4
Chapter 2
Exercise 6
ASSETS (a) Bal. (b)
15,000 15,000 (4,000) 4,000 15,000 9,000 24,000 (2,000) 22,000
Bal. (c) Bal. (d) Bal.
=
LIABILITIES
OWNER’S EQUITY
+
15,000 15,000
15,000 9,000 9,000 (2,000) 7,000
=
15,000 +
15,000
Exercise 7 ASSETS = LIABILITIES + (Items Owned) (Amts. Owed)
OWNER’S EQUITY (Owner’s Investment) (Earnings)
Cash
Accounts Payable
Glen Ross, Glen Ross, Capital – Drawing +
Bal.
28,000
8,000
(a)
4,000
(b)
(1,200)
1,200
Rent Exp.
(c)
(200)
200
Utilities Exp.
(d)
(600)
Bal.
30,000
=
30,000
=
Revenues
–
Expenses
Description
20,000 4,000
Service Fees
600 8,000
+
20,000
−
600
+
4,000
−
1,400
30,000
© 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 2
Analyzing Transactions: The Accounting Equation
5
Exercise 8 1. ASSETS (Items Owned)
= LIABILITIES + OWNER’S EQUITY (Amts. Owed) (Owner’s Investment) (Earnings)
(a)
Office Accounts Cash + Equipment = Payable 10,000
(b)
5,500
J. Moore, J. Moore, + Capital – Drawing + Revenues – Expenses 10,000
Description
5,500
(c)
900
(d)
(6,000)
(e)
1,500
(f)
(800)
800
Rent Exp.
(g)
(75)
75
Phone. Exp.
(h)
(100)
(i)
(500)
Bal.
4,925 + 16,425
900
Service Fees
1,500
Service Fees
6,000
(100) 500 11,500 =
5,400
+ 10,000 −
=
500
+
2,400
−
875
16,425
2.
Total assets.................................................................
$ 16,425
Total liabilities...........................................................
$ 5,400
Owner’s equity...........................................................
$ 11,025
Owner’s equity in excess of original investment.......
$ 1,025
Total revenues............................................................
$ 2,400
Total expenses............................................................
$
Net income.................................................................
$ 1,525
875
© 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
6
Chapter 2
Exercise 9
Judith Moore Enterprises Income Statement For Month Ended July 31, 20-Revenue: Service fees
$2,400
Expenses: Rent expense
$800
Phone expense
75
Total expenses
875
Net income
$1,525
Exercise 10
Judith Moore Enterprises Statement of Owner’s Equity For Month Ended July 31, 20-Judith Moore, capital, July 1, 20--
$10,000
Investment in July
10,000$10,000-
Total investment Net income for July Less withdrawals for July Increase in capital Judith Moore, capital, July 31, 20--
$1,525
-
500 1,025 $11,025
© 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 2
Analyzing Transactions: The Accounting Equation
Exercise 11
Judith Moore Enterprises Balance Sheet July 31, 20-ASSETS
LIABILITIES
Cash
$ 4,925
Office equipment
11,500
Accounts payable
$ 5,400
OWNER’S EQUITY
Total assets
$16,425
Judith Moore, capital
11,025
Total liabilities and owner’s equity
$16,425
© 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
7
8
Chapter 2
PROBLEMS Problem 12 ASSETS 1. 2. 3. 4.
=
LIABILITIES
$18,800 $23,400 $21,900 Net income for January = $2,100 Net loss for February = $300
OWNER’S EQUITY
+
$4,700 $7,200 $6,000
$14,100 $16,200 $15,900
Problem 13 1.
Cash (a)
+
ASSETS
= LIABILITIES +
(Items Owned)
(Amts. Owed)
Office Equip.
+
(Owner’s Investment)
(Earnings)
Prepaid Accounts J. Moore, J. Moore, Insur. = Payable + Capital – Drawing + Revenues – Expenses
12,000
(b)
OWNER’S EQUITY
Description
12,000 7,500
7,500
(c)
(800)
800
(d)
700
(e)
(600)
600
Rent Exp.
(f)
(150)
150
Wages Exp.
(g)
(200)
(h)
(3,000)
(i)
(100)
Bal.
7,850 +
700
Cons. Fees
200 (3,000) 100 8,300 + 16,350
200
= =
4,500
+ 12,000
–
100
+
700
–
750
16,350
© 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 2
Analyzing Transactions: The Accounting Equation
Problem 13 (Concluded) 2. Total assets ..................................................................................... Total liabilities ............................................................................... Owner’s equity ............................................................................... Change in owner’s equity from original investment ...................... Total revenues ................................................................................ Total expenses................................................................................ Net income (loss) ...........................................................................
$ 16,350 $ 4,500 $ 11,850 $ (150) $ 700 $ 750 $ (50)
Problem 14
Susan Cole Consulting Services Income Statement For Month Ended October 31, 20— Revenue: Consulting fees
$700)
Expenses: Rent expense
$600
Wages expense
150
Total expenses Net income (loss)
750) $ (50)
© 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
9
10
Chapter 2
Problem 15
Susan Cole Consulting Services Statement of Owner’s Equity For Month Ended October 31, 20-Susan Cole, capital, October 1, 20--
$12,000)
Investment in October
12,000)
Total investment
$12,000)
Less: Net loss for October
$ 50
Withdrawals for October
100
Decrease in capital
(150)
Susan Cole, capital, October 31, 20--
$11,850)
Problem 16
Susan Cole Consulting Services Balance Sheet October 31, 20-ASSETS
Cash
LIABILITIES
$ 7,850
Prepaid insurance
200
Office equipment
8,300
Total assets
$16,350
Accounts payable
$ 4,500
OWNER’S EQUITY
Susan Cole, capital
11,850
Total liabilities and owner’s equity
$16,350
© 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 2
Analyzing Transactions: The Accounting Equation
11
Problem 17 1.
Cash
ASSETS
= LIABILITIES +
(Items Owned)
(Amts. Owed)
OWNER’S EQUITY
(Owner’s Investment)
(Earnings)
Accounts Office Accounts S. Cassady, S. Cassady, + Receivable. + Supplies = Payable + Capital – Drawing + Revenues – Expenses
(a)
10,000
(b)
(200)
200
(c)
(400)
800
(d)
300
(e)
(600)
(f)
(100)
(g)
200
(h)
(200)
(i)
200
(200)
Bal.
9,200 +
200
Description
10,000
400 300
Typing Fees
600
Rent Exp.
100 400
600
Typing Fees
(200)
10,400
+ 1,000
=
=
200
+ 10,000 –
100
+
900
–
600
10,400
© 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
12
Chapter 2
Problem 17 (Concluded) 2.
