Probset 1 Answers

Group Number 4

Cuebillas, Del Rosario, Fernandez, Jimenez, Lagrada, Pajarillo, Paredes,

Rina Cianen Elisha Anne Rizza Angelie Denise Ralph Angelo Patricia Gwyneth

Accounting 1 TTh 10:00 - 11:30AM Ms. Noreen Gonzaga Professor

Problem 2.2

Six transactions of HORIZON MOVING COMPANY are summarized below in equation form, with each of the six transactions identified by a letter. For transactions (a) through (f) you are to write a separate statement explaining the nature of the transaction. For example, the explanation of transactio follows: Purchased equipment for cash at a cost of $3,200

Horizon Moving Company Thursday, August 20, 2015 Accounts Receivable

Cash + Balances

$

(a) Balances

$ $ $

45,000.00

$

110,000.00

= $

22,800.00 23,700.00 20,200.00

$

39,000.00

$

42,000.00

$

45,000.00

$

110,000.00

$

39,200.00

$

42,000.00

$

45,000.00

$

110,000.00

$

39,200.00

$

42,000.00

-900.00 $

38,100.00

13500.00 $

38,100.00

$

45,000.00

$

110,000.00

$

52,700.00

10000.00 $

$

5,700.00

52,000.00 -14500.00

$

38,100.00

$

45,000.00

$

110,000.00

$

52,700.00

$

37,500.00

$

38,100.00

$

45,000.00

$

110,000.00

$

52,700.00

$

37,500.00

15000.00 $

20,700.00

(f) Balances

36,000.00

-14500.00

( e) Balances

$

+

-3500.00

(d) Balances

39,000.00

+

Accounts Payable

Equipment

3200.00

900.00

(c) Balances

$

+

Building

-3200.00

(b) Balances

26,000.00

Land

2100.00 $

20,700.00

$

38,100.00

$

45,000.00

$

110,000.00

$

54,800.00

2100.00 $

39,600.00

Problem 2.2 ANSWERS a.

Purchased equipment for cash at a cost of $3,200

b.

Received $900 from the remaining balance of Mrs. Gonzaga

c.

Purchased an equipment from XYZ Company which costs $13,500. The company agreed to pay a downpayment of 3,500 and th

d.

Payed the existing $14,500 balance to Aldub Inc.

e.

P. Youngblood decided to invest his $15,000 cash in HMC

f.

Purchased equipment for $2,100 on account.

form, with each of the six transactions identified by a letter. For each of the re of the transaction. For example, the explanation of transaction a could be as r cash at a cost of $3,200

g Company

st 20, 2015

+

P. Youngblood, Capital $

214,000.00

$

214,000.00

$

214,000.00

$

214,000.00

$

214,000.00 15000.00

$

229,000.00

$

229,000.00

e company agreed to pay a downpayment of 3,500 and the rest on account.

Problem 3.5 Campbell Crop Dusting

1-Jun-01

Cash Pat Campbell, Capital Deposited 60,000 cash in bank for the business

2-Jun

Aircraft Accounts Payable Purchased an aircraft for 180,000 on account

4-Jun

Rent Expense Cash Paid 2,500 for rent office and hanger space for the month

15-Jun

Accounts Receivable Crop-Dusting Revenue Billed customers for crop-dusting services on the first half of June

Salaries Expense Cash Paid employees' salaries

18-Jun

Maintenance Expense Cash Paid cash for maintenance and repair services

25-Jun

Cash Accounts Receivable Received cash from the customers on the first half of June

30-Jun

Accounts Receivable Crop-Dusting Revenue Billed customers for crop-dusting services on the second half of June

Salaries Expense Cash Paid employees' salaries

Fuel Expense Notes Payable Received a bill from Henry's Feed & Fuel. Due on July 10

Pat Campbell, Drawing Cash Withrew cash from the company

Ledger Assets 1-Jun 4-Jun 15-Jun 18-Jun 25-Jun 30-Jun 30-Jun Bal

2-Jun

Bal

$

Aircraft 180,000.00

$

$

$

Liabilities 2-Jun

Bal

$

Cash 60,000.00 $ $ $ 4,910.00 $ $ 46,640.00

2,500.00 5,880.00 1,890.00

Accounts Receivable 8,320.00

15-Jun $ 25-Jun 30-Jun $

16,450.00

$

19,860.00

6,000.00 2,000.00 Bal

180,000.00

Accounts Payable $ 180,000.00

$

Notes Payable 30-Jun

180,000.00 Bal

Owner's Equity

Pat Campbell, Capital $ 60,000.00

1-Jun Bal

$

Revenues

Bal

$

Expenses

Bal

Bal

$ $

15-Jun 30-Jun

Bal

$

2,000.00

Crop-Dusting Revenue $ 8,320.00 $ 16,450.00

15-Jun 30-Jun

4-Jun

60,000.00

$

Pat Campbell, Drawing 2,000.00

$ $ $

24,770.00

Rent Expense 2,500.00 2,500.00

18-Jun $ Bal

Salaries Expense 5,880.00 6,000.00 11,880.00

$

30-Jun $

Bal

$

Maintenance Expense 1,890.00 1,890.00

Fuel Expense 2,510.00

2,510.00

Campbell Crop Dusting 30-Jun-01

Cash Accounts Receivable Aircraft Accounts Payable Notes Payable Pat Campbell, Capital Pat Campbell, Drawings Crop-Dusting Revenue Rent Expense Salaries Expense Maintenance Expense Fuel Expense

