2 Semester Cengage Now, Warren Accounting
26th Edition
ISBN: 9781305662308
Author: WARREN
Publisher: Cengage
expand_more
expand_more
format_list_bulleted
Question
Chapter 2, Problem 2.5CP
a.
To determine
Chart of Accounts: The purpose of chart of accounts is to identify the particular account with the number assigned to it, to help the business better organize number of accounts used. Any account can be recognized through the short number allocated to it instead of large name of the account. This number is unique to an account to avoid any confusion.
Income statement: The financial statement which reports revenues and expenses from business operations and the result of those operations as net income or net loss for a particular time period is referred to as income statement.
T-account:
An account is referred to as a T-account, because the alignment of the components of the account resembles the capital letter ‘T’. An account consists of the three main components which are as follows:
- (a) The title of the account
- (b) The left or debit side
- (c) The right or credit side
To prepare: A chart of accounts that would be appropriate for Service EC.
b.
To determine
To prepare: An income statement for the month of June using T-accounts in order to assess the profitability of Service EC.
c.
To determine
To compute: The amount of cash on hand on June 30 based on Person CN’s records of receipts and payments.
d.
To determine
To discuss: The possible causes of the difference between the amount of cash computed in (c) and the actual amount of cash on hand.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
Prepare the journal entries to record the transactions assume JE#, accounts, and dates.
Cy discovers a receipt for renter insurance for the storage locker rental. The renter insurance was purchased from Cyrus Insurance to provide insurance coverage for the inventory that Cy planned to store in the storage locker. Mookie The Beagle™ Concierge purchased 1 month of renter insurance coverage for the period January 1 through January 31, 2022. Using the company credit card, Mookie The Beagle™ Concierge paid $16.00 on January 16, 2022 for the 1 month of insurance coverage.
So at the end of the accounting period on January 31, 1 month of rent had expired at $16.00. Since Mookie The Beagle™ Concierge had not recorded the transaction, the entire $16.00 should be recorded as Renter Insurance Expense with an adjusting entry to bring accounts up to date at January 31.
Create Adjusting Journal Entry. (Round your answer to 2 decimal places.)
Select Create (+) icon > Journal Entry
Enter the adjusting journal entry in QBO on January 31, 2022
Enter Journal No.: ADJ 8
Complete the…
Review the following transactions for Sandals Golf Club and record any required journal entries, narrations are required.
Sep. 6
Sandals Golf Club purchases 55 golf clubs at $40 each with cash.
Sep. 8
Sandals Golf Club purchases 80 golf clubs at $45 each on credit. Terms of the purchase are 2/10, n/30, invoice date September 8.
Sep. 10
Sandals Golf Club discovers 10 of the golf clubs are damaged from the Sep. 6 purchase and returns them to the supplier for a full refund. Sandals Golf Club also discovers that 10 of the golf clubs from the Sep. 8 purchase are painted the wrong color but keeps them since the supplier granted an allowance of $20 per golf club.
Sep. 18
Sandals Golf Club pays their account in full from the September 8 purchase, less any returns, allowances, and/or discounts.
Chapter 2 Solutions
2 Semester Cengage Now, Warren Accounting
Ch. 2 - What is the difference between an account and a...Ch. 2 - Prob. 2.2DQCh. 2 - Prob. 2.3DQCh. 2 - eCatalog Services Company performed services in...Ch. 2 - If the two totals of a trial balance are equal,...Ch. 2 - Assume that a trial balance is prepared with an...Ch. 2 - Assume that when a purchase of supplies of 2,650...Ch. 2 - Assume that Muscular Consulting erroneously...Ch. 2 - Assume that Sunshine Realty Co. borrowed 300,000...Ch. 2 - Checking accounts are a common form of deposits...