Stuart Cassady Typing Service Income Statement For Month Ended April 30, 20-Revenue: Typing fees
$900
Expense: Rent expense
600
Net income
$300
Stuart Cassady Typing Service Statement of Owner’s Equity For Month Ended April 30, 20-Stuart Cassady, capital, April 1, 20--
$10,000
Investment in April
10,000-
Total investment
$10,000-
Net income for April
$300
Less withdrawals for April
100
Increase in owner’s equity
200
Stuart Cassady, capital, April 30, 20--
$10,200
Stuart Cassady Typing Service Balance Sheet April 30, 20-ASSETS
Cash Accounts receivable Office supplies
Total assets
LIABILITIES
$ 9,200
Accounts payable
$
200
200 1,000
$10,400
OWNER’S EQUITY
Stuart Cassady, capital
10,200
Total liabilities and owner’s equity
$10,400
© 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 3
The Double-Entry Framework
13
CHAPTER 3 REVIEW QUESTIONS 1. 2. 3. 4. 5. 6.
T account debit credit footing balance debit
7. 8. 9. 10. 11. 12.
credit credit debit credit double-entry accounting trial balance
EXERCISES Exercise 1 Assets debit credit
Liabilities debit credit
Owner’s Capital debit credit
Owner’s Drawing debit credit
Expenses debit credit
Revenues debit credit
Expenses (+) (−)
Revenues (−) (+)
Exercise 2 (a) Debit (b) Credit (c) Credit
(d) Credit (e) Debit (f) Debit
Exercise 3 Assets (+) (−)
Liabilities (−) (+)
Owner’s Capital (−) (+)
Owner’s Drawing (+) (−)
Exercise 4 Cash
Jacque Hamon, Capital
(a) 3,000
Cash
(a) 3,000
Accounts Payable
(e) 200
(e)
200
Cash (b) 1,000
Professional Fees (b) 1,000
(f)
Cash 300
Professional Fees (f) 300
Office Equipment (c) 500
Accounts Payable (c) 500
Cash (g) 1,000
Notes Payable (g) 1,000
Cash (d)
75
(d)
Utilities Expense 75
Cash (h)
50
(h)
Phone Expense 50
© 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
14
Chapter 3
Exercise 5 Assets Debit +
=
Credit –
Liabilities Debit –
Credit +
Cash
Accounts Payable
(a)12,000 (c) 75 (d) 5,000 (e) 3,000
(e) 3,000 (b) 8,000
Office Equipment
Notes Payable
(b) 8,000
+
Owner’s Equity Debit –
Credit +
C. Sung, Capital (a)12,000
(d) 5,000
Prepaid Insurance (c)
75
Exercise 6 1. and 2. Assets Debit +
=
Credit –
Cash Bal. 9,000 (b) (a)
Liabilities
Owner’s Equity
+
Debit Credit – +
Debit –
Accounts Payable 100
Credit +
F. Baar, Capital
Bal. 2,500
Bal. 9,000
500 (c) 1,200
Office Furnishings Bal. 2,500
Drawing
Expenses
Debit Credit + –
Debit +
Credit –
Rent Expense (c) 1,200
Revenues Debit –
Credit +
Counseling Fees (a)
500
Magazine Expense (b)
100
© 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 3
The Double-Entry Framework
15
Exercise 7 1. and 2. Assets Debit +
=
Credit – Cash
Owner’s Equity
+
Credit +
Debit –
Accounts Payable
(a) 20,000 (b) (f)
Liabilities Debit –
500
(i) 2,000 (d) 4,000
1,200 (c) 6,000
Bal.2,000
Credit + B. Estavez, Capital (a) 20,000
21,200 (d) 5,000
(e)
800
(g)
700
(h)
200
(i) 2,000 15,200
Bal. 6,000 Accounts Receivable (f)
600
Drawing
Expenses
Debit
Credit
Debit
Credit
Debit
Credit
+
–
+
–
–
+
B. Estavez, Drawing Office Supplies (b)
Revenues
(h) 200
(g)
Rent Expense 700
Accounting Fees (f) 1,800
500
Office Furniture (c) 6,000
Computer Equipment (d) 9,000
Computer Software (e) 800
© 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 3
The Double-Entry Framework
17
PROBLEMS Problem 9 1. and 2. Assets Debit +
=
Credit –
Liabilities Debit –
Credit +
Cash
Accounts Payable
(a)10,000 (c) 1,500
(j) 2,500 (b) 5,000
(g) 2,000 (d)
350
(c) 3,000
(k)
200
8,000 Bal. 5,500
250
(e)
12,250
(f)
300
(h)
600
Owner’s Equity
+ Debit
Credit +
– J. Abdul, Capital
(a) 10,000
(i) 1,000 (j) 2,500 6,450
Bal. 5,800 Accounts Receivable (g)
500 (k)
Drawing 250
Bal. 250
Expenses
Credit
Debit
Credit
Debit
Credit
+
–
+
–
–
+
J. Abdul, Drawing Office Supplies (d)
Revenues
Debit
(i) 1,000
Wages Expense (h)
600
Promotion Fees (g)
2,500
350 Phone Expense
Office Furniture
(f)
300
(b) 5,000 Postage Expense (e)
200
Computer Equipment (c) 4,500
© 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
18
Chapter 3
Problem 9 (Concluded) 3.
J. A. Productions Trial Balance January 31, 20-DEBIT BALANCE
ACCOUNT
Cash
CREDIT BALANCE
5 8 0 0 00
Accounts Receivable
2 5 0 00
Office Supplies
3 5 0 00
Office Furniture
5 0 0 0 00
Computer Equipment
4 5 0 0 00
Accounts Payable
5 5 0 0 00
Jali Abdul, Capital
10 0 0 0 00
Jali Abdul, Drawing
1 0 0 0 00
Promotion Fees
2 5 0 0 00
Wages Expense
6 0 0 00
Phone Expense
3 0 0 00
Postage Expense
2 0 0 00 18 0 0 0 00
18 0 0 0 00
Problem 10 (a)
Total revenue for the month
$2,500
(b)
Total expenses for the month
$1,100
(c)
Net income for the month
$1,400
(d)
Abdul’s original investment in the business
$10,000
(e)
+ Net income for the month
$1,400
– Owner’s drawing
$1,000
Increase in capital
$
400
= Owner’s equity at the end of the month
$10,400
End-of-month accounting equation: Assets $15,900
=
Liabilities $5,500
+
Owner’s Equity $10,400
© 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 3
The Double-Entry Framework
19
Problem 11
(a)
J. A. Productions Income Statement For Month Ended January 31, 20-Revenue: Promotion fees
$2,500
Expenses: Wages expense
$600
Phone expense
300
Postage expense
200 1,100
Total expenses Net income
$1,400
(b)
J. A. Productions Statement of Owner’s Equity For Month Ended January 31, 20-Jali Abdul, capital January 1, 20--
$10,000
Investments during January
10,000
Total investment
$10,000
Net income for January
$1,400
Less withdrawals for January
1,000
Increase in capital Jali Abdul, capital, January 31, 20--
400 $10,400
© 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
20
Chapter 3
Problem 11 (Concluded)
(c)
J. A. Productions Balance Sheet January 31, 20-Assets Cash
Liabilities $ 5,800
Accounts receivable
250
Office supplies
350
Office furniture
5,000
Computer equipment
4,500
Total assets
$15,900
Accounts payable
$ 5,500
Owner’s Equity Jali Abdul, capital
10,400
Total liabilities & owner’s equity
$15,900
© 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 4
Journalizing and Posting Transactions
21
CHAPTER 4 REVIEW QUESTIONS 1. source document 2. chart of accounts 3. owner’s equity accounts 4. 5 5. journal (general journal) 6. book of original entry 7. compound entries
8. journalizing 9. one-half inch 10. general ledger 11. general ledger 12. posting 13. daily 14. cross-reference
15. trial balance 16. slide 17. transposition 18. ruling 19. correcting
EXERCISES Exercise 1 2. .. 3. 4.
