Chapter 3 - CHAPTER 3 CHAPTER 3 BRIEF EXERCISE 3-6 1/10/09:...

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CHAPTER 3 CHAPTER 3 BRIEF EXERCISE 3-6 1/10/09: Cash 150,000 Capital Stock 150,000 Issued capital stock (3 owners × $50,000 each). Balance Sheet Income Statement Assets = Liabilities + Stockholders’ Equity Revenues Expenses = Net Income Cash 150,000 Capital Stock 150,000 1/12/09: Cash 100,000 Notes Payable 100,000 Borrowed $100,000 at local bank. Balance Sheet Income Statement Assets = Liabilities + Stockholders’ Equity Revenues Expenses = Net Income Cash 100,000 Notes Payable 100,000 1/15/09: Land 200,000 Cash 200,000 Acquired land for cash. Balance Sheet Income Statement Assets = Liabilities + Stockholders’ Equity Revenues Expenses = Net Income 1
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CHAPTER 3 Land 200,000 Cash (200,000) EXERCISE 3-8 The debits and credits are reversed in this entry. The correct entry is: June 5 Cash 12,450 Accounts Receivable 10,000 Sales Revenue 2,450 To record cash received on June 5: $10,000 on account and $2,450 in cash sales. Balance Sheet Income Statement Assets = Liabilities + Stockholders’ Equity Revenues Expenses = Net Income Cash 12,450 Accounts Receivable (10,000) 2,450 Sales Revenue 2,450 2,450 From the bank’s perspective, a customer’s account is a liability because the bank owes that amount to the customer. Thus, when the liability account is increased, it is increased with a credit. At the same time, the cash received from the customer is an increase in the bank’s cash and, as an asset, Cash is increased with a debit. EXERCISE 3-10 Cash Accounts Receivable Office Supplies (1) 19,500 130 (2) (5) 200 200 (7) (2) 130 (4) 125 15,000 (6) 2
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(7) 200 19,825 15,130 Bal. 0 Bal. 4,695 Van Accounts Payable Capital Stock (3) 15,000 (6) 15,000 15,000 (3) 19,500 (1) 0 Bal. Delivery Services 125 (4) 200 (5) 325 Bal. EXERCISE 3-13 Beginning Balance + Services on Account – Collections = Ending Balance Beginning Balance + $7,500 – $6,000 = $2,500 Beginning Balance = $1,000 Accounts Receivable Beg. Bal. X* 7,500 6,000 End. Bal. 2,500 *X = $1,000: (X + $7,500 – $6,000 = $2,500) EXERCISE 3-16 1. Fuel Expense 10,000 Cash 10,000 Paid for Fuel Expense. 3
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This note was uploaded on 04/14/2011 for the course ACCT 2101 taught by Professor Christianwurst during the Spring '08 term at Temple.

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Chapter 3 - CHAPTER 3 CHAPTER 3 BRIEF EXERCISE 3-6 1/10/09:...

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