ACCT 2013 Lecture Notes - Lecture 4: Deferred Income, Retained Earnings, Accounts Payable

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ceruleankoala833

30 Jan 2017

School

University of Arkansas

Department

Accounting

Course

ACCT 2013

Professor

Robyn D.Jarnagin

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Document Summary

Common mistake & keys: we account for transaction from company"s perspective. Issue of common stock = increase in cash & common stock: prepaid expense. Pay one year of rent in advance at the beginning of yr: purchase on account . E. g. ) purchase supplies with credit card: receivable . Customer pays you later= you will receive cash later. > increase retained earnings (for the right side of accounting equation: deferred revenue. Receive cash in advance for the g/s given in future. Key points: revenue increase retained earnings, expense decrease retained earnings, dividend decrease retained earnings. Debit & credit effects on accounts in basic accounting equation: left side (of acct equation): assets increase w. debit. =expense & dividend up w. debit: right side (of acct equation): liabilities & stockholders" equity increase w. credit. = common stock, retained earning, revenue increase w. credit. Provides chronological record of all transactions: journal entry. Credit: always on bottom (need to be indented)

Related Questions

Below is the journal I completed. Based on this, please help meout to complete following worksheet and income statement, statementof retained earning, and balance sheet. (also, how do I close allthe accounts?)

Date	Accounts and Explanation	Debit	Credit
12/2/14	Inventory	1,300
	Account Payable		1,300
	Purchased 10 Units of Software on Account for $1300
12/2/14	Salaries Payable	2,500
	Cash		2,500
	Paid Employees Salaries Owed
12/2/14	Account Receivable	3,200
	Service Revenue		3,200
	Provided Accounting Service on Account, $3200
12/5/14	Office Equipment	4,800
	Account Payable		4,800
	Purchased Office Equipment on Account, $4800
12/8/14	Supplies	950
	Cash		950
	Purchased Supplies for $950 Cash
12/10/14	Cash	3,000
	Account Receivable		3,000
	Received $3000 Payment on Account
12/11/14	Account Receivable	4,500
	Sales Revenue		4,500
	Sold 15 Units of Inventory on Account, $4500
12/11/14	Cost of goods sold	2,000
	Inventory		2,000

12/11/14	Account Payable	1,200
	Cash		1,200
	Made Payment on Account
12/12/14	Inventory	2,400
	Account Payable		2,400
	Purchased Inventory on Account
12/14/14	Advertising Expense	375
	Cash		375
	Paid for Advertising
12/15/14	Cash	8,000
	Service Revenue		8,000
	Provided Accounting Service for Cash
12/16/14	Salaries Expense	2,500
	Cash		2,500
	Paid Salaries for December 1st-15th
12/17/14	Account Receivable	6,000
	Service Revenue		6,000
	Provided Accounting Service on Account
12/19/14	Account Receivable	3,000
	Sales Revenue		3,000

12/19/14	Cost of goods sold	1,200
	Inventory		1,200

12/22/14	Cash	2,500
	Accounts Receivable		2,500

12/23/14	Accounts Payable	2,800
	Cash		2,800
	Made Payment on Account
12/24/14	Utility Expense	850
	Cash		850
	Paid Monthly Utility Bills
12/27/14	Cash	2,000
	Unearned Service Revenue		2,000
	(Advance Received against Services)
12/29/14	Cash	5,000
	Service Revenue		5,000
	Provided Accounting Service for Cash
12/30/14	Cash	15,000
	Common Stock		1,000
	Additional Paid in Capital		14,000
	Issued 1000 shares of Common Stock
12/31/14	Dividend Payable	31,500
	Cash		31,500
	(Dividend paid)
12/31/14	Salary Expense	2,500
Adj	Salary Payable		2,500
	To accrue salary expense
12/31/14	Depreciation Expense - Building	7,500
Adj	Accumulated Depreciation- Building		7,500

12/31/14	Depreciation Expense - Furniture	12,000
Adj	Accumulated Depreciation - Furniture		12,000

12/31/14	Depreciation Expense - Equiptment	200
Adj	Accumulated Depreciation - Equiptment		200

12/31/14	Supplies Expense	1,625
Adj	Supplies		1,625

12/31/14	Cost of Inventories Sold	280
Adj	Inventory		280

12/31/14	Unearned Revenue	500
Adj	Revenue		500

12/31/14	Uncollectible Account Expense	167
Adj	Allowance for Uncollectible Accounts		167

	Service Revenue
Clo	Retained Earnings


	Retained Earnings
Clo	Salary Expense
	Supplies Expense
	Depreciation Expense
	Utilities Expense





	Retained Earnings
Clo	Dividends

Worksheet (I worked onit, but debit and credit balances are not correct. Please help meout to find errors and complete it correctly.)

