FinancialAccounting-OP_YioY6nY-42

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EB25. 3.6 Prepare an unadjusted trial balance, in correct format, from the alphabetized account
information as follows. Assume all accounts have normal balances.
Problem Set A
PA1. 3.1 For each of the following situations write the principle, assumption, or concept that justifies or
explains what occurred.
A. A landscaper received a customer’s order and cash prepayment to install sod at a house that would not
be ready for installation until March of next year. The owner should record the revenue from the
customer order in March of next year, not in December of this year.
B. A company divides its income statements into four quarters for the year.
C. Land is purchased for $205,000 cash; the land is reported on the balance sheet of the purchaser at
$205,000.
D. Brandy’s Flower Shop is forecasting its balance sheet for the next five years.
E. When preparing financials for a company, the owner makes sure that the expense transactions are
kept separate from expenses of the other company that he owns.
F. A company records the expenses incurred to generate the revenues reported.
196 Chapter 3 Analyzing and Recording Transactions
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PA2. 3.2 Assuming the following account balances, what is the missing value?
PA3. 3.2 3.4 Assuming the following account balance changes for the period, what is the missing value?
PA4. 3.2 3.4 Assuming the following account balance changes for the period, what is the missing value?
PA5. 3.2 3.4 Identify the financial statement on which each of the following account categories would
appear: the balance sheet (BS), the income statement (IS), or the retained earnings statement (RE). Indicate
the normal balance (Dr for debit; Cr for credit) for each account category.
Financial statement Normal balance
Assets
Common stock
Dividends
Expenses
Liabilities
Revenue
Table 3.16
Chapter 3 Analyzing and Recording Transactions 197
PA6. 3.4 Indicate what impact (+ for increase; – for decrease) the following transactions would have on the
accounting equation, Assets = Liabilities + Equity.
Impact 1 Impact 2
A. Issued stock for cash
B. Purchased supplies on account
C. Paid employee salaries
D. Paid note payment to bank
E. Collected balance on accounts receivable
Table 3.17
PA7. 3.4 Indicate how changes in the following types of accounts would be recorded (Dr for debit; Cr for
credit).
Increase Decrease
A. Asset accounts
B. Liability accounts
C. Common stock
D. Revenue
E. Expense
Table 3.18
198 Chapter 3 Analyzing and Recording Transactions
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PA8. 3.4 Identify the normal balance (Dr for Debit; Cr for Credit) and type of account (A for asset, L for
liability, E for equity, E-rev for revenue, E-exp for expense, and E-eq for equity) for each of the following items.
Normal balance Account type
A. Accounts Payable
B. Supplies
C. Inventory
D. Common Stock
E. Dividends
F. Salaries Expense
Table 3.19
PA9. 3.4 Indicate the net effect (+ for increase; – for decrease; 0 for no effect) of each of the following
transactions on each part of the accounting equation, Assets = Liabilities + Equity. For example, for payment of
an accounts payable balance, A (–) = L (–) + E (0).
A. sale of merchandise to customer on account
B. payment on note payable
C. purchase of equipment for cash
D. collection of accounts receivable
E. purchase of supplies on account
PA10. 3.4 Identify whether the following transactions would be recorded with a debit (Dr) or credit (Cr)
entry. Indicate the normal balance of the account.
Transaction Debit or credit? Normal balance
A. Equipment increase
B. Dividends Paid increase
C. Repairs Expense increase
D. Service revenue decrease
E. Miscellaneous Expense increase
F. Bonds Payable decrease
Table 3.20
Chapter 3 Analyzing and Recording Transactions 199
PA11. 3.5 The following information is provided for the first month of operations for Legal Services Inc.:
A. The business was started by selling $100,000 worth of common stock.
B. Six months’ rent was paid in advance, $4,500.
C. Provided services in the amount of $1,000. The customer will pay at a later date.
D. An office worker was hired. The worker will be paid $275 per week.
E. Received $500 in payment from the customer in “C”.
F. Purchased $250 worth of supplies on credit.
G. Received the electricity bill. We will pay the $110 in thirty days.
H. Paid the worker hired in “D” for one week’s work.
I. Received $100 from a customer for services we will provide next week.
J. Dividends in the amount of $1,500 were distributed.
Prepare the necessary journal entries to record these transactions. If an entry is not required for any of these
transactions, state this and explain why.
PA12. 3.5 Sewn for You had the following transactions in its first week of business.
A. Jessica Johansen started Sewn for You, a seamstress business, by contributing $20,000 and receiving
stock in exchange.
B. Paid $2,250 to cover the first three months’ rent.
C. Purchased $500 of sewing supplies. She paid cash for the purchase.
D. Purchased a sewing machine for $1,500 paying $200 cash and signing a note for the balance.
E. Finished a job for a customer earning $180. The customer paid cash.
F. Received a $500 down payment to make a wedding dress.
G. Received an electric bill for $125 which is due to be paid in three weeks.
H. Completed an altering job for $45. The customer asked to be billed.
Prepare the necessary journal entries to record these transactions. If an entry is not required for any of these
transactions, state this and explain why.
PA13. 3.5 George Hoskin started his own business, Hoskin Hauling. The following transactions occurred in
the first two weeks:
A. George Hoskin contributed cash of $12,000 and a truck worth $10,000 to start the business. He
received Common Stock in return.
B. Paid two months' rent in advance, $800.
C. Agreed to do a hauling job for a price of $1,200.
D. Performed the hauling job discussed in “C.” We will get paid later.
E. Received payment of $600 on the hauling job done in “D.”
F. Purchased gasoline on credit, $50.
G. Performed another hauling job. Earned $750, was paid cash.
Record the following transactions in T-accounts. Label each entry with the appropriate letter. Total the T-
accounts when you are done.
PA14. 3.5 Prepare journal entries to record the following transactions. Create a T-account for Cash, post any
entries that affect the account, and calculate the ending balance for the account. Assume a Cash beginning
balance of $16,333.
A. February 2, issued stock to shareholders, for cash, $25,000
B. March 10, paid cash to purchase equipment, $16,000
200 Chapter 3 Analyzing and Recording Transactions
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	Chapter 3. Analyzing and Recording Transactions
	Problem Set A