(continued) E 2-4
Req. 2
a. $55,800
b. $4,000
c. $10,500 ($500 + $10,000)
d. $45,300 ($55,800 – $10,500, or $40,000 + $5,300)
e. $5,300 (Revenue, $8,000 minus total expenses of $2,700, equals net income, $5,300.)
62 Financial Accounting 6/e Solutions Manual
(10-15 min.) E 2-5
DATE Oct. 6 9 12 15 15-31 15-31 31 31 31
Journal
ACCOUNT TITLES AND EXPLANATION
Cash……………………………………….. Common Stock………………………. Issued stock to owner.
Land………………………………………... Cash……………………………………. Purchased land.
Medical Supplies………………………… Accounts Payable…………………… Purchased supplies on account.
Not a transaction of the business.
Cash……………………………………….. Accounts Receivable…………………… Service Revenue……………………..
Performed service for cash and on account.
Salary Expense………………………….. Rent Expense…………………………….. Utilities Expense………………………… Cash……………………………………. Paid expenses.
Cash……………………………………….. Medical Supplies…………………….. Sold supplies.
Cash……………………………………….. Note Payable………………………….. Borrowed money.
Accounts Payable………………………. Cash……………………………………. Paid on account.
DEBIT
40,000
30,000
2,000
4,000 4,000
1,400 1,000 300
500
10,000
1,500
CREDIT
40,000
30,000
2,000
8,000
2,700
500
10,000
1,500
(10-15 min.) E 2-6
Req. 1
Total assets = $145 million ($100 + $60 – $55 + $35 + $26 – $21) Req. 2
Company owes $41 million [$60 – $55 + $35 + $22 – $21] Req. 3
Net income = $4 million ($26 – $22)
Chapter 2 Transaction Analysis 63
(10-20 min.) E 2-7
Req. 1 (journal entries)
Journal
DATE
ACCOUNT TITLES AND EXPLANATION
Aug. 1
Cash…………………………………………… Common Stock…………………………... Issued common stock to owner.
2 Office Supplies……………………………… Accounts Payable……………………….. Purchased office supplies on account.
4 Land…………………………………………… Cash……………………………………….. Paid cash for land.
6 Cash…………………………………………… Service Revenue………………………… Performed services for cash.
9 Accounts Payable…………………………... Cash……………………………………….. Paid cash on account.
17 Accounts Receivable………………………. Service Revenue………………………… Performed service on account.
23 Cash…………………………………………… Accounts Receivable…………………… Received cash on account.
31 Salary Expense……………………………… Rent Expense………………………………... Cash………………………………………..
Paid cash expenses.
(continued) E 2-7
Req. 2
Ending cash = $6,800
($19,500 – $14,000 + $2,000 – $100 + $900 – $1,500)
Expects to collect on account = $300 ($1,200 – $900)
Total liabilities = $700 ($800 – $100)
Net income (profit) = $1,700 ($2,000 + $1,200 – $1,000 – $500)
64 Financial Accounting 6/e Solutions Manual
DEBIT CREDIT
19,500
19,500
800
800
14,000
14,000
2,000
2,000
100
100
1,200
1,200
900
900
1,000 500
1,500
(20-30 min.) E 2-8
Req. 1 Aug. 1 6 23 Aug. 31 Aug. 2 Aug. 31 Aug. 9 Accounts Payable 100 Aug. 2 Aug. 31 Service Revenue Aug. 6 17 Aug. 31 Rent Expense 500 500 800 700
2,000 1,200 3,200
Aug. 31 Aug. 31
Common Stock Aug. 1 Aug. 31 Salary Expense 1,000 1,000
19,500 19,500
Office Supplies 800 800
Aug. 4 Aug. 31 Land 14,000 14,000 Cash 19,500 Aug. 4 2,000 9 900 31 6,800
14,000 100 1,500
Aug. 17 Aug. 31
Accounts Receivable 1,200 Aug. 23 300
900
Aug. 31 Aug. 31 (continued) E 2-8 Req. 2
Coaxial Electronic Systems, Inc.
Trial Balance August 31, 20X6
ACCOUNT
Cash…………………………... Accounts receivable……….. Office supplies……………… Land…………………………... Accounts payable………….. Common stock……………… Service revenue…………….. Salary expense……………… Rent expense………………... Total…………………………...
DEBIT $ 6,800 300 800 14,000
1,000 500 $23,400 CREDIT
$ 700 19,500 3,200
$23,400 Req. 3
Total assets ($6,800 + $300 + 800 + $14,000)…….. $21,900 Total liabilities…………………………………………. (700) Total stockholders’ equity ($21,900 – $700)……… $21,200
Chapter 2 Transaction Analysis 65
(10-15 min.) E 2-9
Cash………………………………….. 10,000 Common Stock………………….. Issued common stock. Cash………………………………….. 7,000 Note Payable…………………….. Borrowed money; signed note payable. Land………………………………….. 31,000 Cash……………………………….. Note Payable…………………….. Purchased land by paying cash and signing a note payable. Supplies……………………………… 600 Accounts Payable………………. Purchased supplies on account. Cash………………………………….. 100 Supplies…………………………... Sold supplies for cash. Equipment…………………………… 6,000 Cash……………………………….. Paid cash for equipment. Accounts Payable………………….. 300 Cash……………………………….. Paid cash on account.
Cash balance = $2,800 ($10,000 + $7,000 – $8,000 + $100 – $6,000 – $300) Company owes $30,300 ($7,000 + $23,000 + $600 – $300) (10-20 min.) E 2-10
Req. 1
Whirlpool Appliance Service
Trial Balance June 30, 20X6
ACCOUNT
Cash…………………………... Accounts receivable……….. Building………………………. Land…………………………... Accounts payable………….. Note payable………………… Common stock……………… Retained earnings………….. Dividends…………………….. Service revenue……………..
66 Financial Accounting 6/e Solutions Manual
DATE
1. 2. 3. 4. 5. 6. 7.
Journal
ACCOUNT TITLES AND EXPLANATION
DEBIT CREDIT
10,000
7,000
8,000 23,000
600
100
6,000
300
DEBIT $ 9,000 15,500 40,250 29,000
6,000
CREDIT
$ 4,300 13,000 48,800 21,350*
22,000