201X
Explanation Post Ref.
Debit Credit Balance
Debit Credit
June 29 GJ1 2 2 0 00 2 2 0 00
(c)
BRENDA'S ART STUDIO TRIAL BALANCE
JUNE 30, 201X
Dr. Cr.
Cash 57 7 0 0 00
Accounts Receivable 2 5 0 0 00
Prepaid Rent 2 0 0 0 00
Art Supplies 5 0 0 00
Equipment 2 0 0 0 00
Accounts Payable 2 0 0 0 00
B. Rennicke, Capital 52 0 0 0 00
B. Rennicke, Withdrawals 2 0 0 00
Art Fees Earned 12 5 0 0 00
Electrical Expense 8 0 00
Salaries Expense 1 3 0 0 00
Telephone Expense 2 2 0 00
Totals 66 5 0 0 00 66 5 0 0 00
3-24
PROBLEM 3A-3
(a, b)
A. ONE'S PLACEMENT AGENCY GENERAL JOURNAL
PAGE 1
Date 201X
Account Titles and Description PR Dr. Cr.
Jun. 1 Cash 111 9 0 0 0 00
A. One, Capital 311 9 0 0 0 00
Owner investment
1 Equipment 141 1 5 0 0 00
Accounts Payable 211 1 5 0 0 00
Purchase of equipment on account
3 Accounts Receivable 112 1 4 0 0 00
Placement Fees Earned 411 1 4 0 0 00
Fee earned on account
5 A. One, Withdrawals 312 6 0 0 00
Cash 111 6 0 0 00
Owner withdrawal
7 Wage Expense 511 3 0 0 00
Cash 111 3 0 0 00
Wages paid
9 Cash 111 4 0 0 0 00
Placement Fees Earned 411 4 0 0 0 00
Fee earned for cash
15 Supplies 131 3 5 0 00
Accounts Payable 211 3 5 0 00
Purchase of supplies on account
28 Telephone Expense 521 2 2 0 00
Cash 111 2 2 0 00
Paid telephone bill
29 Advertising Expense 531 5 0 0 00
Accounts Payable 211 5 0 0 00
Received advertising bill
3-25
PROBLEM 3A-3 (CONTINUED)
GENERAL LEDGER OF A. ONE'S PLACEMENT AGENCY
CASH ACCOUNT NO. 111
Balance
Date 201X
Explanation Post Ref.
Debit Credit Debit Credit
June 1 GJ1 9 0 0 0 00 9 0 0 0 00
5 GJ1 6 0 0 00 8 4 0 0 00
7 GJ1 3 0 0 00 8 1 0 0 00
9 GJ1 4 0 0 0 00 12 1 0 0 00
28 GJ1 2 2 0 00 11 8 8 0 00
ACCOUNTS RECEIVABLE ACCOUNT NO. 112
Balance
Date 201X
Explanation Post Ref.
Debit Credit Debit Credit
June 3 GJ1 1 4 0 0 00 1 4 0 0 00
SUPPLIES ACCOUNT NO. 131
Balance
Date 201X
Explanation Post Ref.
Debit Credit Debit Credit
June 15 GJ1 3 5 0 00 3 5 0 00
EQUIPMENT ACCOUNT NO. 141
Balance
Date 201X
Explanation Post Ref.
Debit
Credit Debit Credit
June 1 GJ1 1 5 0 0 00 1 5 0 0 00
3-26
PROBLEM 3A-3 (CONTINUED)
ACCOUNTS PAYABLE ACCOUNT NO. 211
Balance
Date 201X
Explanation Post Ref.
Debit Credit Debit Credit
June 1 GJ1 1 5 0 0 00 1 5 0 0 00
15 GJ1 3 5 0 00 1 8 5 0 00
29 GJ1 5 0 0 00 2 3 5 0 00
A. ONE, CAPITAL ACCOUNT NO. 311
Balance
Date 201X
Explanation Post Ref.
Debit Credit Debit Credit
June 1 GJ1 9 0 0 0 00 9 0 0 0 00
A. ONE, WITHDRAWALS ACCOUNT NO. 312
Balance
Date 201X
Explanation Post Ref.
Debit Credit Debit Credit
June 5 GJ1 6 0 0 00 6 0 0 00
PLACEMENT FEES EARNED ACCOUNT NO. 411
Balance
Date 201X
Explanation Post Ref.
Debit Credit Debit Credit
June 3 GJ1 1 4 0 0 00 1 4 0 0 00
9 GJ1 4 0 0 0 00 5 4 0 0 00
WAGE EXPENSE ACCOUNT NO. 511
Balance
Date 201X
Explanation Post Ref.
