www.downloadslide.net
CHAPTER 2
The Recording Process
ASSIGNMENT CLASSIFICATION TABLE
Brief
Exercises
Learning Objectives
Questions
Do It!
1.
Explain what an account
is and how it helps in the
recording process.
1
2.
Define debits and credits
and explain their use in
recording business
transactions.
2, 3, 4, 5,
6, 7, 8, 9,
14, 21
1, 2, 5
3.
Identify the basic steps in
the recording process.
10, 19
4
4.
Explain what a journal is
and how it helps in the
recording process.
11, 12, 13,
14, 16
3, 6
5.
Explain what a ledger is
and how it helps in the
recording process.
17
6.
Explain what posting is
and how it helps in the
recording process.
15, 17
7, 8
3
7.
Prepare a trial balance
and explain its purposes.
18, 20
9, 10
4
A
Exercises Problems
B
Problems
1
1
2, 4, 6,
7, 14
1A, 2A,
3A, 5A
1B, 2B,
3B, 5B
1A, 2A,
3A, 5A
1B, 2B,
3B, 5B
9, 12
2A, 3A, 5A
2B, 3B, 5B
9, 10, 11,
13, 14, 15
2A, 3A,
4A, 5A
2B, 3B,
4B, 5B
6, 7
2
3, 5, 6, 7
10, 11, 12
8
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
2-1
www.downloadslide.net
ASSIGNMENT CHARACTERISTICS TABLE
Problem
Number
2-2
Description
Difficulty
Level
Time Allotted
(min.)
1A
Journalize a series of transactions.
Simple
20–30
2A
Journalize transactions, post, and prepare a trial balance.
Simple
30–40
3A
Journalize and post transactions and prepare a trial balance.
Moderate
40–50
4A
Prepare a correct trial balance.
Moderate
30–40
5A
Journalize transactions, post, and prepare a trial balance.
Moderate
40–50
1B
Journalize a series of transactions.
Simple
20–30
2B
Journalize transactions, post, and prepare a trial balance.
Simple
30–40
3B
Journalize transactions, post, and prepare a trial balance.
Moderate
40–50
4B
Prepare a correct trial balance.
Moderate
30–40
5B
Journalize transactions, post, and prepare a trial balance.
Moderate
40–50
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
www.downloadslide.net
WEYGANDT FINANCIAL ACCOUNTING 8E
CHAPTER 2
THE RECORDING PROCESS
Number
LO
BT
Difficulty
Time (min.)
BE1
2
C
Simple
6–8
BE2
2
C
Simple
4–6
BE3
4
AP
Simple
4–6
BE4
3
C
Moderate
4–6
BE5
2
C
Simple
6–8
BE6
4
AP
Simple
4–6
BE7
6
AP
Simple
4–6
BE8
6
AP
Simple
4–6
BE9
7
AP
Simple
4–6
BE10
7
AN
Moderate
6–8
DI1
2
C
Simple
3–5
DI2
4
AP
Simple
3–5
DI3
6
AP
Simple
2–4
DI4
7
AP
Simple
6–8
EX1
1
K
Simple
2–4
EX2
2
C
Simple
10–15
EX3
4
AP
Simple
8–10
EX4
2
C
Simple
6–8
EX5
4
AP
Simple
6–8
EX6
2–4
AP
Simple
6–8
EX7
2–4
AP
Simple
8–10
EX8
5
K
Simple
2–4
EX9
6, 7
AP
Simple
10–12
EX10
4, 7
AP
Moderate
10–12
EX11
4, 7
AP
Moderate
12–15
EX12
4, 6
AP
Moderate
12–15
EX13
7
AN
Moderate
6–8
EX14
2, 7
AP
Simple
8–10
EX15
7
C
Simple
4–6
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
2-3
www.downloadslide.net
THE RECORDING PROCESS (Continued)
Number
LO
BT
Difficulty
Time (min.)
P1A
2, 4
AP
Simple
20–30
P2A
2, 4, 6, 7
AP
Simple
30–40
P3A
2, 4, 6, 7
AP
Moderate
40–50
P4A
7
AN
Moderate
30–40
P5A
2, 4, 6, 7
AP
Moderate
40–50
P1B
2, 4
AP
Simple
20–30
P2B
2, 4, 6, 7
AP
Simple
30–40
P3B
2, 4, 6, 7
AP
Moderate
40–50
P4B
7
AN
Moderate
30–40
P5B
2, 4, 6, 7
AP
Moderate
40–50
BYP1
2
C
Simple
8–10
BYP2
2, 4
AN
Simple
8–10
BYP3
—
AP
Simple
15–20
BYP4
6, 7
AP, S
Moderate
20–30
BYP5
3, 6
AP, S
Moderate
10–15
BYP6
7
S
Simple
10–15
BYP7
—
AN, E
Moderate
15–20
BYP8
—
E
Moderate
10–15
BYP9
—
E
Moderate
15–20
BYP10
—
E
Moderate
15–20
2-4
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
www.downloadslide.net
Learning Objective
Knowledge
Comprehension
Application
1.
Explain what an account
is and how it helps in the
recording process.
2.
Define debits and credits and Q2–21
explain their use in recording
business transactions.
Q2-2
Q2-3
Q2-4
Q2-5
Q2-6
3.
Identify the basic steps in
the recording process.
Q2-10
Q2-19
BE2-4
E2-6
E2-7
4.
Explain what a journal is and
how it helps in the recording
process.
Q2-12
Q2-11
Q2-13
Q2-14
Q2-16
BE2-3
BE2-6
DI2-2
E2-3
E2-5
E2-6
E2-7
E2-10
E2-11
E2-12
P2-1A
P2-2A
P2-3A
5.
Explain what a ledger is and
how it helps in the recording
process.
E2-8
Q2-17
6.
Explain what posting is and
how it helps in the recording
process.
Q2-15
Q2-17
BE2-7
BE2-8
DI2-3
E2-9
E2-12 P2-2B
P2-2A P2-3B
P2-3A P2-5B
P2-5A
7.
Prepare a trial balance and
explain its purposes.
Q2-18
E2-15
BE2-9
DI2-4
E2-9
E2-10
E2-11
E2-14
P2-2A
P2-3A
Broadening Your Perspective
Analysis
Synthesis
Evaluation
Q2-1
E2-1
Q2-7
Q2-8
Q2-9
Q2-14
BE2-1
BE2-2 E2-6
BE2-5 E2-7
DI2-1 E2-14
E2-2 P2-1A
E2-4 P2-2A
P2-3A P2-5B
P2-5A
P2-1B
P2-2B
P2-3B
P2-5A
P2-1B
P2-2B
P2-3B
P2-5B
P2-5A
P2-2B
P2-3B
P2-5B
Financial Reporting Decision–Making
Across the
Organization
Real–World Focus
Q2-20
BE2-10
E2-13
P2-4A
P2-4B
Comparative Analysis Communication All About You
Ethics Case
Decision Making Ethics Case
Across the
Organization
BLOOM’S TAXONOMY TABLE
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
Correlation Chart between Bloom’s Taxonomy, Learning Objectives and End-of-Chapter Exercises and Problems
2-5
www.downloadslide.net
ANSWERS TO QUESTIONS
1.
A T account has the following parts: (a) the title, (b) the left or debit side, and (c) the right or credit side.
2.
Disagree. The terms debit and credit mean left and right respectively.
3.
Tom is incorrect. The double-entry system merely records the dual effect of a transaction on the
accounting equation. A transaction is not recorded twice; it is recorded once, with a dual effect.
4.
Olga is incorrect. A debit balance only means that debit amounts exceed credit amounts in an
account. Conversely, a credit balance only means that credit amounts are greater than debit
amounts in an account. Thus, a debit or credit balance is neither favorable nor unfavorable.
5.
(a) Asset accounts are increased by debits and decreased by credits.
(b) Liability accounts are decreased by debits and increased by credits.
(c) Revenues, common stock, and retained earnings are increased by credits and decreased by
debits. Expenses and dividends are increased by debits and decreased by credits.
6.
(a)
(b)
(c)
(d)
(e)
(f)
(g)
Accounts Receivable—debit balance.
Cash—debit balance.
Dividends—debit balance.
Accounts Payable—credit balance.
Service Revenue—credit balance.
Salaries and Wages Expense—debit balance.
