Before you begin this assignment, review the Tying It All Together feature in the chapter. Part of the Fry’s Electronics, Inc.’s experience involves providing technical support to its customers. This includes in-home installations of electronics and also computer support at their retail store locations.
The business transaction is recorded in Step 1 and the two financial statements are the balance sheet and income statement.
The two major financial statements which are directly affected by this transaction will be as follows:
Balance Sheet: The cash received will increase the assets side of the balance sheet.
Income statement: The service revenue will increase the revenue shown on the business's income statement.
Question: Preparing financial statements from the trial balance and calculating the debt ratio
Preparing financial statements from the trial balance and calculating the debt ratio
Account Title Debit Credit
Office Supplies 1,400
Accounts Receivable 9,100
Prepaid Insurance 2,600
Accounts Payable 3,400
Unearned Revenue 1,296
Notes Payable 34,000
Common Stock 20,000
Salaries Expense 1,600
Rent Expense 700
Utilities Expense 100
Service Revenue 15,804
Total Balance $ 74,500 $ 74,500
Requirements 4. Calculate the debt ratio as of July 31, 2018.
Using the following accounts and their balances, calculate the debt ratio for Cooper Furniture Repair as of December 31.
Cash $ 7,000 Advertising Expense $ 1,200
Unearned Revenue 4,500 Utilities Expense 800
Equipment 10,000 Rent Expense 5,000
Service Revenue 8,000 Accounts Payable 2,300
Common Stock 12,200 Dividends 3,000
Journalizing transactions, posting journal entries to four-column accounts, and preparing a trial balance
Terrence Murphy opened a law office on January 1, 2018. During the first month of operations, the business completed the following transactions:
Jan. 1 Murphy contributed $78,000 cash to the business, Terrence Murphy, Attorney. The business issued common stock to Murphy.
3 Purchased office supplies, $600, and furniture, $1,700, on account.
4 Performed legal services for a client and received $1,000 cash.
7 Purchased a building with a market value of $130,000, and land with a market value of $25,000. The business paid $25,000 cash and signed a note payable to the bank for the remaining amount.
11 Prepared legal documents for a client on account, $400.
15 Paid assistant’s semimonthly salary, $1,120.
16 Paid for the office supplies purchased on January 3 on account.
18 Received $2,700 cash for helping a client sell real estate.
19 Defended a client in court and billed the client for $1,800.
25 Received a bill for utilities, $600. The bill will be paid next month.
29 Received cash on account, $1,500.
30 Paid $1,200 cash for a 12-month insurance policy starting on February 1.
30 Paid assistant’s semimonthly salary, $1,120.
31 Paid monthly rent expense, $1,800.
31 Paid cash dividends of $2,200.
2. Open the following four-column accounts including account numbers: Cash, 101; Accounts Receivable, 111; Office Supplies, 121; Prepaid Insurance, 131; Land, 141; Building, 151; Furniture, 161; Accounts Payable, 201; Utilities Payable, 211; Notes Payable, 221; Common Stock, 301; Dividends, 311; Service Revenue, 411; Salaries Expense, 511; Rent Expense, 521; and Utilities Expense, 531.
Question: Journalizing transactions, posting journal entries to T-accounts, and preparing a trial balance
Vince York practices medicine under the business title Vince York, M.D. During July, the medical practice completed the following transactions:
Jul. 1 York contributed $63,000 cash to the business in exchange for common stock.
5 Paid monthly rent on medical equipment, $510.
9 Paid $23,000 cash to purchase land to be used in operations.
10 Purchased office supplies on account, $1,600.
19 Borrowed $22,000 from the bank for business use.
22 Paid $1,100 on account.
28 The business received a bill for advertising in the daily newspaper to be paid in August, $240.
31 Revenues earned during the month included $6,400 cash and $6,000 on account.
31 Paid employees’ salaries $2,200, office rent $1,900, and utilities $560. Record as a compound entry.
31 The business received $1,120 for medical screening services to be performed next month.
31 Paid cash dividends of $7,200.
The business uses the following accounts: Cash; Accounts Receivable; Office Supplies; Land; Accounts Payable; Advertising Payable; Unearned Revenue; Notes Payable; Common Stock; Dividends; Service Revenue; Salaries Expense; Rent Expense; Utilities Expense; and Advertising Expense.
Requirements 2. Post the journal entries to the T-accounts, using transaction dates as posting references in the ledger accounts. Label the balance of each account Bal.
Identifying increases and decreases in accounts and normal balances Insert the missing information into the accounting equation. Signify increases as Incr. and decreases as Decr.
(a) ASSETS Retained Earnings Common Stock (d) Revenues Expenses Contributed Capital (g) (p) (h) Credit (k) Debit (l) Credit (i) (q) (j) Credit Incr. (r) (m) Credit Decr. (o) (f) Credit (c) LIABILITIES (b)
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