ID: 193120001

Assignment on:
Transaction Analysis, General Journal, Ledger, Adjusting Entries, Break
Even Point.

Accounting consists of three basic activities.

It identifies, records, and communicates the economic events of an
organization to interested users.

GAAP= Generally Accepted Accounting Principles.

Financial Statement :

-Balance Sheet

-Income Statement

-Statement of Owner's Equity

-Statement of Cash Flows

-Note Disclosure

Monetary Unit Assumption requires that companies include in

the accounting records only transaction data that can be expressed in terms
of money.

Fair Value Principle states that assets and liabilities should be

reported at fair value.

Fair value the price received to sell an asset or settle a liability.

Example of Assets:
1. Cash 2. Supplies 3. Accounts receive-able

4. Pre-paid expense 5. Furniture 6. Equipment

7. Building 8. Land

Liabilities:
1. Account’s Payable.

2. Un-earned revenue.

3. Loan.

Owner’s Security:-
1. Capital

2. Drawing

3. Revenue

4. Expense

Revenue:
1. Sales Revenue

2. Service Revenue

3. Consultancy Revenue

4. Commission Revene

5. Member fee revenue

6. Rent revenue

Expense:
1. Salary Expense

2. Utility Expense

3. Rent Expense

4. Interest Expense

5. Insurance Expense

6. Depreciation Expense

Assets= Liabilities + Owner’s Equity (Capital + Drawing

+ Revenue Expenses)
 Transaction Analysis

(Book page no 15)

TRANSACTION 1.

INVESTMENT BY OWNER Ray Neal decides to start a Smartphone app

development company which he names Softbyte. On September 1, 2017, he
invests $15,000 cash in the business. This transaction results in an equal
increase in assets and owner’s equity.

TRANSACTION 2.

PURCHASE OF EQUIPMENT FOR CASH Softbyte Inc. purchases

computer equipment for $7,000 cash.

TRANSACTION 3.

PURCHASE OF SUPPLIES ON CREDIT Softbyte Inc. purchases for $1,600

headsets and other accessories expected to last several months. The supplier
allows Softbyte to pay this bill in October.

TRANSACTION 4.

SERVICES PERFORMED FOR CASH Softbyte Inc. receives $1,200 cash

from customers for app development services it has performed.

TRANSACTION 5.

PURCHASE OF ADVERTISING ON CREDIT Softbyte Inc. receives a bill

for $250 from the Daily News for advertising on its online website but
postpones payment until a later date.

TRANSACTION 6.
SERVICES PERFORMED FOR CASH AND CREDIT. Softbyte performs
$3,500 of services. The company receives cash of $1,500 from customers, and
it bills the balance of $2,000 on account.

TRANSACTION 7.

PAYMENT OF EXPENSES Softbyte Inc. pays the following expenses in cash

for September: office rent $600, salaries and wages of employees $900 and
utilities $200.

TRANSACTION 8.

PAYMENT OF ACCOUNTS PAYABLE Softbyte Inc. pays its $250 Daily

News bill in cash. The company previously (in Transaction 5) recorded the bill
as an increase in Accounts Payable.

TRANSACTION 9.

RECEIPT OF CASH ON ACCOUNT Softbyte Inc. receives $600 in cash from

customers who had been billed for services (in Transaction 6).

TRANSACTION 10.

WITHDRAWAL OF CASH BY OWNER Ray Neal withdraws $1,300 in cash

in cash from the business for his personal use.

Answer:

Company Name: Softbyte

Transaction analysis

For the month ended September 30, 2017.

