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ACC120 Lecture Notes - Lecture 4: Trial Balance, Accounting Equation, General Ledger

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ceruleanrabbit658

20 Nov 2017

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Fanshawe College

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Document Summary

The terms increase + and decrease have been used in recording transactions in t-accounts, however formal accounting required the use of debits and credits. In the debits and credits system a debit always recorded on the. Left, a credit is always recorded on the right. (dr) represents. Credits or debits does not mean an increase/decrease it is dependent on the type of account a credit/debit is entered in. Every transaction will have at least one debit and credit. The total of debits in a transaction must equal the total of all the credits. Debits do not equal credits the accounting equation will not be equal. Purpose of accounting is to prepare financial statements to help users make informed decisions. There are many transactions during an accounting period, it is nessacery to summarize them all within the financial statements. The framework used to make sure this is done correctly is called the accounting cycle.

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Related Questions

Ch. 8 #4

Prepare the journal entries to record each of the below transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

1.The issuance of common stock and preferred stock on January 1, 2016.

2.The declaration of dividends on December 28, 2017.

3.The payment of dividends on February 12, 2018.

Record stock issuances.

Record the declaration of dividends.

Record the payment of dividends.

General Journal

January 01, 2016

*Enter debits before credits

Record the declaration of dividends.

Record the payment of dividends.

General Journal

December 28, 2017

*Enter debits before credits

Record the payment of dividends.

General Journal

February 12, 2018

*Enter debits before credits

b. Of the total amount of dividends declared during 2017, how much will be received by preferred shareholders?

azureleopard464

Prepare the journal entry to record Jevonte Companyâs issuanceof 43,000 shares of its common stock assuming the shares havea:

$2 par value and sell for $21cash per share.

$2 stated value and sell for $21 cash per share.

Journal Entry Worksheet

Record the issuance of 43,000 shares of common stock assumingthe shares have a $2 par value and sell for $21 cash per share.

General Journal

a.

*Enter debits before credits

Journal Entry Worksheet

Record the issuance of 43,000 shares of common stock assumingthe shares have a $2 par value and sell for $21 cash per share.

General Journal

b.

*Enter debits before credits

July 15		Declared a cash dividend payableto common stockholders of $170,000.
Aug. 15		Date of record is August 15 forthe cash dividend declared on July 15.
Aug. 31		Paid the dividend declared onJuly 15.

Prepare journal entries to record the above transactions forEmerson Corporation. (If no journal entry is required,select "No journal entry required" in the first accountfield.)

Journal Entry Worksheet

Record the declaration of a cash dividend payable to commonstockholders.

Record the date of record for the cash dividend.

Record the payment of cash dividend.

General Journal

Jul 15

*Enter debits before credits

Journal Entry Worksheet

Record the declaration of a cash dividend payable to commonstockholders.

Record the date of record for the cash dividend.

Record the payment of cash dividend.

General Journal

Aug 15

*Enter debits before credits

Journal Entry Worksheet

Record the declaration of a cash dividend payable to commonstockholders.

Record the date of record for the cash dividend.

Record the payment of cash dividend.

General Journal

Aug 31

*Enter debits before credits

Murray Company reports net income of $609,500 for the year. Ithas no preferred stock, and its weighted-average common sharesoutstanding is 230,000 shares.

Compute its basic earnings per share. (Leave no cellsblank.)

Basic Earnings Per Share
Choose Numerator:			/	Choose Denominator:	=	Basic EPS
	â		/		=	Basic EPS
	â		/		=		pershare

Rodriguez Corporation issues 6,000 shares of its common stockfor $63,500 cash on February 20. Prepare journal entries to recordthis event under each of the following separate situations.

1.	The stock has a $4 parvalue.
2.	The stock has neither par norstated value.
3.	The stock has a $2 statedvalue.

Journal Entry Worksheet

Record the issue of 6,000 shares of $4 par value common stockfor $63,500 cash.

Record the issue of 6,000 shares of no-par, no-stated valuecommon stock for $63,500 cash.

Record the issue of 6,000 shares of $2 stated value common stockfor $63,500 cash.

General Journal

1

*Enter debits before credits

Journal Entry Worksheet

Record the issue of 6,000 shares of $4 par value common stockfor $63,500 cash.

Record the issue of 6,000 shares of no-par, no-stated valuecommon stock for $63,500 cash.

Record the issue of 6,000 shares of $2 stated value common stockfor $63,500 cash.

General Journal

2

*Enter debits before credits

Journal Entry Worksheet

Record the issue of 6,000 shares of $4 par value common stockfor $63,500 cash.

Record the issue of 6,000 shares of no-par, no-stated valuecommon stock for $63,500 cash.

Record the issue of 6,000 shares of $2 stated value common stockfor $63,500 cash.

General Journal

3

*Enter debits before credits

Match each description 1 through 6 with the characteristic ofpreferred stock that it best describes in the dropdown next to eachdescription.

