HOMEWORK

EXERCISE

2-6.
a.

Account payable

Dr Cr
30/9 $152,000
Amount was paid in Oct $X
Total purchased in Oct $281,000

31/10 $132,500
(152,000+281,000)- X = 132,500 => X= 300500($)
b.

Account receivable

D
Cr
30/9 $102,500
Amount of sales on account in Oct $X
During Oct $102,890

31/10 $89,000
(102,500+X) -102,890= 89,000 => X= 89,390($)
c.

Cash
Dr Cr
30/9 X cash disbursements $103,150
In Oct $102,500
31/10 $18,600

(X+102,500)- 103,150= 18,600 => X= 19,250($)

2-11.

1. Dr. AP $12,000
Cr. Cash $12,000
2. Dr Salary expense $1,233
 Cr Cash $1,233
3. Dr Equipment $39,200
Cr Cash $39,200
4. Dr Unities expense $870
Cr Cash $870
5. Dr Withdrew $4,500
Cr Cash $4,500

Expenses
Dr Cr
Salary expense $1,233
Dr Unities expense $870
Total $2,103

Problem:

2-2A
Journal Entry
June Transactions Particula Debit Credit
r
a. Dr Cash 101 $100,000
Dr Office Equipment 163 $5,000
Dr Draft Equipment 164 $60,000
Cr Capital 301 $165,000
b. Dr Land 172 $49,000
Cr Cash 101 $6,300
Cr Note payable 250 $42,700
c. Dr Building 170 $55,000
Cr Cash 101 $55,000
d. Dr Prepaid insurance 108 $3,000
Cr Cash 101 $3,000
e. Dr Cash 101 $6,200
Cr Service revenue 402 $6,200
f. Dr Draft equipment 164 $20,000
Cr Cash 101 $9,500
Cr Note payable 250 $10,500
g. Dr Account receivable 106 $14,000
Cr Service revenue 402 $14,000
h. Dr Office equipment 163 $1,150
Cr Account payable 201 $1,150
i. Dr Account receivable 106 $22,000
Cr Service revenue 402 $22,000
 j. Dr Equipment Rental 602 $1,333
Expense
Cr Account payable 201 $1,333
k. Dr Cash 101 $7,000
Cr Account Receivable 106 $7,000
l. Dr Wages expense 601 $1,200
Cr Cash 101 $1,200
m. Dr Account payable 201 $1,150
Cr Cash 101 $1,150
n. Dr Repair expense 604 $925
Cr Cash 101 $925
o. Dr Withdrawals 302 $9,480
Cr Cash 101 $9,480
p. Dr Wage expenses 601 $1,200
Cr Cash 101 $1,200
q. Dr Advertising Expense 603 $2,500
Cr Cash 101 $2,500
T account
Cash
Dr Cr
$100,000 $6,300
$6,200 $55,000
$7,000 $3,000
$9,500
$1,200
$1,150
$925
$9,480
$1,200
$2,500
$22,945

Equipment
Dr Cr
$5,000
$60,000
$20,000
$1,150
$86,150

Land
Dr Cr
$49,000
$49,000

Building
Dr Cr
$55,000
$55,000

Prepaid insurance
Dr Cr
$3,000
$3,000

Account receivable
Dr Cr
$14,000 $7,000
$22,000
$29,000

Account payable
Dr Cr
$1,150 $1,150
$1,333
$1,333

Note payable
Dr Cr
$42,700
$10,500
$53,200

Capital
Dr Cr
$165,000
$165,000

Withdrew
Dr Cr
$9,480
$9,480
 Revenue
Dr Cr
$6,200
$14,000
$22,000
$42,200

Expense
Dr Cr
$1,333
$1,200
$925
$1,200
$2,500
$7,158

Trial balance
Dr Cr
Cash $22,945
Equipment $86,150
Land $49,000
Building $55,000
Prepaid insurance $3,000
Account receivable $29,000
Account payable $1,333
Note payable $53,200
Capital $165,000
Withdrew $9,480
Revenue $42,200
Expense $7,158
$261,733 $261,733

2-5A
1.
Nettle Distribution
Trial balance
December 31, 2014
Asset Liabilities
Cash $64,300 Account payable $3,500
Account receivable $26,240 Note payable $0
Office supplies 3,160 Total Liabilities= $3,500
 Office equipment 44,000 Total Equity= total assets- total
Trucks 148,000 liabilities= 285,700- 3,500=
Building $0 282,200($)
Land $0
Total Assets= $285,700