 Assets =Liabilities + Owner’s Equity
Tra + + + + = Accou + - + -
nsac Cash Account Suppl Equipm nts Capit Drawi Reven Expen
tion ($) s ies ent Payabl al ngs ue ses
Receiva ($) ($) e ($) ($) ($) ($)
ble ($)
($)
1 +15,0 +15,0
00 00
2 -7000 +7,000
3 +1,60 +1,60
0 0
4 +1,20 +1,20
0 0
5 +250 -250
6 +1,50 +2,000 +3,50
0 0
7 - -1,700
1,700
8 -250 -250
9 +600 -600
10 - -1,300
1,300
Tota 18,050 18,050
l ($)
 (Book page no 31):
Joan Robinson opens her own law office on July 1,
2017. During the first month of operations, the
following transactions occurred.
1. Joan invested $11,000 in cash in the law practice.
2. Paid $800 for July rent on office space.
3. Purchased equipment on account $3,000.
4. Performed legal services to clients for cash
$1,500.
5. Borrowed $700 cash from a bank on a note
payable.
6. Performed legal services for client on account
$2,000.
7. Paid monthly expenses: salaries and wages $500,
utilities $300, and advertising $100.
8. Joan withdrew $1,000 cash for personal use.
Answer:

X company

Transaction analysis

For the month ended July 31, 2017.

Assets = Liabilities + Owner’s Equity

Tra + + + + = Notes Accou + - + -
nsa Cash Account Sup Equi Payabl nts Capit Drawi Reve Exp
cti ($) s plie pme e Payabl al ngs nue ense
on Receiva s nt ($) e ($) ($) ($) s
ble ($) ($) ($) ($)
($)
1 +11,0 +11,0
00 00
2 -800 -800
3 +3,0 +3,00
00 0
4 +1,50 +1,5
0 00
5 +700 +700
6 +2,000 +2,0
00
7 -900 -900
8 - +1,00
1,000 0
Tot 15,500 15,500
al
($)
Exercise Problem P1-1A
(Book page no 40):
On April 1, Julie Spengel established Spengel’s Travel Agency. The following
transactions were completed during the month.
1. Invested $15,000 cash to start the agency.
2. Paid $600 cash for April office rent.
3. Purchased equipment for $3,000 cash.
4. Incurred $700 of advertising costs in the Chicago Tribune, on account.
5. Paid $900 cash for office supplies.
6. Performed services worth $10,000: $3,000 cash is received from customers, and
the balance of $7,000 is billed to customers on account.
7. Withdrew $600 cash for personal use.
8. Paid Chicago Tribune $500 of the amount due in transaction (4).
9. Paid employees’ salaries $2,500.
10. Received $4,000 in cash from customers who have previously been billed in
transaction (6).

Answer:

Company Name: Spengel’s Travel Agency

Transaction analysis

For the month ended April 30, 2012.

 Assets =Liabilities + Owner’s Equity
Tra + + + + = Accou + - + -
nsac Cash Account Suppl Equipm nts Capit Drawi Reven Expen
tion ($) s ies ent Payabl al ngs ue ses
Receiva ($) ($) e ($) ($) ($) ($)
ble ($)
($)
1 +15,0
00
2 -600 -600
3 - +3,000
3,000
4 +700 -700
5 -900 +900
6 +3,00 +7,000 +10,0
0 00
7 -600 -600
8 -500 -500
9 - -2,500
2,500
10 +4,00 -4,000
0
Tota 20,800 20,800
l ($)
Exercise Problem P1-2A
(Book page no 40):
Judi Salem opened a law office on July 1, 2017. On July 31, the balance sheet
showed Cash $5,000, Accounts Receivable $1,500, Supplies $500, Equipment
$6,000, Accounts Payable $4,200 and Owner’s Capital $8,800. During August, the
following transactions occurred.
1. Collected $1,200 of accounts receivable.
2. Paid $2,800 cash on accounts payable.
3. Recognized revenue of $7,500 of which $3,000 is collected in cash and the
balance is due in September.
4. Purchased additional equipment for $2,000, paying $400 in cash and the balance
on account.
5. Paid salaries $2,500, rent for August $900, and advertising expenses $400.
6. Withdrew $700 in cash for personal use.
7. Received $2,000 from Standard Federal Bank—money borrowed on a note
payable.
8. Incurred utility expenses for month on account $270.