Common Stock—credit balance.
7.
(a)
(b)
(c)
(d)
(e)
Accounts Receivable—asset—debit balance.
Accounts Payable—liability—credit balance
Equipment—asset—debit balance.
Dividends—stockholders’ equity—debit balance.
Supplies—asset—debit balance.
8.
(a) Debit Supplies and credit Accounts Payable.
(b) Debit Cash and credit Notes Payable.
(c) Debit Salaries and Wages Expense and credit Cash.
9.
(1)
(2)
(3)
(4)
(5)
(6)
10.
2-6
Cash—both debit and credit entries.
Accounts Receivable—both debit and credit entries.
Dividends—debit entries only.
Accounts Payable—both debit and credit entries.
Salaries and Wages Expense—debit entries only.
Service Revenue—credit entries only.
The basic steps in the recording process are:
1. Analyze each transaction for its effect on the accounts.
2. Enter the transaction information in a journal.
3. Transfer the journal information to the appropriate accounts in the ledger.
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
www.downloadslide.net
Questions Chapter 2 (Continued)
11.
The advantages of using the journal in the recording process are:
(a) It discloses in one place the complete effects of a transaction.
(b) It provides a chronological record of all transactions.
(c) It helps to prevent or locate errors because the debit and credit amounts for each entry can
be easily compared.
12.
(a) The debit should be entered first.
(b) The credit should be indented.
13.
When three or more accounts are required in one journal entry, the entry is referred to as a
compound entry. An example of a compound entry is the purchase of equipment, part of which is
paid for with cash and the remainder is on account.
14.
(a) No, business transaction debits and credits should not be recorded directly in the ledger.
(b) The advantages of using the journal are:
1. It discloses in one place the complete effects of a transaction.
2. It provides a chronological record of all transactions.
3. It helps to prevent or locate errors because the debit and credit amounts for each entry
can be easily compared.
15.
The advantage of the last step in the posting process is to indicate that the item has been posted.
16.
(a) Cash ..............................................................................................
Common Stock .....................................................................
(Issued shares of stock for cash)
9,000
(b) Prepaid Insurance .........................................................................
Cash .....................................................................................
(Paid one-year insurance policy)
800
(c)
17.
9,000
800
Supplies .........................................................................................
Accounts Payable .................................................................
(Purchased supplies on account)
2,000
(d) Cash ..............................................................................................
Service Revenue ..................................................................
(Received cash for services rendered)
7,800
2,000
7,800
(a) The entire group of accounts maintained by a company, including all the asset, liability, and
stockholders’ equity accounts, is referred to collectively as the ledger.
(b) A chart of accounts is a list of accounts and the account numbers that identify their location
in the ledger. The chart of accounts is important, particularly for a company that has a large
number of accounts, because it helps organize the accounts and define the level of detail that
a company desires in its accounting system.
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
2-7
www.downloadslide.net
Questions Chapter 2 (Continued)
18.
A trial balance is a list of accounts and their balances at a given time. The primary purpose of a
trial balance is to prove (check) that the debits equal the credits after posting. A trial balance also
facilitates the discovery of errors in journalizing and posting. In addition, it is useful in preparing
financial statements.
19.
No, Juan is not correct. The proper sequence is as follows:
(b) Business transaction occurs.
(c) Information entered in the journal.
(a) Debits and credits posted to the ledger.
(e) Trial balance is prepared.
(d) Financial statements are prepared.
20.
(a) The trial balance would balance.
(b) The trial balance would not balance.
21.
The normal balances are Cash debit, Accounts Payable credit, and Interest Expense debit.
2-8
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
www.downloadslide.net
SOLUTIONS TO BRIEF EXERCISES
BRIEF EXERCISE 2-1
1.
2.
3.
4.
5.
6.
Accounts Payable
Advertising Expense
Service Revenue
Accounts Receivable
Common Stock
Dividends
(a)
Debit
Effect
Decrease
Increase
Decrease
Increase
Decrease
Increase
(b)
Credit
Effect
Increase
Decrease
Increase
Decrease
Increase
Decrease
(c)
Normal
Balance
Credit
Debit
Credit
Debit
Credit
Debit
BRIEF EXERCISE 2-2
June 1
2
3
12
Account Debited
Cash
Equipment
Rent Expense
Accounts Receivable
Account Credited
Common Stock
Accounts Payable
Cash
Service Revenue
BRIEF EXERCISE 2-3
June 1
2
3
12
Cash ......................................................................
Common Stock .............................................
4,000
Equipment ............................................................
Accounts Payable ........................................
1,200
Rent Expense .......................................................
Cash ..............................................................
800
Accounts Receivable ...........................................
Service Revenue...........................................
300
4,000
1,200
800
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
300
2-9
www.downloadslide.net
BRIEF EXERCISE 2-4
The basic steps in the recording process are:
1.
Analyze each transaction. In this step, business documents are examined
to determine the effects of the transaction on the accounts.
2.
Enter each transaction in a journal. This step is called journalizing and
it results in making a chronological record of the transactions.
3.
Transfer journal information to ledger accounts. This step is called
posting. Posting makes it possible to accumulate the effects of
journalized transactions on individual accounts.
BRIEF EXERCISE 2-5
(a)
Aug.
2-10
Effect on Accounting Equation
(b)
Debit-Credit Analysis
1 The asset Cash is increased; the
stockholders’ equity account
Common Stock is increased.
Debits increase assets:
debit Cash $5,000.
Credits increase stockholders’ equity:
credit Common Stock $5,000.
4 The asset Prepaid Insurance is
increased; the asset Cash is
decreased.
Debits increase assets:
debit Prepaid Insurance $1,800.
Credits decrease assets:
credit Cash $1,800.
16 The asset Cash is increased; the
revenue Service Revenue is
increased.
Debits increase assets:
debit Cash $1,900.
Credits increase revenues:
credit Service Revenue $1,900.
27 The expense Salaries and Wages
Expense is increased; the asset
Cash is decreased.
Debits increase expenses:
debit Salaries and Wages Expense
$1,000.
Credits decrease assets:
credit Cash $1,000.
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
www.downloadslide.net
BRIEF EXERCISE 2-6
Aug. 1
4
16
27
Cash .......................................................................
Common Stock..............................................
5,000
Prepaid Insurance ................................................
Cash ...............................................................
1,800
Cash .......................................................................
Service Revenue ...........................................
1,900
Salaries and Wages Expense ..............................
Cash ...............................................................
1,000
5,000
1,800
1,900
1,000
BRIEF EXERCISE 2-7
Cash
5/12
2,100
5/15
3,200
Ending Bal. 5,300
5/5
Accounts Receivable
5,000 5/12
Service Revenue
5/5
5,000
5/15
3,200
Ending Bal. 8,200
2,100
Ending Bal. 2,900
BRIEF EXERCISE 2-8
Cash
Date
May 12
15
Explanation
Ref.
J1
J1
Debit
2,100
3,200
Credit
Balance
2,100
5,300
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
2-11
www.downloadslide.net
BRIEF EXERCISE 2-8 (Continued)
Accounts Receivable
Date
Explanation
May 5
12
Ref.
J1
J1
Debit
5,000
Service Revenue
Date
Explanation
May 5
15
Ref.
J1
J1
Debit
Credit
2,100
Balance
5,000
2,900
Credit
5,000
3,200
Balance
5,000
8,200
BRIEF EXERCISE 2-9
FAVRE COMPANY
Trial Balance
June 30, 2015
Cash .............................................................................
Accounts Receivable ..................................................
Equipment ...................................................................
Accounts Payable .......................................................
Common Stock............................................................
Dividends .....................................................................
Service Revenue .........................................................
Salaries and Wages Expense ....................................
Rent Expense ..............................................................
2-12
Debit
$ 5,200
3,000
17,000
Credit
$ 7,000
20,000
800
6,000
6,000
1,000
$33,000
$33,000
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
www.downloadslide.net
BRIEF EXERCISE 2-10
ERIKA COMPANY
Trial Balance
December 31, 2015
Cash .............................................................................
Prepaid Insurance ......................................................
Accounts Payable.......................................................
Unearned Service Revenue .......................................
Common Stock ...........................................................
Dividends ....................................................................
Service Revenue .........................................................
Salaries and Wages Expense ....................................
