Chapter1HWanswers - PRACTICE EXERCISES PE 11A $37,000 Under...

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PRACTICE EXERCISES PE 1–1A $37,000. Under the cost concept, the land should be recorded at the cost to Johnson Repair Service. PE 1–1B $100,000. Under the cost concept, the land should be recorded at the cost to Duck Repair Service. PE 1–2A a. A = L + OE b. A = L + OE $617,000 = $382,000 + OE +$114,000 = –$29,000 + OE OE = $235,000 OE = +$143,000 OE on December 31, 2008 = $378,000 = $235,000 + $143,000 PE 1–2B a. A = L + OE b. A = L + OE $336,000 = $172,500 + OE +$75,000 = $15,000 + OE OE = $163,500 OE = +$60,000 OE on December 31, 2008 = $223,500 = $163,500 + $60,000 PE 1–3A (2) Asset (Cash) decreases by $815; Liability (Accounts Payable) decreases by $815. (3) Asset (Accounts Receivable) increases by $3,250; Revenue (Delivery Service Fees) increases by $3,250.
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(4) Asset (Cash) increases by $1,150; Asset (Accounts Receivable) decreases by $1,150. (5) Asset (Cash) decreases by $500; Drawing (Pamela Kolp, Drawing) increases by $500.
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PE 1–3B (2) Expense (Advertising Expense) increases by $674; Asset (Cash) decreases by $674. (3) Asset (Supplies) increases by $280; Liability (Accounts Payable) increases by $280. (4) Asset (Accounts Receivable) increases by $4,800; Revenue (Delivery Service Fees) increases by $4,800. (5) Asset (Cash) increases by $1,150; Asset (Accounts Receivable) decreases by $1,150. PE 1–4A HERAT TRAVEL SERVICE Income Statement For the Year Ended June 30, 2008 Fees earned ....................................................................... $378,200 Expenses: Wages expense ........................................................... $181,500 Office expense ............................................................. 91,350 Miscellaneous expense .............................................. 3,150 Total expenses ........................................................ 276,000 Net income ......................................................................... $ 102,200 PE 1–4B LEOTARD TRAVEL SERVICE Income Statement For the Year Ended February 28, 2008 Fees earned ....................................................................... $377,000 Expenses: Wages expense ........................................................... $225,000 Office expense ............................................................. 156,650
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Miscellaneous expense .............................................. 6,350 Total expenses ........................................................ 388,000 Net loss .............................................................................. $ 11,000
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PE 1–5A HERAT TRAVEL SERVICE Statement of Owner’s Equity For the Year Ended June 30, 2008 Lola Stahn, capital, July 1, 2007 ...................................... $ 75,000 Additional investment by owner during year ................ $ 20,000
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