Ch. 2 - Rules of debit and credit and normal balances...Ch. 2 - Rules of debit and credit and normal balances...Ch. 2 - Journal entry for asset purchase Prepare a journal...Ch. 2 - Journal entry for asset purchase Prepare a journal...Ch. 2 - Journal entry for fees earned Prepare a journal...Ch. 2 - Journal entry for fees earned Prepare a journal...Ch. 2 - Journal entry for owner's withdrawal Prepare a...Ch. 2 - Journal entry for owner's withdrawal Prepare a...Ch. 2 - Prob. 2.5APECh. 2 - Missing amount from an account On August 1, the...Ch. 2 - Trial balance errors For each of the following...Ch. 2 - Trial balance errors For each of the following...Ch. 2 - Correcting entries The following errors took place...Ch. 2 - Correcting entries The following errors took place...Ch. 2 - Prob. 2.8APECh. 2 - Prob. 2.8BPECh. 2 - Chart of accounts The following accounts appeared...Ch. 2 - Chart of accounts Innerscape Interiors is owned...Ch. 2 - Prob. 2.3EXCh. 2 - Rules of debit and credit The following table...Ch. 2 - Prob. 2.5EXCh. 2 - Normal balances of accounts Identify each of the...Ch. 2 - Transactions Jardine Consulting Co. has the...Ch. 2 - Journalizing and posting On January 7, 2016,...Ch. 2 - Transactions and T accounts The following selected...Ch. 2 - Prob. 2.10EXCh. 2 - Account balances a.During February, 186,500 was...Ch. 2 - Capital account balance As of January 1, Terrace...Ch. 2 - Identifying transactions Wyoming Tours Co. is a...Ch. 2 - Prob. 2.14EXCh. 2 - Trial balance Based upon the data presented in...Ch. 2 - Trial balance The accounts in the ledger of...Ch. 2 - Effect of errors on trial balance Indicate which...Ch. 2 - Errors in trial balance The following preliminary...Ch. 2 - Effect of errors on trial balance The following...Ch. 2 - Errors in trial balance Identify the errors in the...Ch. 2 - Entries to correct errors The following errors...Ch. 2 - Entries to correct errors The following errors...Ch. 2 - Horizontal analysis of income statement The...Ch. 2 - Horizontal analysis of income statement The...Ch. 2 - Entries into T accounts and trial balance Kimberly...Ch. 2 - Journal entries and trial balance On August 1,...Ch. 2 - Journal entries and trial balance On November 1,...Ch. 2 - Journal entries and trial balance Elite Realty...Ch. 2 - Corrected trial balance The Colby Group has the...Ch. 2 - Entries into T accounts and trial balance Ken...Ch. 2 - Journal entries and trial balance On August 1,...Ch. 2 - Journal entries and trial balance On October 1,...Ch. 2 - Journal entries and trial balance Valley Realty...Ch. 2 - Corrected trial balance Tech Support Services has...Ch. 2 - The transactions completed by PS Music during June...Ch. 2 - Ethics and professional conduct in business At the...Ch. 2 - Prob. 2.2CPCh. 2 - Prob. 2.3CPCh. 2 - Prob. 2.5CP
Knowledge Booster
Similar questions
- Preparing financial statements. Hugo Garcia is preparing his balance sheet and income and expense statement for the year ending December 31, 2020. He is having difficulty classifying six items and sks for your help. Which, if any, of the following transactions are assets, liabilities, income, or expense items? a. Hugo rents a house for 1,350 a month. b. On June 21, 2020 Hugo bought diamond earrings for his wife and charged them using his Visa card. The earrings cost 900, but he hasnt yet received the bill. c. Hugo borrowed 3,500 from his parents last fall, but so far, he has made no payments to them. d. Hugo makes monthly payments of 225 on an installment loan; about half of it is interest, and the balance is repayment of principal. He has 20 payments left, totaling 4,500. e. Hugo paid 3,800 in taxes during the year and is due a tax refund of 650, which he hasnt yet received. f. Hugo invested 2,300 in a mutual fund. g. Hugos Aunt Lydia gave him a birthday gift of 300.arrow_forwardPrepare journal entries for the following transactions. Make sure to observe the proper format of journal entries. Use EXCEL in presenting your answers. Mr. Panatag opened the Panatag Security Services. The following financial transactions and other arrangements took place from July 01 