Rent Expense ..............................................................
Debit
$16,800
3,500
Credit
$ 3,000
4,200
13,000
4,500
25,600
18,600
2,400
$45,800
$45,800
SOLUTIONS FOR DO IT! REVIEW EXERCISES
DO IT! 2-1
James would likely need the following accounts in which to record the
transactions necessary to ready his photography studio for opening day:
Cash (debit balance)
Supplies
(debit balance)
Equipment
(debit balance)
Notes Payable (credit balance)
Accounts Payable
(credit balance)
Common Stock (credit balance)
Rent Expense (debit balance)
DO IT! 2-2
Each transaction that is recorded is entered in the general journal. The
three activities would be recorded as follows:
1.
2.
3.
Cash ...............................................................
Common Stock ....................................
8,000
Supplies .........................................................
Cash ......................................................
Accounts Payable................................
1,600
8,000
300
1,300
No entry because no transaction has occurred.
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
2-13
www.downloadslide.net
DO IT! 2-3
Cash
4/1 1,600 4/16 600
4/3 3,900 4/20 500
4/30 4,400
DO IT! 2-4
CHILLIN’ COMPANY
Trial Balance
December 31, 2015
Debit
Cash ............................................................................. $ 6,000
Accounts Receivable ..................................................
8,000
Supplies .......................................................................
5,000
Equipment ...................................................................
76,000
Notes Payable .............................................................
Accounts Payable .......................................................
Salaries Wages Payable .............................................
Common Stock............................................................
Dividends .....................................................................
8,000
Service Revenue .........................................................
Rent Expense ..............................................................
2,000
Salaries and Wages Expense ....................................
38,000
$143,000
2-14
Credit
$ 20,000
9,000
3,000
25,000
86,000
$143,000
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
www.downloadslide.net
SOLUTIONS TO EXERCISES
EXERCISE 2-1
1.
False. An account is an accounting record of a specific asset, liability,
or stockholders’ equity item.
2.
False. An account shows increases and decreases in the item it relates to.
3.
False. Each asset, liability, and stockholders’ equity item has a
separate account.
4.
False. An account has a left, or debit side, and a right, or credit side.
5.
True.
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
2-15
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
Account Debited
Account Credited
Effect
(d)
Normal
Balance
Common
Stock
Increase
Credit
Asset
Cash
Decrease
Debit
Debit
Liability
Accounts
Payable
Increase
Credit
Increase
Debit
Stockholders’
Equity
Service
Revenue
Increase
Credit
Advertising
Expense
Increase
Debit
Asset
Cash
Decrease
Debit
Asset
Cash
Increase
Debit
Asset
Accounts
Receivable
Decrease
Debit
23
Liability
Accounts
Payable
Decrease
Credit
Asset
Cash
Decrease
Debit
28
Stockholders’
Equity
Dividends
Increase
Debit
Asset
Cash
Decrease
Debit
Effect
(d)
Normal
Balance
(a)
Basic
Type
(b)
Specific
Account
Cash
Increase
Debit
Stockholders’
Equity
Asset
Equipment
Increase
Debit
9
Asset
Supplies
Increase
11
Asset
Accounts
Receivable
16
Stockholders’
Equity
20
Transaction
(a)
Basic
Type
(b)
Specific
Account
Jan.
2
Asset
3
(c)
(c)
EXERCISE 2-2
2-16
www.downloadslide.net
www.downloadslide.net
EXERCISE 2-3
General Journal
Account Titles and Explanation
Date
Jan. 2
3
9
11
16
20
23
28
Ref.
Debit
Cash ...................................................
Common Stock ..........................
15,000
Equipment .........................................
Cash ...........................................
8,200
Supplies .............................................
Accounts Payable .....................
500
Accounts Receivable........................
Service Revenue .......................
1,800
Advertising Expense ........................
Cash ...........................................
200
Cash ...................................................
Accounts Receivable ................
780
Accounts Payable .............................
Cash ...........................................
300
Dividends ...........................................
Cash ...........................................
500
J1
Credit
15,000
8,200
500
1,800
200
780
300
500
EXERCISE 2-4
Oct. 1
Debits increase assets: debit Cash $20,000.
Credits increase stockholders’ equity: credit Common Stock
$20,000.
2
No transaction.
3
Debits increase assets: debit Equipment $2,300.
Credits increase liabilities: credit Accounts Payable $2,300.
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
2-17
www.downloadslide.net
EXERCISE 2-4 (Continued)
Oct. 6
Debits increase assets: debit Accounts Receivable $3,600.
Credits increase revenues: credit Service Revenue $3,600.
27
Debits decrease liabilities: debit Accounts Payable $850.
Credits decrease assets: credit Cash $850.
30
Debits increase expenses: debit Salaries and Wages Expense
$2,500.
Credits decrease assets: credit Cash $2,500.
EXERCISE 2-5
Date
Oct. 1
Ref.
Debits
20,000
No entry.
3
Equipment .........................................
Accounts Payable ....................
2,300
Accounts Receivable ........................
Service Revenue .......................
3,600
Accounts Payable .............................
Cash...........................................
850
Salaries and Wages Expense ...........
Cash...........................................
2,500
27
30
Credit
20,000
2
6
2-18
General Journal
Account Titles and Explanation
Cash....................................................
Common Stock .........................
2,300
3,600
850
2,500
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
www.downloadslide.net
EXERCISE 2-6
(a)
1.
2.
3.
Increase the asset Cash, increase the liability Notes Payable.
Increase the asset Equipment, decrease the asset Cash.
Increase the asset Supplies, increase the liability Accounts Payable.
(b)
1.
Cash ..................................................................
Notes Payable ............................................
Equipment ........................................................
Cash............................................................
Supplies ............................................................
Accounts Payable .....................................
2.
3.
5,000
5,000
2,500
2,500
450
450
EXERCISE 2-7
(a)
Assets = Liabilities + Stockholders’ Equity
1. +
+
(Issue stock)
2. –
–
(Expense)
3. +
+
(Revenue)
4. –
–
(Dividends)
(b)
1.
2.
3.
4.
Cash ..................................................................
Common Stock ..........................................
Rent Expense....................................................
Cash............................................................
Accounts Receivable .......................................
Service Revenue ........................................
Dividends ..........................................................
Cash............................................................
5,000
5,000
950
950
4,700
4,700
600
600
EXERCISE 2-8
1.
2.
3.
4.
5.
False. The general ledger contains all the asset, liability, and stockholders’ equity accounts.
True.
False. The accounts in the general ledger are arranged in financial
statement order: first the assets, then the liabilities, common stock,
retained earnings, dividends, revenues, and expenses.
True.
False. The general ledger is not a book of original entry; transactions
are first recorded in the general journal, then in the general ledger.
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
2-19
www.downloadslide.net
EXERCISE 2-9
(a)
Aug. 1
10
31
Bal.
Cash
6,000 Aug. 12
2,700
880
8,780
Accounts Receivable
Aug. 25
1,600 Aug. 31
Bal.
720
Aug. 12
(b)
Equipment
5,000
800
880
Notes Payable
Aug. 12
4,200
Common Stock
Aug. 1
6,000
Service Revenue
Aug. 10
25
Bal.
2,700
1,600
4,300
KATI TILLMAN, INVESTMENT BROKER
Trial Balance
August 31, 2015
Cash .........................................................................
Accounts Receivable ..............................................
Equipment ................................................................
Notes Payable ..........................................................
Common Stock ........................................................
Service Revenue .....................................................
Debit
$ 8,780
720
5,000
$14,500
2-20
Credit
$ 4,200
6,000
4,300
$14,500
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
www.downloadslide.net
EXERCISE 2-10
(a)
Date
Apr. 1
12
15
25
29
30
General Journal
Account Titles and Explanation
Cash .....................................................
Common Stock ...............................
(Issued shares of stock
for cash)
Ref.
Debit
10,000
Credit
10,000
Cash .....................................................
Service Revenue ............................
(Received cash for
services provided)
900
Salaries and Wages Expense ............
Cash ................................................
(Paid salaries to date)
720
Accounts Payable...............................
Cash ................................................
(Paid creditors on account)
1,500
Cash .....................................................
Accounts Receivable .....................
(Received cash in payment
of account)
400
Cash .....................................................
Unearned Service Revenue ...........
