chapter 5 & 6
Cclegg00
chapter_5_questions.pdf
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1. EX.53
2. EX.54
3. EX.56.ALGO
4. EX.57.ALGO
eBook
Identify Journals
Assuming the use of a twocolumn (allpurpose) general journal, a revenue journal, and a cash receipts journal, indicate the journal in which each of the transactions should be recorded:
Pick the correct journal from the list.
a. Closing of drawing account at the end of the year.
b. Providing services for cash.
c. Sale of office supplies on account, at cost, to a neighboring business.
d. Receipt of cash from sale of office equipment.
e. Receipt of cash for rent.
f. Receipt of cash on account from a customer.
g. Providing services on account.
h. Investment of additional cash in the business by the owner.
i. Receipt of cash refund from overpayment of taxes.
j. Adjustment to record accrued salaries at the end of the year.
eBook
Identify Journals
Assuming the use of a twocolumn (allpurpose) general journal, a purchases journal, and a cash payments journal, indicate the journal in which each of the following transactions should be recorded:
Pick the correct journal from the list.
a. Purchase of office supplies for cash.
b. Advance payment of a oneyear fire insurance policy on the office.
c. Purchase of office equipment for cash.
d. Adjustment to prepaid insurance at the end of the month.
e. Adjustment to prepaid rent at the end of the month.
f. Adjustment to record accrued salaries at the end of the period.
g. Purchase of services on account.
h. Purchase of office supplies on account.
i. Adjustment to record depreciation at the end of the month.
j. Payment of six months’ rent in advance.
k. Purchase of an office computer on account.
eBook Show Me How
Prepare Journal Entries in a Revenue Journal
Patton Services Company had the following transactions during the month of April:
Apr. 2. Issued Invoice No. 201 to Triple Play Corp. for services rendered on account, $290.
Apr. 3. Issued Invoice No. 202 to Mid States Inc. for services rendered on account, $410.
Apr. 14. Issued Invoice No. 203 to Triple Play Corp. for services rendered on account, $150.
Apr. 22. Issued Invoice No. 204 to Parker Co. for services rendered on account, $610.
Apr. 30. Collected Invoice No. 201 from Triple Play Corp.
a. Prepare a revenue journal (in chronological order) to record the April revenue transactions for Patton Services Company.
REVENUE JOURNAL
DATE Invoice No. Account Debited Post. Ref. Accounts Rec. Dr.
Fees Earned Cr.
b. What is the total amount posted to the accounts receivable and fees earned accounts from the revenue journal for April?
Accounts receivable $
Fees earned $
c. What is the April 30 balance of the Triple Play Corp. customer account assuming a zero balance on April 1?
$
eBook Show Me How
Posting a Revenue Journal
The revenue journal for TechAid Consulting Inc. is shown below. The accounts receivable control account has a July 1, 2016, balance of $720 consisting of an amount due from Astro Star Co. There were no collections during July.
REVENUE JOURNAL Page 12
Date
Invoice
No. Account Debited
Post.
Ref.
Accounts Rec. Dr.
Fees Earned Cr.
2016
July 4 112 Borman Co. 1,750
July 9 113 Life Star Inc. 2,885
July 14 114 Astro Star Co. 1,330
July 22 115 Borman Co. 2,370
July 31 8,335
The T accounts for the accounts receivable customer accounts are set up below.
a. Post the transactions from the revenue journal to the customer accounts, and determine their ending balances.
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5. EX.510.ALGO
Astro Star Co.
Bal.
Borman Co.
Bal.
Life Star Inc.
Bal.
b. Prepare T accounts for the accounts receivable and fees earned accounts. Post control totals to the two accounts, and determine the ending balances.
Accounts Receivable
Bal.
Fees Earned
Bal.
c. Prepare a schedule of the customer account balances to verify the equality of the sum of the customer account balances and the accounts receivable controlling account balance.
TechAid Consulting Inc. Accounts Receivable Customers Balances
July 31, 2016
Astro Star Co. $
Borman Co.
Life Star Inc.
Total accounts receivable $
d. All of the following are typical of a computerized system EXCEPT:
eBook
Revenue and Cash Receipts Journals
Essential Paris, Inc. has $2,580 in the December 1 balance of the accounts receivable account consisting of $1,190 from Chrystal Co. and $1,390 from Venus Co. Transactions related to revenue and cash receipts completed by Essential Paris, Inc. during the month of December
2016 are as follows:
Dec. 3. Issued Invoice No. 622 for services provided to Palace Corp., $2,710.
5. Received cash from Chrystal Co., on account, for $1,190.
8. Issued Invoice No. 623 for services provided to Sunstream Aviation Inc., $4,670.
12. Received cash from Venus Co., on account, for $1,390.
18. Issued Invoice No. 624 for services provided to Amex Services Inc., $3,280.
23. Received cash from Palace Corp. for Invoice No. 622.
28. Issued Invoice No. 625 to Venus Co., on account, for $2,760.
30. Received cash from Rogers Co. for services provided, $100.
a. Prepare a singlecolumn revenue journal to record these transactions. Enter transactions in chronological order.