Nettle Distribution
Trial balance
December 31, 2015
Asset Liabilities
Cash $15,640 Account payable $ 33,500
Account receivable$19,390 Note payable $40,000
Office supplies $1,960 Total Liabilities= $73,500
Office equipment $44,000 Total Equity= total assets- total
Trucks $157,000 liabilities= 377,990- 73,500= 304,490($)
Building $80,000
Land $60,000
Total Assets= $377,990

2.
Statement of changes in Equity
For month ended December 31, 2015
Mr. Nettle, Capital, late in Dec $ 0
2015
Investment by owner $35,000
Net income X
$35,000+X
Withdrawals by owner ($3,000)
Increase in equity during year $22,290
(35,000+ X) – 3,000= 22,290 => X=
Computation of 2015 equity increase:
Equity on December 31, 2014 $282,200
Equity on December 31, 2015 $304,490
Equity increased during 2015 $22,290

3. Debt ratio= (Total liabilities/ Total assets) *100% = ($73,500/ $377,990)

*100%=19,4%

2-1B
a.
September Transactions Particular Debit Credit
Sep 1 Dr Cash 101 $38,000
 Dr Office Equipment 163 $15,000
Cr H. Humble Capital 301 $53,000
Sep 2 Dr Prepaid rent 131 $9,000
Cr Cash 101 $9,000
Sep 4 Dr Office equipment 163 $8,000

Cr Office supplies 124 $2,400

Cr Account payable 201 $10,400

Sep 8 Dr Cash 101 $3,280
Cr Services revenue 401 $3,280
Sep 12 Dr Account receivable 106 $15,400
Cr Services revenue 401 $15,400
Sep 13 Dr Account payable 201 $10,400
Cr Cash 101 $10,400
Sep 19 Dr Prepaid insurance 128 $1,900
Cr Cash 101 $1,900
Sep 22 Dr Cash 101 $7,700
Cr Account receivable 106 $7,700
Sep 24 Dr Account receivable 106 $2,100
Cr Service revenue 401 $2,100
Sep 28 Dr H. Humble, 302 $5,300
Withdrawals
Cr Cash 101 $5,300
Sep 29 Dr Office supplies 124 $550
Cr Account payable 201 $550
Sep 30 Dr Utilities Expense 690 $860
Cr Cash 101 $860

b.
Cash
Date Explanation Particular Debit Credit Balance
Sep 1 G1 $38,000 $38,000
Sep 2 G1 $9,000 $29,000
Sep 8 G1 $3,280 $32,280
Sep 13 G1 $10,400 $21,880
Sep 19 G1 $1,900 $19,980
Sep 22 G1 $7,700 $27,680
Sep 28 G1 $5,300 $22,380
Sep 30 G1 $860 $21,520

Account receivable
Date Explanatio Particular Debit Credit Balance
n
Sep 12 G1 $15,400 $15,400
Sep 22 G1 $7,700 $7,700
Sep 24 G1 $2,100 $9,800

Office supplies
Date Explanatio Particular Debit Credit Balance
n
Sep 4 G1 $2,400 $2,400
Sep 29 G1 $550 $2,950

Office equipment
Date Explanatio Particular Debit Credit Balance
n
Sep 1 G1 $15,000 $15,000
Sep 4 G1 $8,000 $23,000

Prepaid insurance
Date Explanatio Particular Debit Credit Balance
n
Sep 19 G1 $1,900 $1,900

Prepaid rent
Date Explanatio Particular Debit Credit Balance
n
Sep 2 G1 $9,000 $9,000

Account payable
Date Explanation Particular Debit Credit Balance
Sep 4 G1 $10,400 $10,400
Sep 13 G1 $10,400 $0
Sep 19 G1 $550 $550

Capital
Date Explanatio Particular Debit Credit Balance
n
Sep 1 $53,000 $53,000
 Withdrawals
Date Explanatio Particular Debit Credit Balance
n
Sep 28 G1 $5,300 $5,300

Service revenue
Date Explanatio Particular Debit Credit Balance
n
Sep 8 $3,280 $3,280
Sep 12 $15,400 $18,680
Sep 24 $2,100 $20,780

Utilities Expenses
Date Explanatio Particular Debit Credit Balance
n
Sep 30 G1 $860 $860

c.
Trial balance
Dr Cr
Cash $21,520
Account receivable $9,800
Office supplies $2,950
Prepaid insurance $1,900
Prepaid Rent $9,000
Office equipment $23,000
Account payable $550
H. Humble, Capital $53,000
H. Humble, Withdrawals $5,300
Services Revenue $20,780
Utilities Expense $860
Total $74,330 $74,330