Account
(+)
Cash Revenue Rent Expense Cash Office Equipment Accounts Payable
(–)
Account 5. . 6.
7.
Accounts Payable Cash Phone Expense Cash Accounts Payable Cash
(+)
(–)
8. 9.
10.
Account
(+)
J. A. Abbott, Drawing Cash Wages Expense Cash Accounts Receivable Revenue or Fees
(–)
© 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
22
Chapter 4
Exercise 2 GENERAL JOURNAL DATE 1 2
DESCRIPTION
PAGE POST. REF.
DEBIT
1
CREDIT
20--
May
1 Cash
101
Susan Poe, Capital
1
5 0 0 0 00
311
5 0 0 0 00
2
Owner’s original investment
3
3
4 5 6
4
5 Office Furniture Accounts Payable
182
3 0 0 0 00
202
5
3 0 0 0 00
6
Purchased office furniture on account
7
7
8
8
9
9 Rent Expense
521
10
Cash
101
4 5 0 00
4 5 0 00 10
Paid office rent
11
11 12
12 13 14
10 Cash
101
Referral Fees
5 0 0 00
401
15 16
16
18
15 Accounts Payable
Cash
202
1 0 0 00
101
19 20
20
20 Cash
101
1 2 5 00
21
1 7 5 00
22
22
Accounts Receivable
122
23
Referral Fees
401
3 0 0 00 23
Referral fees earned in cash and on account
24
24 25
25 26
25 Wages Expense
511
27
Cash
101
4 0 0 00
28 29
29
31
28 Susan Poe, Drawing Cash
312
1 0 0 00
101
32 33
33
35 36
30
1 0 0 00 31
Owner’s withdrawal
32
34
26
4 0 0 00 27
Paid part-time worker
28
30
17
1 0 0 00 18
Payment for furniture on account
19
21
13
5 0 0 00 14
Received cash for referral services
15
17
9
29 Cash
101
Accounts Receivable Received cash on account
122
1 5 0 00
34
1 5 0 00 35 36
© 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 4
Journalizing and Posting Transactions
23
Exercise 3 GENERAL LEDGER ACCOUNT: Cash DATE
ACCOUNT NO. ITEM
POST. REF.
DEBIT
CREDIT
101
BALANCE DEBIT
CREDIT
20--
1
J1
9
J1
10
J1
15
J1
20
J1
25
J1
4 0 0 00
4 6 7 5 00
28
J1
1 0 0 00
4 5 7 5 00
29 9
J1
May
5 0 0 0 00
5 0 0 0 00 4 5 0 00
5 0 0 00
4 5 5 0 00 5 0 5 0 00
1 0 0 00 1 2 5 00
4 9 5 0 00 5 0 7 5 00
1 5 0 00
4 7 2 5 00
ACCOUNT: Accounts Receivable DATE
ITEM
POST. REF.
ACCOUNT NO. DEBIT
CREDIT
122
BALANCE DEBIT
CREDIT
20--
May
20
J1
29
J1
1 7 5 00
1 7 5 00 1 5 0 00
2 5 00
ACCOUNT: Office Furniture DATE
ITEM
ACCOUNT NO. POST. REF.
DEBIT
CREDIT
182
BALANCE DEBIT
CREDIT
20--
5
May
J1
3 0 0 0 00
3 0 0 0 00
ACCOUNT: Accounts Payable DATE
ITEM
ACCOUNT NO.
POST. REF.
DEBIT
CREDIT
20--
May
5
J1
15
J1
3 0 0 0 00 1 0 0 00
202
BALANCE DEBIT
CREDIT
3 0 0 0 00 2 9 0 0 00
© 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
24
Chapter 4
Exercise 3 (Concluded) GENERAL LEDGER ACCOUNT: Susan Poe, Capital DATE
ITEM
ACCOUNT NO.
POST. REF.
DEBIT
CREDIT
BALANCE DEBIT
CREDIT
20--
1
May
J1
5 0 0 0 00
5 0 0 0 00
ACCOUNT: Susan Poe, Drawing DATE
ITEM
POST. REF.
ACCOUNT NO. DEBIT
CREDIT
311
312
BALANCE DEBIT
CREDIT
20--
May
28
J1
1 0 0 00
1 0 0 00
ACCOUNT: Referral Fees DATE
ITEM
ACCOUNT NO. POST. REF.
DEBIT
CREDIT
401
BALANCE DEBIT
CREDIT
20--
May
10
J1
5 0 0 00
5 0 0 00
20
J1
3 0 0 00
8 0 0 00
ACCOUNT: Wages Expense DATE
ITEM
ACCOUNT NO. POST. REF.
DEBIT
CREDIT
511
BALANCE DEBIT
CREDIT
20--
May
25
J1
4 0 0 00
4 0 0 00
ACCOUNT: Rent Expense DATE
ITEM
ACCOUNT NO. POST. REF.
DEBIT
CREDIT
521
BALANCE DEBIT
CREDIT
20--
May
9
J1
4 5 0 00
4 5 0 00
© 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 4
Journalizing and Posting Transactions
25
Exercise 4 Poe’s Connections Trial Balance May 31, 20-ACCT. NO.
DEBIT BALANCE
Cash
101
4 7 2 5 00
Accounts Receivable
122
2 5 00
Office Furniture
182
3 0 0 0 00
Accounts Payable
202
2 9 0 0 00
Susan Poe, Capital
311
5 0 0 0 00
Susan Poe, Drawing
312
Referral Fees
401
Wages Expense
511
4 0 0 00
Rent Expense
521
4 5 0 00
ACCOUNT TITLE
CREDIT BALANCE
1 0 0 00 8 0 0 00
8 7 0 0 00
8 7 0 0 00
© 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
26
Chapter 4
PROBLEMS Problem 5 1.
GENERAL JOURNAL
DATE 1
2
DESCRIPTION
PAGE POST. REF.