REVENUE JOURNAL PAGE 19
DATE
Invoice No.
Account Debited
Post. Ref.
Accounts Rec. Dr.
Fees Earned Cr.
2016
✔
✔
✔
✔
Total
Prepare a cash receipts journal to record these transactions. For those boxes in which no entry is required, leave the box blank.
CASH RECEIPTS JOURNAL PAGE 25
DATE Account Credited Post. Ref. Fees Earned Cr. Accounts Rec. Cr. Cash Dr.
2016
✔
✔
✔
Dec. 31 Total
b. Prepare a listing of the accounts receivable customer balances and verify that the total of the accounts receivable customer balances equals the balance of the accounts receivable controlling account on December 31, 2016.
Essential Paris, Inc. Accounts Receivable Customer Balances
December 31, 2016
Amex Services Inc. $
Sunstream Aviation Inc.
Venus Co.
Total accounts receivable $
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6. EX.514.ALGO
7. EX.517.ALGO
8. PE.55.ALGO
c. Essential Paris, Inc. uses a subsidiary ledger for accounts receivable for all of the following reasons EXCEPT:
eBook Show Me How
Prepare Journal Entries in a Purchases Journal
Sentry Security Company had the following transactions during the month of January:
Jan. 4. Purchased office supplies from Office Universe Inc. on account, $910.
9. Purchased office equipment on account from Tek Village, Inc., $3,600.
16. Purchased office supplies from Office Universe Inc. on account, $250.
21. Purchased office supplies from PapertoGo Inc. on account, $370.
27. Paid invoice on January 4 purchase from Office Universe Inc.
a. Prepare a purchases journal to record the January purchase transactions for Sentry Security Company. If an amount box does not require an entry, leave it blank.
If no entry is required in "Other Accounts Dr." then select "No entry required".
PURCHASES JOURNAL
DATE Account Credited Post. Ref. Accounts Payable Cr. Office Supplies Dr. Other Accounts Dr. Post. Ref. Amount
Jan. 4
Jan. 9
Jan. 16
Jan. 21
Jan. 31 Total
b. What is the total amount posted to the accounts payable and office supplies accounts from the purchases journal for January?
Credit to accounts payable $
Debit to office supplies $
c. What is the January 31 balance of the Office Universe Inc. creditor account assuming a zero balance on January 1?
$
eBook Show Me How
Purchases and Cash Payments Journals
Transactions related to purchases and cash payments completed by Marion Cleaning Services Inc. during the month of August 2016 are as follows:
Aug. 1. Issued Check No. 57 to Liquid Klean Supplies Inc. in payment of account, $290.
3. Purchased cleaning supplies on account from SaniFresh Products Inc., $170.
8. Issued Check No. 58 to purchase equipment from Carson Equipment Sales, $2,960.
12. Purchased cleaning supplies on account from Porter Products Inc., $250.
15. Issued Check No. 59 to Abbott Laundry Service in payment of account, $150.
18. Purchased supplies on account from Liquid Klean Supplies Inc., $330.
20. Purchased laundry services from Abbott Laundry Service on account, $120.
26. Issued Check No. 60 to SaniFresh Products Inc. in payment of August 3 invoice.
31. Issued Check No. 61 in payment of salaries, $5,680.
Marion Cleaning Services Inc. uses the following accounts:
Cash 11
Cleaning Supplies 14
Equipment 18
Accounts Payable 21
Salary Expense 51
Laundry Service Expense 53
Prepare a purchases journal and a cash payments journal to record the above transactions in chronological order. Ignore posting references for this exercise. If an amount box does not require an entry, leave it blank and select "No entry required" from the dropdown.
If no entry is required in "Other Accounts Dr." then select "No entry required".
PURCHASES JOURNAL PAGE 36
DATE Account Credited Post. Ref. Accounts Payable Cr. Cleaning Supplies Dr. Other Accounts Dr. Post. Ref. Amount
2016
Aug. 31 Total
CASH PAYMENTS JOURNAL PAGE 41
DATE Ck. No. Account Debited Post.
Ref.
Other
Accounts Dr.
Accounts
Payable Dr. Cash Cr.
2016
Aug. 31 Total
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Show Me How
Segment Analysis
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Harrow Company does business in two customer segments, Retail and Wholesale. The following annual revenue information was determined from the accounting system's invoice information:
2016 2015
Retail $164,268 $152,100
Wholesale 199,836 237,900
Total revenue $364,104 $390,000
Prepare a horizontal analysis of the segments. Round percentages to one decimal place. Enter negative values as negative numbers.
Harrow Company Horizontal Analysis
For the Years 2015 and 2016
2016 2015 Difference Amount Difference Percent
Retail $164268 $152100 $ %
Wholesale 199836 237900 %
Total revenue $364104 $390000 $ %
Prepare a vertical analysis of the segments. If required, round percentages to one decimal place.
Harrow Company Vertical Analysis
For the Years 2015 and 2016
2016 Amount 2016 Percent 2015 Amount 2015 Percent
Retail $164268 % $152100 %
Wholesale 199836 % 237900 %
Total revenue $364104 % $390000 %
