Loose Leaf for Financial Accounting: Information for Decisions
9th Edition
ISBN: 9781260158762
Author: John J Wild
Publisher: McGraw-Hill Education
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Question
Chapter 2, Problem 2SP
1.
Summary Introduction
Introduction: Expenses means the
1.
Expert Solution
Answer to Problem 2SP
All the journal entries required are maintained and the ledger of the accounts is maintained with trial balance.
Explanation of Solution
| Date | Particulars | Debit ($) | Credit($) |
| Oct 1. | Cash | 45,000 | |
| Office Equipment | 8,000 | ||
| Computer Equipment | 20,000 | ||
| Common stock | 73,000 | ||
| (Being cash and equipment invested by owner in stock) | |||
| Oct 2 | Prepaid Rent | 3,300 | |
| Cash | 3,300 | ||
| (Being 4 months advance paid) | |||
| Oct 3 | Computer Supplies | 1,420 | |
| Accounts Payable | 1,420 | ||
| (Being supply purchased on credit) | |||
| Oct 5 | Prepaid Insurance | 2,220 | |
| Cash | 2,220 | ||
| (Being 12 month premium paid in advance) | |||
| Oct 6 | 4,800 | ||
| Computer Service Provider | 4,800 | ||
| (Being customer billed for services) | |||
| Oct 8 | Account Payable | 1,420 | |
| Cash | 1,420 | ||
| (Being balance paid due on account payable) | |||
| Oct 12 | Accounts Receivable | 1,400 | |
| Computer Services Revenue | 1,400 | ||
| (Being customer billed for services) | |||
| Oct 15 | Cash | 4,800 | |
| Accounts Receivables | 4,800 | ||
| (Being account receivables collected) | |||
| Oct 17 | Repairs Expense- Computer | 805 | |
| Cash | 805 | ||
| (Being payment made for Computer repairs) | |||
| Oct 20 | Advertising Expenses | 1,728 | |
| Cash | 1,728 | ||
| (Being advertising expenses paid off) | |||
| Oct 22 | Cash | 1,400 | |
| Account Receivables | 1,400 | ||
| (Being Account receivable collected) | |||
| Oct 28 | Accounts Receivables | 5,208 | |
| Computer Services revenue | 5,208 | ||
| (Being customer billed for services) | |||
| Oct 31 | Wages expenses | 875 | |
| Cash | 875 | ||
| (Being Employee paid for part time work) | |||
| Oct 31 | Dividends | 3,600 | |
| Cash | 3,600 | ||
| (Being dividend paid off) | |||
| Nov 1 | Mileage Expenses | 320 | |
| Cash | 320 | ||
| (Being Mileage expenses reimbursed) | |||
| Nov 2 | Cash | 4,633 | |
| Computer Service Revenue | 4,633 | ||
| (Being cash collected from customer) | |||
| Nov 5 | Computer Supplies | 1,125 | |
| Cash | 1,125 | ||
| (Being computer supplies purchased) | |||
| Nov 8 | Accounts Receivables | 5,668 | |
| Computer Service Revenue | 5,668 | ||
| (Being customer billed for services) | |||
| Nov18 | Cash | 2,208 | |
| Accounts receivable | 2,208 | ||
| (Being Accounts receivable collected) | |||
| Nov 22 | Miscellaneous Expenses | 250 | |
| Cash | 250 | ||
| (Being donation recorded) | |||
| Nov 24 | Accounts Receivables | 3,950 | |
| Computer Service Revenue | 3,950 | ||
| (Being customer billed for services) | |||
| Nov 28 | Mileage Expenses | 384 | |
| Cash | 384 | ||
| (Being Mileage expenses reimbursed) | |||
| Nov 30 | Wages expenses | 1,750 | |
| Cash | 1,750 | ||
| (Being Employee paid for part time work) | |||
| Nov 30 | Dividends | 2,000 | |
| Cash | 2,000 | ||
| (Being dividend paid off) | |||
2.
Summary Introduction
Introduction: Expenses means the cash outflow from the organization and it is shown on the debit side of the company’s account. As expenses arise when any service or good is purchased, they do not cause a regular outflow of cash. Considering income and revenues refers to the credit balance in the company’s account. Assets of the company always have debit balance as it is owned by the company.
To calculate: Journal entries, trial balance and general ledgers of the accounts.
2.
Expert Solution
Answer to Problem 2SP
All the journal entries required are maintained and the ledger of the accounts is maintained with trial balance.