DEBIT
101
30 0 0 0 00
1
CREDIT
20--
May
1 Cash Della Jordan, Capital
311
1
30 0 0 0 00
2
Owner’s original investment
3
3
4 5
4
3 Stereo Equipment
181
7 0 0 0 00
5
6
Cash
101
3 0 0 0 00
6
7
Accounts Payable
202
4 0 0 0 00
7
Purchased equipment from Big Al’s
8
8
9 10 11
9
4 CDs
183
Cash
2 5 0 0 00
101
2 5 0 0 00 11
Purchased CDs
12
12
13 14 15
13
4 Lighting Equipment Cash
184
2 0 0 0 00
101
16
17
19
17
5 Office Furniture Accounts Payable
182
5 0 0 00
202
20
21
23
21
7 Van
185
Cash
101
Purchased van
24
9 5 0 0 00 17 0
25 26
18 Cash
8 0 0 00
26
3 0 0 0 00
27
122
28
Disc Jockey Fees
401
3 8 0 0 00 28
Disc jockey fees earned in cash and on account
29
30
32 33 34
9 5 0 0 00 23 3 24
101
Accounts Receivable
31
22
25
27
29
18
5 0 0 00 19
Purchased office furniture on account
20
22
14
2 0 0 0 00 15
Purchased lighting equipment
16
18
10
30
20 Wages Expense
511
Cash
101
Paid part-time associates
6 0 0 00
31
6 0 0 00 32 33 34
© 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 4
Journalizing and Posting Transactions
27
Problem 5 (Continued) GENERAL JOURNAL DATE 1
2
DESCRIPTION
PAGE POST. REF.
DEBIT
2
CREDIT
20--
May 21 Accounts Payable
202
Cash
101
1 5 0 0 00 0
Made payment for equipment on account
3
1
1 5 0 0 00
2 3
4
4
5
25 Gas Expense
538
6
Cash
101
4 0 00
5
4 0 00
6
Purchased gas for van
7
7
8
8
9
27 Phone Expense
525
10
Cash
101
8 0 00 0
Paid phone bill
11
14 15
12
28 Cash
101
Accounts Receivable
1 5 0 0 00
122
Received cash on account
15 16
17
29 Wages Expense
511
18
Cash
101
1 1 0 0 00
Paid part-time associates
19 20
21
30 Rent Expense
521
22
Cash
101
5 0 0 00
26 27
Paid rent
23 24
30 Accounts Payable Cash
202
1 2 0 0 00
101
30 31
25
1 2 0 0 00 26
Made payment for equipment on account
27
28 29
21
5 0 0 00 22
24 25
17
1 1 0 0 00 18
20
23
13
1 5 0 0 00 14
16
19
8 0 00 10 11
12 13
9
28
30 Della Jordan, Drawing Cash Owner’s withdrawal
312 101
1 0 0 0 00
29
1 0 0 0 00 30 31
32
32
33
33
34
34
© 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
28
Chapter 4
Problem 5 (Continued) 2.
GENERAL LEDGER
ACCOUNT: Cash
ACCOUNT NO. POST. REF.
DEBIT
1
J1
30 0 0 0 00
3
J1
3 0 0 0 00
27 0 0 0 00
4
J1
2 5 0 0 00
24 5 0 0 00
4
J1
2 0 0 0 00
22 5 0 0 00
7
J1
9 5 0 0 00
13 0 0 0 00
18
J1
20
J1
6 0 0 00
13 2 0 0 00
21
J2
1 5 0 0 00
11 7 0 0 00
25
J2
4 0 00
11 6 6 0 00
27
J2
8 0 00
11 5 8 0 00
28
J2
29
J2
1 1 0 0 00
11 9 8 0 00
30
J2
5 0 0 00
11 4 8 0 00
30
J2
1 2 0 0 00
10 2 8 0 00
30
J2
1 0 0 0 00
9 2 8 0 00
DATE
ITEM
CREDIT
101
BALANCE DEBIT
CREDIT
20--
May
30 0 0 0 00
8 0 0 00
13 8 0 0 00
1 5 0 0 00
13 0 8 0 00
ACCOUNT: Accounts Receivable DATE
ITEM
POST. REF.
ACCOUNT NO. DEBIT
CREDIT
122
BALANCE DEBIT
CREDIT
20--
May
18
J1
28
J2
3 0 0 0 00
3 0 0 0 00 1 5 0 0 00
1 5 0 0 00
ACCOUNT: Stereo Equipment DATE
ITEM
ACCOUNT NO.
POST. REF.
DEBIT
CREDIT
181
BALANCE DEBIT
CREDIT
20--
May
3
J1
7 0 0 0 00
7 0 0 0 00
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Chapter 16
Accounting for Accounts Receivable
171
Problem 8 1. and 2.
1 2
TALLAHASSEE SEMINOLE SHOP AGING SCHEDULE OF ACCOUNTS RECEIVABLE A
B
Customer
3 Borthick, A.
Total
C Not Yet Due
D 1–30
$ 6,500
$ 3,000
$1,200
E F G Number of Days Past Due 31–60 61–90 Over 90 $2,300
4 Clark, R.
3,700
5 Copley, P.
9,600
2,800
6 Davis, H.
1,500
1,500
7 Heagy, C.
200
8 O’Keefe, S.
4,700
1,400
9 Pasewark, W.
5,500
5,500
10 Schroeder, M.
2,300
2,300
11 Shockley, W.
3,800
3,000
800
12 Wilkerson, J.
3,100
1,700
1,100
$40,900
$21,200
$6,400
$4,600
$4,700
$4,000
2%
4%
8%
16%
32%
$424
$256
$368
$752
$1,280
13 Total
Estimated percent 14 uncollectible Total est. uncollectible 15 accounts
$3,080
$3,700 2,300
$4,500 200
3,300
300
16 17 18 19 20
3. GENERAL JOURNAL DATE 1
2
DESCRIPTION
PAGE POST. REF.
DEBIT
CREDIT
20-9
Dec. 31 Bad Debt Expense Allowance for Doubtful Accounts
1
3 5 8 0 00 3 5 8 0 00
3
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2 3
172
Chapter 16
Problem 9 GENERAL JOURNAL DATE 1
DESCRIPTION
PAGE POST. REF.
DEBIT
CREDIT
20-6
Mar. 20 Accounts Receivable/Ready Merchants Sales
2
1
19 4 0 0 00 19 4 0 0 00
2
Made sale on account
3
3
4 5
4
May 12 Accounts Receivable/Neighborhood Watchers
13 8 0 0 00
Sales
6
5
13 8 0 0 00
6
Made sale on account
7
7
8 9
8
July
9 Cash
12 0 0 0 00
Accounts Receivable/Ready Merchants
10
12 0 0 0 00 10
Collection on account
11
11
12
12
9 Bad Debt Expense
13
7 4 0 0 00
Accounts Receivable/Ready Merchants
14
15
16
16
Oct. 15 Cash
6 0 0 0 00
Accounts Receivable/Neighborhood Watchers
18
19
20
20
15 Bad Debt Expense
21
7 8 0 0 00
Accounts Receivable/Neighborhood Watchers
22
23
24
24
Dec.
