Financial Accounting Assignment

Pretty Simple assignment, just time consuming.

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First Name: C

orrinne

C e
Last Name: Bailey Rae

B e
Chapter: 2 –

Debit

s &

Credit

s

2

4

NAME TABLES Score: 0%

2 4
E

x

ercise 1 Match the following definitions to the appropriate term: factor

4
a) Costs incurred to generate revenues (assets consumed or liabilities incurred to generate revenu

e) X Dropdown Choices Answ Ran Definition Answer Feedback b) Asset

s

received for selling a product or performing a service.

X

Account

s Payable Expenses

1 5

Things of value the business owns (economic resources) Assets c) Amounts you’re owed by customers

X

Accounts Receivable Revenue

s

2 6

Snapshot of company’s financial position at a moment in time Balance Sheet d) Amounts you owe suppliers and vendors

X Assets Accounts Receivable

3

7

Shares of ownership issued in exchange for cash received Common Stock

e) Things of value the business owns (economic resources) X Balance Sheet Accounts Payable 4

8

Shareholder’s claim to assets Shareholder’s

E

q

uity f)

Snapshot of company’s financial position at a moment in time X

Cash

Flow

Statement

Assets 5

9

Reports payments and receipts of cash by category

Cash Flow Statement

g)

Shares of ownership issued in exchange for cash received X Common Stock Balance Sheet 6

10 Income not distributed to shareholders Retained Earnings h)

Shareholder’s claim to assets X

Dividends

Common Stock 7

11 Reports changes in undistributed earnings from net income and dividends. Retained Earnings Stmt i)

Reports payments and receipts of cash by category X Expenses

Shareholder’s

Equity

8

12 Distribution of assets to shareholders

Dividends
j

)

Income not distributed to shareholders X

Income Statement

Cash Flow Statement 9

13 Detailed accout of company’s performance over period of time

Income Statement
k)

Reports changes in undistributed earnings from net income and dividends. X

Liabilities

Retained Earnings 10

14 Debts or obligations (creditor’s claim to assets)

Liabilities
l)

Distribution of assets to shareholders X Retained Earnings Retained Earnings Stmt 11 1

Costs incurred to generate revenues (assets consumed or liabilities incurred to generate revenue)

Expenses
m)

Detailed accout of company’s performance over period of time X Retained Earnings Stmt Dividends 12 2

Assets received for selling a product or performing a service. Revenues n)

Debts or obligations (creditor’s claim to assets) X Revenues Income Statement 13 3 Amounts you’re owed by customers Accounts Receivable
Shareholder’s Equity

Liabilities 14 4 Amounts you owe suppliers and vendors Accounts Payable
Trial Balance Left Assigned Right

Assigned
Exercise 2 For each account, identify the type, normal balance (how you increase it), and on what financial statement it appears.

a 1 a 2
Account

Type Normal Balance

Statement Dropdown Choices Answ Answ Answ Ran Account Statement Type

Dr.

/

Cr.

b 2 b 4
a)

Service revenue

X X X Balance Sheet Equity Income Statement Credit 1 3

Accounts payable (

A/P

)

Balance Sheet

Liability

Credit c 2 c 4
b)

Unearned revenue

X X X Income Statement Liability Balance Sheet Credit 2 4

Accounts receivable (

A/R

)

Balance Sheet Asset Debit d 8 d 4
c)

Accounts payable (A/P)

X X X Retained Earnings Liability Balance Sheet Credit 3 5 Cash Balance Sheet Asset Debit e 9 e 4
d)

Accounts receivable (A/R)

X X X Asset Balance Sheet Debit 4 6

Common stock

Balance Sheet Equity Credit f 2 f 5
e) Cash X X X Debit Asset Balance Sheet Debit 5 7 Dividends Retained Earnings Equity Debit g 3 g 5
f) Common stock X X X Credit Equity Balance Sheet Credit 6 8

Equipment

Balance Sheet Asset Debit h 3 h 5
g) Dividends X X X Equity Retained Earnings Debit 7 9

Insurance expense

Income Statement Equity Debit
h) Equipment X X X Asset Asset Balance Sheet Debit 8 10

Office supplies

Balance Sheet Asset Debit
i) Insurance expense X X X Liability Equity Income Statement Debit 9 11