Answer:

Company Name: Judi Salem’s Law Office

Transaction analysis

For the month ended August 31, 2018.

 Assets = Liabilities + Owner’s Equity
Tra + + + + = Notes Accou + - + -
nsa Cash Account Sup Equi Payabl nts Capit Drawi Reve Exp
cti ($) s plie pme e Payabl al ngs nue ense
on Receiva s nt ($) e ($) ($) ($) s
ble ($) ($) ($) ($)
($)
Cu +5,00 +1,500 +50 +6,0 +4,20 +8,80
rre 0 0 00 0 0
nt
1 +1,20 -1,200
0
2 - -2,800
2,800
3 +3,00 +4,500 +7,5
0 00
4 -400 +2,0 +1,60
00 0
5 -400 -400
- -
2,500 2,50
-900 0
-900
6 -700 -700
7 +2,00 +2,00
0 0
8 +270 -270
Tot 3,800 3,800
al
($)

Exercise Problem P1-4A

(Book page no 41):
Trixie Maye started her own consulting firm, Matrix Consulting, on May 1, 2017.
The following transactions occurred during the month of May.
May 1 Trixie invested $7,000 cash in the business.

2 Paid $900 for office rent for the month.

3 Purchased $600 of supplies on account.

5 Paid $125 to advertise in the County News.

9 Received $4,000 cash for services performed.

12 Withdrew $1,000 cash for personal use.

15 Performed $5,400 of services on account.

17 Paid $2,500 for employee salaries.

20 Paid for the supplies purchased on account on May 3.

23 Received a cash payment of $4,000 for services performed on account

on May 15.

26 Borrowed $5,000 from the bank on a note payable.

29 Purchased equipment for $4,200 on account.

30 Paid $275 for utilities.

Answer:

Company Name: Matrix Consulting

Transaction analysis

For the month ended May 30, 2017.

 Assets = Liabilities + Owner’s Equity
Tra + + + + = Notes Accou + - + -
nsa Cash Account Sup Equi Payabl nts Capit Drawi Reve Exp
cti ($) s plie pme e Payabl al ngs nue ense
on Receiva s nt ($) e ($) ($) ($) s
Dat ble ($) ($) ($) ($)
e ($)
1 +7,00 +7,00
0 0
2 -900 -900
3 +60 +600
0
5 -125 -125
9 +4,00 +4,0
0 00
12 - -1,000
1,000
15 +5,400 +5,4
00
17 - -
2,500 2,50
0
20 -600 -600
23 +4,00 -4,000
0
26 +5,00 +5,00
0 0
29 +4,2 +4,20
00 0
30 -275 -275
Tot 20,800 20,800
al
($)
 Journal & ledger
Math 1 (page no 61):
On October 1, C. R. Byrd invests $10,000 cash in advertising
Company called Pioneer Advertising.

On October 1, Pioneer purchases office equipment costing $5,000 by signing

a 3-month, 12%, $5,000 note payable.

On October 2, Pioneer receives a $1,200 cash advance from

R. Knox, a client, for advertising services that are expected to be completed by
December 31.

On October 3, Pioneer pays office rent for October in cash, $900.

On October 4, Pioneer pays $600 for a one-year insurance policy that will expire
next year on September 30.

On October 5, Pioneer purchases an estimated 3-month supply of advertising

materials on account from Aero Supply for $2,500.

On October 9, Pioneer hires four employees to begin work on

October 15. Each employee is to receive a weekly salary of $500 for a 5-day work
week, payable every 2 weeks—first payment made on October 26.

On October 20, C. R. Byrd withdraws $500 cash for personal use.

On October 26, Pioneer owes employee salaries of $4,000 and pays them in cash
(see October 9 event).

On October 31, Pioneer receives $10,000 in cash from Copa

Company for advertising services performed in October .

Answer: Journal

Company’s Name: Pioneer Advertising

General Journal

For the months ended October 31.

