EXERCISE 3-1
1. Increase in assets and increase in stockholders’ equity.
2. Decrease in assets and decrease in stockholders’ equity.
3. Increase in assets and increase in stockholders’ equity.
4. Increase in assets and increase in stockholders’ equity.
5. Decrease in assets and decrease in stockholders’ equity.
6. Increase in liabilities and decrease in stockholders’ equity.
7. Increase in assets and decrease in assets.
8. Increase in assets and decrease in assets.
9. Increase in assets and increase in liabilities.
E3-3 see Excel Spreadsheet
EXERCISE 3-13
(a)
Aug. 1
10
31
Bal.
Cash
8,000 Aug. 12
1,700
600
9,100
Accounts Receivable
Aug. 25 3,400 Aug. 31
Bal.
2,800
Aug. 12
Bal.
Equipment
6,200
6,200
1,200
600
Notes Payable
Aug. 12
Bal.
5,000
5,000
Common Stock
Aug. 1
Bal.
8,000
8,000
Service Revenue
Aug. 10
25
Bal.
1,700
3,400
5,100
(b)
GALAXY INC.
Trial Balance
August 31, 2012
Cash ....................................................................
Accounts Receivable .........................................
Equipment .........................................................
Notes Payable ....................................................
Common Stock ..................................................
Service Revenue ................................................
Debit
$ 9,100
2,800
6,200
$18,100
Copyright © 2011 John Wiley & Sons, Inc.
Kimmel, Financial Accounting, 6/e, Solutions Manual
(For Instructor Use Only)
Credit
$ 5,000
8,000
5,100
$18,100
3-4
EXERCISE 3-17
Account
Accounts payable
Accounts receivable
Common stock
Depreciation expense
Interest expense
Interest income
Inventories
Prepaid expenses
Property and Equipment
Revenues
Copyright © 2011 John Wiley & Sons, Inc.
(a)
Normal
Balance
Debit or Credit
Credit
Debit
Credit
Debit
Debit
Credit
Debit
Debit
Debit
Credit
Kimmel, Financial Accounting, 6/e, Solutions Manual
(b)
Balance Sheet or
Income Statement
Balance sheet
Balance sheet
Balance sheet
Income statement
Income statement
Income statement
Balance sheet
Balance sheet
Balance sheet
Income statement
(For Instructor Use Only)
3-5
P3-2A see Excel Spreadsheet
(b)
TAYLOR MADE CONSULTING INC.
Income Statement
For the Month Ended May 31, 2012
Revenues
Service revenue ............................................
Expenses
Salaries and wages expense .........................
Rent expense .................................................
Utilities expense ............................................
Advertising expense .....................................
Total expenses .......................................
Net income ............................................................
(c)
$5,600
$2,500
600
180
150
3,430
$2,170
TAYLOR MADE CONSULTING INC.
Balance Sheet
May 31, 2012
Assets
Current assets
Cash...............................................................
Accounts receivable .....................................
Supplies .........................................................
$18,270
3,000
500
Equipment ....................................................
Total assets ...................................................
2,000
$23,770
Liabilities and Stockholders’ Equity
Current liabilities
Notes payable ...............................................
$ 5,000
Accounts payable .........................................
1,800
Total liabilities .............................................
Stockholders’ Equity
Common stock .............................................
15,000
Retained earnings ($0 + $2,170 – $200) .....
1,970
Total liabilities and stockholders’
equity.............................................................
Copyright © 2011 John Wiley & Sons, Inc.
Kimmel, Financial Accounting, 6/e, Solutions Manual
(For Instructor Use Only)
$ 6,800
16,970
$23,770
3-6
(d)
TAYLOR MADE CONSULTING INC.
Statement of Retained Earnings
May 31, 2012
Retained earnings, May 1
$
Add: Net Income
0
2,170
2,170
Less: Dividends
200
Retained earnings, May 31
Copyright © 2011 John Wiley & Sons, Inc.
Kimmel, Financial Accounting, 6/e, Solutions Manual
$ 1,970
(For Instructor Use Only)
3-7
PROBLEM 3-4A
Date
Mar. 1
3
5
6
10
18
19
25
Account Titles and Explanation
Cash .................................................................
Common Stock.........................................
(Issued stock for cash)
Debit
50,000
Land ..................................................................
Buildings ..........................................................
Equipment ........................................................
Cash ..........................................................
(Purchased Arnie’s Golf Land)
23,000
9,000
6,000
Advertising Expense .......................................
Cash ..........................................................
(Paid for advertising)
1,200
Prepaid Insurance ...........................................
Cash ..........................................................
(Paid for one-year insurance policy)
2,400
Equipment ........................................................
Accounts Payable ....................................
(Purchased equipment on account)
5,500
Cash .................................................................
Service Revenue ......................................
(Received cash for revenue earned)
1,600
Cash (100 X $25) ..............................................
Unearned Service Revenue .....................
(Received cash for coupon books
sold)
2,500
Dividends .........................................................
Cash ..........................................................
(Payment of cash dividend)
500
Copyright © 2011 John Wiley & Sons, Inc.
Kimmel, Financial Accounting, 6/e, Solutions Manual
Credit
50,000
38,000
1,200
2,400
5,500
1,600
2,500
(For Instructor Use Only)
500
3-8
PROBLEM 3-4A (Continued)
Date
Mar. 30
30
31
Account Titles and Explanation
Salaries and Wages Expense .........................
Cash ..........................................................
(Paid salaries expense)
Debit
800
Accounts Payable ............................................
Cash ..........................................................
(Paid creditor on account)
5,500
Cash .................................................................
Service Revenue ......................................
(Received cash for revenue earned)
900
Copyright © 2011 John Wiley & Sons, Inc.
Kimmel, Financial Accounting, 6/e, Solutions Manual
Credit
800
5,500
(For Instructor Use Only)
900
3-9
PROBLEM 3-5A
(a)
Date
Apr. 1
Account Titles and Explanation
Cash .................................................................
Common Stock.........................................
(Issued shares of stock for cash)
Debit
18,000
18,000
1
No entry—not a transaction.
2
Rent Expense ...................................................
Cash ..........................................................
(Paid monthly office rent)
900
Supplies ...........................................................
Accounts Payable ....................................
(Purchased supplies on account
from Spring Green Company)
1,300
Accounts Receivable ......................................
Service Revenue ......................................
(Billed clients for services rendered)
1,900
Cash .................................................................
Unearned Service Revenue .....................
(Received cash advance for future
service)
700
Cash .................................................................
Service Revenue ......................................
(Received cash for revenue earned)
2,800
Salaries and Wages Expense .........................
Cash ..........................................................
(Paid monthly salary)
1,500
3
10
11
20
30
Copyright © 2011 John Wiley & Sons, Inc.
Kimmel, Financial Accounting, 6/e, Solutions Manual
Credit
900
1,300
1,900
700
2,800
(For Instructor Use Only)
1,500
3-10
30
Accounts Payable ............................................
Cash ..........................................................
(Paid Spring Green Company
on account)
Copyright © 2011 John Wiley & Sons, Inc.
Kimmel, Financial Accounting, 6/e, Solutions Manual
300
(For Instructor Use Only)
300
3-11
Copyright © 2011 John Wiley & Sons, Inc.
Kimmel, Financial Accounting, 6/e, Solutions Manual
(For Instructor Use Only)
3-12