Prepaid rent

Balance Sheet Asset Debit
j)

Office supplies X X X Equity Asset Balance Sheet Debit 10 12

Rent expense

Income Statement Equity Debit
k) Prepaid rent X X X Asset Balance Sheet Debit 11 13

Repair expense

Income Statement Equity Debit
l) Rent expense X X X Equity Income Statement Debit 12 14

Retained earnings

Balance Sheet Equity Credit
m) Repair expense X X X Equity Income Statement Debit 13 1 Service revenue Income Statement Equity Credit
n) Retained earnings X X X Equity Balance Sheet Credit 14 2 Unearned revenue Balance Sheet Liability Credit
i 3 i 5
* Retained earnings also appears on the retained earnings statement.

j 4 j 6
k 4 k 6
Accounts payable (A/P) l 5 l 6
Accounts receivable (A/R) m 5 m 6
Cash n 5 n 1
Common stock o 6 o 7
Dividends p 6 p 7
Equipment q 6 q 7
Insurance expense r 6 r 7
Office supplies s 7 s 8
Postage expense

t 7 t 8
Prepaid rent u 7 u 8
Rent expense v 8 v 8
Repair expense w 8 w 9
Retained earnings x 8 x 9
Service revenue y 9 y 3
Unearned revenue
Utilities expense 3 3
z

9 z 3

3

0

factor 4

Feedback Dropdown Choices Answ Feedback Ran Transaction

Feedback

a)

Debit

1 5

Debit

b)

Credit

2 6

Credit

c)

Credit

3 7

Debit

d)

Credit

4 8

Credit

and decreases are cr.

e) To increase land Debit Debit Land is an asset and increases as a dr. 5 9

Debit Prepaid rent is an asset

f) To increase A/P Credit Credit A/P is a liability and increases with a cr. 6 10

Credit

g) To increase dividends Debit Dividends are debited 7 11

Debit

h) To decrease cash Credit Cash is an asset and decreases are cr. 8 12

Debit Cash is an asset

i) To increase prepaid rent Debit Prepaid rent is an asset 9 13

Debit

j) To increase service revenue Credit Revenues are credited 10 14

Debit

k) To decrease A/P Debit A/P is a liability and decreases with dr. 11 1 Increase utilty expense Debit Expenses are debited
l) To increase cash Debit Cash is an asset 12 2 Decrease prepaid rent Credit Prepaid rent is an asset
m) Increase equipment Debit Equipment is an asset 13 3 To increase unearned revenue Credit Unearned revenue is a liability
n) Decrease wages payable Debit Wages payable is a liability 14 4 Increase common stock Credit Common stock increases with a cr.

14 poss
Exercise 3	Given the following transactions, should you debit or credit the account?
	Transaction	Debit/Credit	Dr./Cr.
	Increase utilty expense		Expenses are debited		To increase land		Land is an asset and increases as a dr.
	Decrease prepaid rent				Prepaid rent is an asset		To increase A/P		A/P is a liability and increases with a cr.
	To increase unearned revenue		Unearned revenue is a liability		To increase dividends		Dividends are debited
	Increase common stock		Common stock increases with a cr.		To decrease cash				Cash is an asset
	To increase prepaid rent
	To increase service revenue		Revenues are credited
	To decrease A/P		A/P is a liability and decreases with dr.
	To increase cash
	Increase equipment		Equipment is an asset
	Decrease wages payable		Wages payable is a liability

4

0

poss

2

Ran

Dr. Cr.

Accounts payable (A/P) 1 3

of office supplies on account from Office Depot invoice# 31

10 20 Office supplies

Debit Credit Accounts payable (A/P) 2 4

services for Client Co. on account invoice #123

0

Accounts receivable (A/R)

1 X X Dividends 40 Accounts receivable (A/R) 3 5

9 for $ 60 from PG&E for this month’s utilities

60 Utilities expense Accounts payable (A/P)

X X

40

4 6

of equipment

400 Equipment Cash

X Cash 5 7

) to Allstate for 6 months insurance

40 80

Cash

Cash 6 8

for services performed for Customer Co.