Explanation of Solution
General Ledger Accounts
| Date | Debit($) | Credit($) | Balance($) |
| Oct 1 | 4500 | 45,000 | |
| Oct 2 | 3,300 | 41,700 | |
| Oct 5 | 2,220 | 39,480 | |
| Oct 8 | 1,420 | 38,060 | |
| Oct 15 | 4,800 | 42,860 | |
| Oct 17 | 805 | 42,055 | |
| Oct 20 | 1,728 | 40,327 | |
| Oct 22 | 1,400 | 41,727 | |
| Oct 31 | 875 | 40,852 | |
| Oct 31 | 3,600 | 37,252 | |
| Nov 1 | 320 | 36,932 | |
| Nov 2 | 4,633 | 41,565 | |
| Nov 5 | 1,125 | 40,440 | |
| Nov 18 | 2,208 | 42,648 | |
| Nov 22 | 250 | 42,398 | |
| Nov 28 | 384 | 42,014 | |
| Nov 30 | 1,750 | 40,264 | |
| Nov 30 | 2,000 | 38,264 |
Account Receivable
| Date | Debit ($) | Credit($) | Balance($) |
| Oct 6 | 4,800 | 4,800 | |
| Oct 12 | 1,400 | 6,200 | |
| Oct 15 | 4,800 | 1,400 | |
| Oct 22 | 1,400 | 0 | |
| Oct 28 | 5,208 | 5,208 | |
| Nov 8 | 5,668 | 10,876 | |
| Nov 18 | 2,208 | 8,668 | |
| Nov 28 | 3,950 | 12,618 |
Computer Supplies
| Date | Debit ($) | Credit($) | Balance($) |
| Oct 3 | 1,420 | 1,420 | |
| Nov 5 | 1,125 | 2,545 |
Prepaid Insurance
| Date | Debit ($) | Credit($) | Balance($) |
| Oct 3 | 2,220 | 2,220 |
Prepaid Rent
| Date | Debit ($) | Credit($) | Balance($) |
| Oct 2 | 3,330 | 3,330 |
Office Equipment
| Date | Debit ($) | Credit($) | Balance($) |
| Oct 1 | 8,000 | 8,000 |
Computer Equipment
| Date | Debit ($) | Credit($) | Balance($) |
| Oct 1 | 20,000 | 20,000 |
Account payable
| Date | Debit ($) | Credit($) | Balance($) |
| Oct 3 | 1,420 | 1,420 | |
| Oct 8 | 1,420 | 0 |
Common Stock
| Date | Debit ($) | Credit($) | Balance($) |
| Oct 1 | 73,000 | 73,000 |
Dividends
| Date | Debit ($) | Credit($) | Balance($) |
| Oct 31 | 3,600 | 3,600 | |
| Nov 30 | 2,000 | 5,600 |
Computer Service Revenue
| Date | Debit ($) | Credit($) | Balance($) |
| Oct 6 | 4,800 | 4,800 | |
| Oct 12 | 1,400 | 6,200 | |
| Oct 28 | 5,208 | 11,408 | |
| Nov 2 | 4,633 | 16,041 | |
| Nov 28 | 5,668 | 21,709 | |
| Nov 24 | 3,950 | 25,659 |
Wages Expense
| Date | Debit ($) | Credit($) | Balance($) |
| Oct 31 | 875 | 875 | |
| Nov 30 | 1,750 | 2,625 |
Advertising Expenses
| Date | Debit ($) | Credit($) | Balance($) |
| Oct 30 | 1,728 | 1,728 |
Mileage Expenses
| Date | Debit ($) | Credit($) | Balance($) |
| Nov 1 | 320 | 320 | |
| Nov 28 | 384 | 704 |
Miscellaneous Expenses
| Date | Debit ($) | Credit($) | Balance($) |
| Nov 22 | 250 | 250 |
Repair expenses-Computer
| Date | Debit ($) | Credit($) | Balance($) |
| Oct 17 | 805 | 805 |
3.
Summary Introduction
Introduction: Expenses means the cash outflow from the organization and it is shown on the debit side of the company’s account. As expenses arise when any service or good is purchased, they do not cause a regular outflow of cash. Considering income and revenues refers to the credit balance in the company’s account. Assets of the company always have debit balance as it is owned by the company. To calculate: Journal entries, trial balance and general ledgers of the accounts.
3.
Expert Solution
Answer to Problem 2SP
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 November 30)
| Particulars | Debit | Credit |
| Cash | $38,264 | |
| Supplies | $2,545 | |
| Equipment | $8,000 | |
| Account Receivable | $12,618 | |
| Rent in Advance | $3,300 | |
| Prepaid Insurance | $2,220 | |
| Computer equipment | $20,000 | |
| Accounts payable | 0 | |
| Common Stock | $73,000 | |
| Dividend Paid | $5,600 | |
| Wage Expenses | $2,625 | |
| Advertisement | $1,728 | |
| Mileage expenses | $704 | |
| Miscellaeous Expenses | $250 | |
| Repair | $805 | |
| Service revenue | $25,659 | |
| Total | $98,659 | $98,659 |
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Students have asked these similar questions
a) Prepare journal entries to record above transactions.
b) Post to relevant ledger accounts.