	Trial Balance		Adjustments		Adj. Trial Balance
	Debit	Credit	Debit	Credit	Debit	Credit
Cash	79,941				79,941
Accounts Receivable	26,200				26,200
Allowance for Unc. Accounts		900		167		1,067
Supplies	3,950			1,625	2,325
Inventory	4,700			280	4,420
Building	150,000				150,000
Accumulated Depreciation- Building				7,500		7,500
Furnishing	30,000				30,000
Accumulated Depreciation- Furnishings				12,000		12,000
Office Equipment	4,800				4,800
Accumulated Depreciation- Off. Equip.				200		200
Accounts Payable		5,700			5,700
Salary Payable		-		2,500		2,500
Unearned Service Revenue		2,000		500		2,500
Stock, Common		19,000				19,000
Additonal Paid in Capital		166,000				166,000
Retained Earnings		40,000				40,000
Dividends	31,500				31,500
Service Revenue		142,700				142,700
Sales Revenue		23,000				23,000
Advertising Expense	8,174				8,174
Depreciation Expense	-		19,700		19,700
Repairs & Maintenance Expense	10,675				10,675
Supplies Expense	3,560				3,560
Uncollectible Accounts Expense	900		167		1,067
Utilities Expense	6,500				6,500
Cost of Goods Sold		10,900	280			10,900
Salary Expense	57,500		2,500		60,000
Total	$418,400	$410,200	$22,647	$24,772	$444,562	$427,367

Please help me! Thanks

beigegoose862

Module 14 Accounting for Corporations Problem 13-4A -

1. Instruction

Morrow Enterprises Inc. manufactures bathroom fixtures. Thestockholdersâ equity accounts of Morrow Enterprises Inc., withbalances on January 1, 2016, are as follows:

Common Stock, $20 stated value(500,000 shares authorized, 375,000 shares issued)	$7,500,000
Paid-In Capital in Excess of StatedValueâCommon Stock	825,000
Retained Earnings	33,600,000
Treasury Stock (25,000 shares, atcost)	450,000

The following selected transactions occurred during theyear:

Jan.	22	Paid cash dividends of $0.08 pershare on the common stock. The dividend had been properly recordedwhen declared on December 1 of the preceding fiscal year for$28,000.
Apr.	10	Issued 75,000 shares of commonstock for $24 per share.
Jun.	6	Sold all of the treasury stock for$26 per share.
Jul.	5	Declared a 4% stock dividend oncommon stock, to be capitalized at the market price of the stock,which is $25 per share.
Aug.	15	Issued the certificates for thedividend declared on July 5.
Nov.	23	Purchased 30,000 shares of treasurystock for $19 per share.
Dec.	28	Declared a $0.10-per-share dividendon common stock.
	31	Closed the credit balance of theincome summary account, $1,125,000.
	31	Closed the two dividends accountsto Retained Earnings.

Required:

Enter the January 1 balances inT accounts for the stockholdersâ equity accounts listed.

Journalize the entries torecord the transactions, and post to the eight selected accounts.No post ref is required in the journal. Refer to the Chart ofAccounts for exact wording of account titles.

Prepare a retained earningsstatement for the year ended December 31, 2016. Enter all amountsas positive numbers. The word âLessâ is not required.*

Prepare the StockholdersâEquity section of the December 31, 2016, balance sheet. âLessâ orâDeductâ will automatically appear if it is required. *

* Refer to the list of Amount Descriptions provided for theexact wording of the answer choices for text entries2.

