ACC301-sol-ch02

ACC301-sol-ch02 - PRACTICE EXERCISES PRACTICE 2- 1 Cash...

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Unformatted text preview: PRACTICE EXERCISES PRACTICE 2- 1 Cash 3,000 Accounts Receivable 9,000 Sales 12,000 Cost of Goods Sold 7,500 Inventory 7,500 PRACTICE 2- 2 Equipment 100,000 Cash 10,000 Short-Term Notes Payable 20,000 Long-Term Notes Payable 70,000 PRACTICE 2- 3 Cash 40,000 Equipment 75,000 Gain on Sale of Land 65,000 Land 50,000 PRACTICE 2- 4 Dividends (or Retained Earnings) 12,000 Cash 12,000 PRACTICE 2- 5 Wages Expense 30,000 Land 30,000 PRACTICE 2- 6 Cash Beginning balance 10,000 a. 2,775 1,500 b. d. 3,450 6,200 c. Ending balance 8,525 PRACTICE 2- 7 Accounts Payable 8,000 Beginning Balance b. 6,500 2,700 a. c. 200 2,550 d. 6,550 Ending Balance PRACTICE 2- 8 Debit Credit Cash $ 400 Inventory 4,000 Accounts Payable $ 1,100 Paid-In Capital 2,000 Retained Earnings (beginning) 1,000 Sales 10,000 Cost of Goods Sold 9,000 Dividends 700 ______ Total $14,100 $14,100 PRACTICE 2- 9 Debit Credit Cash $ 800 Prepaid Rent Expense 3,000 Unearned Service Revenue $ 4,700 Paid-In Capital 2,000 Retained Earnings (beginning) 1,500 Service Revenue 20,000 Salary Expense 18,000 Rent Expense 6,400 ______ Total $28,200 $28,200 PRACTICE 2- 10 From Practice 2- 8: Sales $10,000 Cost of Goods Sold 9,000 Net Income $ 1,000 From Practice 2- 9: Service Revenue $20,000 Salary Expense $18,000 Rent Expense 6,400 24,400 Net Loss $ (4,400 ) PRACTICE 2- 11 From Practice 2- 8: Assets Cash $ 400 Inventory 4,000 Total Assets $4,400 Liabilities Accounts Payable $1,100 Stockholders’ Equity Paid-In Capital $2,000 Retained Earnings (ending) 1,300 Total Liabilities and Stockholders’ Equity $4,400 Computation of ending Retained Earnings: $1,000 + ($10,000 – $9,000) – $700 = $1,300 From Practice 2- 9: Assets Cash $ 800 Prepaid Rent Expense 3,000 Total Assets $3,800 Liabilities Unearned Service Revenue $ 4,700 Stockholders’ Equity Paid-In Capital $ 2,000 Retained Earnings (ending) (2,900 ) Total Liabilities and Stockholders’ Equity $ 3,800 Computation of ending Retained Earnings: $1,500 + ($20,000 – $18,000 – $6,400) = $(2,900) PRACTICE 2- 12 Depreciation Expense 5,500 Accumulated Depreciation 5,500 PRACTICE 2- 13 Bad Debt Expense 1,200 Allowance for Bad Debts 1,200 PRACTICE 2- 14 Interest Expense 693 Interest Payable 693 $8,000 × 0.13 × 8/12 = $693 PRACTICE 2- 15 Rent Expense 1,500 Prepaid Rent 1,500 $3,600/12 = $300 per month; amount used = $300 × 5 months = $1,500 PRACTICE 2- 16 Unearned Service Revenue 4,400 Service Revenue 4,400 $4,800/12 = $400 per month; amount earned = $400 × 11 months = $4,400 PRACTICE 2- 17 Sales 10,000 Retained Earnings 10,000 Retained Earnings 9,000 Cost of Goods Sold 9,000 Retained Earnings 700 Dividends 700 Balance sheet accounts are not closed. PRACTICE 2- 18 Service Revenue 20,000 Retained Earnings 20,000 Retained Earnings 24,400 Salary Expense 18,000 Rent Expense 6,400 Balance sheet accounts are not closed. EXERCISES 2–19. 1. and 2....
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This note was uploaded on 06/11/2009 for the course ACC 301 taught by Professor Pendarvis during the Spring '09 term at St. Leo.

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ACC301-sol-ch02 - PRACTICE EXERCISES PRACTICE 2- 1 Cash...

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