ANSWERS TO QUESTIONS
19.
(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) The chart of accounts is important, particularly for a company that has a large number of
accounts, because it helps organize the accounts and identify their location in the ledger.
20.
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 the mathematical equality of debits and credits after all journalized transactions have been posted. A trial balance also facilitates the discovery of errors in journalizing
and posting. In addition, it is useful in preparing financial statements.
SOLUTIONS TO BRIEF EXERCISES
BRIEF EXERCISE 3-11
LYNDON COMPANY
Trial Balance
June 30, 2012
Cash ............................................................................
Accounts Receivable .................................................
Equipment ..................................................................
Accounts Payable ......................................................
Common Stock ...........................................................
Dividends ....................................................................
Service Revenue ........................................................
Salaries and Wages Expense ....................................
Rent Expense .............................................................
Debit
$ 5,400
3,000
13,000
Credit
$ 1,000
18,000
1,200
8,600
4,000
1,000
$27,600
$27,600
SOLUTIONS TO EXERCISES
EXERCISE 3-12
(a)
Date
Apr. 1
4
7
12
15
25
29
30
General Journal
Account Titles and Explanation
Debit
Cash .................................................................. 15,000
Common Stock..........................................
(Issued stock for cash)
Supplies ............................................................
Accounts Payable .....................................
(Purchased supplies on account)
5,200
Accounts Receivable .......................................
Service Revenue .......................................
(Billed clients for services
rendered)
3,400
Cash ..................................................................
Service Revenue .......................................
(Received cash for revenue
earned)
700
Salaries and Wages Expense ..........................
Cash ...........................................................
(Paid salaries)
800
Accounts Payable .............................................
Cash ...........................................................
(Paid creditors on account)
3,500
Cash ..................................................................
Accounts Receivable ................................
(Received cash in payment of
account)
800
Cash ..................................................................
Unearned Service Revenue ......................
(Received cash for future services)
900
Credit
15,000
5,200
3,400
700
800
3,500
800
900
EXERCISE 3-12 (Continued)
(b)
McGREGOR GARDENING COMPANY, INC.
Trial Balance
April 30, 2012
Cash ....................................................................
Accounts Receivable .........................................
Supplies ..............................................................
Accounts Payable ..............................................
Unearned Service Revenue ...............................
Common Stock ..................................................
Service Revenue ................................................
Salaries and Wages Expense ............................
Debit
$13,100
2,600
5,200
Credit
$ 1,700
900
15,000
4,100
800
$21,700
$21,700
PROBLEM 3-6A
(a) & (c)
10/1 Bal.
10/5
Bal.
Cash
8,200 10/15
1,300 10/20
10/29
10/31
5,700
Common Stock
10/1 Bal. 15,000
Bal.
15,000
1,200
1,900
300
400
10/29
Bal.
Accounts Receivable
10/1 Bal. 2,600 10/5
1,300
10/10
5,100
Bal.
6,400
10/1 Bal.
Bal.
Supplies
2,100
2,100
10/1 Bal.
Bal.
Equipment
8,000
8,000
10/20
Accounts Payable
1,900 10/1 Bal.
Bal.
Dividends
300
300
Service Revenue
10/10
10/17
Bal.
5,100
600
5,700
Salaries and Wages Expense
10/15
1,200
Bal.
1,200
10/31
Bal.
4,800
2,900
Unearned Service Revenue
10/17
600 10/1 Bal. 1,000
Bal.
500
Utilities Expense
400
400
PROBLEM 3-6A (Continued)
(b)
Date
Oct. 5
10
15
17
20
29
31
Account Titles and Explanation
Cash .................................................................
Accounts Receivable ..............................
(Received collections from
customers on account)
Debit
1,300
Accounts Receivable ......................................
Service Revenue ......................................
(Billed customers for services
performed)
5,100
Salaries and Wages Expense .........................
Cash .........................................................
(Paid employee salaries)
1,200
Unearned Service Revenue ............................
Service Revenue ......................................
(Performed services for customers
who paid in advance)
600
Accounts Payable ...........................................
Cash .........................................................
(Paid creditors on account)
1,900
Dividends .........................................................
Cash .........................................................
(Payment of cash dividend)
300
Utilities Expense .............................................
Cash .........................................................
(Paid utilities)
400
Credit
1,300
5,100
1,200
600
1,900
300
400
PROBLEM 3-6A (Continued)
(d)
MIMOSA COMPANY
Trial Balance
October 31, 2012
Cash ....................................................................
Accounts Receivable .........................................
Supplies ..............................................................
Equipment ...........................................................
Accounts Payable ..............................................
Unearned Service Revenue ...............................
Common Stock ...................................................
Dividends ............................................................
Service Revenue .................................................
Salaries and Wages Expense ............................
Utilities Expense .................................................
Debit
$ 5,700
6,400
2,100
8,000
Credit
$ 2,900
500
15,000
300
5,700
1,200
400
$24,100
$24,100