180 Cash Service revenue

from Buyer Co. for services it will perform next month

Common stock 7 1 Joel Co. paid $40 to its shareholders 20 40 Dividends Cash

8 2 Joel Co. received $140 from Buyer Co. for services it will perform next month

140 Cash

General Journal Dividends
Date Account/Explanation PR Debit Credit

0

May 2 X X Cash 140 Equipment 0
X X Unearned revenue 140

0

X Insurance expense

Office supplies

General Journal Prepaid insurance
Date Account/Explanation PR Debit Credit

May 3 X X Office supplies 20 Prepaid rent
X X Accounts payable (A/P) 20

X Rent expense

services for Client Co. on account invoice #123

Repair expense

General Journal Service revenue
Date Account/Explanation PR Debit Credit Service revenue
May 4 X X Accounts receivable (A/R) 160 Unearned revenue
X X Service revenue 160 Unearned revenue
X Utilities expense
Joel Co. received invoice # 8329 for $ 60 from PG&E for this month’s utilities
General Journal
Date Account/Explanation PR Debit Credit
May 5 X X Utilities expense 60
X X Accounts payable (A/P) 60
X

General Journal
Date Account/Explanation PR Debit Credit

May 6 X X Equipment 400
X X Cash 400

X

Joel Co. paid $80 (ck# 365) to Allstate for 6 months insurance

General Journal
Date Account/Explanation PR Debit Credit

May 7 X X Prepaid insurance 80
X X Cash 80

X

General Journal
Date Account/Explanation PR Debit Credit

May 8 X X Cash 180
X X Service revenue 180

X

Exercise 4

Journalize the following transactions for Joel Company.

40

Joel Co. paid $40 to its shareholders

Factor

Nominal

Adjusted

General Journal

Joel Co. bought $

20

35

Accounts payable (A/P)

Date

Account/Explanation

PR

Joel Co. performed $

1

60

80

16

Service revenue

May

Joel Co. received invoice # 8

32

30

Cash

Accounts receivable (A/R)

Joel Co. issued check #359 to Luf Co. to purchase $

400

200

Joel Co. paid $80 (ck# 3

65

Prepaid insurance

Joel Co. received $

180

90

Joel Co. received $

140

Common stock

70

Unearned revenue

Dividends

Equipment

Insurance expense

Joel Co. bought $20 of office supplies on account from Office Depot invoice# 3135

Office supplies

Prepaid insurance

Prepaid rent

Rent expense

Joel Co. performed $

160

Repair expense

Utilities expense

Joel Co. issued check #359 to Luf Co. to purchase $400 of equipment

Joel Co. received $180 for services performed for Customer Co.

5

0 0

given the following account balances.

0 factor 2 factor

A/P 20 40
A/P 40

20

A/R 30 60

A/R 60

0

200 400

Building 400

Cash

30

Cash 30

40 Common Stock 65

Common Stock 130

240

Consulting Revenue 240

60 Dividends 30 60

Dividends 60

20 Equipment 80 160

Equipment 160

60

15 30

Insurance Expense 30 Legal Expense 10 20
Loan Payable 120 240
Consulting Corp.

65 130

Income Statement Prepaid Insurance

50

Rent Expense 20 40

Retained Earnings 1/1/0X 50 100
Revenue

X X

Unearned Revenue 30 60

Expenses Wage Expense 10 20
X X -1 Wages Payable 30 60
X X -1
X X -1 A/P
X X -1 A/R

X

Building

X X -1 Cash Revenue
Common Stock Consulting Revenue

Consulting Corp. Consulting Revenue Expenses

Dividends Insurance Expense

Year Ending 200X Equipment Legal Expense

20.00

Insurance Expense Rent Expense 20.00 40.00
X X -1 Legal Expense Wage Expense 10.00 20.00

X X -1 Loan Payable Total Expenses

– X X -1 Net Income Net Income

X X

Prepaid Insurance

Rent Expense
Consulting Corp. Retained Earnings 1/1/0X Retained Earnings 1/1/0X

Balance Sheet

Net Income 65.00 130.00

12/31/0X Unearned Revenue Dividends

Wage Expense Retained Earnings 12/31/0X

Assets Wages Payable
X X -1 Assets
X X -1 Cash

30.00

X X -1 A/R 30.00

X X -1 Prepaid Insurance

50.00

X X -1 Equipment

X

Building

Total Assets

Liabilities
X X -1 Liabilities
X X -1 A/P 20.00 40.00
X X -1 Wages Payable 30.00 60.00
X X -1 Unearned Revenue 30.00 60.00

