Salary expense……………… 8,000 Utilities expense……………. 1,400
Delivery expense…………… 300 Total…………………………...
$109,450 $109,450
*Total debits………………………………………… $109,450 Total credits, excluding retained earnings…… (88,100) Retained earnings………………………………… $ 21,350
(continued) E 2-10
Req. 2
Whirlpool Appliance Service
Income Statement
Month Ended June 30, 20X6
Service revenue………………... $22,000 Salary expense………………… $8,000 Utilities expense……………….. 1,400 Delivery expense………………. 300
Total expenses…………………. 9,700 Net income………………………
$12,300
(15-25 min.) E 2-11
Car Connection, Inc.
Trial Balance December 31, 20X3
ACCOUNT
DEBIT CREDIT
Cash…………………………... $ 4,600* Accounts receivable……….. 12,600* Inventory……………………... 17,000 Supplies……………………… 600 Land…………………………... 55,000
Accounts payable………….. $13,100* Common stock……………… 48,300* Sales revenue………………..
35,700
Cost of goods sold…………. 3,900 Salary expense……………… 1,700 Rent expense……………….. 800
Utilities expense……………. 900* _______ Total…………………………...
$97,100 $97,100
_____
*Explanations:
Cash: $4,200 + $400 = $4,600
Accounts Receivable: $13,000 – $400 = $12,600
Accounts Payable: $12,000 + $1,000 – $100 + $200 = $13,100 Common Stock: $47,900 + $400 = $48,300 Utilities Expense: $700 + $200 = $900
Chapter 2 Transaction Analysis 67
(5-15 min.) E 2-12
(a) Bal. (c) Bal. (e) (g) Bal.
Cash 12,500 (b) (d) (e) (g) 6,800 Office Supplies 800 800 Accounts Payable 400 (c) Bal. Dividends 2,000 2,000 Salary Expense 1,800 1,800 1,500 1,800 400 2,000
(f) Bal.
Accounts Receivable 8,300 8,300 Office Furniture 9,000 9,000 Common Stock (a) Bal. Service Revenue (f) Bal. Rent Expense 1,500 1,500
800 400
(a) Bal. 21,500 21,500 8,300 8,300 (d) Bal. (10-20 min.) E 2-13
Req. 1
(b) Bal. LaVell Oxford, Attorney
Trial Balance July 31, 20X8
ACCOUNT
Cash…………………………... Accounts receivable……….. Office supplies……………… Office furniture……………… Accounts payable………….. Common stock……………… Dividends…………………….. Service revenue…………….. Salary expense……………… Rent expense……………….. Total…………………………...
Req. 2
DEBIT $ 6,800 8,300 800 9,000
2,000
1,800 1,500 $30,200 CREDIT
$ 400 21,500
8,300
$30,200 68 Financial Accounting 6/e Solutions Manual
The business performed well during July. The result of operations was net income of $5,000, as shown by the income statement accounts:
Service revenue…………………. $ 8,300 Salary expense……….. $1,800 Rent expense…………. 1,500 Total expenses……………….. (3,300) Net income……………………….. $ 5,000
(20-30 min.) E 2-14
Reqs. 1 and 3
Cash Accounts Receivable Dec. 2 7,000 Dec. 2 500 Dec. 18 1,700 9 800 3 3,000 12 200 Bal. 4,100 Supplies Equipment Dec. 5 300 Dec. 3 3,000 Furniture Accounts Payable Dec. 4 3,600 Dec. 4 3,600 5 300 Bal. 3,900
Common Stock Dividends Dec. 2 7,000 Service Revenue Rent Expense Dec. 9 800 Dec. 2 500 18 1,700 Bal. 2,500 Utilities Expense Salary Expense Dec. 12 200 (continued) E 2-14
Req. 2
Journal
DATE ACCOUNT TITLES AND EXPLANATION DEBIT CREDIT
Dec. 2 Cash…………………………………….. 7,000 Common Stock…………………….. 7,000 2 Rent Expense…………………………. 500 Cash…………………………………. 500 3 Equipment……………………………... 3,000 Cash…………………………………. 3,000
Chapter 2 Transaction Analysis 69
4 Furniture……………………………….. 3,600
Accounts Payable…………………. 5 Supplies………………………………... 300
Accounts Payable…………………. 9 Cash…………………………………….. 800
Service Revenue…………………... 12 Utilities Expense……………………… 200
Cash…………………………………. 18 Accounts Receivable………………… 1,700
Service Revenue…………………...
(continued) E 2-14
Req. 4
Matthew Rogers, Certified Public Accountant, P.C.
Trial Balance December 18, 20XX
ACCOUNT
DEBIT CREDIT Cash…………………………... $ 4,100 Accounts receivable……….. 1,700 Supplies……………………… 300 Equipment…………………… 3,000 Furniture……………………... 3,600
Accounts payable………….. $ 3,900 Common stock……………… 7,000
Dividends…………………….. — Service revenue…………….. 2,500
Rent expense……………….. 500 Utilities expense……………. 200
Salary expense……………… — Total…………………………...
$13,400 $13,400
(20-40 min.) E 2-15
a. Net income for March – Given as follows:
Retained Earnings
Feb. 28 Bal. 7,000 March March dividends 15,800 net income X = $19,300 Mar. 31 Bal. 10,500
$7,000 + X – $15,800 = $10,500
X = $19,300
b. Total cash paid during March:
Cash
Feb. 28 Bal. 11,600
70 Financial Accounting 6/e Solutions Manual
3,600
300
800
200
1,700
March receipts Mar. 31 Bal.
81,200 March payments 5,000 X = $87,800
$11,600 + $81,200 – X = $ 5,000 X = $87,800
(continued) E 2-15
c. Cash collections from customers during March:
Accounts Receivable
Feb. 28 Bal. 24,300 March sales on account 49,400 March collections X = $47,000 Mar. 31 Bal. 26,700
$24,300 + $49,400 – X = $26,700 X = $47,000
d. Cash paid on a note payable during March:
Note Payable Feb. 28 Bal. 13,900 March March X =17,500 payments on note X new borrowing 25,000 Mar. 31 Bal. 21,400
$13,900 + $25,000 – X = $21,400 X = $17,500
(20-30 min.) E 2-16
Req. 1
Road Runner, Inc. Trial Balance December 31, 20X5
Cash…………………………... Accounts receivable……….. Supplies……………………… Land…………………………... Accounts payable………….. Note payable………………… Common stock……………… Retained earnings………….. Service revenue…………….. Salary expense……………… Advertising expense………. Totals………………………….
Out of balance by $3,300
Chapter 2 Transaction Analysis 71
$ 4,200 7,200 800 34,000
3,400 900 $50,500
$ 5,800 5,000 20,000 7,300 9,100
_______ $47,200