5 Accounts Receivable/Ready Merchants
7 4 0 0 00
Bad Debt Expense
27
28
30 31
25
7 4 0 0 00 26
Reinstated account receivable
27
29
21
7 8 0 0 00 22
Wrote off uncollectible account
23
26
17
6 0 0 0 00 18
Collection on account
19
25
13
7 4 0 0 00 14
Wrote off uncollectible account
15
17
9
28
5 Cash
7 4 0 0 00
Accounts Receivable/Ready Merchants Collection on account
29
7 4 0 0 00 30 31
32
32
33
33
34
34
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Chapter 16
Accounting for Accounts Receivable
173
Problem 9 (Concluded) GENERAL JOURNAL DATE 1
DESCRIPTION
PAGE POST. REF.
DEBIT
CREDIT
20-7
Feb. 26 Accounts Receivable/Neighborhood Watchers
2
Uncollectible Accounts Recovered
3
Reinstated account receivable
1
7 8 0 0 00 7 8 0 0 00
2 3
4 5 6 7
4
26 Cash
7 8 0 0 00
Accounts Receivable/Neighborhood Watchers
5
7 8 0 0 00
6
Collection on account
7
8
8
9
9
10
10
11
11
12
12
13
13
14
14
15
15
16
16
17
17
18
18
19
19
20
20
21
21
22
22
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Chapter 17
Accounting for Notes and Interest
175
CHAPTER 17 REVIEW QUESTIONS 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.
promissory note maker payee principal interest term Time Maturity value Accounts Receivable credit advice discounting bank discount
13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23.
proceeds contingent dishonored Accounts Receivable notes receivable notes accrued discounting contra-liability Accrued interest current liability
For ease of presentation, the exercise and problem journal entries do not include explanations. Students should include explanations similar to those illustrated in the chapter.
EXERCISES Exercise 1 68 58 65 94 48 91
Exercise 2 March 18 July 10 June 16 July 1 February 8 February 28
Exercise 3 $ 9.38 30.00 131.25 20.53 56.47 52.40
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176
Chapter 17
Exercise 4 GENERAL JOURNAL DATE 1
DESCRIPTION
PAGE POST. REF.
DEBIT
CREDIT
20--
Jan.
2 Notes Receivable Sales
2
1
3 0 0 0 00 3 0 0 0 00
2
3
3
4
15 Notes Receivable Accounts Receivable/K. Jones
5
4
2 5 0 0 00 2 5 0 0 00
5
6 7
6
Feb.
1 Cash Notes Receivable (new note)
8 9
Notes Receivable (old note)
10
Interest Revenue
1 5 00
7
3 0 0 0 00
8
3 0 0 0 00
1 5 00 10
11
11
14 Cash
12
Notes Receivable (new note)
13 14
Notes Receivable (old note)
15
Interest Revenue
5 1 0 42
12
2 0 0 0 00
13
2 5 0 0 00 14 1 0 42 15
16 17
9
16
Mar.
3 Cash
3 0 1 6 25
17
18
Notes Receivable
3 0 0 0 00 18
19
Interest Revenue
1 6 25 19
20 21
20
16 Cash
2 0 1 0 00
21
22
Notes Receivable
2 0 0 0 00 22
23
Interest Revenue
1 0 00 23
24 25
.
24 25
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Chapter 17
Accounting for Notes and Interest
177
Exercise 5 GENERAL JOURNAL DATE 1
DESCRIPTION
PAGE POST. REF.
DEBIT
CREDIT
20--
Apr.
1 Notes Receivable Accounts Receivable
2
1
5 0 0 0 00 5 0 0 0 00
2
3
3
4
20 Cash
4
5 0 1 1 10
5
Notes Receivable
5 0 0 0 00
5
6
Interest Revenue
1 1 10
6
7
($5,000 0.065 90/360 = $81.25 interest)
7
8
($5,000 + $81.25 = $5,081.25 maturity value)
8
9
($5,081.25 0.07 71/360 = $70.15 discount)
9
10
($5,081.25 − $70.15 = $5,011.10 net proceeds)
10
11 12
11
May
2 Notes Receivable
3 5 0 0 00
Accounts Receivable
13
3 5 0 0 00 13
14 15
12
14
July
1 Accounts Receivable
3 5 3 5 00
15
16
Notes Receivable
3 5 0 0 00 16
17
Interest Revenue
3 5 00 17
18
($3,500 0.06 60/360 = $35 interest)
18
19
($3,500 + $35 = $3,535 maturity value)
19
20 21
20
Aug. 15 Cash
3 5 6 1 51
22
Accounts Receivable
23
Interest Revenue
24
($3,535 0.06 45/360 = $26.51 interest)
21
3 5 3 5 00 22 2 6 51 23 24
25
25
26
26
27
27
28
28
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178
Chapter 17
Exercise 6 GENERAL JOURNAL DATE 1
2
DESCRIPTION
PAGE POST. REF.
DEBIT
CREDIT
20--
Jan. 11 Accounts Payable/G. Adams
1
5 0 0 0 00
Notes Payable
5 0 0 0 00
2
3 4
5
3
20 Purchases
4
3 0 0 0 00
Notes Payable
3 0 0 0 00
5
6 7 8
6
Feb. 10 Notes Payable (old note) Interest Expense
9
Notes Payable (new note)
10
Cash
11
5 0 0 0 00
7
2 5 00
8
4 5 0 0 00
5 2 5 00 10
($5,000 0.06 30/360 = $25 interest)
11
12 13 14 15 16
12
Mar. 12 Notes Payable Interest Expense
4 5 0 0 00
13
2 2 50
14
Cash
4 5 2 2 50 15
($4,500 0.06 30/360 = $22.50 interest)
16
17 18 19 20 21
9
17
21 Notes Payable Interest Expense Cash ($3,000 0.06 60/360 = $30 interest)
3 0 0 0 00
18
3 0 00
19
3 0 3 0 00 20 21
22
22
23
23
24
24
25
25
26
26
27
27
28
28
29
29
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Chapter 17
Accounting for Notes and Interest
179
Exercise 7 GENERAL JOURNAL DATE 1
DESCRIPTION
PAGE POST. REF.
DEBIT
CREDIT
20--
1 Cash
Apr.
Notes Payable
2
1
5 0 0 0 00 5 0 0 0 00
2
3 4
3
May
1 Cash Discount on Notes Payable
5
5 8 9 5 00
4
1 0 5 00
5
Notes Payable
6
6 0 0 0 00
6
($6,000 0.07 90/360 = $105 interest)
7
7
8 9
8
May 31 Notes Payable Interest Expense
10
5 0 0 0 00
9
5 0 00
10
Cash
11
5 0 5 0 00 11
($5,000 0.06 60/360 = $50 interest)
12
12
13 14
13
July
30 Notes Payable Interest Expense
15 16
Discount on Notes Payable
17
Cash
6 0 0 0 00
14
1 0 5 00
15
1 0 5 00 16 6 0 0 0 00 17
18
18
Exercise 8 GENERAL JOURNAL DATE 1
2
DESCRIPTION
PAGE POST. REF.