X -4 Loan Payable

Total Liabilities 200.00 400.00
Shareholder’s Equity Equity
X X -1 Common Stock 65.00 130.00
X X -3 Retained Earnings 12/31/0X

X -4

.00

X

Total Liabilities & Equity 350.00 700.00

	35 possible
Exercise 5	Prepare financial statements for			Consulting Corp.
	List expenses in alphabetical order and assets in order of liquidity.		nominal		adjusted		Sign
			Legal Expense		47 possible
			Loan Payable								24				Building
			Prepaid Insurance						50			15
							Rent Expense			130
							Retained Earnings 1/1/0X									100				Consulting Revenue								120
							Unearned Revenue
							Wage Expense
							Wages Payable				Insurance Expense
							Net Income
	25
			Year Ending 200X
	Hide-Vlookup		Retained Earnings		12/31/0X										– 0
																																					-1
			Total Expenses						-4
1						20.00	2					40.00
	Retained Earnings Statement		1		5.00					30.00
			10.00
	+	55.00	110.00
		65.00			130.00
	=				-3
		50.00	100.00
					Retained Earnings 12/31/0X
(30)	(60)
85	170
15.00
			60.00
25.00
80.00		160.00
					Total Assets		-5			200.00		400.00
	350.00		700.00
					Total Liabilities	120.00	240.00
85.00	1		70.00
	Total Shareholder’s Equity		Total Equity	150.00			300
			Total Liabilities & Equity		-8

6

0

Factor 4
Ran Nominal Adjusted Dr. Cr. Feedback
General Journal Accounts payable (A/P) 1 5

30 120 Prepaid rent Cash

Date Account/Explanation PR Debit Credit Accounts payable (A/P) 2 6

50 200 Cash Service revenue

1 X X Accounts receivable (A/R) 160 Accounts receivable (A/R) 3 7

40 160

ry

Accounts payable (A/P)

X X Service revenue 160 Accounts receivable (A/R) 4 8

25 100 Dividends Cash

5 9

35 140 Accounts payable (A/P) Cash

6 1 (Performed $160 of services on account for P Co.) 40 160 Accounts receivable (A/R) Service revenue

Jan 2 X X

40 Cash 7 2

10 40 Telephone expense Accounts payable (A/P)

X X Accounts payable (A/P) 40 Cash 8 3

60 240 Cash Accounts receivable (A/R)

(Received a $40 invoice from AT&T for this month’s phone service) Common stock 9 4

20 80 Advertising expense Cash

Common stock
Jan 3 X X Cash 240 Dividends
X X Accounts receivable (A/R) 240 Dividends
(Received $240 payment from E Co. (for work done last month)) Machinery
Jan 4 X X Advertising expense 80 Prepaid rent
X X Cash 80 Prepaid rent
(Issued a $80 check to Paper Co. for ads run this month) Rent expense
Rent expense
Jan 5 X X Prepaid rent 120 Repair expense
X X Cash 120 Repair expense
(Paid 3 months rent in advance of $120 to L Co.) Service revenue
Service revenue
Jan 6 X X Cash 200

X X Service revenue 200

(Performed services for D Co. and received payment of $200) Telephone expense
Jan 7 X X Machinery 160 Unearned revenue
X X Accounts payable (A/P) 160 Unearned revenue
(Purchased $160 machinery on account from Y Co.)
Jan 8 X X Dividends 100
X X Cash 100
(Issued checks to shareholders totaling $100)
Jan 9 X X Accounts payable (A/P) 140
X X Cash 140
(Paid $140 on account (amount owed suppliers))

Exercise 6

Record the appropriate journal entry for each transaction.

36 possible

(Paid 3 months rent in advance of $120 to L Co.)

(Performed services for D Co. and received payment of $200)

Jan

(Purchased $160 machinery on account from Y Co.)

Machine

(Issued checks to shareholders totaling $100)

(Performed $160 of services on account for P Co.)