(Received cash for future
services)
1,000
900
720
1,500
400
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
1,000
2-21
www.downloadslide.net
EXERCISE 2-10 (Continued)
(b)
SANTANA LANDSCAPING COMPANY
Trial Balance
April 30, 2015
Cash ..........................................................................
Accounts Receivable ...............................................
Supplies ....................................................................
Accounts Payable ....................................................
Unearned Service Revenue .....................................
Common Stock .........................................................
Service Revenue ......................................................
Salaries and Wages Expense ..................................
Debit
$10,080
2,800
1,800
Credit
$
720
$15,400
300
1,000
10,000
4,100
$15,400
EXERCISE 2-11
(a) Oct. 1 Cash .............................................................
Common Stock .....................................
(Issued shares of stock for cash)
5,000
10 Cash .............................................................
Service Revenue ..................................
(Received cash for services
provided)
730
10 Cash .............................................................
Notes Payable .......................................
(Obtained loan from bank)
3,000
20 Cash .............................................................
Accounts Receivable ...........................
(Received cash in payment of
account)
500
20 Accounts Receivable ..................................
Service Revenue ..................................
(Billed clients for services
provided)
910
2-22
5,000
730
3,000
500
910
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
www.downloadslide.net
EXERCISE 2-11 (Continued)
(b)
HIGGS CO.
Trial Balance
October 31, 2015
Cash .....................................................................
Accounts Receivable ..........................................
Supplies ...............................................................
Equipment ..........................................................
Notes Payable .....................................................
Accounts Payable ...............................................
Common Stock ...................................................
Dividends.............................................................
Service Revenue .................................................
Salaries and Wages Expense ............................
Rent Expense ......................................................
Debit
$ 8,250
1,210
400
2,000
Credit
$ 3,000
500
7,000
300
2,440
500
280
$12,940
$12,940
EXERCISE 2-12
(a)
Date
Sept. 1
5
25
30
General Journal
Account Titles and Explanation
Cash ...................................................
Common Stock..........................
Ref.
101
311
Debit
10,000
Equipment .........................................
Cash ...........................................
Accounts Payable .....................
157
101
201
12,000
Accounts Payable.............................
Cash ...........................................
201
101
2,400
Dividends...........................................
Cash ...........................................
332
101
500
J1
Credit
10,000
4,000
8,000
2,400
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
500
2-23
www.downloadslide.net
EXERCISE 2-12 (Continued)
(b)
Cash
Date
Sept. 1
5
25
30
Explanation
Equipment
Date
Explanation
Sept. 5
Accounts Payable
Date
Explanation
Sept. 5
25
Common Stock
Date
Explanation
Sept. 1
Dividends
Date
Explanation
Sept. 30
2-24
Ref.
J1
J1
J1
J1
Ref.
J1
Ref.
J1
J1
Ref.
J1
Ref.
J1
Debit
10,000
Credit
4,000
2,400
500
Debit
12,000
Debit
Credit
No. 157
Balance
12,000
Credit
8,000
No. 201
Balance
8,000
5,600
2,400
Debit
Debit
500
No. 101
Balance
10,000
6,000
3,600
3,100
Credit
10,000
Credit
No. 311
Balance
10,000
No. 332
Balance
500
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
www.downloadslide.net
EXERCISE 2-13
Error
1.
2.
3.
4.
5.
6.
(a)
In Balance
No
Yes
Yes
No
Yes
No
(b)
Difference
$450
—
—
300
—
27
(c)
Larger Column
Debit
—
—
Credit
—
Debit
EXERCISE 2-14
TIME IS MONEY DELIVERY SERVICE
Trial Balance
July 31, 2015
Debit
Cash ($90,907 – Debit total without Cash
$69,340) ...................................................................
Accounts Receivable .................................................
Prepaid Insurance ......................................................
Equipment ...................................................................
Notes Payable .............................................................
Accounts Payable.......................................................
Salaries and Wages Payable .....................................
Common Stock ...........................................................
Retained Earnings ......................................................
Dividends ....................................................................
Service Revenue .........................................................
Salaries and Wages Expense ....................................
Maintenance and Repairs Expense ..........................
Gasoline Expense.......................................................
Utilities Expense .........................................................
Credit
$21,567
10,642
1,968
49,360
$26,450
8,396
815
40,000
4,636
700
10,610
4,428
961
758
523
$90,907
$90,907
EXERCISE 2-15
Transactions 4, 5, and 7 are operating activities
Transaction 3 is an investing activity
Transactions 1, 2 and 6 are financing activities.
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
2-25
www.downloadslide.net
SOLUTIONS TO PROBLEMS
PROBLEM 2-1A
Date
Account Titles and Explanation
Apr. 1
Cash ........................................................
Common Stock ..............................
(Issued shares of stock
for cash)
50,000
Land ........................................................
Cash ................................................
(Purchased land for cash)
34,000
Advertising Expense .............................
Accounts Payable ..........................
(Incurred advertising
expense on account)
1,800
Salaries and Wages Expense ...............
Cash ................................................
(Paid salaries)
1,500
4
8
11
Debit
50,000
34,000
1,800
1,500
12
No entry—Not a transaction.
13
Prepaid Insurance ..................................
Cash ................................................
(Paid for one-year
insurance policy)
2,400
Dividends ................................................
Cash ................................................
(Declared and paid cash
dividends)
1,400
Cash ........................................................
Service Revenue ............................
(Received cash for services
provided)
5,700
17
20
2-26
Ref.
J1
Credit
2,400
1,400
5,700
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
www.downloadslide.net
PROBLEM 2-1A (Continued)
Date
Account Titles and Explanation
Apr. 25
Cash ......................................................
Unearned Service Revenue .............
(Received cash for future
services)
3,000
Cash ......................................................
Service Revenue ...........................
(Received cash for services
provided)
8,900
Accounts Payable ................................
Cash ...............................................
(Paid creditor on account)
840
30
30
Ref.
Debit
Credit
3,000
8,900
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
840
2-27
www.downloadslide.net
PROBLEM 2-2A
(a)
Date
Account Titles and Explanation
Ref.
Debit
May 1
Cash ........................................................
Common Stock ..............................
(Issued shares of stock
for cash)
101
311
20,000
No entry—not a transaction.
3
Supplies ..................................................
Accounts Payable ..........................
(Purchased supplies on
account)
126
201
1,500
Rent Expense .........................................
Cash ................................................
(Paid office rent)
729
101
900
Accounts Receivable .............................
Service Revenue ............................
(Billed client for services
provided)
112
400
2,800
Cash ........................................................
Unearned Service Revenue ..........
(Received cash for future
services)
101
209
3,500
Cash ........................................................
Service Revenue ............................
(Received cash for services
provided)
101
400
1,200
Salaries and Wages Expense ...............
Cash ................................................
(Paid salaries)
726
101
2,000
11
12
17
31
2-28
20,000
2
7
J1
Credit
1,500
900
2,800
3,500
1,200
2,000
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
www.downloadslide.net
PROBLEM 2-2A (Continued)
Date
Account Titles and Explanation
Ref.
Debit
May 31
Accounts Payable ($1,500 X 40%) .........
Cash ..............................................
(Paid creditor on account)
201
101
600
Credit
600
(b)
Cash
Date
May 1
7
12
17
31
31
Explanation
Accounts Receivable
Date
Explanation
May 11
Supplies
Date
Explanation
May 3
Accounts Payable
Date
Explanation
May 3
31
Unearned Service Revenue
Date
Explanation
May 12
Ref.
J1
J1
J1
J1
J1
J1
Ref.
J1
Ref.
J1
Ref.
J1
J1
Ref.
J1
Debit
20,000
Credit
900
3,500
1,200
2,000
600
Debit
2,800
Debit
1,500
Debit
No. 101
Balance
20,000
19,100
22,600
23,800
21,800
21,200
Credit
No. 112
Balance
2,800
Credit
No. 126
Balance
1,500
Credit
1,500
No. 201
Balance
600
900
Debit
No. 209
Balance
3,500
Credit
3,500
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
2-29
www.downloadslide.net
PROBLEM 2-2A (Continued)
Common Stock
Date
Explanation
May 1
Ref.
J1
Service Revenue
Date
Explanation
May 11
17
Ref.
