Determine if a debit, credit, or nil entry would be made to the balance sheet:
- Increase Accounts Receivable
- Increase Accounts Payable
- Decrease Mortgage Payable
- Increase Office Supplies
- Decrease Owner’s Capital
- Increase Cash
- Decrease Office Furniture
- Increase Owner’s Withdrawals
- Decrease Unearned Revenue
- Increase Revenue
Determine if the normal balance is a debit or a credit:
- Service Revenue
- Unearned Revenue
- Accounts Receivable
- Bank Loan
- Advertising Expense
- Note Payable
- Rent Expense
- Owner’s Capital
- Undeveloped Land
John Tree started a business, Tree Trimming, which is a proprietorship, on June 01, 2018. The following transactions occurred in June 2018:
- June 5: Tree Trimming provided tree trimming services for a client, on account, for $ 3,000.
- June 9: John Tree withdrew $ 500 from his personal bank account and used the funds to purchase a television for his mother.
- June 15: Tree Trimming received cash for the June 5 work that it had performed.
- June 22: Tree Trimming paid $ 250 regarding an ad that it placed in the local newspaper.
- June 24: Tree Trimming received $ 10,000 cash for tree trimming services it performed that day.
Journalize the above transactions affecting Tree Trimming. Provide a written explanation for each journal entry recorded or not recorded.
Linda Jewel started a business, Jewelry By Design, a proprietorship, in November 2018. The following transactions transpired in November 2018:
- November 01: Linda Jewel deposited $ 5,000 of her personal funds to Jewelry By Design.
- November 01: Jewelry By Design paid $ 1,000 for November’s rent.
- November 10: Jewelry By Design invoiced a customer $ 7,000 regarding creating necklaces for thecustomer.
- November 13: Jewelry By Design paid $ 700 cash for office supplies and purchased on account $ 3,000 office furniture.
- November 20: Jewelry By Design attended a craft fair and received $ 3,500 cash for selling bracelets.
- November 22: Jewelry By Design collected payment for the November 10 sale.
- November 26: Jewelry By Design paid $ 1,500 accounts payable.
- Prepare journal entries for the above transactions.
- Post the journal entries to T-accounts. Identify the postings by date. Date the ending balance of each T-account Nov. 30.
- Prepare Jewelry By Design’s unadjusted trial balance at November 30, 2018.
Sam Strong, on March 01, 2018, started his income tax business, Strong Taxes. The following transactions occurred in March 2018:
- Sam Strong transferred several personal assets to the business: cash $ 60,000, land valued at $ 400,000, and a building valued at $ 100,000.
- Strong Taxes paid cash for the following items:
- $ 1,000 Office Supplies
- $ 5,000 Computer Equipment
- $ 4,000 Office Furniture
- Strong Taxes paid consulting fees, $ 3,000 cash.
- Strong Taxes did tax consulting work and charged the client $ 8,000. That amount will be paid in April 2018.
- Sam Strong took a vacation and Strong Taxes paid $ 10,000 cash for the vacation.
- Strong Taxes received a $ 2,500 invoice for placing a radio ad. The invoice will be paid at a later date.
- Strong Taxes did tax planning work and received $ 12,000 for the tax work done.
- Strong Taxes prepared several income tax returns and charged the client $ 4,000.
- Strong Taxes was billed $ 12,000 by its lawyer; Strong Taxes paid cash for half of the billed amount and will pay the remaining balance in May.
- Strong Taxes received cash for the work it had done preparing the income tax returns for a client.
- Journalize the above transactions using the numerals to identify the transaction.
- Following Exhibit 2-11 on page 79 in your textbook, open the following ledgers:
Cash # 1100
Accounts Receivable # 1200
Office Supplies # 1300
Office Furniture #1400
Computer Equipment #1500
Accounts Payable #2100
Sam Strong, Capital # 3100
Sam Strong, Withdrawals # 3200
Service Revenue # 4100
Consulting Fees Expense #5100
Advertising Expense #5200
Legal Fees Expense #5300
- Post the journal entries to the ledger accounts, keeping a running balance for each account.
- Prepare the unadjusted trial balance for Strong Taxes at March 31, 2018.
Ron Able formed Able Construction, a proprietorship. Ron Able attempted to produce a trial balance, and his trial balance did not balance:
|Ron Able, Capital||32,100|
|Ron Able, Withdrawals||2,500|
|Consulting Service Revenue||7,800|
Able Construction’s accountant, Sue Smart, uncovered the following errors:
- The cash balance is over stated by $ 150.
- The cost of the land was $ 43,100, not $ 47,100.
- A $ 500 purchase of supplies on account was neither journalized nor posted.
- A $ 2,000 credit to Consulting Service Revenue was not posted.
- Rent Expense of $ 300 was posted as a credit rather than a debit.
- The balance of Salary Expense is $ 2,400, but it was listed as $ 2,600 on the trial balance.
- A $ 500 debit to Accounts Receivable was posted as $ 50. The credit to Consulting Service Revenue was correct.
- The balance of Utilities Expense was overstated by $ 610.
- A $ 700 debit to the Ron Able, Withdrawals account was posted as a debit to Ron Able, C
Prepare Able Construction’s correct trial balance at November 30, 2018. Show your calculations. Journal entries are not required.