Advertising expense

(Paid $140 on account (amount owed suppliers))

Advertising expense

Telephone expense

(Received a $40 invoice from AT&T for this month’s phone service)

(Received $240 payment from E Co. (for work done last month))

(Issued a $80 check to Paper Co. for ads run this month)

Machinery

Supplies

Supplies expense

Telephone expense

7

0

Factor 4

Larry Co. Curly Co. Mo Co. Larry Co. Curly Co. Mo Co.

Revenues 120 200 80 Revenues 30 50 20 120 200 80
Expenses 80 180 40 Expenses 20

10 80 180 40

10 5 10 40 20 40

Total Assets

0

Total Assets 200 180 120 800 720 480

Total Liabilities 400

Total Liabilities 100

24 400 612 96

800 400 Average Assets

200 100

800 400

X X X Debt Ratio

X X X Return on Assets

%

2.5% 10.0%

X Larry Co.
Curly Co.

Mo Co.

X

X

Exercise 7	Given the following information calculate each company’s debt ratio and return on assets (ROA).	18 possible
			Larry Co.				Curly Co.				Mo Co.
45
NI
			800		720				48
	612		96	153
	Average Assets		1,000	250	1000
	Debt Ratio	50.0%	85.0%	20.0%	50.00%	85%	20%
	Return on Assets	4.0%		2.5%		10.0%			4.00
Which company is most highly leveraged (relies most on creditor financing)?
Which company relies most heavily on equity financing?
Which company most effectively utilizes its assets?

8

Record the appropriate journal entry for each transaction. 0

Factor 4
Ran Nominal Adjusted Dr. Cr. Feedback

General Journal Accounts payable (A/P) 1 1

to start Delivery Corp. (DC) )

1,000

Cash Common stock

Date Account/Explanation PR Debit Credit Accounts payable (A/P) 2 2

by issuing check #101)

Cash

1 X X Cash 4000 Accounts receivable (A/R) 3 3

100 400 Supplies Accounts payable (A/P)

X X Common stock 4000 Accounts receivable (A/R) 4 4

0

)

Cash

Cash 5 5

10 40

Cash

Cash 6 6

)

300

Accounts receivable (A/R) Delivery Revenue

Aug 2 X X Van (delivery equipment) 3600 Common stock 7 7

Accounts payable (A/P)

X X Cash 3600 Common stock 8 8

)

Cash Delivery Revenue

9 9

100 400 Accounts payable (A/P) Cash

Delivery Revenue 10 10

300 1,200 Cash Accounts receivable (A/R)

Aug 3 X X Supplies 400 Fuel (gas) expense 11 11

invoice from Law Co. for legal advice)

400

Accounts payable (A/P)

X X Accounts payable (A/P) 400

(DC purchased $400 supplies on account from Supply Co.) Legal expense
Aug 4 X X Cash 20000 Security expense
X X Delivery Revenue 20000

Supplies

Supplies expense
Aug 5 X X Fuel (gas) expense 40 Telephone expense
X X Cash 40 Telephone expense
(DC paid $40 to buy gasoline for the van.) Unearned revenue
Unearned revenue
Aug 6 X X Accounts receivable (A/R) 1200 Van (delivery equipment)
X X Delivery Revenue 1200

Aug 7 X X Security expense 2000
X X Accounts payable (A/P) 2000
(DC received a $2000 invoice from Mafia Co. for monthly ‘security’)
Aug 8 X X Cash 24000
X X Delivery Revenue 24000
Aug 9 X X Accounts payable (A/P) 400
X X Cash 400
(DC paid $400 on account – for suppies purchased 8/3)
Aug 10 X X Cash 1200
X X Accounts receivable (A/R) 1200
(DC received $1200 from Legit Co. on account – from 8/6)
Aug 11 X X Legal expense 1600
X X Accounts payable (A/P) 1600

Exercise 8

44 possible

(Stu Pidman invested $

4000

4,000

(DC purchased a used van for $

3600

900

3,600

Van (delivery equipment)

Aug

(DC purchased $400 supplies on account from Supply Co.)

(DC delivered goods to Shady Co. and received $

2000

5,000

20,000

Delivery Revenue

(Stu Pidman invested $4000 to start Delivery Corp. (DC) )

(DC paid $40 to buy gasoline for the van.)