J1
J1
Salaries and Wages Expense
Date
Explanation
May 31
Rent Expense
Date
Explanation
May 7
(c)
Ref.
J1
Ref.
J1
Debit
Debit
Debit
2,000
Debit
900
Credit
20,000
No. 311
Balance
20,000
Credit
2,800
1,200
No. 400
Balance
2,800
4,000
Credit
No. 726
Balance
2,000
Credit
No. 729
Balance
900
JULIA DUMARS, INC.
Trial Balance
May 31, 2015
Debit
Cash ..................................................................... $21,200
Accounts Receivable ..........................................
2,800
Supplies ...............................................................
1,500
Accounts Payable ...............................................
Unearned Service Revenue ................................
Common Stock ....................................................
Service Revenue .................................................
Salaries and Wages Expense .............................
2,000
Rent Expense ......................................................
900
$28,400
2-30
Credit
$ 900
3,500
20,000
4,000
$28,400
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
www.downloadslide.net
PROBLEM 2-3A
(a) & (c)
Balance
(4)
(6)
Cash
8,000
(1)
(3)
13,000
(5)
5,000
(7)
(8)
4,300
Common Stock
Balance
1,000
1,700
Retained Earnings
Balance
14,400
3,000
1,600
(8)
Accounts Receivable
Balance 15,000
(4)
13,000
(6)
9,000
11,000
Balance
(2)
Balance
Balance
(5)
Supplies
11,000
3,600
14,600
Prepaid Rent
3,000
3,000
Equipment
21,000
21,000
Accounts Payable
Balance
(2)
14,400
30,000
30,000
11,000
11,000
Dividends
1,600
1,600
Service Revenue
(6)
(1)
Advertising Expense
1,000
1,000
(3)
Miscellaneous Expense
1,700
1,700
14,000
14,000
Salaries and Wages Expense
(7)
3,000
3,000
17,000
3,600
6,200
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
2-31
www.downloadslide.net
PROBLEM 2-3A (Continued)
(b)
Trans.
1.
2.
3.
4.
5.
6.
7.
8.
2-32
Account Titles and Explanation
Debit
Advertising Expense ..............................
Cash ................................................
1,000
Supplies ...................................................
Accounts Payable .........................
3,600
Miscellaneous Expense .........................
Cash ................................................
1,700
Cash .........................................................
Accounts Receivable ....................
13,000
Accounts Payable ...................................
Cash ................................................
14,400
Cash .........................................................
Accounts Receivable .............................
Service Revenue ............................
5,000
9,000
Salaries and Wages Expense ................
Cash ................................................
3,000
Dividends ................................................
Cash ................................................
1,600
Credit
1,000
3,600
1,700
13,000
14,400
14,000
3,000
1,600
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
www.downloadslide.net
PROBLEM 2-3A (Continued)
(d)
TABLETTE REPAIR SERVICE, INC.
Trial Balance
January 31, 2015
Cash .....................................................................
Accounts Receivable ..........................................
Supplies ...............................................................
Prepaid Rent........................................................
Equipment ...........................................................
Accounts Payable ...............................................
Common Stock ...................................................
Retained Earnings ..............................................
Dividends.............................................................
Service Revenue .................................................
Advertising Expense ..........................................
Miscellaneous Expense .....................................
Salaries and Wages Expense ............................
Debit
$ 4,300
11,000
14,600
3,000
21,000
Credit
$ 6,200
30,000
11,000
1,600
14,000
1,000
1,700
3,000
$61,200
$61,200
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
2-33
www.downloadslide.net
PROBLEM 2-4A
DOMINIC COMPANY
Trial Balance
May 31, 2015
Cash ($3,850 + $520 – $405) .........................................
Accounts Receivable ($2,570 – $420) .........................
Prepaid Insurance ($700 + $100) .................................
Supplies ($0 + $520) .....................................................
Equipment ($12,000 – $520) .........................................
Accounts Payable ($4,500 – $100 + $520 – $420).......
Unearned Service Revenue ..........................................
Common Stock ($11,700 + $1,000) ..............................
Dividends ($0 + $1,000) ................................................
Service Revenue ...........................................................
Salaries and Wages Expense ($4,200 + $200) ............
Advertising Expense ($1,100 + $405) ..........................
Utilities Expense ($800 + $100) ....................................
2-34
Debit
$ 3,965
2,150
800
520
11,480
Credit
$ 4,500
560
12,700
1,000
8,960
4,400
1,505
900
$26,720
$26,720
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
www.downloadslide.net
PROBLEM 2-5A
(a) & (c)
Cash
Date
Apr. 1
2
9
10
12
25
29
30
30
Explanation
Balance
J1
J1
J1
J1
J1
J1
J1
J1
Accounts Receivable
Date
Explanation
Apr. 30
Prepaid Rent
Date
Explanation
Apr. 30
Land
Date
Apr. 1
Ref.
Explanation
Balance
Buildings
Date
Explanation
Apr. 1
Balance
Ref.
J1
Ref.
J1
Ref.
Ref.
Debit
Credit
800
1,800
3,000
320
5,200
1,600
90
1,000
Debit
90
Debit
1,000
Debit
Debit
No. 101
Balance
6,000
5,200
7,000
4,000
3,680
8,880
7,280
7,370
6,370
Credit
No. 112
Balance
90
Credit
No. 136
Balance
1,000
Credit
No. 140
Balance
12,000
Credit
No. 145
Balance
8,000
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
2-35
www.downloadslide.net
PROBLEM 2-5A (Continued)
Equipment
Date
Explanation
Apr. 1
Balance
Accounts Payable
Date
Explanation
Apr. 1
Balance
10
20
Mortgage Payable
Date
Explanation
Apr. 1
Balance
10
Common Stock
Date
Explanation
Apr. 1
Balance
Service Revenue
Date
Explanation
Apr. 9
25
Rent Revenue
Date
Explanation
Apr. 30
2-36
Ref.
Debit
Ref.
Debit
J1
J1
1,000
Debit
J1
2,000
Ref.
J1
J1
Ref.
J1
Credit
950
Ref.
Ref.
Credit
Debit
Debit
Debit
No. 157
Balance
6,000
No. 201
Balance
2,000
1,000
1,950
Credit
No. 275
Balance
10,000
8,000
Credit
No. 311
Balance
20,000
Credit
1,800
5,200
No. 400
Balance
1,800
7,000
Credit
180
No. 429
Balance
180
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
www.downloadslide.net
PROBLEM 2-5A (Continued)
Advertising Expense
Date
Explanation
Apr. 12
Salaries and Wages Expense
Date
Explanation
Apr. 29
Rent Expense
Date
Explanation
Apr. 2
20
Ref.
J1
Ref.
J1
Ref.
J1
J1
Debit
320
Debit
1,600
Debit
800
950
Credit
No. 610
Balance
320
Credit
No. 726
Balance
1,600
Credit
No. 729
Balance
800
1,750
(b)
Date
Apr. 2
Account Titles and Explanation
Rent Expense......................................
Cash ............................................
(Paid film rental)
Ref.
729
101
Debit
800
800
3
No entry—not a transaction.
9
Cash .....................................................
Service Revenue ........................
(Received cash for services
provided)
101
400
1,800
Mortgage Payable...............................
Accounts Payable...............................
Cash ............................................
(Made payments on
mortgage and accounts
payable)
275
201
101
2,000
1,000
10
J1
Credit
1,800
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
3,000
2-37
www.downloadslide.net
PROBLEM 2-5A (Continued)
Date
Account Titles and Explanation
Apr. 11
No entry—not a transaction.
12
20
25
29
30
30
2-38
Ref.
Debit
Advertising Expense ............................
Cash ..............................................
(Paid advertising expenses)
610
101
320
Rent Expense ........................................
Accounts Payable........................
(Rented film on account)
729
201
950
Cash .......................................................
Service Revenue ..........................
(Received cash for services
provided)
101
400
5,200
Salaries and Wages Expense ..............
Cash ..............................................
(Paid salaries expense)
726
101
1,600
Cash .......................................................
Accounts Receivable ...........................
Rent Revenue...............................
(18% X $1,000)
(Received cash and
balance on account for
concession revenue)
101
112
429
90
90
Prepaid Rent .........................................
Cash ..............................................