2.CHART OF ACCOUNTSMorrow Enterprises Inc.General Ledger

	ASSETS
110	Cash
120	Accounts Receivable
131	Notes Receivable
132	Interest Receivable
141	Merchandise Inventory
145	Office Supplies
151	Prepaid Insurance
181	Land
193	Equipment
194	AccumulatedDepreciation-Equipment

	LIABILITIES
210	Accounts Payable
221	Notes Payable
226	Interest Payable
231	Cash Dividends Payable
236	Stock Dividends Distributable
241	Salaries Payable
261	Mortgage Note Payable

	EQUITY
311	Common Stock
313	Paid-In Capital in Excess of StatedValue-Common Stock
315	Treasury Stock
321	Preferred Stock
322	Paid-In Capital in Excess ofPar-Preferred Stock
331	Paid-In Capital from Sale ofTreasury Stock
340	Retained Earnings
351	Cash Dividends
352	Stock Dividends
390	Income Summary

	REVENUE
410	Sales
610	Interest Revenue

EXPENSES

510

Cost of Merchandise Sold

Office Supplies Expense

537

Organizational Expenses

562

Depreciation Expense-Equipment

590

Miscellaneous Expense

710

Interest Expense

3. AmountDescriptions
Cash balance, July 31, 2016
Common stock, $20 stated value;500,000 shares authorized, 375,000 issued
Common stock, $20 stated value;500,000 shares authorized, 438,000 issued
Common stock, $20 stated value;500,000 shares authorized, 468,000 issued
Decrease in retained earnings
Dividends
Excess of issue price over statedvalue
For the Year Ended December 31,2016
From sale of treasury stock
Increase in retained earnings
Net income
Net loss
Retained earnings
Retained earnings, December 31,2016
Retained earnings, January 1,2016
Total
Total paid-in capital
Total stockholdersâ equity

4. T Accounts:

A. Enter the January 1 balances in T accounts for thestockholdersâ equity accounts listed. Post the journal entries frompart B to the eight selected accounts. No post ref is required inthe journal.

Common Stock

Paid-In Capital inExcess of Stated Value-Common Stock

Retained Earnings

Treasury Stock

Paid-In Capital fromSale of Treasury Stock

Stock DividendsDistributable

Stock Dividends

Cash Dividends

5. Journal

B. Journalize the entries to record the transactions. No postref is required in the journal. Refer to the Chart of Accounts forexact wording of account titles.

PAGE 10

JOURNAL

6.Retained Earning Statements

C. Prepare a retained earnings statement for the year endedDecember 31, 2016. Enter all amounts as positive numbers. The wordâLessâ is not required. Refer to the list of Amount Descriptionsprovided for the exact wording of the answer choices for textentries.

Morrow Enterprises

Retained Earnings Statement

For the Year Ended December 31, 2016

1
2
3
4
5

7. Stockholdersâ Equity

D. Prepare the Stockholdersâ Equity section of the December 31,2016 balance sheet. âLessâ or âDeductâ will automatically appear ifit is required. Refer to the list of Amount Descriptions providedfor the exact wording of the answer choices for text entries.

Stockholdersâ Equity

1	Paid-in capital:
2
3
4
5
6
7
8

pinkbee658

NEED ASAP PLEASE

Question 1

Which one of the following is not an externaluser of accounting information?

		Customers
		Investors
		Regulatory agencies
		All of these are external users

3 points

Question 2

The first step in solving an ethical dilemma is to

		identify and analyze the principal elements in thesituation.
		identify the alternatives.
		recognize an ethical situation and the ethical issuesinvolved.
		weigh the impact of each alternative on variousstakeholders.

3 points

Question 3

Generally accepted accounting principles are

		income tax regulations of the Internal Revenue Service.
		standards that indicate how to report economic events.
		theories that are based on physical laws of the universe.
		principles that have been proven correct by academicresearchers.

3 points

Question 4

Which of the following events is not a businesstransaction?

		Issuance of stock in exchange for cash.
		Hired employees.
		Incurred utility expenses for the month.
		Earned revenue for services provided.

3 points

Question 5

When assets are distributed to the owners of a corporation,these distributions are termed

		depletions.
		consumptions.
		dividends.
		a credit line.

3 points

Question 6

If total liabilities increased by $8,000, then

		assets must have decreased by $8,000.
		stockholders' equity must have increased by $8,000.
		assets must have increased by $8,000, or stockholders' equitymust have decreased by $8,000.
		assets and stockholders' equity each increased by $4,000.

3 points

Question 7

If total liabilities increased by $30,000 and stockholders'equity increased by $20,000 during a period of time, then totalassets must change by what amount and direction during that sameperiod?