Fuel (gas) expense

(DC delivered goods to Legit Co. and billed them $

1200

1,200

(DC received a $2000 invoice from Mafia Co. for monthly ‘security’)

500

2,000

Security expense

(DC made a delivery to Scary Co. and received $

24000

6,000

24,000

(DC purchased a used van for $3600 by issuing check #101)

Delivery revenue

(DC paid $400 on account – for suppies purchased 8/3)

(DC received $1200 from Legit Co. on account – from 8/6)

(DC received a $

1600

1,600

Legal expense

Fuel (gas) expense

Legal expense

Security expense

(DC delivered goods to Shady Co. and received $20000)

Van (delivery equipment)

(DC delivered goods to Legit Co. and billed them $1200)

(DC made a delivery to Scary Co. and received $24000)

(DC received a $1600 invoice from Law Co. for legal advice)

9

0 0 35 possible

given the following account balances.

0 factor 4 factor

List expenses in alphabetical order and assets in order of liquidity. nominal adjusted Sign

A/P 5 20

A/P 20 Rent Expense 16 47 possible A/R 10 40
A/R 40 Retained Earnings 1/1/0X 40

2 8

Advertising Expense 8

200 Cash 13

Cash 52 Supplies 20 Common Stock 3 12
Common Stock 12

12 Dividends 1 4

Dividends 4 Unearned Revenue 32 Machine 40 160
Machine 160 Wage Expense 48 Net Income

60 Wages Payable 4 Note Payable 15 60

8 Prepaid Rent 2 8

Rent Expense 4 16
Yo Corp. Retained Earnings 1/1/0X 10 40
Income Statement Retained Earnings 12/31/0X – 0
Year Ending 200X Service Revenue 50 200
Supplies 5 20
Revenue Hide-Vlookup Supplies Expense 3 12
X X -1 Unearned Revenue 8 32
Expenses Wage Expense 12 48
X X -1 Wages Payable 1 4
X X -1
X X -1 A/P
X X -1 A/R
Total Expenses X -4 Advertising Expense
X X -1 Cash Revenue
Common Stock Service Revenue 50.00 200.00
Yo Corp. Dividends Expenses – 0
Retained Earnings Statement Machine Advertising Expense

Year Ending 200X Net Income Rent Expense 4.00

Note Payable Supplies Expense

X X -1 Prepaid Rent Wage Expense 12.00

+ X X -1 Rent Expense Total Expenses

– X X -1 Retained Earnings 1/1/0X Net Income 29.00

= X X -3 Retained Earnings 12/31/0X – 0
Service Revenue – 0
Yo Corp. Supplies Retained Earnings 1/1/0X 10.00 40.00
Balance Sheet Supplies Expense Net Income 29.00 116.00
12/31/0X Unearned Revenue Dividends

Wage Expense Retained Earnings 12/31/0X

Assets Wages Payable – 0
X X -1 Assets – 0
X X -1 Cash

52.00

X X -1 A/R 10.00 40.00
X X -1 Machine 40.00 160.00
X X -1 Prepaid Rent 2.00 8.00
Total Assets X -5 Supplies 5.00 20.00
Total Assets 70.00

Liabilities – 0
X X -1 Liabilities – 0
X X -1 A/P 5.00 20.00
X X -1 Wages Payable 1.00 4.00
X X -1 Unearned Revenue 8.00

Total Liabilities X -4 Note Payable 15.00 60.00
Total Liabilities 29.00 116.00
Shareholder’s Equity Equity – 0
X X -1 Common Stock 3.00 12.00
X X -3 Retained Earnings 12/31/0X

Total Shareholder’s Equity X -4 Total Equity

Total Liabilities & Equity X -8 Total Liabilities & Equity 70.00 280.00

Exercise 9	Prepare financial statements for			Yo Corp.
33 possible
			Advertising Expense
			Service Revenue		52
			Supplies Expense
			29.00	116
			Note Payable
			Prepaid Rent
	2.00			8.00
16.00
	3.00			12.00
48.00
2	1.00	84.00
		116.00
(1)	(4.00)
38	1	52.00
13.00
	280.00
32.00
38.00	152.00
41.00	164.00