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Lewis University
Exam #1
Accounting #1
Sept 7, 2013
1
Trial Balance –
a. Explain the purpose of the trial balance.
b. If the trial balance balances, does that indicate all of journal entries have been posted correctly and in the proper month? Please explain
2 Create a transaction that will decrease an asset and decrease equity.
3 Customer ‘Over There’ owes the Wood Company $16,000 on August 31, 2013. On Sept 7, 2013. Over There sent a check for 50%,to Wood Company, of the amount due. Please explain how the Sept 7 transaction affect s the income statement for Wood Company.
4 The Shore Company has sent you a puzzle to solve. They heard you love puzzles. The pieces for the puzzle are:
a. Assets on Aug 1, 2013 $ 732,000
b. Assets in Aug 31, 2013 1,005,000
c. Liabilities on Aug 1, 2013 442,000
d. Liabilities on Aug 31, 2013 685,000
e. During the month of August 2013, the owners invested an additional $85,000 into the company.
f. During the month of August 2013, the owners withdrew $40,000 from the company.
Required — calculate the net income for the company during the month of August. Show your work.
5. The Woody Shore Company opened their doors to the business on August 31, 2013. The company incurred the following transactions during August 2013.
August 1 The owners deposited $87,000 into the business
August 2 Purchased supplies on credit, total $800.
August 2 Company purchased a 12 month insurance policy for their business $3,600
August 3 Paid rent for t
Lewis University
Exam #1 Accounting #1 Sept 7, 2013 1 Trial Balance – a. Explain the purpose of the trial balance. b. If the trial balance balances, does that indicate all of journal entries have been posted correctly and in the proper month? Please explain 2 Create a transaction that will decrease an asset and decrease equity. 3 Customer ‘Over There’ owes the Wood Company $16,000 on August 31, 2013. On Sept 7, 2013. Over There sent a check for 50%,to Wood Company, of the amount due. Please explain how the Sept 7 transaction affect s the income statement for Wood Company. 4 The Shore Company has sent you a puzzle to solve. They heard you love puzzles. The pieces for the puzzle are: a. Assets on Aug 1, 2013 $ 732,000 b. Assets in Aug 31, 2013 1,005,000 c. Liabilities on Aug 1, 2013 442,000 d. Liabilities on Aug 31, 2013 685,000 e. During the month of August 2013, the owners invested an additional $85,000 into the company. f. During the month of August 2013, the owners withdrew $40,000 from the company. Required — calculate the net income for the company during the month of August. Show your work. 5. The Woody Shore Company opened their doors to the business on August 31, 2013. The company incurred the following transactions during August 2013. August 1 The owners deposited $87,000 into the business August 2 Purchased supplies on credit, total $800. August 2 Company purchased a 12 month insurance policy for their business $3,600August 3 Paid rent for t
Lewis University
Exam #1
Accounting #1
Sept 7, 2013
1 Trial Balance –
a. Explain the purpose of the trial balance.
b. If the trial balance balances, does that indicate all of journal entries have been posted correctly and in the proper month? Please explain
2 Create a transaction that will decrease an asset and decrease equity.
3 Customer ‘Over There’ owes the Wood Company $16,000 on August 31, 2013. On Sept 7, 2013. Over There sent a check for 50%,to Wood Company, of the amount due. Please explain how the Sept 7 transaction affect s the income statement for Wood Company.
4 The Shore Company has sent you a puzzle to solve. They heard you love puzzles. The pieces for the puzzle are:
a. Assets on Aug 1, 2013 $ 732,000
b. Assets in Aug 31, 2013 1,005,000
c. Liabilities on Aug 1, 2013 442,000
d. Liabilities on Aug 31, 2013 685,000
e. During the month of August 2013, the owners invested an additional $85,000 into the company.
f. During the month of August 2013, the owners withdrew $40,000 from the company.
Required — calculate the net income for the company during the month of August. Show your work.
5. The Woody Shore Company opened their doors to the business on August 31, 2013. The company incurred the following transactions during August 2013.
August 1 The owners deposited $87,000 into the business
August 2 Purchased supplies on credit, total $800.
August 2 Company purchased a 12 month insurance policy for their business $3,600
August 3 Paid rent for their office $2,800
August 5 Purchased equipment for $15,000 paid cash of $3,000 and signed a note with the bank for the remaining balance.
August 9 Completed service for customers and issued invoices, $7,500
August 14 Automobile expense for the company was $825
August 15 Received cash from customer for services provided $2,800
August 18 Paid monthly salary for the employees $4,000
August 22 Paid first installment for note on August 5, 450
August 25 Paid $300 on amount due from August 2
August 30 Customers from August 9 sent you cash for $3,000
August 31 Owners withdrew $2,100 from the company
Required:
1. Prepare the journal entries for the above transaction using the accounts in the Chart of Accounts; Cash, Accounts Receivable, Supplies, Prepaid Insurance, Equipment, Accounts Payable, Notes Payable, Capital, Owners Withdrawal, Insurance Expense, Rent Expense, Automobile Expense, Salary Expense .
2. Create T accounts for all of the accounts and post the journal entries into the proper accounts.
3. Compute the ending balances for each T Account.
4. Prepare a Trial Balance as of August 31.
5. Prepare the Income Statement, Statement of Owners Equity and the Balance Sheet for the month of August 2013.