to August, 2019: July 01 Mr. Panatag invested his savings in the business amounting to P895,000, and his old car with market value of P545,000. July 02 Mr. Panatag signed a lease contract to be used as the office of his business. In accordance with the lease contract, Mr. Panatag paid the advance rental for three months amounting to P60,000. July 03 The owner purchased furniture amounting to P50,00. Paid 70% cash and the balance will be paid after 30 days. July 04 Mr. Panatag conducted interviews of security guards, and hired 10 security guards with a monthly salary of P13,000 per month. July 05 The owner secured a loan from the bank amounting to P250,000 payable over the…arrow_forwardSEPTEMBER 2019: In September 2019, Kate incorporated Kate’s Cards after investigating different organizational forms, and began the process of getting her business up and running. The following events occurred during the month of September 2019: Kate deposited $10,000 that she had saved into a newly opened business checking account. She received common stock in exchange. Kate designed a brochure that she will use to promote her greeting cards at local stationery stores. Kate paid Fred Simmons $50 to critique her brochure before undertaking her final design and printing. Kate purchased a new iMac computer tablet, specialized graphic arts software, and commercial printer for the company, paying $4,800 in cash. She decided to record all of these items under the same equipment account. Kate purchased supplies such as paper and ink for $350 at the local stationery store. She opened a business account with the store and was granted 30 days credit on all purchases, including the one she just…arrow_forward
- On June 7, 2022 your mother visits Jewel to purchase purchase shampoo, paper towels, toothpaste, and laundry detergent. She finds all of the items on her list and pays the cashier $40 in cash (including taxes) for her purchases. Your mother returns home to find you studying for Acc. 350 and you comment that she had a contract with Jewel. She states that she paid in cash ... no legal document was signed. Eplain why a contract existed between your mother and Jewel on June 7, 2022?arrow_forwardAs at 31 December 2019 Jenny had a bank loan of $4.500 and a balance of $1,400 in her bank acCount. How should these amounts be recorded on Jenny's opening trial balance at 1 January 2020? Select one: a. Debit $1,400 and Credit $4,500 b. Debit $4,500 and Credit $1,400 c. Credit $5,900 d. Debit $5.900arrow_forwardKatie Wright’s banker has asked her to submit a personal balance sheet as of June 30, 2020, in support of an application for a $6,000 home improvement loan. She comes to you for help in preparing it. So far, she has made the following list of her assets and liabilities as of June 30, 2020:arrow_forward
- Morgan runs a calendar printing business. He rented a shop to expand his business. The rent costs $2 000 per month. His business has a financial year end of 31 March. The following information has been provided. Rent expense account Date 2020 Apr 1 2021 Jan 31 Mar 31 REQUIRED Particulars Cash at bank Prepaid rent expense 31 Income summary (i) (ii) State the name of the item. Account balances at 1 April 2020 Commission income received in advance (b) State the amount to be shown on 31 March 2021 (c) Explain both entries on 31 March 2021. The business also provided the following information. During the year ended 31 March 2021 Commission received by cheque Debit S 30 500 $ 800 4 200 Credit $ 600 (b)(0) (b)(ii) Balance $ Additional information Commission income, $1 200, had not been received on 31 March 2021. 600 Cr 29 900 Dr REQUIRED (d) Prepare the journal entries to account for commission income for the year ended 31 March 2021, including the closing entry. Narrations are not required.