ACCT 1220 Lecture Notes - Lecture 4: General Ledger, Income Statement, Retained Earnings

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orchidtoad181

31 Jan 2017

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Transactions: economic events that must be recorded in the financial statements. Not all events are recorded and reported as accounting transaction. Only those that change assets, liabilities or shareholders" equity: revenue (cid:1371, 2. A = l + se () (0) () Each transaction has a fuel (double sided effect on the equation) An individual accounting record of increases and decreases in a specific asset, liability or. Account: cash (cid:1373) (cid:882)(cid:882, prepaid insurance (cid:1371) (cid:882)(cid:882) shareholders" equity item. Describe where entries are made in the accounts. Debiting: entering an amount on the left side. Crediting: entering an amount on the right side. Debit balance: if debit amounts exceed credit amounts. Credit balance: if credit amount exceed debit amounts. For each of the transactions, do the following: journalize the transaction, using t accounts, post the journal entry to the general ledger, issued common shares for ,000 cash. 2)performed ,000 of services on account for a customer.

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At December 31, 2016, the accounting records of Hill Pool, Co.reflected the following:

AccountsPayable $10,100 AccountsReceivable 8,450

RetainedEarnings 7,830 Supplies ` 2,350

Building 23,950 Cash 15,420

Notes Payable, due Jan2018 10,240 CommonStock 20,000

UnearnedRevenue 2,000

During January 2017, the following transactions occurred:

Jan2 Issued 5,000 shares of common stockin exchange for $10,000

Jan8 Paid creditors $2,500 of what wasowed on account.

Jan15 Repaired a pool and collected the fee of$1,800.

Jan19 Performed a $500 repair job, which Hill hadpreviously been paid for.

Jan25 Collected $2,400 from customers on account.

Jan28 Repaired a customerâs pool for$8,200. Billed the customer.

Jan30 Declared and paid a cash dividend of $500.

Jan30 Paid $2,000 for January wages.

Jan30 Supplies on hand at the end of the month amountto $1,300.

Jan30 Received a utility bill for $500 which will bepaid next month.

1. Thejournal entry to record the Jan 19 transaction would include a:

A. Debit to Accounts Receivable

B. Credit to Service Revenue

C. Debit to Service Revenue

D. Credit to Unearned Revenue

E. Credit to Accrued Expenses Payable

2. Torecord the Jan 30 transaction for the supplies, Hill, Incwould:

A. Debit to Supplies Expense for $1,300

B. Debit to Supplies for $1,050

C. Credit to Cash for $1,050

D. Credit to Supplies $1,300

E. Debit to Supplies Expense for $1,050

3. Thebalance in the Cash account on January 31, 2017 is:

A. $24,620

B. $26,320

C. $26,820

D. $25,770

E. $23,570

4. What isnet income for the month of January?

A. $16,350

B. $8,850

C. $6,950

D. $18,350

E. $5,850

limeshark233

Exercise 3-2 Blossom Company entered into these transactions during May 2017, its first month of operations. 1. Stockholders invested $33,500 in the business in exchange for common stock of the company 2. Purchased computers for office use for $27,200 from Ladd on account. 3. Paid $3,700 cash for May rent on storage space. 4. Performed computer services worth $18,000 on account. 5. Performed computer services for Wharton Construction Company for $3,200 cash. 6. Paid Western States Power Co. $8,900 cash for energy usage in May. 7. Paid Ladd for the computers purchased in (2). 8. Incurred advertising expense for May of $1,700 on account. 9. Received $13,700 cash from customers for contracts billed in (4). Using the following tabular analysis, show the effect of each transaction on the accounting equation. Put explanations for changes to Stockholdersâ Equity in the far right column. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced. See Illustration 3-3 for example.) Assets = Liabilities + Stockholdersâ Equity Cash + Accounts Receivable + Equipment = Accounts Payable + Common Stock + Retained Earnings Revenues - Expenses (1) $ $ $ $ $ $ $ (2) (3) (4) (5) (6) (7) (8) (9) $ $ $ = $ $ $ $

harlequinraven630

AvaAva

PetrilloPetrillo

recently opened her own law office on

MarchMarch

?1, which she operates as a corporation. The name of the newentity is

AvaAva

PetrilloPetrillo?,

Attorney.

PetrilloPetrillo

experienced the following events during the organizing phase ofthe new business and its first month of? operation,

MarchMarch

20182018.

Some of the events were personal and did not affect the lawpractice. Others were business transactions and should be accountedfor by the business.

Mar.Mar.???1		Sold personal investment in Amazon?stock, which she had owned for several? years, receiving $ 33 comma 000$33,000 cash.
2		Deposited the $ 33 comma 000$33,000 cash from the sale of the Amazon stock in her personal bankaccount.
3		Deposited $ 60 comma 000$60,000 cash in a new business bank account titled AvaAva PetrilloPetrillo?, Attorney. The business issued common stock to PetrilloPetrillo.
5		Paid $ 450$450 cash for ink cartridges for the printer.
7		Purchased computer for the law?office, agreeing to pay the? account, $ 7 comma 000$7,000?, within three months.
9		Received $ 3 comma 100$3,100 cash from customers for services rendered.
15		Received bill from TheLawyer for magazine? subscription, $ 200$200. ?(Use Miscellaneous Expense? account.)
23		Finished court hearings on behalfof a client and submitted a bill for legal? services, $ 12 comma 000$12,000?, on account.
28		Paid bill from The Lawyer.
30		Paid? utilities, $ 1 comma 300$1,300.
3131		Received $ 1 comma 000$1,000 cash from clients billed on MarchMarch 23.
3131		Cash dividends of $ 3 comma 000$3,000 were paid to stockholders.

Analyze the effects of thepreceding events on the accounting equation of

AvaAva

PetrilloPetrillo?,

Attorney.

Prepare the following financial? statements:

a. Income statement.

b. Statement of retained earnings.

c. Balance sheet.

d. Statement of cash flows.

Requirement 1. Analyze the effects of thepreceding events on the accounting equation of

AvaAva

PetrilloPetrillo?,

Attorney.Analyze the events? chronologically, one transaction ata time. Beginning with the transaction on the? 2nd, calculate thebalance in each account after analyzing the effect of thetransaction on the accounting equation. After calculating theending balance of each account on the

3131?st,

calculate total assets and total liabilities and equity.?(Complete only the necessary answer boxes for your transactionlines. If a transaction is personal and does not affect the?business, leave the transaction line blank. Carry down all balancesto the? "Bal." line, including zero balance? accounts, entering a?"0" for any zero balances. Enter a decrease in an account with aminus sign or parentheses. Abbreviations? used: A/P? = Accounts?Payable; A/R? = Accounts? Receivable; Com.? = Common; Contr. Cap.?= Contributed? Capital; Div.? = Dividends; Comp.? = Computer; Exp.?= Expense; Liab.? = Liabilities; Misc.? = Miscellaneous; Rev.? =Revenue; Sup.? = Supplies; Util.? = Utilities.)

ASSETS

LIAB.

EQUITY

Contr.

Cap.

Retained Earnings

Cash

A/R

Office

Comp.

A/P

Com.

Div.

Service

Util.

Misc.

Sup.

Stock

Rev.

Exp.

3/1

72,000

3/2

Bal.

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ACCT 1220 Lecture Notes - Lecture 4: General Ledger, Income Statement, Retained Earnings

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