DEBIT
CREDIT
20--
Dec. 31 (a) Accrued Interest Receivable
1
3 7 50
Interest Revenue
3 7 50
3 4 5
2 3
31 (b) Interest Expense Accrued Interest Payable
7 1 10
4
7 1 10
5
6
6
7
7
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180
Chapter 17
PROBLEMS Problem 9 GENERAL JOURNAL DATE 1
2
DESCRIPTION
PAGE POST. REF.
DEBIT
CREDIT
20--
Mar.
1 Notes Receivable
1
1 4 0 0 00
Sales
1 4 0 0 00
2
3 4 5
3
13 Notes Receivable
2 0 0 0 00
Accounts Receivable
4
2 0 0 0 00
5
6 7
6
29 Cash
1 4 0 2 85
7
8
Notes Receivable
1 4 0 0 00
8
9
Interest Revenue
2 85
9
10
($1,400 0.05 90/360 = $17.50 interest)
10
11
($1,400 + $17.50 = $1,417.50 maturity value)
11
12
($1,417.50 0.06 62/360 = $14.65 discount)
12
13
($1,417.50 − $14.65 = $1,402.85 proceeds)
13
14 15 16
14
Apr. 12 Cash Notes Receivable (new note)
17
Notes Receivable (old note)
18
Interest Revenue
4 0 9 17
15
1 6 0 0 00
16
2 0 0 0 00 17 9 17 18
($2,000 0.055 30/360 = $9.17)
19
19
20 21
20
May 12 Cash
1 6 0 8 00
21
22
Notes Receivable
1 6 0 0 00 22
23
Interest Revenue
8 00 23
(1,600 x 0.06 x 30/360 = $8 interest)
24
24
25 26 27
25
30 Accounts Receivable
1 4 4 7 50
Cash
1 4 4 7 50 27
28 29
28
June 29 Cash
1 4 7 2 24
30
Accounts Receivable
31
Interest Revenue
32 33
26
($1,447.50 0.06 30/360 = $7.24)
29
1 4 6 5 00 30 7 24 31 32 33
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Chapter 17
Accounting for Notes and Interest
181
Problem 10 GENERAL JOURNAL DATE 1
DESCRIPTION
PAGE POST. REF.
DEBIT
CREDIT
20--
May
1 Purchases Notes Payable
2
1
4 0 0 0 00 4 0 0 0 00
2
3
3
20 Accounts Payable
4
1 5 0 0 00
Notes Payable
5
4
1 5 0 0 00
5
6
6
31 Cash
7
Discount on Notes Payable
8
4 9 5 0 00
7
5 0 00
8
Notes Payable
9
5 0 0 0 00
($5,000 0.06 60/360 = $50 discount)
10
10
11 12
9
11
June 19 Notes Payable Interest Expense
13
1 5 0 0 00
12
8 75
13
Cash
14
1 5 0 8 75 14
($1,500 x 0.07 x 30/360 = $8.75 interest)
15
15
16
16
30 Notes Payable (old note)
17
Interest Expense
18
4 0 0 0 00
17
4 6 67
18
19
Cash
1 0 4 6 67 19
20
Notes Payable (new note)
3 0 0 0 00 20
($4,000 x 0.07 x 60/360 = $46.67 interest)
21
21
22 23 24
22
July
15 Cash
3 0 0 0 00
Notes Payable
3 0 0 0 00 24
25 26 27
23
25
30 Notes Payable Interest Expense
28
Cash
29
Discount on Notes Payable
5 0 0 0 00
26
5 0 00
27
5 0 0 0 00 28 5 0 00 29
30
30
31
31
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182
Chapter 17
Problem 11 (a)
(b) $ 7.50 8.75 9.47 $25.72
$10.69 7.00 15.00 $32.69
GENERAL JOURNAL DATE 1
2
DESCRIPTION
PAGE POST. REF.
DEBIT
CREDIT
20--
Dec. 31 (a) Accrued Interest Receivable
1
2 5 72
Interest Revenue
2 5 72
3 4 5
2 3
31 (b) Interest Expense Accrued Interest Payable
3 2 69
4
3 2 69
5
6
6
7
7
8
8
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Chapter 18
Accounting for Long-Term Assets
183
CHAPTER 18 REVIEW QUESTIONS 1. long-term 2. tangible 3. land 4. property, plant, and equipment 5. equivalent price 6. allocation 7. physical 8. functional 9. depreciation
10. useful life 11. salvage 12. Depreciable cost 13. undepreciated cost 14. straight-line 15. declining-balance 16. sum-of-the-years’-digits 17. units-of-production 18. equipment
19. Accumulated Depreciation— Equipment 20. depletion 21. wasting 22. patent 23. copyright 24. trade name 25. franchise or license 26. goodwill 27. impaired
EXERCISES Exercise 1 Purchase price.......................................................... Legal fees related to purchase................................. Removal of old warehouse...................................... Realtor fee...............................................................
$30,000 1,000 8,000 1,200 $40,200
Exercise 2
$5,000 – $500 5 years Year 1: Year 2: Year 3: Year 4: Year 5:
= $900/year
$900 $900 $900 $900 $900
Exercise 3 Straight-line rate: 100% divided by 5 = 20% Double-declining rate: 40% Year 1: Year 2: Year 3: Year 4: Year 5:
$11,000.00 × 0.40 6,600.00 × 0.40 3,960.00 × 0.40 2,376.00 × 0.40 1,425.60 × 0.40
= = = = =
$4,400.00 depreciation expense 2,640.00 depreciation expense 1,584.00 depreciation expense 950.40 depreciation expense 425.60 depreciation expense*
*(maximum deduction is $425.60 because of $1,000 salvage value)
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184
Chapter 18
Exercise 4 5 + 4 + 3 + 2 + 1 = 15 20-1:
$7,500 × 5/15 = $2,500 × 3/12 =
$ 625
20-2:
$7,500 × 5/15 = $2,500 × 9/12 = $7,500 × 4/15 = $2,000 × 3/12 =
$1,875 500
$2,375
$7,500 × 4/15 = $2,000 × 9/12 = $7,500 × 3/15 = $1,500 × 3/12 =
$1,500 375
1,875
$7,500 × 3/15 = $1,500 × 9/12 = $7,500 × 2/15 = $1,000 × 3/12 =
$1,125 250
1,375
$7,500 × 2/15 = $1,000 × 9/12 = $7,500 × 1/15 = $ 500 × 3/12 =
$ 750 125
875
$7,500 × 1/15 = $ 500 × 9/12 =
$ 375
20-3: 20-4: 20-5: 20-6:
Exercise 5
$9,000 – $500 34,000
= $0.25 per unit
Year 1: 12,000 × $0.25 = $3,000 Year 2: 8,000 × $0.25 = 2,000 Year 3: 14,000 × $0.25 = 3,500 Exercise 6 GENERAL JOURNAL DATE
DESCRIPTION
PAGE POST. REF.
