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Ch 1 -Exercises (23rd)

# Ch 1 -Exercises (23rd) - CHAPTER 1 INTRODUCTION TO...

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CHAPTER 1 INTRODUCTION TO ACCOUNTING AND BUSINESS PRACTICE EXERCISES PE 1–1A \$81,000. Under the cost concept, the land should be recorded at the cost to Snap Repair Service. PE 1–1B \$44,000. Under the cost concept, the land should be recorded at the cost to Terri- er Repair Service. PE 1–2A a. A = L + OE b. A = L + OE \$475,000 = \$115,000 + OE +\$90,000 = \$28,000 + OE OE = \$360,000 OE = +\$62,000 OE on December 31, 2010 = \$422,000 = \$360,000 + \$62,000 PE 1–2B a. A = L + OE b. A = L + OE \$750,000 = \$293,000 + OE +\$75,000 = –\$30,000 + OE OE = \$457,000 OE = +\$105,000 OE on December 31, 2010 = \$562,000 = \$457,000 + \$105,000 PE 1–3A (2) Expense (Advertising Expense) increases by \$900; Asset (Cash) decreases by \$900. (3) Asset (Supplies) increases by \$600; Liability (Accounts Payable) increases by \$600. (4) Asset (Accounts Receivable) increases by \$9,000; Revenue (Delivery Service Fees) increases by \$9,000. 1

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(5) Asset (Cash) increases by \$5,500; Asset (Accounts Receivable) decreases by \$5,500. PE 1–3B (2) Asset (Cash) decreases by \$1,500; Liability (Accounts Payable) decreases by \$1,500. (3) Asset (Accounts Receivable) increases by \$11,500; Revenue (Delivery Ser- vice Fees) increases by \$11,500. (4) Asset (Cash) increases by \$2,700; Asset (Accounts Receivable) decreases by \$2,700. (5) Asset (Cash) decreases by \$2,000; Drawing (Betty Pasha, Drawing) increases by \$2,000. PE 1–4A IMPECCABLE TRAVEL SERVICE Income Statement For the Year Ended November 30, 2010 Fees earned ....................................................................... \$754,000 Expenses: Wages expense ........................................................... \$450,000 Office expense ............................................................. 313,300 Miscellaneous expense .............................................. 12,700 Total expenses ........................................................ 776,000 Net loss .............................................................................. \$ 22,000 PE 1–4B EXPRESS TRAVEL SERVICE Income Statement For the Year Ended June 30, 2010 Fees earned ....................................................................... \$475,000 Expenses: Wages expense ........................................................... \$239,000 Office expense ............................................................. 111,000 Miscellaneous expense .............................................. 8,000 Total expenses ........................................................ 358,000 Net income ......................................................................... \$ 117,000 2
PE 1–5A IMPECCABLE TRAVEL SERVICE Statement of Owner’s Equity For the Year Ended November 30, 2010 Charly Maves, capital, December 1, 2009 ...................... \$380,000 Additional investment by owner during year ................ \$ 36,000 Net loss for the year ......................................................... (22,000) Less withdrawals .............................................................. (20,000 )

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