Debit Credit Debit Credit
June 7 GJ1 3 0 0 00 3 0 0 00
3-27
PROBLEM 3A-3 (CONCLUDED)
TELEPHONE EXPENSE ACCOUNT NO. 521
Balance
Date 201X
Explanation Post Ref.
Debit Credit Debit Credit
June 28 GJ1 2 2 0 00 2 2 0 00
ADVERTISING EXPENSE ACCOUNT NO. 531
Balance
Date 201X
Explanation Post Ref.
Debit Credit Debit Credit
June 29 GJ1 5 0 0 00 5 0 0 00
(c)
A. ONE'S PLACEMENT AGENCY TRIAL BALANCE
JUNE 30, 201X
Dr. Cr.
Cash 11 8 8 0 00
Accounts Receivable 1 4 0 0 00
Supplies 3 5 0 00
Equipment 1 5 0 0 00
Accounts Payable 2 3 5 0 00
A. One, Capital 9 0 0 0 00
A. One, Withdrawals 6 0 0 00
Placement Fees Earned 5 4 0 0 00
Wage Expense 3 0 0 00
Telephone Expense 2 2 0 00
Advertising Expense 5 0 0 00
Totals 16 7 5 0 00 16 7 5 0 00
3-28
SOLUTIONS TO B PROBLEMS
PROBLEM 3B-1 JIMMY'S CLEANING SERVICE
GENERAL JOURNAL PAGE 1
Date 201X Account Titles and Description PR Dr. Cr.
Mar. 1 Prepaid Rent 2 0 0 0 00
Cash 2 0 0 0 00
Rent paid in advance
6 Cleaning Equipment 5 0 0 0 00
Account Payable 5 0 0 0 00
Purchased equipment on account
12 Cleaning Supplies 9 0 0 00
Cash 9 0 0 00
Paid cash for supplies
14 Cash 1 6 0 0 00
Cleaning Fees Earned 1 6 0 0 00
Earned fee and received cash
20 Jimmy Cook, Withdrawals 1 0 0 00
Cash 1 0 0 00
Owner withdrawal
21 Advertising Expense 6 0 0 00
Accounts Payable 6 0 0 00
Received advertising bill
25 Electrical Expense 1 0 0 00
Cash 1 0 0 00
Paid electrical expense
28 Salaries Expense 3 0 0 00
Cash 3 0 0 00
Paid salaries
3-29
PROBLEM 3B-1 (CONCLUDED)
JIMMY’S CLEANING SERVICE GENERAL JOURNAL
PAGE 2
Date 201X Account Titles and Description PR Dr. Cr.
Mar. 29 Accounts Receivable 2 5 0 0 00
Cleaning Fees Earned 2 5 0 0 00
Earned fee on account
30 Accounts Payable 2 5 0 0 00
Cash 2 5 0 0 00
Paid on account
3-30
PROBLEM 3B-2
(a, b) BETH'S ART STUDIO
GENERAL JOURNAL PAGE 1
Date 201X Account Titles and Description PR Dr. Cr.