(Paid cash for future film
rentals)
136
101
1,000
Credit
320
950
5,200
1,600
180
1,000
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
www.downloadslide.net
PROBLEM 2-5A (Continued)
(d)
PALACE THEATER
Trial Balance
April 30, 2015
Cash .....................................................................
Accounts Receivable ..........................................
Prepaid Rent........................................................
Land .....................................................................
Buildings .............................................................
Equipment ...........................................................
Accounts Payable ...............................................
Mortgage Payable ...............................................
Common Stock ...................................................
Service Revenue .................................................
Rent Revenue ......................................................
Advertising Expense ..........................................
Salaries and Wages Expense ............................
Rent Expense ......................................................
Debit
$ 6,370
90
1,000
12,000
8,000
6,000
Credit
$ 1,950
8,000
20,000
7,000
180
320
1,600
1,750
$37,130
$37,130
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
2-39
www.downloadslide.net
PROBLEM 2-1B
Date
Mar. 1
3
5
6
10
18
19
2-40
Account Titles and Explanation
Cash .........................................................
Common Stock ...............................
(Issued shares of stock
for cash)
Ref.
Debit
60,000
J1
Credit
60,000
Land .........................................................
Buildings ..................................................
Equipment ...............................................
Cash .................................................
(Purchased Arnie’s Golf Land)
26,000
8,000
4,000
Advertising Expense ..............................
Cash .................................................
(Paid for advertising)
1,600
Prepaid Insurance ...................................
Cash .................................................
(Paid for one-year insurance
policy)
3,800
Equipment ...............................................
Accounts Payable ...........................
(Purchased equipment on
account)
1,050
Cash .........................................................
Service Revenue .............................
(Received cash for services
provided)
420
Cash .........................................................
Unearned Service Revenue ...........
(Received cash for coupon
books sold)
1,800
38,000
1,600
3,800
1,050
420
1,800
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
www.downloadslide.net
PROBLEM 2-1B (Continued)
Date
Mar. 25
30
30
31
Account Titles and Explanation
Dividends.............................................
Cash .............................................
(Declared and paid cash
dividend)
Ref.
Debit
800
Credit
800
Salaries and Wages Expense ............
Cash .............................................
(Paid salaries)
280
Accounts Payable...............................
Cash .............................................
(Paid creditor on account)
1,050
Cash .....................................................
Service Revenue .........................
(Received cash for services
provided)
200
280
1,050
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
200
2-41
www.downloadslide.net
PROBLEM 2-2B
(a)
Date
Account Titles and Explanation
Ref.
Debit
Apr. 1
Cash ........................................................
Common Stock ..............................
(Issued shares of stock
for cash)
101
311
40,000
No entry—not a transaction.
2
Rent Expense .........................................
Cash ................................................
(Paid monthly office rent)
729
101
1,700
Supplies ..................................................
Accounts Payable ..........................
(Purchased supplies on
account from Jennings
Company)
126
201
5,200
Accounts Receivable .............................
Service Revenue ............................
(Billed clients for services
provided)
112
400
6,600
Cash ........................................................
Unearned Service Revenue ..........
(Received cash for future
service)
101
209
1,200
Cash ........................................................
Service Revenue ............................
(Received cash for services
provided)
101
400
2,100
Salaries and Wages Expense................
Cash ................................................
(Paid monthly salary)
726
101
2,400
10
11
20
30
2-42
40,000
1
3
J1
Credit
1,700
5,200
6,600
1,200
2,100
2,400
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
www.downloadslide.net
PROBLEM 2-2B (Continued)
Date
Account Titles and Explanation
Ref.
Debits
Apr. 30
Accounts Payable ..............................
Cash ............................................
(Paid Jennings Company on
account)
201
101
2,200
Credit
2,200
(b)
Cash
Date
Apr. 1
2
11
20
30
30
Explanation
Accounts Receivable
Date
Explanation
Apr. 10
Supplies
Date
Explanation
Apr. 3
Accounts Payable
Date
Explanation
Apr. 3
30
Unearned Service Revenue
Date
Explanation
Apr. 11
Ref.
J1
J1
J1
J1
J1
J1
Ref.
J1
Ref.
J1
Ref.
J1
J1
Ref.
J1
Debit
40,000
Credit
1,700
1,200
2,100
2,400
2,200
Debit
6,600
Debit
5,200
Debit
Credit
No. 112
Balance
6,600
Credit
No. 126
Balance
5,200
Credit
5,200
No. 201
Balance
5,200
3,000
2,200
Debit
No. 101
Balance
40,000
38,300
39,500
41,600
39,200
37,000
Credit
1,200
No. 209
Balance
1,200
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
2-43
www.downloadslide.net
PROBLEM 2-2B (Continued)
Common Stock
Date
Explanation
Apr. 1
Ref.
J1
Service Revenue
Date
Explanation
Apr. 10
20
Ref.
J1
J1
Salaries and Wages Expense
Date
Explanation
Apr. 30
Rent Expense
Date
Explanation
Apr. 2
(c)
Ref.
J1
Ref.
J1
Debit
Debit
Debit
2,400
Debit
1,700
Credit
6,600
2,100
No. 400
Balance
6,600
8,700
Credit
No. 726
Balance
2,400
Credit
No. 729
Balance
1,700
ALICIA HIRAM, DENTIST
Trial Balance
April 30, 2015
Cash .....................................................................
Accounts Receivable ..........................................
Supplies ...............................................................
Accounts Payable ...............................................
Unearned Service Revenue ................................
Common Stock ....................................................
Service Revenue .................................................
Salaries and Wages Expense .............................
Rent Expense ......................................................
2-44
Credit
40,000
No. 311
Balance
40,000
Debit
$37,000
6,600
5,200
Credit
$ 3,000
1,200
40,000
8,700
2,400
1,700
$52,900
$52,900
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
www.downloadslide.net
PROBLEM 2-3B
(a)
Trans.
1.
Account Titles and Explanation
Debit
Cash ..................................................
Common Stock ........................
50,000
50,000
2.
No entry—Not a transaction.
3.
Prepaid Rent .....................................
Cash .........................................
24,000
Equipment.........................................
Cash .........................................
Accounts Payable ...................
28,000
Prepaid Insurance ............................
Cash .........................................
2,640
Supplies ............................................
Cash .........................................
750
Supplies ............................................
Accounts Payable ...................
1,300
Cash ..................................................
Accounts Receivable .......................
Service Revenue .....................
6,000
12,000
Accounts Payable ............................
Cash .........................................
400
Cash ..................................................
Accounts Receivable ..............
3,200
Utilities Expense ..............................
Accounts Payable ...................
260
4.
5.
6.
7.
8.
9.
10.
11.
Credit
24,000
5,000
23,000
2,640
750
1,300
18,000
400
3,200
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
260
2-45
www.downloadslide.net
PROBLEM 2-3B (Continued)
Trans.
12.
Account Titles and Explanation
Salaries and Wages Expense .........
Cash ..........................................
Debit
Credit
5,600
5,600
(b)
(1)
(8)
(10)
(8)
(6)
(7)
(5)
(3)
2-46
Cash
50,000
(3)
(4)
(5)
(6)
6,000
(9)
3,200
(12)
20,810
(4)
24,000
5,000
2,640
750
400
(9)
5,600
Accounts Receivable
12,000
(10)
3,200
8,800
Prepaid Rent
24,000
24,000
Accounts Payable
(4)
23,000
(7)
1,300
400
(11)
260
24,160
Common Stock
(1)
50,000
50,000
Service Revenue
(8)
18,000
18,000
Supplies
750
1,300
2,050
Prepaid Insurance
2,640
2,640
Equipment
28,000
28,000
Salaries and Wages Expense
(12)
5,600
5,600
(11)
Utilities Expense
260
260
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
www.downloadslide.net
PROBLEM 2-3B (Continued)
(c)
HILLSBOROUGH SERVICES
Trial Balance
May 31, 2015
Cash .................................................................
Accounts Receivable ......................................
Supplies ...........................................................
Prepaid Insurance ...........................................
Prepaid Rent....................................................
Equipment .......................................................
Accounts Payable ...........................................
Common Stock ...............................................
Service Revenue .............................................
Salaries and Wages Expense ........................
Utilities Expense .............................................