Date Account Ref Debit ($) Credit ($)

Oct 1 Cash ……Dr 10,000

Capital ......Cr 10,000

Equipment ……Dr 5,000

Note Payable ……Cr 5,000

Oct 2 Cash ……Dr 1,200

Unearned Service Revenue ……Cr 1,200

Oct 3 Rent Expense ……Dr 900

Cash ……Cr 900

Oct 4 Prepaid Insurance ……Dr 600 L nb

Cash ……Cr 600

Oct 5 Supply ……Dr 2,500

Accounts Payable ……Cr 2,500

Oct 9 No Transaction

Oct 20 Owner’s Drawing ……Dr 500

Cash ……Cr 500

Oct 26 Salaries Expense ……Dr 4,000

Cash ……Cr 4,000

Oct 30 Cash ……Dr 10,000

Service Revenue ……Cr 10,000

 Total Total
34,700 34,700

Ledger

1.Cash:

Date Accounts Debit Credit Balance

Debit Credit

Oct 1 Capital 10,000 10,000

Oct 2 Unearned 1,200 11,200

Service
Revenue

Oct 3 Rent Expense 900 10,300

Oct 4 Prepaid 600 9,700

Insurance

Oct Owner’s 500 9,200

20 Drawing

Oct Salaries 4,000 5,200

26 Expense

Oct Service 10,000 15,200

30 Revenue
 2.Account Payable:
Date Accounts Debit Credit Balance

Debit Credit

Oct 30 Cash 10,000 10,000

3.Service Revenue:
Date Accounts Debit Credit Balance

Debit Credit

Oct 5 Accounts 2500 2500

Payable

4.Supplies:
Date Accounts Debit Credit Balance

Debit Credit

Oct 1 Note Payable 1,000 1,000

5.Equipments
Date Accounts Debit Credit Balance

Debit Credit

Oct 2 Cash 12,00 12,00

Math 2 (page no of Book 73):

Presented below is information related to Hammond Real Estate

Agency.

Oct. 1 Lia Berge begins business as a real estate agent with a cash
investment of $30,000

2 Paid rent, $700, on office space.

3 Purchases office equipment for $2,800, on account.

6 Sells a house and lot for Hal Smith; bills Hal Smith $4,400 for realty
services performed.

27 Pays $1,100 on the balance related to the transaction of October 3.

30 Receives bill for October utilities, $130 (not paid at this time).
Answer: Journal

Company’s Name: Hammond Real Estate Agency

General Journal

For the months ended October 31.

Date Account Ref Debit ($) Credit
($)

Oct 1 Cash ……Dr 30,000

Capital ……Cr 30,000

Oct 2 Rent Expense ……Dr 700

Cash ……Cr 700

Oct 3 Equipment ……Dr 2,800

Accounts Payable ……Cr 2,800

Oct 6 Accounts Receivable ……Dr 4,400

Service Receivable ……Cr 4,400

Oct Accounts Payable ……Dr 1,100

27
Cash ……Cr 1,100

Oct Utility Payable ……Dr 130

30
Accounts payable ……Cr 130

Total 39,130 Total

39,130
 Ledger

1.Cash:

Date Accounts Debit Credit Balance

Debit Credit

Oct 1 Capital 30,000 30,000

Oct 2 Rent Expense 700 29,300

Oct Accounts 1,100 28,200

27 Payable

2.Account Payable:

Date Accounts Debit Credit Balance

Debit Credit

Oct 3 Equipment 2,800 2,800

Oct 27 Accounts Payable 1,100 1,700

Oct 30 Utility Payable 130 1,830

3.Account Receivable:
Date Accounts Debit Credit Balance

Debit Credit

Oct 6 Service 4,500 4,500

Receivable

4.Equipments
Date Accounts Debit Credit Balance

Debit Credit

Oct 3 Accounts 2,700 2,700

Payable
Math 3 ( page no of Book 75):

Bob Sample opened the Campus Laundromat on September 1, 2017. During the
first month
Of operations, the following transactions occurred.

Sept. 1 Bob invested $20,000 cash in the business.