Apr. 1 Cash 111 15 0 0 0 00
Beth Orth, Capital 311 15 0 0 0 00
Owner investment
1 Prepaid Rent 114 1 6 0 0 00
Cash 111 1 6 0 0 00
Rent paid in advance
3 Equipment 131 1 3 0 0 00
Accounts Payable 211 1 3 0 0 00
Purchase of equipment on account
5 Cash 111 3 0 0 0 00
Art Fees Earned 411 3 0 0 0 00
Fees earned for cash
8 Art Supplies 121 3 5 0 00
Cash 111 3 5 0 00
Purchase of supplies for cash
9 Accounts Receivable 112 3 3 0 0 00
Art Fees Earned 411 3 3 0 0 00
Fees earned on account
10 Salaries Expense 521 7 0 0 00
Cash 111 7 0 0 00
Salaries paid
15 Beth Orth, Withdrawals 312 1 0 0 0 00
Cash 111 1 0 0 0 00
Owner withdrawal
28 Electrical Expense 511 5 0 00
Cash 111 5 0 00
Paid electrical bill
29 Telephone Expense 531 1 3 0 00
Cash 111 1 3 0 00
Paid telephone bill
3-31
PROBLEM 3B-2 (CONTINUED)
GENERAL LEDGER OF BETH'S ART STUDIO
CASH ACCOUNT NO. 111
Date 201X Explanation
Post Ref. Debit Credit
Balance
Debit Credit
Apr. 1 GJ1 15 0 0 0 00 15 0 0 0 00
1 GJ1 1 6 0 0 00 13 4 0 0 00
5 GJ1 3 0 0 0 00 16 4 0 0 00
8 GJ1 3 5 0 00 16 0 5 0 00
10 GJ1 7 0 0 00 15 3 5 0 00
15 GJ1 1 0 0 0 00 14 3 5 0 00
28 GJ1 5 0 00 14 3 0 0 00
29 GJ1 1 3 0 00 14 1 7 0 00
ACCOUNTS RECEIVABLE ACCOUNT NO. 112
Date 201X Explanation
Post Ref. Debit Credit
Balance
Debit Credit
Apr. 9 GJ1 3 3 0 0 00 3 3 0 0 00
PREPAID RENT ACCOUNT NO. 114
Date 201X Explanation
Post Ref. Debit Credit
Balance
Debit Credit
Apr. 1 GJ1 1 6 0 0 00 1 6 0 0 00
ART SUPPLIES ACCOUNT NO. 121
Date 201X Explanation
Post Ref. Debit Credit
Balance
Debit Credit
Apr. 8 GJ1 3 5 0 00 3 5 0 00
3-32
PROBLEM 3B-2 (CONTINUED)
EQUIPMENT ACCOUNT NO. 131
Date 201X Explanation
Post Ref. Debit Credit
Balance
Debit Credit
Apr. 3 GJ1 1 3 0 0 00 1 3 0 0 00
ACCOUNTS PAYABLE ACCOUNT NO. 211
Date 201X Explanation
Post Ref. Debit Credit
Balance
Debit Credit
Apr. 3 GJ1 1 3 0 0 00 1 3 0 0 00
BETH ORTH, CAPITAL ACCOUNT NO. 311
Date 201X Explanation
Post Ref. Debit Credit
Balance
Debit Credit
Apr. 1 GJ1 15 0 0 0 00 15 0 0 0 00
BETH ORTH, WITHDRAWALS
ACCOUNT NO. 312
Date 201X Explanation
Post Ref. Debit Credit
Balance
Debit Credit
Apr. 15 GJ1 1 0 0 0 00 1 0 0 0 00
ART FEES EARNED ACCOUNT NO. 411
Date 201X Explanation
Post Ref. Debit Credit
Balance
Debit Credit
Apr. 5 GJ1 3 0 0 0 00 3 0 0 0 00
9 GJ1 3 3 0 0 00 6 3 0 0 00
3-33
PROBLEM 3B-2 (CONCLUDED)
ELECTRICAL EXPENSE ACCOUNT NO. 511
Date 201X Explanation
Post Ref. Debit Credit
Balance
Debit Credit
Apr. 28 GJ1 5 0 00 5 0 00
SALARIES EXPENSE ACCOUNT NO. 521
Date 201X Explanation
Post Ref. Debit Credit
Balance
Debit Credit
Apr. 10 GJ1 7 0 0 00 7 0 0 00
TELEPHONE EXPENSE ACCOUNT NO. 531
Date 201X Explanation
Post Ref. Debit Credit
Balance
Debit Credit
Apr. 29 GJ1 1 3 0 00 1 3 0 00
(c)
BETH'S ART STUDIO TRIAL BALANCE
April 30, 201X Dr. Cr.
Cash 14 1 7 0 00
Accounts Receivable 3 3 0 0 00
Prepaid Rent 1 6 0 0 00
Art Supplies 3 5 0 00
Equipment 1 3 0 0 00
Accounts Payable 1 3 0 0 00
Beth Orth, Capital 15 0 0 0 00
Beth Orth, Withdrawals 1 0 0 0 00
Art Fees Earned 6 3 0 0 00
Electrical Expense 5 0 00
Salaries Expense 7 0 0 00
Telephone Expense 1 3 0 00
Totals 22 6 0 0 00 22 6 0 0 00
3-34
PROBLEM 3B-3 (a, b)
A. FRENCH'S PLACEMENT AGENCY GENERAL JOURNAL
PAGE 1
Date 201X Account Titles and Description PR Dr. Cr.