DEBIT
CREDIT
1 2
1
1.
Repairs Expense
5 0 00
Cash
3
2
5 0 00
3
4 5
4
2.
Accumulated Depreciation—Hydraulic Lift #2
6 0 0 00
Cash
6
5
6 0 0 00
6
7 8 9 10
7
3.
Hydraulic Lift #2 Cash
1 0 0 0 00
8
1 0 0 0 00
9 10
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Chapter 18
Accounting for Long-Term Assets
185
Exercise 7 $400,000,000/16,000 tons = $25,000/ton Year 1:
800 ×
$25,000
=
$20,000,000
Year 2:
1,200 ×
$25,000
=
30,000,000
Year 3:
750 ×
$25,000
=
18,750,000
PROBLEMS Problem 8 1. (a) Year
Depreciation Expense
Book Value
1 2 3 4 5
$15,000 × 0.20 15,000 × 0.20 15,000 × 0.20 15,000 × 0.20 15,000 × 0.20
= = = = =
$3,000 3,000 3,000 3,000 3,000
$15,000 12,000 9,000 6,000 3,000
1. (b) 1 2 3 4 5
$15,000 × 5/15 15,000 × 4/15 15,000 × 3/15 15,000 × 2/15 15,000 × 1/15
= = = = =
$5,000 4,000 3,000 2,000 1,000
$13,000 9,000 6,000 4,000 3,000
1. (c) 1 2 3 4
$18,000 × 0.40 10,800 × 0.40 6,480 × 0.40 3,888
= = = =
$7,200 4,320 2,592 888*
$10,800 6,480 3,888 3,000
*Cannot be depreciated below $3,000 salvage value. 2.
1 2 3 4 5 6 Total
$18,000 × 0.20 = $ 3,600.00 18,000 × 0.32 = 5,760.00 18,000 × 0.192 = 3,456.00 18,000 × 0.1152 = 2,073.60 18,000 × 0.1152 = 2,073.60 18,000 × 0.576 = 1,036.80 $18,000.00
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186
Chapter 18
Problem 9 1.
GENERAL JOURNAL
DATE
DESCRIPTION
1
PAGE POST. REF.
DEBIT
CREDIT 1
Adjusting Entries 20-1
2
Dec. 31
3
Depreciation Expense—Sonar System #1
2
6 0 0 00
Accumulated Depreciation—Sonar System #1
6 0 0 00
4
3 4
5
31
6
Depreciation Expense—Sonar System #2
5
6 0 0 00
Accumulated Depreciation—Sonar System #2
6 0 0 00
6
7
7
8
8
9
9
GENERAL JOURNAL
2. DATE
DESCRIPTION
PAGE POST. REF.
DEBIT
CREDIT
20-2 1
Jan.
1
2
Accumulated Depreciation—Sonar System #1
1
2 0 0 00
Cash
2 0 0 00
3 4 5
2 3
1
Sonar System #2
4
1 0 0 0 00
Cash
1 0 0 0 00
5
6
6
7
7
8
8
9
9
3.
Depreciation expense for each sonar system for 20-2 through 20-6.
Cost of sonar system............................................................................. Accumulated depreciation .................................................................... Book value ............................................................................................ Salvage value ........................................................................................ New depreciable base ........................................................................... $3,200/8 years = $400 depreciation per year for Sonar System #1 $4,000/5 years = $800 depreciation per year for Sonar System #2
Sonar System #1 $4,000 (400) $3,600 (400) $3,200
Sonar System #2 $5,000 (600) $4,400 (400) $4,000
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Chapter 18
Accounting for Long-Term Assets
187
Problem 10 GENERAL JOURNAL DATE
DESCRIPTION
PAGE POST. REF.
DEBIT
CREDIT
20-1
Jan.
5
2
Accumulated Depreciation—Backhoe
1
85 0 0 0 00
Backhoe
2
85 0 0 0 00
3 4
3
28
5
Cash
1 0 0 0 00
4
Accumulated Depreciation—Truck
27 2 0 0 00
5
6
Truck
7
Gain on Sale of Truck
28 0 0 0 00
6
2 0 0 00
7
8 9
8
Feb. 10
Cash
10
Accumulated Depreciation—Handtruck
11
Loss on Sale of Handtruck
1 5 0 00
9
2 2 0 0 00
10
1 5 0 00
11
Handtruck
12
2 5 0 0 00 12
13 14
13
Mar. 11
15
Forklift (new)
60 0 0 0 00
14
Accumulated Depreciation—Forklift
45 0 0 0 00
15
16
Forklift (old)
50 0 0 0 00 16
17
Cash
55 0 0 0 00 17
18
18
Caterpillar (new)
120 0 0 0 00
19
20
Accumulated Depreciation—Caterpillar
90 0 0 0 00
20
21
Loss on Exchange of Caterpillar
5 0 0 0 00
21
19
May 16
22
Caterpillar (old)
105 0 0 0 00 22
23
Cash
110 0 0 0 00 23
24 25 26
24
June 10
Dump Truck (new)
90 0 0 0 00
25
Accumulated Depreciation—Dump Truck
78 0 0 0 00
26
27
Dump Truck (old)
80 0 0 0 00 27
28
Cash
87 0 0 0 00 28
29
Gain on Exchange of Dump Truck
1 0 0 0 00 29
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188
Chapter 18
Problem 11 1.
$105,000,000 – $5,000,000
= $10/karat mined
10,000,000 20-1: 20-2: 20-3:
4,000,000 × $10 3,500,000 × $10 2,000,000 × $10
= $40 million = $35 million = $20 million
2. GENERAL JOURNAL DATE
DESCRIPTION
POST. REF.
PAGE
DEBIT
CREDIT
20-1 1
Dec. 31
Depletion Expense—Diamond Mine Accum. Depletion—Diamond Mine
2
1
40,000 0 0 0 00 40,000 0 0 0 00
2
3
3
20-2 4
Dec. 31
Depletion Expense—Diamond Mine Accum. Depletion—Diamond Mine
5
4
35,000 0 0 0 00 35,000 0 0 0 00
5
6
6
20-3 7
Dec. 31
Depletion Expense—Diamond Mine Accum. Depletion—Diamond Mine
8
7
20,000 0 0 0 00 20,000 0 0 0 00
8
9
9
Problem 12 GENERAL JOURNAL DATE
DESCRIPTION
POST. REF.