2 The company paid $1,000 cash for store rent for September.

3 Purchased washers and dryers for $25,000, paying $10,000 in cash and
signing a $15,000, 6-month, 12% note payable.

4 Paid $1,200 for a one-year accident insurance policy.

10 Received a bill from the Daily News for online advertising of the opening of
the Laundromat $200.

20 Bob withdrew $700 cash for personal use.

30 The company determined that cash receipts for laundry services for the
month were $6,200.

The chart of accounts for the company is the same as that for Pioneer Advertising
plus No. 610 Advertising Expense.

Answer:

Company’s Name: Laundromat Campus

General Journal

For the months ended September 30.

Date Account Ref Debit ($) Credit ($)

Sept 1 Cash ……Dr 20,000

Capital ……Cr 20,000

Sept 2 Rent Expense ……Dr 1,000

Cash ……Cr 1,000

Sept 3 Equipment ……Dr 25,000

Cash ……Cr 10,000

Note Payable ……. Cr 15,000

Sept 4 Prepaid Insurance ……Dr 1,200

Cash ……Cr 1,200

Sept 10 Advertising Expense ……Dr 200

Account Payable ……Cr 200

Sept 20 Owner’s drawing ……Dr 700

Cash ……Cr 700

Sept 30 Cash ……Dr 6,200

Service Revenue ……Cr 6,200

Total 54,300 Total 54,300

Ledger

1.Cash:

Date Accounts Debit Credit Balance

Debit Credit
Sept 1 Capital 20,000 20,000

Sept 2 Rent Expense 1,000 19,000

Sept 3 Equipment 25,000 6000

Sept 3 Note Payable 15,000 21,000

Sept 4 Prepaid 12,000 33,000

Insurance
Sept 20 Owner’s 700 33,700
drawing
Sept 30 Service 6,200 27500
Revenue
 2.Account Payable:

Date Accounts Debit Credit Balance

Debit Credit

Sept 10 Advertising Expense 200 200

3. Service Revenue:

Date Accounts Debit Credit Balance

Debit Credit

Sept 30 Cash 6,200 6,200

4. Equipment:

Date Accounts Debit Credit Balance

Debit Credit

Sept 3 Cash 10,000 10,000

Sept 3 Note Payable 15,000 25,000

Math 4 (P2-1A) ( book page no 83):
Holz Disc Golf Course was opened on March 1 by Ian Holz. The following selected events and
transactions occurred during March.

Mar. 1 Invested $20,000 cash in the business.

3 Purchased Rainbow Golf Land for $15,000 cash. The price consists of land $12,000, shed
$2,000, and equipment $1,000. (Make one compound entry.)

5 Paid advertising expenses of $900.

6 Paid cash $600 for a one-year insurance policy.

10 Purchased golf discs and other equipment for $1,050 from Stevenson Company payable
in 30 days.

18 Received $1,100 in cash for golf fees (Holz records golf fees as service revenue).

19 Sold 150 coupon books for $10 each. Each book contains 4 coupons that enable the
holder to play one round of disc golf.

25 Withdrew $800 cash for personal use.

30 Paid salaries of $250.

30 Paid Stevenson Company in full.

31 Received $2,700 cash for golf fees.

Holz Disc Golf uses the following accounts: Cash, Prepaid Insurance, Land, Buildings, Equipment,
Accounts Payable, Unearned Service Revenue, Owner’s Capital, Owner’s Drawings, Service
Revenue, Advertising Expense, and Salaries and Wages Expense.

Answer:

Company’s Name: Holz Disc Golf Course

General Journal

For the months ended March 31.