	Description	Characteristic
1.	Holders of the stock areentitled to receive current and all past dividends before commonstockholders receive any dividends.
2.	The issuing corporation canretire the stock by paying a prespecified price.
3.	Holders of the stock canreceive dividends exceeding the stated rate under certainconditions.
4.	Holders of the stock are notentitled to receive dividends in excess of the stated rate.
5.	Holders of this stock canexchange it for shares of common stock.
6.	Holders of the stock lose anydividends that are not declared in the current year.

Required information

Problem 8-5A Preparing a bank reconciliation and recordingadjustments LO P3

[The following information applies to the questionsdisplayed below.]

Chavez Company most recently reconciled its bank statement andbook balances of cash on August 31 and it reported two checksoutstanding, No. 5888 for $1,026 and No. 5893 for $518. Thefollowing information is available for its September 30, 2017,reconciliation.

From the September 30 Bank Statement

PREVIOUS BALANCE	TOTAL CHECKS AND DEBITS	TOTAL DEPOSITS AND CREDITS	CURRENT BALANCE
19,500	9,768	11,581	21,313

CHECKS AND DEBITS					DEPOSITS AND CREDITS
Date	No.	Amount			Date	Amount
09/03	5888	1,026			09/05	1,114
09/04	5902	714			09/12	2,257
09/07	5901	1,813			09/21	4,376
09/17		628	NSF		09/25	2,308
09/20	5905	926			09/30	14	IN
09/22	5903	406			09/30	1,512	CM
09/22	5904	2,118
09/28	5907	257
09/29	5909	1,880

From Chavez Companyâs Accounting Records

Cash Receipts Deposited
Date		Cash Debit
Sept.	5		1,114
	12		2,257
	21		4,376
	25		2,308
	30		1,729
			11,784

Cash Disbursements
Check No.		Cash Credit
5901			1,813
5902			714
5903			406
5904			2,079
5905			926
5906			1,042
5907			257
5908			390
5909			1,880
			9,507

Cash			Acct. No. 101
Date	Explanation	PR	Debit	Credit	Balance
Aug. 31	Balance				17,956
Sept. 30	Total receipts	R12	11,784		29,740
30	Total disbursements	D23		9,507	20,233

Additional Information
Check No. 5904 is correctly drawn for $2,118 to pay for computerequipment; however, the recordkeeper misread the amount and enteredit in the accounting records with a debit to Computer Equipment anda credit to Cash of $2,079. The NSF check shown in the statementwas originally received from a customer, S. Nilson, in payment ofher account. Its return has not yet been recorded by the company.The credit memorandum is from the collection of a $1,530 note forChavez Company by the bank. The bank deducted a $18 collection fee.The collection and fee are not yet recorded.

Journal Entry Worksheet

Record the entry related to the September 30 deposit, ifrequired.

Record the entry related to interest earned, if required.

Record the entry related to the note receivable and thecollection fee, if required.

Record the entry related to the outstanding checks, ifrequired.

Record the entry related to the NSF check, if required.

Record the entry related to the error on check 5904, ifrequired.

General Journal

Sept 30

*Enter debits before credits

Journal Entry Worksheet

Record the entry related to the September 30 deposit, ifrequired.

Record the entry related to interest earned, if required.

Record the entry related to the note receivable and thecollection fee, if required.

Record the entry related to the outstanding checks, ifrequired.

Record the entry related to the NSF check, if required.

Record the entry related to the error on check 5904, ifrequired.

General Journal

Sept 30

*Enter debits before credits

Journal Entry Worksheet

Record the entry related to the September 30 deposit, ifrequired.

Record the entry related to interest earned, if required.

Record the entry related to the note receivable and thecollection fee, if required.

Record the entry related to the outstanding checks, ifrequired.

Record the entry related to the NSF check, if required.

Record the entry related to the error on check 5904, ifrequired.

General Journal

Sept 30

*Enter debits before credits

Journal Entry Worksheet

Record the entry related to the September 30 deposit, ifrequired.

Record the entry related to interest earned, if required.

Record the entry related to the note receivable and thecollection fee, if required.

Record the entry related to the outstanding checks, ifrequired.

Record the entry related to the NSF check, if required.

Record the entry related to the error on check 5904, ifrequired.

General Journal

Sept 30

*Enter debits before credits

Journal Entry Worksheet

Record the entry related to the September 30 deposit, ifrequired.

Record the entry related to interest earned, if required.

Record the entry related to the note receivable and thecollection fee, if required.

Record the entry related to the outstanding checks, ifrequired.

Record the entry related to the NSF check, if required.

Record the entry related to the error on check 5904, ifrequired.

General Journal

Sept 30

*Enter debits before credits

Journal Entry Worksheet

Record the entry related to the September 30 deposit, ifrequired.

Record the entry related to interest earned, if required.

Record the entry related to the note receivable and thecollection fee, if required.

Record the entry related to the outstanding checks, ifrequired.

Record the entry related to the NSF check, if required.

Record the entry related to the error on check 5904, ifrequired.

General Journal

Sept 30

*Enter debits before credits