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FAR Sample Problems 1

The document details the financial transactions of Homes Realty, Inc. for June, including various increases and decreases in accounts such as Cash, Accounts Receivable, and Expenses. It also includes a trial balance and selected transactions for March, along with T accounts for Bytes Consultant Services, Inc. for May, culminating in calculations for net income and capital as of May 31.

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32 views5 pages

FAR Sample Problems 1

The document details the financial transactions of Homes Realty, Inc. for June, including various increases and decreases in accounts such as Cash, Accounts Receivable, and Expenses. It also includes a trial balance and selected transactions for March, along with T accounts for Bytes Consultant Services, Inc. for May, culminating in calculations for net income and capital as of May 31.

Uploaded by

spyxanya26
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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(4) Increase in Note Payable Cr Cr

(5) Increase in Accounts Payable Cr Cr


(6) Decrease in Supplies Cr Dr
(7) Decrease in Salaries Expense Cr Dr
(8) Increase in Accounts Receivable Dr Dr
(9) Increase in Cash Dr Dr
(10) Decrease in Land Cr Dr

4. All nine transactions for Homes Realty, Inc. for June, the first month of operations, are recorded in the
following T accounts:

Exhibit 2-1.

Cash HR, Capital


(1) 20,000 | (3) 7,500 | (1) 20,000
(7) 6,900 | (5) 2,600 |
(9) 4,700 | (6) 5,500
| (8) 2,000

Accounts Receivable HR, Drawings


(4) 4,900 | (9) 4,700 (8) 2,000 |
| |

Supplies Fees Earned


(3) 7,500 | | (4) 4,900
| | (7) 6,900

Equipment Operating Expense


(2) 4,500 | (6) 5,500 |
| |

Accounts Payable
(5) 2,600 | (2) 4,500
|

Refer to Exhibit 2-1. Indicate the following for each debit and each credit:

(a) The type of account affected (asset, liability, Owner’s equity, drawings, revenue, or
expense).
(b) The effect on the account, using + for increase and - for decrease.

Present your answers in the following form:

Account Debited Accounted Credited


Transaction Type Effect Type Effect
1 Asset + Owner’s +
Equity
2 Asset + Liability +
3 Asset + Asset -
4 Asset + Revenue +
5 Liability - Asset -
6 Expenses + Asset -
7 Asset + Revenue +
8 Drawings + Asset -
9 Asset + Asset -

Refer to Exhibit 2-1. Prepare a trial balance, listing the accounts in their proper order.

Cash 14000
A/R 200
Supplies 7500
Equipment 4500
A/P 1900
HR, Capital 20000
HR, Drawings 2000
Fees Earned 11800
Operating Expenses 5500
33700 33700

5. Record the following selected transactions for March in a two-column journal, identifying each
entry by letter:

(a) Received P10,000 from Swinging Gates, the owner.


(b) Purchased equipment for P35,000, paying P10,000 in cash and giving a note
payable for the remainder.
(c) Paid P1,000 for rent for March.
(d) Purchased P8,500 of supplies on account.
(e) Recorded P2,500 of fees earned on account.
(f) Received P11,000 in cash for fees earned.
(g) Paid P200 to creditors on account.
(h) Paid wages of P1,250.
(i) Received P1,150 from customers on account.
(j) Recorded drawings of P1,850.

(a) Cash 10,000


Swinging Gates, Capital 10,000

(b) Equipment 35,000


Cash 10,000
Notes Payable 25,000

( c) Rent Expense 1,000


Cash 1,000

(d) Supplies 8,500


Accounts Payable 8,500

(e) Accounts Receivable 2,500


Fees Earned 2,500

(f) Cash 11,000


Fees Earned 11,000

(g) Accounts Payable 200


Cash 200

(h) Wages Expense 1,250


Cash 1,250

(i) Cash 1,150


Accounts Receivable 1,150

(j) Drawings 1,850


Cash 1,850

6.Set up T accounts for Cash; Accounts Receivable; Supplies; Accounts Payable; Capital; Drawing;
Professional Fees; and Operating Expenses.

(a) In the T accounts, record the following transactions of Bytes Consultant Services,
Inc. for May, identifying each entry by number:

(1) Stockholders invested P12,000 cash in the business.


(2) Purchased supplies on account, P5,750.
(3) Paid operating expenses, P5,000.
(4) Billed clients for fees, P6,940.
(5) Received cash from cash clients, P4,200.
(6) Paid creditors on account, P1,000.
(7) Received P2,600 from clients on account.
(8) Paid Dividends P1,000 cash.

(b) Prepare a trial balance as of May 31 for Bytes Consultant Services, Inc.

Cash 11800
A/R 4340
Supplies 5750
Dividends 1000
A/P 4750
HR, Capital 12000
Fees Earned 11140
Operating Expenses 5000
27890 27890

(c) Assuming that supplies expense (which has not been recorded) amounts to P1,000
for May, determine the following:

(1) Net income for the month.


11,140 – 6,000 = 4,860
(2) Capital as of May 31.
22890 – 4750 = 18,140

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