
FIN & MANAGERIAL ACCT VOL 2 W/CONNECT
7th Edition
ISBN: 9781308675527
Author: Wild
Publisher: MCG/CREATE
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Concept explainers
Question
Chapter 2, Problem 4PSB
1.
To determine
To prepare:
1.
Expert Solution

Explanation of Solution
Journal entries to record the transactions
a.
Date | Account Title and Explanation | Post.ref | Debit($) | Credit($) |
Cash | 35,000 | |||
Office Equipment | 11,000 | |||
Capital account | 46,000 | |||
(Being cash and equipment has been invested by the owner.) |
b.
Date | Account Title and Explanation | Post.ref | Debit($) | Credit($) |
Land | 7,500 | |||
Building | 40,000 | |||
Cash | 15,000 | |||
Notes payable | 32,500 | |||
(Being land and building has been purchased for cash and by issuing notes payable.) |
c.
Date | Account Title and Explanation | Post.ref | Debit($) | Credit($) |
Office supplies | 500 | |||
Accounts payable | 500 | |||
(Being office supplies has been purchased for credit.) |
d.
Date | Account Title and Explanation | Post.ref | Debit($) | Credit($) |
Automobile | 8,000 | |||
Common stock | 8,000 | |||
(Being premium for insurance has been paid in advance) |
e.
Date | Account Title and Explanation | Post.ref | Debit($) | Credit($) |
Office equipment | 1,200 | |||
Accounts payable | 1,200 | |||
(Being purchased on credit.) |
f.
Date | Account Title and Explanation | Post.ref | Debit($) | Credit($) |
Wages expense | 1,000 | |||
Cash | 1,000 | |||
(Being wages paid on cash.) |
g.
Date | Account Title and Explanation | Post.ref | Debit($) | Credit($) |
Cash | 3,200 | |||
Service fees earned | 3,200 | |||
(Being cash received for provided services.) |
h.
Date | Account Title and Explanation | Post.ref | Debit($) | Credit($) |
Utility expense | 540 | |||
Cash | 540 | |||
(Being utility expenses paid on cash.) |
i.
Date | Account Title and Explanation | Post.ref | Debit($) | Credit($) |
Accounts payable | 500 | |||
Cash | 500 | |||
(Being amount paid due.) |
Date | Account Title and Explanation | Post.ref | Debit($) | Credit($) |
Office equipment | 3,400 | |||
Cash | 3,400 | |||
(Being equipment purchased on cash.) |
k.
Date | Account Title and Explanation | Post.ref | Debit($) | Credit($) |
Account receivable | 4,200 | |||
Fees earned | 4,200 | |||
(Being services provided on credit) |
l.
Date | Account Title and Explanation | Post.ref | Debit($) | Credit($) |
Salaries expense | 1,000 | |||
Cash | 1,000 | |||
(Being salaries paid on cash.) |
m.
Date | Account Title and Explanation | Post.ref | Debit($) | Credit($) |
Cash | 2,200 | |||
Account receivables | 2,200 | |||
(Being amount received which was due.) |
n.
Date | Account Title and Explanation | Post.ref | Debit($) | Credit($) |
Dividends | 1,100 | |||
Cash | 1,100 | |||
(Being cash is paid in form of dividend.) |
2.
To determine
To prepare: Ledger accounts.
2.
Expert Solution

Explanation of Solution
General ledger
Cash No.101 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
Capital | 35,000 | 35,000 | |||
Land and building | 15,000 | 20,000 | |||
Salaries expense | 1,000 | 19,000 | |||
Fees earned | 3,200 | 22,200 | |||
Utility expense | 540 | 21,660 | |||
Accounts payable | 500 | 21,160 | |||
Office equipment | 3,400 | 17,760 | |||
Salaries expense | 1,000 | 16,760 | |||
Accounts receivables | 2,200 | 18,960 | |||
Dividends | 1,100 | 17,860 |
So the ending balance is $17,860
Account receivable No.106 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
Fees earned | 4,200 | 4,200 | |||
Cash | 2,200 | 2,000 |
So the ending balance is $2,000
Office Supplies No.108 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
Accounts payable | 500 | 500 |
So the ending balance is $500
Office Equipment No.163 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
Capital account | 11,000 | 11,000 | |||
Accounts payable | 1,200 | 12,200 | |||
Cash | 3,400 | 15,600 |
So the ending balance is $15,600.
Automobile No.163 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
Cash | 8,000 | 8,000 |
So the ending balance is $8,000
Building No.170 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
. | Cash | 40,000 | 40,000 |
So the ending balance is $40,000
Land No.172 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
Cash | 7,500 | 7,500 |
So the ending balance is $7,500
Accounts payable No.201 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
Office supplies | 500 | 500 | |||
Office equipment | 1,200 | 1,700 | |||
Cash | 500 | 1,200 |
So the ending balance is $(1,200)
Notes payable .250 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
Land and building | 32,500 | 32,500 |
So the ending balance is $32,500
Capital No.301 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
Cash and office equipment | 46,000 | 46,000 | |||
Automobile | 8,000 | 54,000 |
So the ending balance is $54,000
Dividends No.302 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
Cash | 1,100 | 1,100 |
So the ending balance is $1,100
Fees Earned No.402 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
Fees earned | 3,200 | 3,200 | |||
Accounts receivable | 4,200 | 7,400 |
So the ending balance is $7,400
Utility Expense 602 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
Accounts payable | 540 | 540 |
So the ending balance is $540
Wages expense No.601 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
Cash | 1,000 | 1,000 | |||
Cash | 1,000 | 2,000 |
So the ending balance is $2,000
3.
To determine
To prepare:
3.
Expert Solution

Explanation of Solution
N consulting | ||
Trial Balance | ||
June 30, 20XX | ||
Accounts Title | Amount($) | Amount($) |
Cash | 17,860 | |
Accounts Payable | 1,200 | |
Accounts Receivable | 2,000 | |
Automobiles | 8,000 | |
Office Supplies | 500 | |
Notes payable | 32,500 | |
Building | 40,000 | |
Land | 7,500 | |
Office equipment | 15,600 | |
Capital | 54,000 | |
Dividends | 1,100 | |
Fees earned | 7,400 | |
Salaries Expenses | 2,000 | |
Utility expenses | 540 | |
Totals | 95,100 | 95,100 |
So, total trial balance is $95,100.
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Chapter 2 Solutions
FIN & MANAGERIAL ACCT VOL 2 W/CONNECT
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