$ $ $

46,640.00 19,860.00 180,000.00 $ $ $

180,000.00 2,510.00 60,000.00

$ $ 2,500.00 $ 11,880.00 $ 1,890.00 $ 2,510.00 $ 267,280.00 $

24,770.00

$

2,000.00

267,280.00

Campbell Crop Dusting 30-Jun-01

ASSETS Cash Accounts Receivable Aircraft Total Assets LIABILITIES AND OWNER'S EQUITY Liabilities Accounts Payable Notes Payable Total Liabilities

$ $

180,000.00 2,510.00

Owner's Equity Pat Campbell, Capital Pat Campbell, Drawings Crop-Dusting Revenue Rent Expense Salaries Expense Maintenance Expense Fuel Expense

$ $

60,000.00 (2,000.00)

$ $ $ $ $

24,770.00 (2,500.00) (11,880.00) (1,890.00) (2,510.00)

Net Profit Total Liabilities and Owner's Equity

Yes. The account balances shall be carried out to the next month since it is only the start of the business and the fiscal year will end o

DR $

$

$

$

$

$

CR 60,000.00 $

60,000.00

$

180,000.00

$

2,500.00

$

8,320.00

$

5,880.00

$

1,890.00

180,000.00

2,500.00

8,320.00

5,880.00

1,890.00

$

$

$

$

$

4,910.00 $

4,910.00

$

16,450.00

$

6,000.00

$

2,510.00

$

2,000.00

16,450.00

6,000.00

2,510.00

2,000.00

Ledger Accounts Receivable $

4,910.00

Notes Payable $ 2,510.00

$

2,510.00

Pat Campbell, Drawing

Maintenance Expense

Fuel Expense

mpbell Crop Dusting 30-Jun-01

mpbell Crop Dusting 30-Jun-01

ASSETS $ $ $ $

46,640.00 19,860.00 180,000.00 246,500.00

$

240,510.00

TIES AND OWNER'S EQUITY

$

182,510.00

$

58,000.00

$ $

5,990.00 246,500.00

it is only the start of the business and the fiscal year will end on May 31, 2002

Problem 3.4 Garwood Marine 2 a. Accounts Receivable is increased. Increase in assets are recorded by debits. Debit Account Receivable, $5,620.00 b. Service has been rendered to a client. Revenues are recorded by credits. Credit Repair Service Revenue, $5,620.00 3 a. The asset cash was increased. Increase in assets are recorded by Debits. Debit Cash, $2,830.00 b. Service has been rendered to a client. Revenues are recorded by Credits. Credit Repair Service Revenue, $2,830.00 4 a. Advertisement is an operating Expense. Expenses are recorded by debits. Debit Advertising Expense, $165.00 b. Liabilities are increased. Increase in Liabilities are recorded in Credits. Credit Accounts Payable, $ 165.00

5 a. The asset cash was increased. Increase in assets are recorded by Debits. Debit Cash, $5,620.00 b. The asset Accounts Receivable was decreased. Decrease in assets are recorded by Credits. Credit Accounts Receivable, $5

6 a. The asset cash was increased. Increase in assets are recorded by Debits. Debit Cash, $400.00 b. The asset Accounts receivable was increased. Increase in assets are recorded by Debits. Debit Accounts Receivable, $149 c. Service has been rendered to a client. Increase in revenue are recorded by Credits. Credit Repair Service Revenue, $1,890 7 a. Liabilities were decreased. Decreased in liabilities are recorded by Debits. Debit Accounts Payable, $165.00 b. The asset cash was decreased. Decrease in cash are recorded by Credits. Credit Cash, $165.00 8 a. Withdrawal of cash decreases owner's equity. Withdrawals are recorded by Debits. Debit Garwood, Withrawal $7,600.00 b. The asset Cash was decreased. Decrease in cash are recorded by Credits. Credit Cash, $7,600.00

are recorded by debits. Debit Account Receivable, $5,620.00 recorded by credits. Credit Repair Service Revenue, $5,620.00

recorded by Credits. Credit Repair Service Revenue, $2,830.00

ease in assets are recorded by Credits. Credit Accounts Receivable, $5,620.00

se in assets are recorded by Debits. Debit Accounts Receivable, $1490.00 venue are recorded by Credits. Credit Repair Service Revenue, $1,890.00

awals are recorded by Debits. Debit Garwood, Withrawal $7,600.00

Problem 3.5 The Outlaws Adjusting Entries

July Entries Prepaid Rent Cash Paid 1500000 to Dodge City Stadium for advance rent use good for 5 months

Cash Unearned Ticket Revenue Collected 2560000 from sales of season tickets August Adjusting Entries Rent Expense Prepaid Rent 1 500 000 x 1/5 Unearned Ticket Revenue Ticket Revenue 2 560 000 x 1 / 8

DR $

$

$

$

CR

1,500,000.00 $

1,500,000.00

$

2,560,000.00

$

300,000.00

$

320,000.00

2,560,000.00

300,000.00

320,000.00

Exercise 4.4 Adjusting Entries Dale & Clark Law Office a. 31-Dec-14

DR $

Salaries Expense Salaries Payable Accrued salaries of staff attorneys which worth 17,800

CR 17,800.00 $

17,800.00

Accounts Receivable $ 18,900.00 Legal Fees Earned $ 18,900.00 Unissued bill of J.R. Stone during his trial for 9 days costing 2,100 per day. b. 1-Jan-15

Salaries Expense Salaries Payable Cash Payed Salaries of staff attorneys

$ $

17,500.00 17,500.00 $

35,000.00

$ $

18,900.00 42,000.00

How much is the amount considered salaries expense of January? Answer: $ 17,500.00 c.

Cash

$

60,900.00

Accounts Receivable Legal Fees Earned Received 60900 from JR Stone for the services rendered What portion of this amount constituted revenue earned in January? Answer: $ 42,000.00