		$50,000 decrease
		$10,000 decrease
		$10,000 increase
		$50,000 increase

3 points

Question 8

Misra Company compiled the following financial information as ofDecember 31:

Revenues	$ 340,000
Retained Earnings, Beginning	$ 60,000
Equipment	$ 80,000
Expenses	$ 250,000
Cash	$ 90,000
Dividends	$ 20,000
Supplies	$ 10,000
Accounts payable	$ 40,000
Accounts receivable	$ 70,000
Common Stock	$ 80,000

Misra's assets on December 31 are

		$180,000.
		$250,000.
		$360,000.
		$ 490,000.

3 points

Question 9

Mofro's Computer Repair Shop started the year with total assetsof $300,000 and total liabilities of $200,000. During the year, thebusiness recorded $500,000 in computer repair revenues, $300,000 inexpenses, and Mofro paid dividends of $50,000. Stockholders' equityat the end of the year was

		$200,000.
		$100,000.
		$250,000.
		$300,000.

3 points

Question 10

A balance sheet shows

		assets, liabilities, and stockholders' equity.
		expenses, dividends, and stockholders' equity.
		revenues, expenses, and dividends.
		revenues, liabilities, and stockholders' equity.

3 points

Question 11

At September 1, Foli Co. reported retained earnings of $136,000.During the month, Foli generated revenues of $20,000, incurredexpenses of $12,000, purchased equipment for $5,000 and paiddividends of $2,000. What is the amount of retained earnings atSeptember 30?

		$136,000
		$142,000
		$8,000
		$137,000

3 points

Question 12

Grayton Industries purchased supplies for $1,000. The Companypaid $500 in cash and agreed to pay the balance in 30 days. Thejournal entry to record this transaction would include a debit toan asset account for $1,000, a credit to a liability account for$500. Which of the following would be the correct way to completethe recording of the transaction?

		Credit an asset account for $500.
		Credit the Retained Earnings account for $500.
		Credit another liability account for $500.
		Debit the Retained Earnings account for $500.

3 points

Question 13

Radio Moscow Industries purchased supplies for $1,000. They paid$400 in cash and agreed to pay the balance in 30 days. The journalentry to record this transaction would include a debit to an assetaccount for $1,000, a credit to a liability account for $600. Whichof the following would be the correct way to complete the recordingof the transaction?

		Credit an asset account for $400.
		Credit another liability account for $400.
		Credit the retained earnings account for $400.
		Debit the retained earnings account for $400.

3 points

Question 14

A credit to a liability account

		must be accompanied by a debit to an asset account.
		indicates an increase in the amount owed to creditors.
		is an error.
		indicates a decrease in the amount owed to creditors.

3 points

Question 15

In recording business transactions, evidence that an accountingtransaction has taken place is obtained from

		business documents.
		the Internal Revenue Service.
		the public relations department.
		the SEC.

3 points

Question 16

On June 1, Leno Inc. buys a copier machine for her business andfinances this purchase with cash and a note. When journalizing thistransaction, the company's accountant will

		make a simple entry.
		use two journal entries.
		make a compound entry.
		list the credit entries first, which is proper form for thistype of transaction.

3 points

Question 17

A three column form of account is so named because it hascolumns for

		debit, credit, and balance.
		debit, credit, and date.
		debit, credit, and account name.
		debit, credit, and reference.

3 points

Question 18

The first step in designing a computerized accounting system isthe creation of the

		general ledger.
		general journal.
		trial balance.
		chart of accounts.

3 points

Question 19

Chik Chik Company showed the following balances at the end ofits first year:

Cash	$ 6,000
Prepaid insurance	$ 9,400
Accounts receivable	$ 7,000
Accounts payable	$ 5,600
Notes payable	$ 8,400
Common stock	$ 2,800
Dividends	$ 1,400
Revenues	$ 44,000
Expenses	$ 35,000

What did Chik Chik Company show as total credits on its trialbalance?

		$51,400
		$60,800
		$62,200
		$70,200

3 points

Question 20

Which of the following time periods would notbe referred to as an interim period?

		Monthly
		Quarterly
		Semi-annually
		Annually

ACCT 2013 Lecture Notes - Lecture 4: Deferred Income, Retained Earnings, Accounts Payable

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