…arrow_forwardKelly Jones and Tami Crawford borrowed $10,500 on a 7-month, 8% note from Gem State Bank to open their business, Oriole’s Coffee House. The money was borrowed on June 1, 2022, and the note matures January 1, 2023. Prepare the entry to record the receipt of the funds from the loan. Date Account Titles and Explanation Debit Credit June 1 enter an account title to record the receipt of the funds from the loan on June 1enter an account title to record the receipt of the funds from the loan on June 1 enter a debit amountenter a debit amount enter a credit amountenter a credit amount enter an account title to record the receipt of the funds from the loan on June 1enter an account title to record the receipt of the funds from the loan on June 1 enter a debit amountenter a debit amountarrow_forwardS. Waweru starts business on 1st July 2020, when he deposits Shs. 18,000 into his business bank account and Shs. 2,500 in his cash account. During the month of July, he undertakes the following transactions:- 2020 July 3 He purchases shop fittings for sh. 2,500 and pays by cheque. July 4 He buys a motor vehicle from AB & Co. on credit Sh. 3,000. July 6 He buys stock for Sh. 1,500 and pays through bank. July 8 He sells goods for cash Sh.1,000. July 10 Buys goods on credit from XY & Co. for Sh. 1,200 July 12 Sells goods to A. Smith for Sh. 900 on credit July 13 Pays wages Sh. 120 by cash July 14 A. Smith returns goods worth Sh. 200 July 15 Pays to AB & Co. Sh. 3,000 by cheque July 17 Goods returned to XY & Co. amounting to Sh. 350 July 21 Receives from A. Smith a cheque for Sh. 700 July 25 Sells goods for cash Sh. 300. July 30…arrow_forward
- S. Waweru starts business on 1st July 2020, when he deposits Shs. 18,000 into his business bank account and Shs. 2,500 in his cash account. During the month of July, he undertakes the following transactions:- 2020 July 3 He purchases shop fittings for sh. 2,500 and pays by cheque. July 4 He buys a motor vehicle from AB & Co. on credit Sh. 3,000. July 6 He buys stock for Sh. 1,500 and pays through bank. July 8 He sells goods for cash Sh.1,000. July 10 Buys goods on credit from XY & Co. for Sh. 1,200 July 12 Sells goods to A. Smith for Sh. 900 on credit July 13 Pays wages Sh. 120 by cash July 14 A. Smith returns goods worth Sh. 200 July 15 Pays to AB & Co. Sh. 3,000 by cheque July 17 Goods returned to XY & Co. amounting to Sh. 350 July 21 Receives from A. Smith a cheque for Sh. 700 July 25 Sells goods for cash Sh. 300. July 30…arrow_forwardPrepare transactionsarrow_forwardAssume that you recently accepted a position with Five Star National Bank & Trust as an assistant loan officer. As one of your first duties, you have been assigned the responsibility of evaluating a loan request for $300,000 from West Gate Auto Co., a small proprietor- ship. In support of the loan application, Joan Whalen, owner, submitted a "Statement of Accounts" (trial balance) for the first year of operations ended October 31, 2019. West Gate Auto Co. Statement of Accounts October 31, 2019 Cash 5,000 Billings Due from Others. Supplies (chemicals, etc.) Building... 40,000 7,500 222,300 Equipment.. 50,000 Amounts Owed to Others.. 31,000 Investment in Business 179,000 Service Revenue 215,000 Wages Expense 75,000 Utilities Expense 10,000 8,000 Rent Expense . Insurance Expense Other Expenses 6,000 1,200 425,000 425,000 Explain to Joan Whalen why a set of financial statements (income statement, 1. statement of owner's equity, and balance sheet) would be useful to you in evaluating the…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Financial AccountingAccountingISBN:9781337272124Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Pfin (with Mindtap, 1 Term Printed Access Card) (...FinanceISBN:9780357033609Author:Randall Billingsley, Lawrence J. Gitman, Michael D. JoehnkPublisher:Cengage Learning
PFIN (with PFIN Online, 1 term (6 months) Printed...FinanceISBN:9781337117005Author:Randall Billingsley, Lawrence J. Gitman, Michael D. JoehnkPublisher:Cengage Learning
Financial Accounting
Accounting
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Pfin (with Mindtap, 1 Term Printed Access Card) (...
Finance
ISBN:9780357033609
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Cengage Learning
PFIN (with PFIN Online, 1 term (6 months) Printed...
Finance
ISBN:9781337117005
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Cengage Learning