Apr. 1 Cash 111 12 0 0 0 00
A. French, Capital 311 12 0 0 0 00
Owner investment
1 Equipment 141 2 1 0 0 00
Accounts Payable 211 2 1 0 0 00
Purchase of equipment on account
3 Accounts Receivable 112 1 8 0 0 00
Placement Fees Earned 411 1 8 0 0 00
Fee earned on account
5 A. French, Withdrawals 312 6 0 0 00
Cash 111 6 0 0 00
Owner withdrawal
7 Wage Expense 511 4 0 0 00
Cash 111 4 0 0 00
Wages paid
9 Cash 111 3 0 0 0 00
Placement Fees Earned 411 3 0 0 0 00
Fee earned for cash
15 Supplies 131 6 0 0 00
Accounts Payable 211 6 0 0 00
Purchase of supplies on account
28 Telephone Expense 521 2 0 0 00
Cash 111 2 0 0 00
Paid telephone bill
29 Advertising Expense 531 1 3 0 00
Accounts Payable 211 1 3 0 00
Received advertising bill
3-35
PROBLEM 3B-3 (CONTINUED)
GENERAL LEDGER OF A. FRENCH'S PLACEMENT AGENCY
CASH ACCOUNT NO. 111
Date 201X Explanation
Post Ref. Debit Credit
Balance
Debit Credit
Apr. 1 GJ1 12 0 0 0 00 12 0 0 0 00
5 GJ1 6 0 0 00 11 4 0 0 00
7 GJ1 4 0 0 00 11 0 0 0 00
9 GJ1 3 0 0 0 00 14 0 0 0 00
28 GJ1 2 0 0 00 13 8 0 0 00
ACCOUNTS RECEIVABLE ACCOUNT NO. 112
Date 201X Explanation
Post Ref. Debit Credit
Balance
Debit Credit
Apr. 3 GJ1 1 8 0 0 00 1 8 0 0 00
SUPPLIES ACCOUNT NO. 131
Date 201X Explanation
Post Ref. Debit Credit
Balance
Debit Credit
Apr. 15 GJ1 6 0 0 00 6 0 0 00
EQUIPMENT ACCOUNT NO. 141
Date 201X Explanation
Post Ref. Debit Credit
Balance
Debit Credit
Apr. 1 GJ1 2 1 0 0 00 2 1 0 0 00
3-36
PROBLEM 3B-3 (CONTINUED)
ACCOUNTS PAYABLE ACCOUNT NO. 211
Date 201X Explanation
Post Ref. Debit Credit
Balance
Debit Credit
Apr. 1 GJ1 2 1 0 0 00 2 1 0 0 00
15 GJ1 6 0 0 00 2 7 0 0 00
29 GJ1 1 3 0 00 2 8 3 0 00
A. FRENCH, CAPITAL ACCOUNT NO. 311
Date 201X Explanation
Post Ref. Debit Credit
Balance
Debit Credit
Apr. 1 GJ1 12 0 0 0 00 12 0 0 0 00
A. FRENCH, WITHDRAWALS ACCOUNT NO. 312
Date 201X Explanation
Post Ref. Debit Credit
Balance
Debit Credit
Apr. 5 GJ1 6 0 0 00 6 0 0 00
PLACEMENT FEES EARNED ACCOUNT NO. 411
Date 201X Explanation
Post Ref. Debit Credit
Balance
Debit Credit
Apr. 3 GJ1 1 8 0 0 00 1 8 0 0 00
9 GJ1 3 0 0 0 00 4 8 0 0 00
WAGE EXPENSE ACCOUNT NO. 511
Date 201X Explanation
Post Ref. Debit Credit
Balance
Debit Credit
Apr. 7 GJ1 4 0 0 00 4 0 0 00
3-37
PROBLEM 3B-3 (CONCLUDED)
TELEPHONE EXPENSE ACCOUNT NO. 521
Date 201X Explanation
Post Ref. Debit Credit
Balance
Debit Credit
Apr. 28 GJ1 2 0 0 00 2 0 0 00
ADVERTISING EXPENSE ACCOUNT NO. 531
Date 201X Explanation
Post Ref. Debit Credit
Balance
Debit Credit
Apr. 29 GJ1 1 3 0 00 1 3 0 00
(c)
A. FRENCH'S PLACEMENT AGENCY
TRIAL BALANCE
APRIL 30, 201X
Dr. Cr.
Cash 13 8 0 0 00
Accounts Receivable 1 8 0 0 00
Supplies 6 0 0 00
Equipment 2 1 0 0 00
Accounts Payable 2 8 3 0 00
A. French, Capital 12 0 0 0 00
A. French, Withdrawals 6 0 0 00
Placement Fees Earned 4 8 0 0 00
Wage Expense 4 0 0 00
Telephone Expense 2 0 0 00
Advertising Expense 1 3 0 00
Totals 19 6 3 0 00 19 6 3 0 00
3-38
FINANCIAL REPORT PROBLEM SOLUTION—2013 Kellogg’s Annual Report
Year Net Sales
(2013) $14,792 million (2012) 14,197 million
Increase $ 595 million
Inward flows of cash and accounts receivable could result from net sales.
