You are on page 1of 24

Group Number 4

Cuebillas,
Del Rosario,
Fernandez,
Jimenez,
Lagrada,
Pajarillo,
Paredes,

Rina Cianen
Elisha Anne
Rizza Angelie
Denise
Ralph Angelo
Patricia
Gwyneth

Accounting 1
TTh 10:00 - 11:30AM
Ms. Noreen Gonzaga
Professor

Problem 2.2

Six transactions of HORIZON MOVING COMPANY are summarized below in equation form, with each of the six transactions identified by a letter. For
transactions (a) through (f) you are to write a separate statement explaining the nature of the transaction. For example, the explanation of transactio
follows: Purchased equipment for cash at a cost of $3,200

Horizon Moving Company


Thursday, August 20, 2015
Accounts
Receivable

Cash
+
Balances

(a)
Balances

$
$
$

45,000.00

110,000.00

=
$

22,800.00
23,700.00
20,200.00

39,000.00

42,000.00

45,000.00

110,000.00

39,200.00

42,000.00

45,000.00

110,000.00

39,200.00

42,000.00

-900.00
$

38,100.00

13500.00
$

38,100.00

45,000.00

110,000.00

52,700.00

10000.00
$

5,700.00

52,000.00
-14500.00

38,100.00

45,000.00

110,000.00

52,700.00

37,500.00

38,100.00

45,000.00

110,000.00

52,700.00

37,500.00

15000.00
$

20,700.00

(f)
Balances

36,000.00

-14500.00

( e)
Balances

-3500.00

(d)
Balances

39,000.00

Accounts
Payable

Equipment

3200.00

900.00

(c)
Balances

Building

-3200.00

(b)
Balances

26,000.00

Land

2100.00
$

20,700.00

38,100.00

45,000.00

110,000.00

54,800.00

2100.00
$

39,600.00

Problem 2.2
ANSWERS
a.

Purchased equipment for cash at a cost of $3,200

b.

Received $900 from the remaining balance of Mrs. Gonzaga

c.

Purchased an equipment from XYZ Company which costs $13,500. The company agreed to pay a downpayment of 3,500 and th

d.

Payed the existing $14,500 balance to Aldub Inc.

e.

P. Youngblood decided to invest his $15,000 cash in HMC

f.

Purchased equipment for $2,100 on account.

form, with each of the six transactions identified by a letter. For each of the
re of the transaction. For example, the explanation of transaction a could be as
r cash at a cost of $3,200

g Company

st 20, 2015

P. Youngblood,
Capital
$

214,000.00

214,000.00

214,000.00

214,000.00

214,000.00
15000.00

229,000.00

229,000.00

e company agreed to pay a downpayment of 3,500 and the rest on account.

Problem 3.5
Campbell Crop Dusting

1-Jun-01

Cash
Pat Campbell, Capital
Deposited 60,000 cash in bank for the business

2-Jun

Aircraft
Accounts Payable
Purchased an aircraft for 180,000 on account

4-Jun

Rent Expense
Cash
Paid 2,500 for rent office and hanger space for the month

15-Jun

Accounts Receivable
Crop-Dusting Revenue
Billed customers for crop-dusting services on the first half of June

Salaries Expense
Cash
Paid employees' salaries

18-Jun

Maintenance Expense
Cash
Paid cash for maintenance and repair services

25-Jun

Cash
Accounts Receivable
Received cash from the customers on the first half of June

30-Jun

Accounts Receivable
Crop-Dusting Revenue
Billed customers for crop-dusting services on the second half of June

Salaries Expense
Cash
Paid employees' salaries

Fuel Expense
Notes Payable
Received a bill from Henry's Feed & Fuel. Due on July 10

Pat Campbell, Drawing


Cash
Withrew cash from the company

Ledger
Assets
1-Jun
4-Jun
15-Jun
18-Jun
25-Jun
30-Jun
30-Jun
Bal

2-Jun

Bal

Aircraft
180,000.00

Liabilities
2-Jun

Bal

Cash
60,000.00
$
$
$
4,910.00
$
$
46,640.00

2,500.00
5,880.00
1,890.00

Accounts Receivable
8,320.00

15-Jun $
25-Jun
30-Jun $

16,450.00

19,860.00

6,000.00
2,000.00
Bal

180,000.00

Accounts Payable
$
180,000.00

Notes Payable
30-Jun

180,000.00
Bal

Owner's Equity

Pat Campbell, Capital


$
60,000.00

1-Jun
Bal

Revenues

Bal

Expenses

Bal

Bal

$
$

15-Jun
30-Jun

Bal

2,000.00

Crop-Dusting Revenue
$
8,320.00
$
16,450.00

15-Jun
30-Jun

4-Jun

60,000.00

Pat Campbell, Drawing


2,000.00

$
$
$

24,770.00

Rent Expense
2,500.00
2,500.00

18-Jun $
Bal

Salaries Expense
5,880.00
6,000.00
11,880.00

30-Jun $

Bal

Maintenance Expense
1,890.00
1,890.00

Fuel Expense
2,510.00

2,510.00

Campbell Crop Dusting


30-Jun-01

Cash
Accounts Receivable
Aircraft
Accounts Payable
Notes Payable
Pat Campbell, Capital
Pat Campbell, Drawings
Crop-Dusting Revenue
Rent Expense
Salaries Expense
Maintenance Expense
Fuel Expense