GJ started operating his new salon business (Sir George Salon) during 2017. He provides services for corporate accounts with 60-day payment term. He submits the following data in 2018:
Supplies inventory, 1/1/2018
50,000
Supplies inventory, 12/31/2018
80,000
Revenues
3,000,000
Accounts receivable, Jan. 1, 2018
500,000
Accounts receivable, Dec. 31, 2018
700,000
Purchase of supplies from VAT registered entities (net)
100,000
Purchase of supplies from non-VAT registered entities
50,000
Determine the following:
What is the applicable business tax for the taxpayer?
How much is the correct business tax due?
Assume the taxpayer is non-VAT registered, how much is the VAT payable for the year?
Assume the taxpayer is VAT registered, how much is the VAT payable for the year?
Statsen Company, which prepares financial reports at the end of the calendar year, established a branch on July 1, 2020. The following transactions occurred during the formation of the branch and its first six months of operations, ending December 31, 2020.
1. The Home Office sent $35,000 cash to the branch to begin operations.
2. The Home Office shipped inventory to the branch. Intercompany billings totaled $75,000, which was the Home Office's cost.
3. The branch acquired merchandise display equipment which cost $15,000 on July 1, 2020. (Assume that branch fixed assets are carried on the home office books).
4. The branch purchased inventory costing $53,750 from outside vendors on account.
5. The branch had credit sales of $106,250 and cash sales of $43,750.
Requirements:
1. Prepare journal entries in the books of the home office and in the books of the branch office for the above transaction
Chapter 2 Solutions
Loose Leaf for Financial Accounting: Information for Decisions
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Ch. 2 - Prob. 11DQCh. 2 - Prob. 12DQCh. 2 - Prob. 13DQCh. 2 - Prob. 14DQCh. 2 - Prob. 15DQCh. 2 - Review the Apple balance sheet in Appendix A....Ch. 2 - Prob. 17DQCh. 2 - Prob. 18DQCh. 2 - Identify the items from the following list that...Ch. 2 - Prob. 2QSCh. 2 - Prob. 3QSCh. 2 - Prob. 4QSCh. 2 - Prob. 5QSCh. 2 - Prob. 6QSCh. 2 - Prob. 7QSCh. 2 - Prob. 8QSCh. 2 - Prob. 9QSCh. 2 - Prob. 10QSCh. 2 - Prob. 11QSCh. 2 - In a recent year’s financial statements, Home...Ch. 2 - Prob. 13QSCh. 2 - Prob. 1ECh. 2 - Prob. 2ECh. 2 - Enter the number for the item that best completes...Ch. 2 - Prob. 4ECh. 2 - Prob. 5ECh. 2 - Prob. 6ECh. 2 - Prob. 7ECh. 2 - Prob. 8ECh. 2 - Prob. 9ECh. 2 - Prob. 10ECh. 2 - Prepare general journal entries for the following...Ch. 2 - Prob. 12ECh. 2 - Assume the following Taccounts reflect Belle Co.’s...Ch. 2 - Prob. 14ECh. 2 - A corporation had the following assets and...Ch. 2 - Prob. 16ECh. 2 - Use the information in Exercise 216 to prepare an...Ch. 2 - Prob. 18ECh. 2 - Compute the missing amount for each of the...Ch. 2 - Prob. 20ECh. 2 - You are told the column totals in a trial balance...Ch. 2 - a. Calculate the debt ratio and the return on...Ch. 2 - Prob. 23ECh. 2 - Prob. 24ECh. 2 - Prob. 1PSACh. 2 - Prob. 2PSACh. 2 - Prob. 3PSACh. 2 - Prob. 4PSACh. 2 - Prob. 5PSACh. 2 - Prob. 6PSACh. 2 - Prob. 1PSBCh. 2 - Prob. 2PSBCh. 2 - Prob. 3PSBCh. 2 - Nuncio Consulting complete the following...Ch. 2 - Prob. 5PSBCh. 2 - Prob. 6PSBCh. 2 - Prob. 2SPCh. 2 - Prob. 1GLPCh. 2 - Prob. 2GLPCh. 2 - Prob. 3GLPCh. 2 - Prob. 4GLPCh. 2 - Prob. 5GLPCh. 2 - Prob. 6GLPCh. 2 - Prob. 7GLPCh. 2 - Using transactions from the following assignments,...Ch. 2 - Prob. 1FSACh. 2 - Prob. 2FSACh. 2 - Prob. 3FSACh. 2 - Assume that you are a cashier and your manager...Ch. 2 - Prob. 2BTNCh. 2 - Access EDGAR online (SEC.gov) and locate the 2016...Ch. 2 - Prob. 5BTNCh. 2 - Prob. 6BTN
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