Debit
$20,810
8,800
2,050
2,640
24,000
28,000
Credit
$24,160
50,000
18,000
5,600
260
$92,160
$92,160
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
2-47
www.downloadslide.net
PROBLEM 2-4B
ZOOP CO.
Trial Balance
June 30, 2015
Cash ($3,960 + $270) ...................................................
Accounts Receivable ($2,648 – $270) .......................
Supplies ($800 – $620)................................................
Equipment ($3,000 + $620) .........................................
Accounts Payable ($2,666 – $309 – $390) .................
Unearned Service Revenue........................................
Common Stock............................................................
Dividends ($800 + $600) .............................................
Service Revenue ($2,367 + $684) ...............................
Salaries and Wages Expense ($3,400 + $700 – $600)
Utilities Expense .........................................................
2-48
Debit
$ 4,230
2,378
180
3,620
Credit
$ 1,967
2,200
9,000
1,400
3,051
3,500
910
$16,218
$16,218
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
www.downloadslide.net
PROBLEM 2-5B
(a) & (c)
Cash
Date
Mar. 1
2
9
10
12
20
20
31
31
31
Explanation
Balance
J1
J1
J1
J1
J1
J1
J1
J1
J1
Accounts Receivable
Date
Explanation
Mar. 31
Land
Date
Mar. 1
Ref.
Explanation
Balance
Buildings
Explanation
Date
Mar. 1
Balance
Equipment
Explanation
Date
Mar. 1
Balance
Ref.
J1
Ref.
Ref.
Ref.
375
9,000
No. 101
Balance
8,000
7,000
11,000
7,600
7,150
12,550
9,950
7,450
7,825
16,825
Debit
375
Credit
No. 112
Balance
375
Credit
No. 140
Balance
22,000
Credit
No. 145
Balance
10,000
Credit
No. 157
Balance
8,000
Debit
Credit
1,000
4,000
3,400
450
5,400
2,600
2,500
Debit
Debit
Debit
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
2-49
www.downloadslide.net
PROBLEM 2-5B (Continued)
Accounts Payable
Explanation
Date
Mar. 1
Balance
2
10
Common Stock
Explanation
Date
Mar. 1
Balance
Service Revenue
Explanation
Date
Mar. 9
20
31
Rent Revenue
Explanation
Date
Mar. 31
Advertising Expense
Explanation
Date
Mar. 12
2-50
Ref.
J1
J1
Ref.
Ref.
J1
J1
J1
Ref.
J1
Ref.
J1
Debit
Credit
2,500
3,400
Debit
Debit
Debit
Debit
450
Credit
No. 201
Balance
6,000
8,500
5,100
No. 311
Balance
42,000
Credit
4,000
5,400
9,000
No. 400
Balance
4,000
9,400
18,400
Credit
750
No. 429
Balance
750
Credit
No. 610
Balance
450
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
www.downloadslide.net
PROBLEM 2-5B (Continued)
Salaries and Wages Expense
Date
Explanation
Mar. 31
Rent Expense
Date
Explanation
Mar. 2
20
Ref.
J1
Ref.
J1
J1
Debit
2,500
Debit
3,500
2,600
Credit
No. 726
Balance
2,500
Credit
No. 729
Balance
3,500
6,100
(b)
J1
Date
Account Titles and Explanation
Ref.
Debit
Mar. 2
Rent Expense .......................................
Accounts Payable .......................
Cash .............................................
(Rented films for cash and
on account)
729
201
101
3,500
2,500
1,000
3
No entry.
9
Cash ......................................................
Service Revenue .........................
(Received cash for services
provided)
101
400
4,000
Accounts Payable ($2,500 + $900) .........
Cash .............................................
(Paid creditors on account)
201
101
3,400
610
101
450
10
11
No entry.
12
Advertising Expense ............................
Cash .............................................
(Paid advertising expense)
Credit
4,000
3,400
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
450
2-51
www.downloadslide.net
PROBLEM 2-5B (Continued)
Date
20
20
Mar. 31
31
31
2-52
Account Titles and Explanation
Cash .......................................................
Service Revenue ..........................
(Received cash for services
provided)
Ref.
101
400
Debit
5,400
Rent Expense ........................................
Cash ..............................................
(Paid film rental)
729
101
2,600
Salaries and Wages Expense...............
Cash ..............................................
(Paid salaries expense)
726
101
2,500
Cash .......................................................
Accounts Receivable ............................
Rent Revenue ...............................
(15% X $5,000)
(Received cash and balance
on account for concession
revenue)
101
112
429
375
375
Cash .......................................................
Service Revenue ..........................
(Received cash for services
provided)
101
400
9,000
Credit
5,400
2,600
2,500
750
9,000
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
www.downloadslide.net
PROBLEM 2-5B (Continued)
(d)
HART THEATER
Trial Balance
March 31, 2015
Cash ..................................................................
Accounts Receivable ......................................
Land ..................................................................
Buildings ..........................................................
Equipment ........................................................
Accounts Payable ...........................................
Common Stock ................................................
Service Revenue ..............................................
Rent Revenue ..................................................
Advertising Expense .......................................
Salaries and Wages Expense .........................
Rent Expense ...................................................
Debit
$16,825
375
22,000
10,000
8,000
Credit
$ 5,100
42,000
18,400
750
450
2,500
6,100
$66,250
$66,250
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
2-53
www.downloadslide.net
BYP 2-1
FINANCIAL REPORTING PROBLEM
(a)
(1)
Increase
Side
Credit
(1)
Decrease
Side
Debit
Accounts Receivable
Debit
Credit
Debit
Property, Plant, and Equipment
Debit
Credit
Debit
Cash and Cash Equivalents
Debit
Credit
Debit
Research and Development
Expense
Debit
Credit
Debit
Inventories
Debit
Credit
Debit
Account
Accounts Payable
(2)
Normal
Balance
Credit
(b) 1.
2.
3.
Cash is increased.
Cash is decreased.
Cash is decreased or Accounts Payable is increased.
(c) 1.
2.
Cash is decreased.
Cash is decreased or Notes or Mortgage Payable is increased.
2-54
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
www.downloadslide.net
BYP 2-2
COMPARATIVE ANALYSIS PROBLEM
BYP 2-2
_______________Pepsi_______
(a) 1.
Inventory:
debit
2.
Property, Plant &
Equipment:
debit
3.
Accounts Payable:
credit
4.
Interest Expense:
debit
______Coca-Cola_____________
1. Accounts Receivable:
2. Cash and Cash Equivalents:
debit
debit
3. Cost of Goods Sold (expense): debit
4. Sales (revenue):
credit
(b)
1. Increase in Accounts Receivable: Service Revenue or Sales Revenue is increased (credited).
2.
Decrease in Salaries and Wages Payable: Cash is decreased (credited).
3.
Increase in Property, Plant and Equipment: Cash is decreased (credited) and Accounts
Payable or Notes payable is increased (credited).
4. Increase in Interest Expense: Cash is decreased (credited).
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
2-55
www.downloadslide.net
BYP 2-3
Comparative Analysis Problem
Amazon
(a) 1. Interest Expense:
debit
Wal-Mart
1. Net Sales Revenues:
credit
2. Cash and Cash
Equivalents:
debit
2. Inventories:
debit
3. Accounts Payable:
credit
3. Cost of Sales:
debit
(b) The following other accounts are ordinarily involved:
2-56
1.
Increase in Accounts Receivable: Service Revenue or Sales Revenue is
increased (credited).
2.
Increase in Interest Expense: Cash is decreased (credited).
3.
Decrease in Salaries and Wages Payable: Cash is decreased (credited).
4.
Increase in Service Revenue: Cash or Accounts Receivable is increased
(debited).
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
www.downloadslide.net
BYP 2-4
REAL–WORLD FOCUS
The answer is dependent upon the company selected by the student.
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
2-57
www.downloadslide.net
BYP 2-5
Real World Focus
(a) The reason the Green Bay Packers’ issue an annual report is because
they are a publicly owned, nonprofit company. They issue the report to
the more than 100,000 shareholders who hold shares. None of the
other teams are publicly owned, so they have no obligation to make
their financial information available except to their small group of
owners.
(b) At the time that the article was written the owners of the NFL teams
and the players’ labor union were negotiating a new contract. Knowing
how profitable the NFL teams are would be useful information for the
players to know so that they would have a better sense of how much
the teams could afford to play. The Packers are obviously a “small
market” team, they are not necessarily representative of teams in
general. However, the Packers’ annual report does give the players
some sense of the profitability of other teams.
