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Chapter3 review

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Department
Administration
Course
ADM1340
Professor
Breid Mc Ilkenny
Semester
Fall

Description
Posted with permission from John Wiley & Sons Canada, Ltd Kimmel, Weygandt, Kieso, Trenholm, Irvine Financial Accounting, Fifth Canadian Edition 2012 CHAPTER 3 SOLUTIONS TO EXERCISES EXERCISE 3-2 Shareholders’ Equity Retained Earnings Common + – – Transaction Assets Liabilities Shares Revenues Expenses Dividends 1. +$8,000 +$8,000 NE NE NE NE 2. –1,600 NE NE NE –$1,600 NE 3. +3,800 NE NE +$3,800 NE NE 4. –500 NE NE NE –500 NE 5. +20,000 NE +$20,000 NE NE NE 6. –8,000 –8,000 NE NE NE NE 7. +/–500* NE NE NE NE NE 8. +/–3,500** NE NE NE NE NE 9. –500 NE NE NE NE –$500 10. –400 NE NE NE –400 NE * No overall effect. In transaction 7 cash is decreased and prepaid insurance is increased. ** In transaction 8 cash is increased and accounts receivable is decreased. EXERCISE 3-11 (a) Aug. 1 Issued shares in exchange for cash Aug. 7 Provided services and was paid cash Aug. 11 Purchased equipment with a down payment of $1,000 and the balance on account Aug. 14 Performed services on account Aug. 16 Collected cash in advance of providing services Aug. 28 Received a collection on account Aug. 30 Paid salaries Aug. 31 Paid dividends Solutions Manual 3-1 Chapter 3 Copyright © 2012 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is strictly prohibited. Posted with permission from John Wiley & Sons Canada, Ltd Kimmel, Weygandt, Kieso, Trenholm, Irvine Financial Accounting, Fifth Canadian Edition 2012 EXERCISE 3-11 (Continued) (b) Cash Aug. 1 3,000 Aug. 11 1,000 7 1,800 30 2,000 16 900 31 500 28 700 Bal. 2,900 Accounts Receivable Aug. 14 1,450 Aug. 28 700 Bal. 750 Equipment Aug. 11 4,000 Bal. 4,000 Accounts Payable Aug. 11 3,000 Bal. 3,000 Unearned Revenue Aug. 16 900 Bal. 900 SoluCopyright © 2012 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is strictly prohibited. Posted with permission from John Wiley & Sons Canada, Ltd Kimmel, Weygandt, Kieso, Trenholm, Irvine Financial Accounting, Fifth Canadian Edition 2012 Common Shares Aug. 1 3,000 Bal. 3,000 Dividends Aug. 31 500 Bal. 500 Service Revenue Aug. 7 1,800 14 1,450 Bal. 3,250 Salaries Expense Aug. 30 2,000 Bal. 2,000 SolutCopyright © 2012 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is strictly prohibited. EXERCISE 3-11 (Continued) (b) KANG, INC. Trial Balance August 31, 2012 Debit Credit Cash $ 2,900 Accounts receivable 750 Equipment 4,000 Unearned revenue $ 900 Accounts payable 3,000 Common shares 3,000 Dividends 500 Service revenue 3,250 Salaries expense _ 2,000 0 0 000 Totals $10,150 $10,150 EXERCISE 3-12 (a) Oct. 1 Issued shares in exchange for cash Oct. 2 Purchased equipment on account Oct. 5 Purchased supplies for cash Oct. 6 Performed services on account Oct. 9 Provided services and was paid cash Oct. 12 Made a partial payment on account Oct. 15 Borrowed cash and signed a note payable Oct. 16 Paid dividends Oct. 20 Received a collection on account Oct. 20 Performed services on account Oct. 23 Issued shares in exchange for cash Oct. 28 Purchased advertising on account Oct. 30 Paid rent for the month of October Oct. 30 Paid salaries (b) HOLLY CORP. Trial Balance October 31, 2012 Debit Credit Cash $10,200 Accounts receivable 1,240 Supplies 400 Equipment 2,000 Accounts payable $ 900$ Notes payable 5,0000 Common shares 7,000 Dividends 300 Service revenue 2,390 Salaries expense 500 Rent expense 250 Advertising expense 400 __ ___ Totals $15,290 $15,290 SOLUTIONS TO PROBLEMS PROBLEM 3-3A (a) (b) (c) Normal Financial Account Balance Statement Classification Accounts payable Credit Statement of Current liabilities and accrued liabilities Financial Position Accounts receivable Debit Statement of Current assets Financial Position Accumulated Credit Statement of Non-current assets depreciation Financial Position (property, plant, and equipment) Building Debit Statement of Non-current assets Financial Position (property, plant, and equipment) Cash Debit Statement of Current assets Financial Position Common shares, Credit Statement of N/A beginning of year Changes in Equity Computer hardware Debit Statement of Non-current assets Financial Position (property, plant, and equipment) Cost of sales Debit Income Statement Expense Depreciation expense Debit Income Statement Expense Furniture and Debit Statement of Non-current assets equipment Financial Position (property, plant, and equipment) Income tax expense Debit Income Statement Expense Income tax payable Credit Statement of Current liabilities Financial Position Interest expense Debit Income Statement Expense Inventories Debit Statement of Current assets Financial Position Land Debit Statement of Non-current assets Financial Position (property, plant, and equipment) Prepaid expenses Debit Statement of Current assets Financial Position Retained earnings, Credit Statement of N/A beginning of year Changes in Equity Sales revenue Credit Income Statement Revenues Shares issued Credit Statement of N/A Changes in Equity Solutions Manual 3-7 Chapter 3 Copyright © 2012 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is strictly prohibited. PROBLEM 3-7A (a) and (c) Cash Mar. 1 Bal.15,000 Mar. 9 16,300 Mar. 2 10,000 Mar. 20 16,600 Mar. 12 17,000 Mar. 25 18,400 Mar. 13 12,000 Mar. 30 645 Mar. 19 950 Mar. 23 3,000 Mar. 27 4,200 Mar. 30 2,000 Bal. 17,795 Accounts Receivable Mar. 30 645 Bal. 645 Land Mar. 1 Bal. 85,000 Bal. 85,000 Buildings Mar. 1 Bal.77,000 Solutions Manual 3-8 Chapter 3 Copyright © 2012 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is strictly prohibited. Bal. 77,000 Equipment Mar. 1 Bal. 20,000 Bal. 20,000 Accounts Payable Mar. 1 Bal.12,000 Mar. 12 17,000 Mar. 2 17,000 Mar. 13 12,000 Bal. 0 Mortgage Payable Mar. 1 Bal. 118,000 Mar. 30 1,250 Bal. 116,750 Common Shares Mar. 1 Bal. 40,000 Bal. 40,000 PROBLEM 3-7A (Continued) (a) and (c) (Continued) Solutions Manual 3-9 Chapter 3 Copyright © 2012 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is strictly prohibited. Retained Earnings Mar. 1 Bal.27,000 Bal. 27,000 Admission Revenue Mar. 9 16,300 Mar. 20 16,600 Mar. 25 18,400 Bal. 51,300 Concession Revenue Mar. 30 1,290 Bal. 1,29
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