ACC 557 Week 2 WileyPlus (Chapter 2 and 3)
Elvira Industries had the following transactions.
1. Borrowed $6,150 from the bank by signing a note.
2. Paid $3,075 cash for a computer.
3. Purchased $553 of supplies on account.
(a) Indicate what accounts are increased and decreased by each transaction.
(b) Journalize each transaction. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Exercise 2-9 (Part Level Submission)
Selected transactions from the journal of Roberta Mendez, investment broker, are presented below.
Date Account Titles and Explanation Ref. Debit Credit
Aug.1 Cash 5,415
Common Stock 5,415
(Investment of cash for stock)
10 Cash 2,924
Service Revenue 2,924
(Received cash for services provided)
12 Equipment 5,415
Notes Payable 4,332
(Purchased office equipment for cash and notes payable)
25 Accounts Receivable 1,733
Service Revenue 1,733
(Billed clients for services provided)
31 Cash 921
Accounts Receivable 921
(Receipt of cash on account)
a. Indicate what accounts are increased and decreased by each transaction.
b. Journalize each transaction.
Exercise 2-11 (Part Level Submission)
Presented below is the ledger for Sparks Co.
10/1 4,563 10/4 384
10/10 735 10/12 1,273
10/10 4,261 10/15 264
10/20 403 10/30 199
10/25 2,148 10/31 497
10/6 785 10/20 403
10/3 3,564 Balance
10/12 1,273 10/3 3,564
Salaries and Wages Expense
a. Reproduce the journal entries for the transactions that occurred on October 1, 10, and 20 and provide explanations for each. (Record entries in the order displayed in the T-Accounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Problem 2-2A (Part Level Submission)
Kara Shin is a licensed CPA. During the first month of operations of her business, Kara Shin, Inc., the following events and transactions occurred.
May 1 Stockholders invested $23,234 cash in exchange for common stock.
2 Hired a secretary-receptionist at a salary of $3,302 per month.
3 Purchased $2,000 of supplies on account from Hartig Supply Company.
7 Paid office rent of $797 cash for the month.
11 Completed a tax assignment and billed client $1,966 for services provided.
12 Received $2,683 advance on a management consulting engagement.
17 Received cash of $1,684 for services completed for Lucille Co.
31 Paid secretary-receptionist $3,302 salary for the month.
31 Paid 45% of balance due Hartig Supply Company.
Kara uses the following chart of accounts: No. 101 Cash, No. 112 Accounts Receivable, No. 126 Supplies, No. 201 Accounts Payable, No. 209 Unearned Service Revenue, No. 311 Common Stock, No. 400 Service Revenue, No. 726 Salaries and Wages Expense, and No. 729 Rent Expense.
Journalize the transactions. (Record entries in the order displayed in the problem statement. If no entry is required, select “No entry” for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered.
b. Post to the ledger accounts. (Post the entries into ledger in the order displayed in Part 1.)
c. Prepare a trial balance on May 31, 2014
The trial balance of the Garland Company shown below does not balance.
Your review of the ledger reveals that each account has a normal balance. You also discover the following errors.
1. The totals of the debit sides of Prepaid Insurance, Accounts Payable, and Utilities Expense were each understated $100.
2. Transposition errors were made in Accounts Receivable and Service Revenue. Based on postings made, the correct balances were $2,470 and $8,860, respectively.
3. A debit posting to Salaries and Wages Expense of $200 was omitted.
4. A $1,577 cash dividend was debited to Common Stock for $1,577 and credited to Cash for $1,577.
5. A $582 purchase of supplies on account was debited to Equipment for $582 and credited to Cash for $582.
6. A cash payment of $520 for advertising was debited to Advertising Expense for $52 and credited to Cash for $52.
7. A collection from a customer for $517 was debited to Cash for $517 and credited to Accounts Payable for $517.
Prepare a correct trial balance. (Hint: It helps to prepare the correct journal entry for the transaction described and compare it to the mistake made.)
Orwell Company accumulates the following adjustment data at December 31.
1. Services provided but not recorded total $1,420.
2. Supplies of $300 have been used.
3. Utility expenses of $225 are unpaid.
4. Unearned service revenue of $260 is recognized for services performed.
5. Salaries of $800 are unpaid.
6. Prepaid insurance totaling $380 has expired.
For each of the above items indicate the following. (Answer for account balances before adjustment should be entered in alphabetical order.)
a. The type of adjustment (prepaid expense, unearned revenue, accrued revenue, or accrued expense).
b. The status of accounts before adjustment (overstatement or understatement).
The ledger of Villa Rental Agency on March 31 of the current year includes the selected accounts, shown below, before adjusting entries have been prepared.
Prepaid Insurance $ 5,760
Accumulated Depreciation—Equipment $ 10,560
Notes Payable 23,000
Unearned Rent Revenue 9,900
Rent Revenue 59,223
Interest Expense 0
Salaries and Wages Expense 14,534
An analysis of the accounts shows the following
1. The equipment depreciates $480 per month.
2. One-third of the unearned rent revenue was recognized during the quarter.
3. Interest of $575 is accrued on the notes payable.
4. Supplies on hand total $970.
5. Insurance expires at the rate of $320 per month.
Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly. Additional accounts are: Depreciation Expense, Insurance Expense, Interest Payable, and Supplies Expense. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
A partial adjusted trial balance of Ruiz Company at January 31, 2014, shows the following.
Adjusted Trial Balance
January 31, 2014
Supplies $ 865
Prepaid Insurance 2,802
Salaries and Wages Payable $ 817
Unearned Service Revenue 658
Supplies Expense 849
Insurance Expense 467
Salaries and Wages Expense 3,159
Service Revenue 2,044
Answer the following questions, assuming the year begins January 1.
(a) If the amount in Supplies Expense is the January 31 adjusting entry, and $797 of supplies was purchased in January, what was the balance in Supplies on January 1?
(b) If the amount in Insurance Expense is the January 31 adjusting entry, and the original insurance premium was for one year, what was the total premium and when was the policy purchased?
(c) If $3,211 of salaries was paid in January, what was the balance in Salaries and Wages Payable at December 31, 2013?
Problem 3-1A (Part Level Submission)
Joey Cuono started his own consulting ﬁrm, Cuono Company, on June 1, 2014. The
trial balance at June 30 is shown below.
In addition to those accounts listed on the trial balance, the chart of accounts for Cuono
Company also contains the following accounts and account numbers: No. 158 Accumulated
Depreciation—Equipment, No. 212 Salaries and Wages Payable, No. 631 Supplies Expense,
No. 711 Depreciation Expense, No. 722 Insurance Expense, and No. 732 Utilities Expense.
1. Supplies on hand at June 30 are $750.
2. A utility bill for $292 has not been recorded and will not be paid until next month.
3. The insurance policy is for a year.
4. $2,625 of unearned service revenue is recognized for services performed at the end of
5. Salaries of $1,900 are accrued at June 30.
6. The equipment has a 5-year life with no salvage value. It is being depreciated at $326
per month for 48 months.
7. Invoices representing $2,466 of services performed during the month have not been
recorded as of June 30.
(a) Prepare the adjusting entries for the month of June.
(b) Prepare an adjusted trial balance at June 30, 2014.