(c) Since some of the cost of the stadium that the Packers play in is
covered by taxpayers, the county and state government has an
interest in the team’s finances.
(d) The Packers’ revenues increased during recent years. However,
because the cost of players’ salaries increased at a faster rate than
revenues, the Packers’ operating profit actually declined.
2-58
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
www.downloadslide.net
BYP 2-6
Decision-Making Across the Organization
(a) May 1
Correct.
5
Correct.
7
Cash .........................................................
Unearned Service Revenue .............
300
Equipment................................................
Cash ..................................................
800
Dividends .................................................
Cash ..................................................
400
Cash .........................................................
Service Revenue ..............................
184
14
15
20
30
Correct.
31
Supplies ...................................................
Accounts Payable ............................
300
800
400
184
1,700
1,700
(b) The errors in the entries of May 14 and 20 would prevent the trial
balance from balancing.
(c) Net income as reported ............................................
Add: 5/15, Salaries expense (Dividends paid)......
$4,500
400
4,900
300
$4,600
Less: 5/7, Boarding revenue unearned ..................
Correct net income ...................................................
(d) Cash as reported ......................................................
Add: 5/20, Transposition error ..............................
5/31, Purchase on account ...........................
$12,475
$
36
1,700
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
1,736
$14,211
2-59
www.downloadslide.net
BYP 2-7
Communication Activity
Date:
May 25, 2015
To:
Accounting Instructor
From: Student
In the first transaction, bills totaling $6,000 were sent to customers for
services performed. Therefore, the asset Accounts Receivable is
increased $6,000 and the revenue Service Revenue is increased $6,000.
Debits increase assets and credits increase revenues, so the journal
entry is:
Accounts Receivable ..............................................................
Service Revenue .............................................................
(Billed customers for services performed)
6,000
6,000
The $6,000 amount is then posted to the debit side of the general ledger
account Accounts Receivable and to the credit side of the general ledger
account Service Revenue.
In the second transaction, $2,000 was paid in salaries to employees.
Therefore, the expense Salaries and Wages Expense is increased $2,000
and the asset Cash is decreased $2,000. Debits increase expenses and
credits decrease assets, so the journal entry is:
Salaries and Wages Expense ................................................
Cash .................................................................................
(Salaries and wages paid)
2,000
2,000
The $2,000 amount is then posted to the debit side of the general ledger
account Salaries and Wages Expense and to the credit side of the
general ledger account Cash.
2-60
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
www.downloadslide.net
BYP 2-8
Ethics Case
(a) The stakeholders in this situation are:
f Meredith Ward, assistant chief accountant.
f Users of the company’s financial statements.
f The Frazier Company.
(b) By adding $1,000 to the Equipment account, that account total is
intentionally misstated. By not locating the error causing the
imbalance, some other account may also be misstated by $1,000. If
the amount of $1,000 is determined to be immaterial, and the intent is
not to commit fraud (cover up an embezzlement or other
misappropriation of assets), Meredith’s action might not be
considered unethical in the preparation of interim financial
statements. However, if Meredith is violating a company accounting
policy by her action, then she is acting unethically.
(c) Meredith’s alternatives are:
1. Miss the deadline but find the error causing the imbalance.
2. Tell her supervisor of the imbalance and suffer the consequences.
3. Do as she did and locate the error later, making the adjustment in
the next quarter.
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
2-61
www.downloadslide.net
BYP 2-9
ETHICS CASE
The decision whether to fire Mr. Edmondson was the responsibility of
Radio Shack’s board of directors, which is elected by the company’s
shareholders to oversee management. The board initially announced its
support for the CEO. After further investigation, the board encouraged
Mr. Edmondson to resign, which he did. In contrast, when Bausch &
Lomb’s CEO offered to resign in a similar situation, the company’s
board refused to accept his resignation. Board members stated that they
felt he was still the best person for the position.
Radio Shack says that although it did a reference check at the time of
Mr. Edmondson’s hiring, it did not check his educational credentials.
Under the Sarbanes-Oxley Act, companies must now perform thorough
background checks as part of a check of internal controls. The bottom
line: Your résumé must be a fair and accurate depiction of your past.
2-62
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
www.downloadslide.net
BYP 2-10
ALL ABOUT YOU
(a) Students’ responses to this question will vary. It is important that the
steps that they identify be as specific as possible, and clearly
directed toward achieving their goal. You may wish to ask a followup question asking them to explain how each step will assist them in
achieving their goal.
(b) There are many sites on the Internet that provide information about
preparing a résumé. For example, you can find extensive resources at:
http://www.rileyguide.com/resprep.html. Many schools also have resources in their placement centers or writing labs. The Writing Center
at Rensselaer Polytechnic Institute provides useful, concise information on its website at http://www.ccp.rpi.edu/resources/careers-andgraduate-school/resumes. A wide variety of sample résumés can be
found. For example, Monster.com provides samples for a wide
variety of professions and situations at http://www.career-advice.
monster.com/resumes-cover-letters/resume-samples/jobs.aspx.
(c) It is important to provide accurate and complete documentation of all
relevant training, education, and employment experiences so as to
provide assurance to the potential employer, and also to enable that
employer to do follow-up work. If you say you have certain skills,
such as computer skills, try to substantiate the claim with
recognized proof of proficiency. Make sure that all addresses and
phone numbers are accurate and up-to-date. Also, ensure that the
people you use as references have a copy of your résumé and cover
letter, and that they are informed that you are interviewing so they
know to expect a call.
(d) See the sample résumés provided in the websites above for various
format options. You might also mention to students that there are
electronic résumé templates available on the Internet.
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
2-63
www.downloadslide.net
BYP 2-10
CONSIDERING PEOPLE, PLANET AND PROFIT
(a) The existence of three different forms of certification would most
likely create confusion for coffee purchasers. It would difficult to
know what aspects of the coffee growing process each certification
covered. Similarly, if there were multiple groups that certified
financial statements, each with different criteria, it would be difficult
for financial statement users to know what each certification
promised.
(b) The Starbucks certification appears to be the most common in that
area. It has the advantage of having a direct link to the Starbucks
coffee market. Although it does not guarantee that Starbucks will buy
its coffee, it is a requirement that must be met before Starbucks will
buy somebody’s coffee. Note that the article states that the
Starbucks
certification
“Incorporates
elements
of
social
responsibility and environmental leadership, but quality of coffee is
the first criteria.” The Smithsonian Bird Friendly is considered to
have the strictest requirements and, as a result, appears to be the
least common.
(c) The certifications have multiple objectives including organic farming
as a means to protect bird species, biodiversity and wildlife habitat.
Some included requirements are to improve workers’ living
conditions, such as providing running water in worker housing, child
labor regulations and education requirements. As mentioned above,
the Starbucks certification has the potential financial benefit of
making Starbucks a potential customer, which can stabilize farmers’
earnings. Certifications can also be financially beneficial because
companies can benefit from the positive relations effects of either
producing or buying coffee produced using sustainable practices.
2-64
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
www.downloadslide.net
IFRS EXERCISES
IFRS 2-1
In deciding whether the U.S. should adopt IFRS, the SEC should consider
the following.
•
•
•
•
•
•
Whether IFRS is sufficiently developed and consistent in application
Whether the IASB is sufficiently independent
Whether IFRS is established for the benefit to investors
The issues involved in educating investors about IFRS
The impact of a switch to IFRS on U.S. laws and regulations
The impact on companies including changes to their accounting
systems, contractual arrangements, corporate governance, and
litigation
• The issues involved in educating accountants, so they can prepare
statements under IFRS
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)
2-65
www.downloadslide.net
IFRS 2-2
INTERNATIONAL FINANCIAL REPORTING PROBLEM
Account
Financial Statement
(a) Other
administrative
expenses
(b) Cash at bank
Consolidated Income
statement
(c) Borrowings and
overdrafts
(d) Finance costs
2-66
Position in Financial
Statement
After gross profit and before
operating profit
Consolidated Balance Current assets
Sheet
Consolidated
Current and Non-current
Balance Sheet
liabilities
Consolidated Income After Operating profit and
Statement
before Profit from
continuing operations
before taxation.
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only)