ACCT 2010 May 14

ACCT 2010 May 14 - CHAPTER III REVIEW Cash D Asset...

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Unformatted text preview: 5/14/08 CHAPTER III REVIEW Cash : D- Asset Wages & Salaries : D- Expense Membership Fees Earned : C- Revenue Notes Payable : C- Liability Accounts Receivable : D- Asset Equipment : D- Asset Accounts Payable : C- Liability Deferred Revenue : C- Liability Revenue : C- Revenue Cost of Good Sold : D- Expense 1) The company received $4,000 from each of 2 owners of the business in exchange for shares of stock. A(increase -cash) = L + OE (increase – shares of stock) CASH SHARES of STOCK + -- + $4,000 $4,000 Dr. Cash $4,000 Cr. Shares of Stock $4,000 to record receipt of cash from owners 2) Purchased 10 new desks values at $4,000 for use in the business office. The company paid cash of $4,000. A(decrease -cash) (increase in assets)= L + OE CASH EQUIPMENT + - + - $4,000 $4,000 Dr. Equipment $4,000 Cr. Cash $4,000 office supplies purchased 3) Provided services of $1,200 on account A (increase Accounts receivable) = L + OE (increase Revenue) Accounts Receivable Revenue 1 5/14/08 + -- + $1,200 $1,200 Dr. Accounts Receivable $1,200 Cr. Revenue $1,200 to record $1,200 for provided services on account 4) Collected the $1,200 cash from customers A (decrease - accounts receivable) (increase - cash)= L + OE Cash Accounts Receivable + - + - $1,200 $1,200 Dr. Cash $1,200 Cr. Accounts Receivable $1,200 to record collection of $1,200 2 5/14/08 CHAPTER 4 EXERCISES We discussed adjusting entries. There are four types of adjusting entries: 1. Deferred Revenue (magazine subscription) 2. Deferred Expense (rent) 3. Accrued Liability (receive rent at the end of the month) 4. Accrued Asset (wages & salaries) Exercise 4-4 (p.184) Somerville Corp. purchases office supplies once a month and prepares monthly financial statements. The asset account Office Supplies on Hand has a balance of $1,450 on May 1. Purchases of supplies during May account to $1,100. Supplies on hand at May 31 amount to $920. Prepare the necessary adjusting entry on Somerville's books on May 31. What would be the effect on net income for May if this entry is not recorded? May 1: A (increase – Assets) (decrease -cash) = L + OE CASH OFFICE SUPPLIES + - + - $1,450 $1,450 $1,100 $1,100 $920 May 31 st Dr. Office Supplies $1,100 Cr. Cash $1,100 to record cash paid for office supplies 3 $1,630 5/14/08 May 31 st ($1,450 + $1,100) - $920 = $1630 (uses expenses) OFFICE SUPPLIES USE EXPENSES...
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This note was uploaded on 06/05/2008 for the course ACCT ACCT 2010 taught by Professor Olvera during the Spring '08 term at North Texas.

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ACCT 2010 May 14 - CHAPTER III REVIEW Cash D Asset...

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