Practice/Homework

profiledamnwa
week2individualproblemsetianswersheet05-09-14.xls
Home>Business & Finance homework help>Accounting homework help>Practice/Homework

Sheet1

Accounting 300 Week 2 Individual Assignment Answer Sheet
Student Name:
Prepare responses to Problem Sets P1-3A (Page 35), and P3-5A (Page 147), from Chapter 1 and 3 of Financial Accounting: Tools for business decision making (6th ed.) by John Wiley & Sons. Out of 15 Points
P1-3A Prepare an income statement, retained earnings statement, and balance sheet; discuss results.
On June 1, Beardsley Service Co. was started with an initial investment in the company of $22,100 cash. Here are the assets and liabilities of the company at June 30, and the revenues and expenses for the month of June, its first month of operations:
Cash $4,600 Notes payable $12,000
Accounts receivable $4,000 Accounts payable $500
Service revenue $7,500 Supplies expense $1,000
Supplies $2,400 Maintenance and repairs expense $600
Advertising expense $400 Utilities expense $300
Equipment $26,000 Salaries and wages expense $1,400
In June, the company issued no additional stock, but paid dividends of $1,400.
Instructions
(a) Prepare an income statement and a retained earnings statement for the month of June and a balance sheet at June 30, 2012.
BEARDSLEY SERVICE CO.
Income Statement Income Statement
For the Month Ended June 30, 2012
Revenues Evaluation/Comment Points Earned
Service revenue 0.25
Expenses Evaluation/Comment Points Earned
Salaries and wages expense 0.25
Supplies expense 0.25
Maintenance and repairs expense 0.25
Advertising expense 0.25
Utilities expense 0.25
Total expenses 0.00
Net Income 0.00
BEARDSLEY SERVICE CO. Retained Earnings Statement
Retained Earnings Statement
For the Month Ended June 30, 2012 Evaluation/Comment Points Earned
Retained earnings, June 1 0.25
Add: Net Income 0.25
0.00 Evaluation/Comment Points Earned
Less: Dividends 0.25
Ending Retained Earnings 0.00
BEARDSLEY SERVICE CO.
Balance Sheet
For the Month Ended June 30, 2012 Balance Sheet
Assets Evaluation/Comment Points Earned
Cash 0.25
Accounts receivable 0.25
Supplies 0.25
Equipment 0.25
Total Assets 0.00
Liabilities and Stockholders' Equity
Liabilities Evaluation/Comment Points Earned
Notes payable 0.25
Accounts payable 0.25
Total liabilities 0.00
Stockholders’ Equity Evaluation/Comment Points Earned
Common Stock 0.25
Retained Earnings 0.00 0.25
Total Liabilities and Stockholders’ Equity 0.00
(b) Briefly discuss whether the company’s first month of operations was a success. Evaluation/Comment Points Earned
0.25
(c) Discuss the company’s decision to distribute a dividend. Evaluation/Comment Points Earned
0.25
P3-5A Towne Architects incorporated as licensed architects on April 1, 2012. During the first month of the operation of the business, these events and transactions occurred:
Apr. 1 Stockholders invested $18,000 cash in exchange for common stock of the corporation.
Apr. 1 Hired a secretary-receptionist at a salary of $375 per week, payable monthly.
Apr. 2 Paid office rent for the month $900.
Apr. 3 Purchased architectural supplies on account from Spring Green Company $1,300.
Apr. 10 Completed blueprints on a carport and billed client $1,900 for services.
Apr. 11 Received $700 cash advance from J. Madison to design a new home.
Apr. 20 Received $2,800 cash for services completed and delivered to M. Svetlana.
Apr. 30 Paid secretary-receptionist for the month $1,500.
Apr. 30 Paid $300 to Spring Green Company for accounts payable due.
The company uses these accounts: Cash, Accounts Receivable, Supplies, Accounts Payable, Unearned Service Revenue, Common Stock, Service Revenue, Salaries and Wages Expense, and Rent Expense.
Instructions
(a) Journalize the transactions, including explanations.
Date Account Titles and Explanation Debit Credit
Evaluation/Comment Points Earned
Apr. 1 Cash 0.25
Common Stock 0.25
(Issued shares of stock for cash)
Apr. 1 No entry - Not a transaction
Evaluation/Comment Points Earned
Apr. 2 Rent Expense 0.25
Cash 0.25
(Paid monthly office rent)
Evaluation/Comment Points Earned
Apr. 3 Supplies 0.25
Accounts Payable 0.25
(Purchased supplies on account from Spring Green Company)
Evaluation/Comment Points Earned
Apr. 10 Accounts Receivable 0.25
Service Revenue 0.25
(Received cash advance for future service)
Evaluation/Comment Points Earned
Apr. 11 Cash 0.25
Unearned Service Revenue 0.25
(Received Cash advance for future service)
Evaluation/Comment Points Earned
Apr. 20 Cash 0.25
Service Revenue 0.25
(Received cash for revenue earned)
Evaluation/Comment Points Earned
Apr. 30 Salaries and Wages Expense 0.25
Cash 0.25
(Paid monthly salary)
Evaluation/Comment Points Earned
Apr. 30 Accounts Payable 0.25
Cash 0.25
(Paid Spring Green Company on Account)
(b) Post to the ledger T accounts.
Cash Evaluation/Comment Points Earned
4/1 4/2 0.50
4/11 4/30 0.50
4/20 4/30 0.50
Bal. 0.00
Accounts Receivable Evaluation/Comment Points Earned
4/10 0.25
Bal. 0.00
Supplies Evaluation/Comment Points Earned
4/3 0.25
Bal. 0.00
Accounts Payable Evaluation/Comment Points Earned
4/30 4/3 0.50
Bal. 0.00
Unearned Service Revenue Evaluation/Comment Points Earned
4/11 0.25
Bal. 0.00
Common Stock Evaluation/Comment Points Earned
4/1 0.25
Bal. 0.00
Service Revenue Evaluation/Comment Points Earned
4/10 0.25
4/20 0.25
Bal. 0.00
Salaries and Wages Expense Evaluation/Comment Points Earned
4/30 0.25
Bal. 0.00
Rent Expense Evaluation/Comment Points Earned
4/2 0.25
Bal. 0.00
(c) Prepare a trial balance on April 30, 2012.
TOWNE ARCHITECTS INC.
Trial Balance
April 30, 2012
Debit Credit Evaluation/Comment Points Earned
Cash 0.25
Accounts Receivable 0.25
Supplies 0.25
Accounts Payable 0.25
Unearned Service Revenue 0.25
Common Stock 0.25
Service Revenue 0.25
Salaries and Wages Expense 0.25
Rent Expense 0.25
0 0

Sheet2

Sheet3