Answers to Practice Problems chap004 (2)

Answers to Practice Problems chap004 (2) - Chapter 4 The...

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Unformatted text preview: Chapter 4 The Bookkeeping Process and Transaction Analysis E4.1. ASSETS = LIABILITIES + OWNERS' EQUITY Accounts Merchandise Notes Accounts Paid in Retained Cash + Receivable + Inventory + Equipment = Payable + Payable + Capital + Earnings + Rev - Exp a. +8,000 +8,000 b. +5,000 +5,000 c.-1,750 +1,750 d.-1,400 -1,400 e.-9,000 +15,000 +6,000 f. +6,500 -4,000 +6,500 -4,000 g. +100 -100 h.-1,200 +4,200 +3,000 i. +3,900 +9,600 -9,000 +13,500 -9,000 j. +1,850* -1,850 k. +3,160 -3,160 l.-4,720 -4,720 ______ _____ _____ _____ _____ _____ _____ _____ ______ _____ 8,490 + 6,440 + 6,200 + 1,750 = 5,000 + 6,230 + 8,000 + + 20,000- 16,350 Month-end totals: Assets $22,880 = Liabilities $11,230 + Owners' equity $11,650 Net income for the month: Revenues $20,000 - Expenses $16,350 = Net income $3,650 * Ordinarily, the Wages Payable account would be increased for employee wage expense that has been incurred but not yet paid. Optional Continuation: BLUE CO. STORES, INC. Income Statement Sales.. $20,000 Cost of goods sold. (13,000) Gross profit $ 7,000 Rent expense. (1,400) Wages expense.. (1,850) Advertising expense..Advertising expense....
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Answers to Practice Problems chap004 (2) - Chapter 4 The...

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