FINANCIAL ACCT-CONNECT
FINANCIAL ACCT-CONNECT
8th Edition
ISBN: 9781266627903
Author: Wild
Publisher: INTER MCG
Question
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Chapter 2, Problem 2PSA

1.

Summary Introduction

Introduction: Journal means recording the transactions made during the course of business in a chronological manner. Whereas journal entry means recording the transaction in a journal or by maintaining a book of accounts for future verification and taking other measures. Trial balance refers to a listing of all the accounts and later on matching with the other accounts so that complete verification is done.

To calculate: Journal entries, trial balance and general ledgers of the accounts.

1.

Expert Solution
Check Mark

Answer to Problem 2PSA

All the journal entries required are maintained and the ledger of the accounts is maintained with trial balance.

Explanation of Solution

    Sr. No.ParticularsPRAmountAmount
    a.Cash101

      $100,000

    Office equipment163

      $5,000

    Drafting Equipment164

      $60,000

    Common stock307

      $165,000

    (Being owner Invested cash and equipment)
    b.Land172

      $49,000

    Cash101

      $6,300

    Note payable250

      $42,700

    (Being land purchased with cash and note payable)
    c.Building170

      $55,000

    Cash101

      $55,000

    (Being building purchased)
    d.Prepaid Insurance108

      $3,000

    Cash101

      $3,000

    (Being insurance policy for 18 month purchased)
    e.Cash101

      $6,200

    Engineering fees earned402

      $6,200

    (Being cash collected after completion of work)
    f.Drafting equipment164

      $20,000

    Cash101

      $9,500

    Note Payable250

      $10,500

    (Being equipment purchased for cash and notes payable)
    g.Accounts receivable106

      $14,000

    Engineering fees earned402

      $14,000

    (Being client services completed)
    h.Office equipment163

      $1,150

    Account payable201

      $1,150

    (Being Equipment purchased on credit)
    i. Account Receivable106

      $22,000

    Engineering fees earned402

      $22,000

    (Being Client billed for completed work)
    j.Equipment Rental expense602

      $1,333

    Accounts payable201

      $1,333

    (Being rental expense incurred on equipment)
    k.Cash101

      $7,000

    Accounts receivable106

      $7,000

    (Being cash collected on account)
    l.Wages expenses601

      $1,200

    Cash101

      $1,200

    (Being wages paid to assistant)
    m.Accounts payable201

      $1,150

    Cash101

      $1,150

    (Being amount due on account)
    n.Repairs Expenses 604

      $925

    Cash101

      $925

    (Being expense paid for repair of equipment)
    o.Dividends319

      $9,480

    Cash101

      $9,480

    (being cash drawn for personal use)
    p.Wages expenses601

      $1,200

    Cash101

      $1,200

    (Being wages paid to assistant)
    q.Advertising Expenses603

      $2,500

    Cash101

      $2,500

    (Being Advertising expenses paid)
Summary Introduction

Introduction: Journal means recording the transactions made during the course of business in a chronological manner. Whereas journal entry means recording the transaction in a journal or by maintaining a book of accounts for future verification and taking other measures. Trial balance refers to a listing of all the accounts and later on matching with the other accounts so that complete verification is done.

To calculate: Journal entries, trial balance and general ledgers of the accounts.

Expert Solution
Check Mark

Answer to Problem 2PSA

All the journal entries required are maintained and the ledger of the accounts is maintained with trial balance.

Explanation of Solution

Cash Ledger- A/c No. 101

    Sr. No.PRDebit CreditBalance
    a.G1

      $100,000

      $100,000

    b.G1$6,300$93,700
    c.G1$55,000$38,700
    d.G1$3,000$35,700
    e.G1$6,200$41,900
    f.G1$9,500$32,400
    k.G1$7,000$39,400
    l.G1$1,200$38,200
    m.G1$1,150$37,050
    n.G1$925$36,125
    o.G1$9,480$26,645
    p.G1$1,200$25,445
    q.G1$2,500$22,945

Account Receivable -A/c. No. 106

    Sr. No.PRDebit CreditBalance
    g.G1$14,000$14,000
    i.G1$22,000$36,000
    k.G1$7,000$29,000

Prepaid Insurance- A/c. No. 108

    Sr. No.PRDebit CreditBalance
    d.G1$3,000$3,000

Office Equipment- A/c No. 163

    Sr. No.PRDebit CreditBalance
    a.G1$5,000$5,000
    h.G1$1,150$6,150

Drafting Equipment − A/C No. 164

    Sr. No.PRDebit CreditBalance
    a.G1$60,000$60,000
    f.G1$20,000$80,000

Building - A/c No. 170

    Sr. No.PRDebit CreditBalance
    c.G1$55,000$55,000

Land - A/c No. 172

    Sr. No.PRDebit CreditBalance
    b.G1$49,000$49,000

Account payable − A/c No. 201

    Sr. No.PRDebit CreditBalance
    h.G1$1,150$1,150
    j.G1$1,333$2,483
    m.G1$1,150$1,150

Notes Payable − A/c No. 250

    Sr. No.PRDebit CreditBalance
    b.G1$42,700$42,000
    f.G1$10,500$53,200

Common Stock −A/c No. 307

    Sr. No.PRDebit CreditBalance
    a.G1$165,000$165,000

Dividends _A/c No. 319

    Sr. No.PRDebit CreditBalance
    o.G1$9,480$9,480

Engineering Fees earned - A/c No. 402

    Sr. No.PRDebit CreditBalance
    e.G1$6,200$6,200
    g.G1$14,000$20,200
    i.G1$22,000$42,200

Equipment rental expenses-A/c No. 602

    Sr. No.PRDebit CreditBalance
    j.G1$1,333$1,333

Wages expenses −A/c No. 601

    Sr. No.PRDebit CreditBalance
    l.G1$1,200$1,200
    p.G1$1,200$2,400

Repair expenses

    Sr. No.PRDebit CreditBalance
    n.G1$925$925

Advertising Expenses − A/c No. 106

    Sr. No.PRDebit CreditBalance
    q.G1$2,500$2,500
Summary Introduction

Introduction: Journal means recording the transactions made during the course of business in a chronological manner. Whereas journal entry means recording the transaction in a journal or by maintaining a book of accounts for future verification and taking other measures. Trial balance refers to a listing of all the accounts and later on matching with the other accounts so that complete verification is done.

To calculate: Journal entries, trial balance and general ledgers of the accounts.

Expert Solution
Check Mark

Answer to Problem 2PSA

All the journal entries required are maintained and the ledger of the accounts is maintained with trial balance.

Explanation of Solution

Trial Balance (As on June 30)

    ParticularsDebitCredit
    Cash$22,945
    Account Receivable$29,000
    Prepaid Expenses$3,000
    Office Equipment$6,150
    Drafting Equipment$80,000
    Building$55,000
    Land$49,000
    Accounts Payable$1,333
    Notes Payable$53,200
    Common Stock$165,000
    Dividends$9,480
    Engineering Fees Earned$42,200
    Equipmenmt Rental Expenses$1,333
    Wages Expenses$2,400
    Repair Expenses$925
    Adverstising Expenses$2,500
    Total$261,733$261,733

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Chapter 2 Solutions

FINANCIAL ACCT-CONNECT

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