3-39
ON THE JOB: SMITH COMPUTER CENTER SOLUTION
SMITH COMPUTER CENTER
GENERAL JOURNAL
PAGE 1
Date 201X Account Titles and Description PR Dr. Cr.
9/1 Prepaid Rent 1025 1 5 0 0 00
Cash 1000 1 5 0 0 00
2 Cash 1000 4 2 0 00
Service Revenue 4000 4 2 0 00
6 Cash 1000 1 5 0 00
Service Revenue 4000 1 5 0 00
8 Accounts Payable 2000 8 0 00
Cash 1000 8 0 00
12 Cash 1000 1 7 0 0 00
Accounts Receivable 1020 1 7 0 0 00
15 Accounts Payable 2000 3 0 0 00
Cash 1000 3 0 0 00
17 Computer Shop Equipment 1080 2 1 0 0 00
Cash 1000 2 1 0 0 00
20 Phone Expense 5040 3 5 00
Accounts Payable 2000 3 5 00
22 Utilities Expense 5030 8 5 00
Accounts Payable 2000 8 5 00
26 Cash 1000 7 5 0 00
Service Revenue 4000 7 5 0 00
28 Accounts Receivable 1020 2 7 0 0 00
Service Revenue 4000 2 7 0 0 00
3-40
CASH ACCOUNT NO. 1000
Date 201X Explanation
Post Ref. Debit Credit
Balance
Debit Credit
8/31 balance forward √ 3 0 8 0 00
9/1 GJ1 1 5 0 0 00 1 5 8 0 00
2 GJ1 4 2 0 00 2 0 0 0 00
6 GJ1 1 5 0 00 2 1 5 0 00
8 GJ1 8 0 00 2 0 7 0 00
12 GJ1 1 7 0 0 00 3 7 7 0 00
15 GJ1 3 0 0 00 3 4 7 0 00
17 GJ1 2 1 0 0 00 1 3 7 0 00
26 GJ1 7 5 0 00 2 1 2 0 00
3-41
ACCOUNTS RECEIVABLE ACCOUNT NO. 1020
Date 201X Explanation
Post Ref. Debit Credit
Balance
Debit Credit
8/31 balance forward √ 1 7 0 0 00
9/12 GJ1 1 7 0 0 00 - 0 -
28 GJ1 2 7 0 0 00 2 7 0 0 00
PREPAID RENT ACCOUNT NO. 1025
Date 201X Explanation
Post Ref. Debit Credit
Balance
Debit Credit
9/1 GJ1 1 5 0 0 00 1 5 0 0 00
SUPPLIES ACCOUNT NO. 1030
Date 201X Explanation
Post Ref. Debit Credit
Balance
Debit Credit
8/31 balance forward √ 5 0 0 00
COMPUTER SHOP EQUIPMENT
ACCOUNT NO. 1080
Date 201X Explanation
Post Ref. Debit Credit
Balance
Debit Credit
8/31 balance forward √ 1 8 0 0 00
9/17 GJ1 2 1 0 0 00 3 9 0 0 00
3-42
OFFICE EQUIPMENT ACCOUNT NO. 1090
Date 201X Explanation
Post Ref. Debit Credit
Balance
Debit Credit
8/31 balance forward √ 3 3 0 0 00
ACCOUNTS PAYABLE ACCOUNT NO. 2000
Date 201X Explanation
Post Ref. Debit Credit
Balance
Debit Credit
8/31 balance forward √ 4 3 0 00
9/8 GJ1 8 0 00 3 5 0 00
15 GJ1 3 0 0 00 5 0 00
20 GJ1 3 5 00 8 5 00
22 GJ1 8 5 00 1 7 0 00
FELDMAN, CAPITAL ACCOUNT NO. 3000
Date 201X Explanation
Post Ref. Debit Credit
Balance
Debit Credit
8/31 balance forward √ 6 0 0 0 00
FELDMAN, WITHDRAWALS ACCOUNT NO. 3010
Date 201X Explanation
Post Ref. Debit Credit
Balance
Debit Credit
8/31 0 balance forward √ 1 7 5 00
3-43
SERVICE REVENUE ACCOUNT NO. 4000
Date 201X Explanation
Post Ref. Debit Credit
Balance
Debit Credit
8/31 balance forward √ 6 2 0 0 00
9/2 GJ1 4 2 0 00 6 6 2 0 00
6 GJ1 1 5 0 00 6 7 7 0 00
26 GJ1 7 5 0 00 7 5 2 0 00
28 GJ1 2 7 0 0 00 10 2 2 0 00