PAGE
DEBIT
CREDIT
20-1
Dec. 31
31
31
2 2 5 0 00
4
2 2 5 0 00
5
Copyright Amortization
6
1 8 3 3 33
Copyright
8
7
1 8 3 3 33
8
($22,000/8 yrs. = $2,750 x 8/12 = $1,833.33)
9
12
Patent Amortization ($15,000/5 yrs. = $3,000 x 9/12 = $2,250)
6
11
2 3
Patent #2
5
10
1 5 0 0 00
($12,000/8 yrs. = $1,500)
3
7
1
1 5 0 0 00
Patent #1
2
4
Patent Amortization
31
Franchise Amortization Franchise ($200,000/10 yrs. = $20,000 x 3/12 = $5,000.00)
9
5 0 0 0 00
10
5 0 0 0 00 11 12
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Chapter 19
Accounting for Partnerships
189
CHAPTER 19 REVIEW QUESTIONS 1. partnership 2. partnership agreement 3. mutual agency 4. unlimited liability 5. dissolves 6. journal entry 7. assets liabilities 8. balance sheets 9. fair market values
10. investment ratio 11. capital account drawing account 12. equally 13. $4,800 14. financial statements 15. income statement 16. partners’ equity 17. Dissolution 18. business operations
19. limited lives 20. equal to greater than less 21. credit balance 22. increase 23. Liquidation 24. partnership liquidation
EXERCISES Exercise 1 GENERAL JOURNAL DATE
DESCRIPTION
PAGE POST. REF.
DEBIT
CREDIT
20-1
June 1
Cash Mary Campbell, Capital
2
1
20 0 0 0 00 20 0 0 0 00
2
Mary Campbell’s investment in partnership
3
3
4 5 6 7
4
1
Cash
25 0 0 0 00
Barb Stanley, Capital
5
25 0 0 0 00
6
Barb Stanley’s investment in partnership
7
8
8
9
9
10
10
11
11
12
12
13
13
14
14
15
15
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190
Chapter 19
Exercise 2 GENERAL JOURNAL DATE
DESCRIPTION
PAGE POST. REF.
DEBIT
CREDIT
20-2 1
Cash
3 3 0 0 00
1
2
Merchandise Inventory
38 0 0 0 00
2
3
Store Equipment
25 0 0 0 00
3
Jan.
1
4
Notes Payable
20 0 0 0 00
4
5
Accounts Payable
15 0 0 0 00
5
6
Jim Hassel, Capital
31 3 0 0 00
6
Jim Hassel’s investment in partnership
7
7
8
8
Cash
12 1 0 0 00
9
10
Merchandise Inventory
24 0 0 0 00
10
11
Notes Payable
5 0 0 0 00 11
12
Accounts Payable
8 0 0 0 00 12
13
Mark Back, Capital
23 1 0 0 00 13
9
1
Mark Back’s investment in partnership
14
14
15
15
Exercise 3 Fisher and Worth Statement of Partners’ Equity For Year Ended December 31, 20-Fisher
Worth
Total
Capital, January 1, 20--
$ 85,000
$64,000
$149,000
Net income for the year
46,800
31,200
78,000
$131,800
$95,200
$227,000
35,000
28,000
63,000
$ 96,800
$67,200
$164,000
Withdrawals Capital, December 31, 20--
© 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 19
Accounting for Partnerships
191
Exercise 3 (Concluded) Fisher and Worth Balance Sheet (Partial) December 31, 20-Partners’ Equity Fisher, capital
$96,800
Worth, capital
67,200
Total partners’ equity
$164,000
Exercise 4 GENERAL JOURNAL DATE
DESCRIPTION
PAGE POST. REF.
DEBIT
CREDIT
20-4 1
July 30
Cash Susan Blue, Capital
2
1
60 0 0 0 00 60 0 0 0 00
Susan Blue admitted to partnership
3
2 3
4
4
5
5
Exercise 5 GENERAL JOURNAL DATE
DESCRIPTION
PAGE POST. REF.
DEBIT
CREDIT
20-3 1
Cash
8 3 0 0 00
1
2
Accounts Receivable
12 0 0 0 00
2
3
Construction Equipment
35 0 0 0 00
3
May 16
4
Allowance for Bad Debts
2 0 0 0 00
4
5
Notes Payable
15 0 0 0 00
5
6
Accounts Payable
5 0 0 0 00
6
7
Linda Philipich, Capital
33 3 0 0 00
7
8
Linda Philipich admitted to partnership
9
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8 9
192
Chapter 19
Exercise 6 GENERAL JOURNAL DATE
DESCRIPTION
PAGE POST. REF.
DEBIT
CREDIT
20-6 1
Dec. 31
R. W. Campbell, Capital Cash
2
1
78 0 0 0 00 78 0 0 0 00
2
3
R. W. Campbell retired, withdrawing $78,000 in
3
4
equity settlement
4
5
5
Exercise 7 GENERAL JOURNAL DATE
DESCRIPTION
PAGE POST. REF.
DEBIT
CREDIT
20-1
Oct.
1
Cash
1
101 0 0 0 00
2
Inventory
92 0 0 0 00
2
3
Gain on Sale of Inventory
9 0 0 0 00
3
4
Sale of inventory
4
5 6
5
1
Gain on Sale of Inventory
9 0 0 0 00
6
7
L. Ling, Capital
4 5 0 0 00
7
8
S. Salk, Capital
4 5 0 0 00
8
9
Allocation of gain
9
10
10
11
11
12
12
13
13
14
14
15
15
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Chapter 19
Accounting for Partnerships
193
PROBLEMS Problem 8 GENERAL JOURNAL DATE
DESCRIPTION
PAGE POST. REF.
DEBIT
CREDIT
20-4 1
Cash
3 2 0 0 00
1
2
Accounts Receivable
2 5 2 4 00
2
3
Merchandise Inventory
4 8 0 0 00
3
4
Projection Equipment
7 5 0 0 00
4
5
Snack Bar and Facilities
18 5 0 0 00
5
Jan.
1
6
Notes Payable
13 5 0 0 00
6
7
Accounts Payable
5 4 8 0 00
7
8
Allowance for Bad Debts
4 3 0 00
8
9
Fred Dusk, Capital
17 1 1 4 00
9
Fred Dusk’s investment in partnership
10
10
11
11
Cash
1 5 3 3 00
12
13
Accounts Receivable
2 1 6 0 00
13
14
Merchandise Inventory
11 4 0 0 00
14
15
Supplies
3 5 6 00
15
16
Office Equipment
4 8 0 0 00
16
17
Projection Equipment
11 2 0 0 00
17
18
Snack Bar and Facilities
48 0 0 0 00
18
12
1
19
Notes Payable
26 0 0 0 00 19
20
Accounts Payable
16 3 0 0 00 20
21
Allowance for Bad Debts
22
Nancy Dawn, Capital
23 24
Nancy Dawn’s investment in partnership
3 2 0 00 21 36 8 2 9 00 22 23 24
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