solutions for tutorial 2
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tuotrialTRANSCRIPT
Tutorial 2 (Recording Business Transactions) Week of 6 April 2015
Quick Check1a, 2d, 3b, 4b, 5b, 6d, 7c, 8b, 9a, 10dS 2-1
Req.11. G2. C3. E4. D5. A6. I7. F8. B9. H10. J
S 2-4
Req. 1
Step 1: Identify each account affected and its type.Step 2: Determine whether each account is increased or decreased.Step 3: Record the transaction in the journal.
AccountTypeIncrease/Decrease
5Accounts receivableAssetIncrease
Service revenueOwners equityIncrease
28CashAssetIncrease
Accounts receivableAssetDecrease
Req. 1 - continuedJournal
DATEACCOUNTS AND EXPLANATIONSPOST.REF.DEBITCREDIT
Jan 5Accounts receivable1,000
Service revenue1,000
Performed service on account.
28Cash600
Accounts receivable600
Received cash on account.
S 2-6
Req. 1
Journal
DATEACCOUNTS AND EXPLANATIONSPOST.REF.DEBITCREDIT
Jan22Accounts receivable8,000
Service revenue8,000
Performed service on account.
30Cash7,000
Accounts receivable7,000
Received cash on account.
31Utilities expense180
Accounts payable180
Received utility bill.
31Salary expense2,000
Cash2,000
Paid salary expense.
31Advertising expense700
Cash700
Paid advertising expense.
S 2-7
Req. 1Journal
DATEACCOUNTS AND EXPLANATIONSPOST.REF.DEBITCREDIT
1.Supplies3,400
Accounts payable3,400
Purchased supplies on account.
2.Accounts payable1,700
Cash ($3,400 )1,700
Paid on account.
Req. 2
Accounts payable
2. 1,7001. 3,400
Bal1,700
S 2-8
Req. 1Journal
DATEACCOUNTS AND EXPLANATIONSPOST.REF.DEBITCREDIT
Accounts receivable16,000
Service revenue16,000
Performed service on account.
Cash9,600
Accounts receivable9,600
Received cash on account.
Req. 2
CashAccounts receivableService revenue
9,60016,0009,60016,000
Bal9,600Bal6,400Bal16,000
Req. 3
a.Washington earned:$16,000as Service revenue
b.Cash$9,600
Accounts receivable 6,400
Total assets$16,000
S 2-10
Req. 1
Oakland Floor Coverings
Trial Balance
December 31, 2012
ACCOUNTDEBITCREDIT
Cash$12,000
Equipment45,000
Accounts payable$ 2,000
Other liabilities18,000
Oakland, capital22,000
Revenues34,000
Expenses 19,000
Total$76,000$76,000
E 2-15
Req. 1
ASSETS=LIABILITIES+OWNERS EQUITY
DebitCreditCredit
$390,000=$260,000+$130,000
Req. 2
REVENUESEXPENSES=NET INCOME (net loss)
$480,000$350,000=$130,000
CreditDebitCredit
NET INCOME represents a net credit because revenues (credits) exceed expenses (debits).
NET LOSS would be a net debit because expenses (debits) would exceed revenues (credits).LOSS would be a net debit because expenses (debits) would exceed revenues (credits).E 2-16
Req. 1Journal
DATEACCOUNTS AND EXPLANATIONSDEBITCREDIT
Jul 2Utilities expense400
Cash400
5Equipment2,100
Accounts payable2,100
10Accounts receivable2,000
Service revenue2,000
12Cash7,000
Note payable7,000
19Cash29,000
Land29,000
21Supplies800
Cash800
27Accounts payable2,100
Cash2,100
10
E 2-18
Req. 1Req. 2
Effect on Trial BalanceAccountAmountDirection of Error
a.Total debits > Total creditsNote payable$7,000Too low
b.Total debits > Total creditsUtility expense 810Too high
c.Total debits = Total creditsFurniture 800Too high
Accounts payable 800Too high
d.Total debits > Total creditsCash 1,080Too high
e.Total debits = Total creditsSupplies 90Too low
Accounts payable 90Too low
E 2-19
Reqs. 1 and 2
CashAccounts receivable
Jul 14,000Jul 2400Jul 102,000
127,000 21 800Jul 31 2,000
1929,000 272,100
Jul 3136,700
SuppliesEquipment
Jul 21800Jul 52,100
Jul 31 800Jul 312,100
LandAccounts payable
Jul 129,000Jul 1929,000Jul 272,100Jul 52,100
Jul 310Jul 310
Notes payableLondon, capital
Jul 127,000 Jul 133,000
Jul 317,000Jul 3133,000
Service revenueUtilities expense
Jul 102,000Jul 2400
Jul 312,000Jul 31400
Req. 3
London Engineering
Trial Balance
July 31, 2012
ACCOUNTDEBITCREDIT
Cash$36,700
Accounts receivable2,000
Supplies800
Equipment2,100
Notes payable$ 7,000
London, capital33,000
Service revenue2,000
Utilities expense 400
Total$42,000$42,000
E 2-20
Req. 1
Journal
DATEACCOUNTS AND EXPLANATIONSPOST.REF.DEBITCREDIT
1.Cash53,000
Adams, capital53,000
Owners investment.
2.Supplies700
Accounts payable700
Purchased supplies on account.
3.Building40,000
Cash40,000
Paid cash for building.
4.Cash50,000
Note payable50,000
Borrowed money; signed note payable.
5.Equipment4,700
Cash4,700
Paid cash for equipment.
Req. 2
Adams Lawn Care Company
Trial Balance
December 31, 2012
ACCOUNTDEBITCREDIT
Cash$ 58,300
Supplies700
Equipment4,700
Building40,000
Accounts payable$ 700
Note payable50,000
Adams, capital 53,000
Total$103,700 $103,700
P 2-31A
Req. 2
Journal
DATEACCOUNTS AND EXPLANATIONSPOST.REF.DEBITCREDIT
Sep 2Cash39,000
Moore, capital39,000
3Supplies600
Furniture2,000
Accounts payable2,600
4Cash1,300
Service revenue1,300
7Land26,000
Cash26,000
11Accounts receivable700
Service revenue700
15Salary expense590
Cash590
16Accounts payable600
Cash600
18Cash2,400
Service revenue2,400
19Accounts receivable800
Service revenue800
29Cash700
Accounts receivable700
30Salary expense590
Cash590
30Rent expense670
Cash670
30Moore, drawing2,400
Cash2,400
Reqs. 1 and 3
CashAccounts receivable
Sep 239,000Sep 726,000Sep 11700Sep 29700
41,300 15590 19 800
182,400 16600Bal800
29700 30590
30670Supplies
302,400Sep 3600
Bal12,550Bal600
FurnitureLand
Sep 32,000Sep 726,000
Bal2,000Bal26,000
Accounts payableMoore, capital
Sep 16600Sep 32,600Sep 239,000
Bal2,000Bal39,000
Moore, drawingService revenue
Sep 302,400Sep 41,300
Bal2,400 11700
182,400
19800
Bal5,200
Salary expenseRent expense
Sep 15590Sep 30670
30590Bal670
Bal1,180
Req. 4Trevor Moore, Attorney
Trial Balance
September 30, 2012
ACCOUNTDEBITCREDIT
Cash$ 12,550
Accounts receivable800
Supplies600
Furniture2,000
Land26,000
Accounts payable$ 2,000
Moore, capital39,000
Moore, drawing2,400
Service revenue5,200
Salary expense1,180
Rent expense 670
Total$46,200$46,200