ADVERTISING EXPENSE ACCOUNT NO. 5010
Date 201X Explanation
Post Ref. Debit Credit
Balance
Debit Credit
8/31 balance forward √ 9 0 0 00
RENT EXPENSE ACCOUNT NO. 5020
Date 201X Explanation
Post Ref. Debit Credit
Balance
Debit Credit
8/31 balance forward √ 5 0 0 00
3-44
UTILITIES EXPENSE ACCOUNT NO. 5030
Date 201X Explanation
Post Ref. Debit Credit
Balance
Debit Credit
8/31 balance forward √ 7 5 00
9/22 GJ1 8 5 00 1 6 0 00
PHONE EXPENSE ACCOUNT NO. 5040
Date 201X Explanation
Post Ref. Debit Credit
Balance
Debit Credit
8/31 balance forward √ 8 0 00
9/20 GJ1 3 5 00 1 1 5 00
SUPPLIES EXPENSE ACCOUNT NO. 5050
Date 201X Explanation
Post Ref. Debit Credit
Balance
Debit Credit
3-45
INSURANCE EXPENSE ACCOUNT NO. 5060
Date 201X Explanation
Post Ref. Debit Credit
Balance
Debit Credit
8/31 balance forward √ 4 5 0 00
POSTAGE EXPENSE ACCOUNT NO. 5070
Date 201X Explanation
Post Ref. Debit Credit
Balance
Debit Credit
8/31 balance forward √ 7 0 00
SMITH COMPUTER CENTER
TRIAL BALANCE SEPTEMBER 30, 201X
Dr. Cr.
Cash 2 1 2 0 00
Accounts Receivable 2 7 0 0 00
Prepaid Rent 1 5 0 0 00
Supplies 5 0 0 00
Computer Shop Equipment 3 9 0 0 00
Office Equipment 3 3 0 0 00
Accounts Payable 1 7 0 00
Feldman, Capital 6 0 0 0 00
Fedman, Withdrawals 1 7 5 00
Service Revenue 10 2 2 0 00
Advertising Expense 9 0 0 00
Rent Expense 5 0 0 00
Utilities Expense 1 6 0 00
Phone Expense 1 1 5 00
Insurance Expense 4 5 0 00
Postage Expense 7 0 00
Totals 16 3 9 0 00 16 3 9 0 00
3-46
SMITH COMPUTER CENTER INCOME STATEMENT
FOR THE QUARTER ENDED SEPTEMBER 30, 201X
Revenue:
Service Revenue $10 2 2 0 00
Operating Expenses
Advertising Expense $ 9 0 0 00
Rent Expense 5 0 0 00
Utilities Expense 1 6 0 00
Phone Expense 1 1 5 00
Insurance Expense 4 5 0 00
Postage Expense 7 0 00
Total Operating Expenses 2 1 9 5 00
Net Income $ 8 0 2 5 00
SMITH COMPUTER CENTER STATEMENT OF OWNER'S EQUITY
FOR THE QUARTER ENDED SEPTEMBER 30, 201X
Feldman, Capital July 1, 201X $ 0 00
Investment in July 6 0 0 0 00
Total Investment in July thru September 6 0 0 0 00
Net Income $ 8 0 2 5 00
Less: Withdrawals for July thru September (1 7 5 00)
Net Increase in Capital 7 8 5 0 00
Feldman, Capital September 30, 201X $13 8 5 0 00
3-47
SMITH COMPUTER CENTER BALANCE SHEET
SEPTEMBER 30, 201X
ASSETS LIABILITIES AND OWNER’S EQUITY
Cash $2 1 2 0 00 Liabilities:
Accounts Receivable 2 7 0 0 00 Accounts Payable $ 1 7 0 00
Prepaid Rent 1 5 0 0 00
Supplies 5 0 0 00 Owner’s Equity
Computer Shop Equipment 3 9 0 0 00 Feldman, Capital 13 8 5 0 00
Office Equipment 3 3 0 0 00
Total Liabilities
Total Assets $14 0 2 0 00 and Owner's Equity $14 0 2 0 00
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