$
$
$

46,640.00
19,860.00
180,000.00
$
$
$

180,000.00
2,510.00
60,000.00

$
$
2,500.00
$
11,880.00
$
1,890.00
$
2,510.00
$ 267,280.00 $

24,770.00

2,000.00

267,280.00

Campbell Crop Dusting


30-Jun-01

ASSETS
Cash
Accounts Receivable
Aircraft
Total Assets
LIABILITIES AND OWNER'S EQUITY
Liabilities
Accounts Payable
Notes Payable
Total Liabilities

$
$

180,000.00
2,510.00

Owner's Equity
Pat Campbell, Capital
Pat Campbell, Drawings
Crop-Dusting Revenue
Rent Expense
Salaries Expense
Maintenance Expense
Fuel Expense

$
$

60,000.00
(2,000.00)

$
$
$
$
$

24,770.00
(2,500.00)
(11,880.00)
(1,890.00)
(2,510.00)

Net Profit
Total Liabilities and Owner's Equity

Yes. The account balances shall be carried out to the next month since it is only the start of the business and the fiscal year will end o

DR
$

CR
60,000.00
$

60,000.00

180,000.00

2,500.00

8,320.00

5,880.00

1,890.00

180,000.00

2,500.00

8,320.00

5,880.00

1,890.00

4,910.00
$

4,910.00

16,450.00

6,000.00

2,510.00

2,000.00

16,450.00

6,000.00

2,510.00

2,000.00

Ledger
Accounts Receivable
$

4,910.00

Notes Payable
$
2,510.00

2,510.00

Pat Campbell, Drawing

Maintenance Expense

Fuel Expense

mpbell Crop Dusting


30-Jun-01

mpbell Crop Dusting


30-Jun-01

ASSETS
$
$
$
$

46,640.00
19,860.00
180,000.00
246,500.00

240,510.00

TIES AND OWNER'S EQUITY

182,510.00

58,000.00

$
$

5,990.00
246,500.00

it is only the start of the business and the fiscal year will end on May 31, 2002

Problem 3.4
Garwood Marine
2 a. Accounts Receivable is increased. Increase in assets are recorded by debits. Debit Account Receivable, $5,620.00
b. Service has been rendered to a client. Revenues are recorded by credits. Credit Repair Service Revenue, $5,620.00
3 a. The asset cash was increased. Increase in assets are recorded by Debits. Debit Cash, $2,830.00
b. Service has been rendered to a client. Revenues are recorded by Credits. Credit Repair Service Revenue, $2,830.00
4 a. Advertisement is an operating Expense. Expenses are recorded by debits. Debit Advertising Expense, $165.00
b. Liabilities are increased. Increase in Liabilities are recorded in Credits. Credit Accounts Payable, $ 165.00

5 a. The asset cash was increased. Increase in assets are recorded by Debits. Debit Cash, $5,620.00
b. The asset Accounts Receivable was decreased. Decrease in assets are recorded by Credits. Credit Accounts Receivable, $5

6 a. The asset cash was increased. Increase in assets are recorded by Debits. Debit Cash, $400.00
b. The asset Accounts receivable was increased. Increase in assets are recorded by Debits. Debit Accounts Receivable, $149
c. Service has been rendered to a client. Increase in revenue are recorded by Credits. Credit Repair Service Revenue, $1,890
7 a. Liabilities were decreased. Decreased in liabilities are recorded by Debits. Debit Accounts Payable, $165.00
b. The asset cash was decreased. Decrease in cash are recorded by Credits. Credit Cash, $165.00
8 a. Withdrawal of cash decreases owner's equity. Withdrawals are recorded by Debits. Debit Garwood, Withrawal $7,600.00
b. The asset Cash was decreased. Decrease in cash are recorded by Credits. Credit Cash, $7,600.00

are recorded by debits. Debit Account Receivable, $5,620.00


recorded by credits. Credit Repair Service Revenue, $5,620.00

recorded by Credits. Credit Repair Service Revenue, $2,830.00

ease in assets are recorded by Credits. Credit Accounts Receivable, $5,620.00

se in assets are recorded by Debits. Debit Accounts Receivable, $1490.00


venue are recorded by Credits. Credit Repair Service Revenue, $1,890.00

awals are recorded by Debits. Debit Garwood, Withrawal $7,600.00

Problem 3.5
The Outlaws
Adjusting Entries

July Entries
Prepaid Rent
Cash
Paid 1500000 to Dodge City Stadium for advance rent use good for 5 months

Cash
Unearned Ticket Revenue
Collected 2560000 from sales of season tickets
August Adjusting Entries
Rent Expense
Prepaid Rent
1 500 000 x 1/5
Unearned Ticket Revenue
Ticket Revenue
2 560 000 x 1 / 8

DR
$

CR

1,500,000.00
$

1,500,000.00

2,560,000.00

300,000.00

320,000.00

2,560,000.00

300,000.00

320,000.00

Exercise 4.4
Adjusting Entries
Dale & Clark Law Office
a.
31-Dec-14

DR
$

Salaries Expense
Salaries Payable
Accrued salaries of staff attorneys which worth 17,800

CR
17,800.00
$

17,800.00

Accounts Receivable
$
18,900.00
Legal Fees Earned
$ 18,900.00
Unissued bill of J.R. Stone during his trial for 9 days costing 2,100 per day.
b.
1-Jan-15

Salaries Expense
Salaries Payable
Cash
Payed Salaries of staff attorneys

$
$

17,500.00
17,500.00
$

35,000.00

$
$

18,900.00
42,000.00

How much is the amount considered salaries expense of January?


Answer:
$
17,500.00
c.

Cash

60,900.00

Accounts Receivable
Legal Fees Earned
Received 60900 from JR Stone for the services rendered
What portion of this amount constituted revenue earned in January?
Answer:
$
42,000.00

You might also like