Date Account Ref Debit($) Credit($)

Mar 1 Cash ----Dr 20,000

Capital ----Cr 20,000

Mar 3 Land ----Dr 12,000

Shed ---Dr 2,000

Equipment -----Dr 1,000

Cash ----Cr 15,000

Mar 5 Advertise Expense ----Dr 900

Cash ----Cr 900

Mar 6 Prepaid Insurance ----Dr 600

Cash ----Cr 600

Mar 10 Equipment ----Dr 1,050

Accounts Payable ----Cr 1,050

Mar 18 Cash ----Dr 1,100

Service Revenue -----Cr 1,100

Mar 19 Cash ----Dr 1,500

Sales Revenue ----Cr 1,500

Mar 25 Owner’s Drawing ----Dr 800

Cash ----Cr 800

Mar 30 Salaries Expense ----Dr 250

Cash ----Cr 250

Accounts Payable ----Dr 1,050

Cash ----Cr 1,050

Mar 31 Cash ----Dr 2,700

Service Revenue ----Cr 2,700

 Total 44,950 Total 44,950

Ledger
1. Cash
Date Accounts Debit Credit Balance

Debit Credit
Mar 1 Owner’s Capital 20,000 20,000
Mar 3 Land, Shed and 15,000 5,000
Equipment
Mar 5 Advertise Expense 900 4,100
Mar 6 Prepaid Insurance 600 3,500
Mar 18 Service Revenue 1,100 4,600
Mar 19 Sales Revenue 1,500 6,100
Mar 25 Owner’s Drawing 800 5,300
Mar 30 Salaries Expense 250 5,050
Mar 30 Accounts Payable 1,050 4,000
Mar 31 Service Revenue 2,700 6,700

2.Accounts Payable
Date Accounts Debit Credit Balance
 Debit Credit

Mar 10 Equipment 1,050 1,050

Mar 30 Cash 1,050 0

3.Service Revenue
Date Accounts Debit Credit Balance

Debit Credit

Mar 18 Cash 1,100 1,100

Mar 31 Cash 2,700 3,800

4. Equipment
Date Accounts Debit Credit Balance

Debit Credit
Mar 3 Land, Shed and 15,000 15,000
Cash
Mar 10 Accounts Payable 1,050 16,050

5. Owner’s Capital
Date Accounts Debit Credit Balance

Debit Credit
Mar 25
Cash 800 800
Math 5 ( page no of Book 84) :
Question: Emily Valley is a licensed dentist. During the first month of the
operation of her

business, the following events and transactions occurred.

April 1 Invested $20,000 cash in her business.

1 Hired a secretary-receptionist at a salary of $700 per week payable monthly.

2 Paid office rent for the month $1,100.

3 Purchased dental supplies on account from Dazzle Company $4,000.

10 Performed dental services and billed insurance companies $5,100.

11 Received $1,000 cash advance from Leah Mataruka for an implant.

20 Received $2,100 cash for services performed from Michael Santos.

30 Paid secretary-receptionist for the month $2,800.

30 Paid $2,400 to Dazzle for accounts payable due.

Emily uses the following chart of accounts: No. 101 Cash, No. 112 Accounts
Receivable,

No. 126 Supplies, No. 201 Accounts Payable, No. 209 Unearned Service Revenue,
No. 301

Owner’s Capital, No. 400 Service Revenue, No. 726 Salaries and Wages Expense,
and

No. 729 Rent Expense.

Instructions

(a) Journalize the transactions.

(b) Post to the ledger accounts.

Answer:
Emily Valley Business

General Journal

For the month April 30,2017

Date Account Reference Debit ($) Credit ($)

April ,1 Cash…Dr 20,000 20,000

Owners Capital...Cr

1 No Transaction

2 Rent Expenses…Dr 1100 1100

Cash…Cr

3 Supplies…Dr 4000 4000

Account Payable…Cr

10 Accounts 5100 5100

Receivable…Dr

Service Revenue…Cr

11 Cash…Dr 1000 1000

Unearned Service
Revenue…Cr

20 Cash…Dr 2100 2100

Service Revenue…Cr

30 Salaries Expenses…Dr 2800 2800

Cash…Dr

30 Accounts payable…Dr 2400 2400

Cash…Cr

Total: 38500$ 38500$

 Ledger

1.Cash:

Date Accounts Debit Credit Balance

Debit Credit

1 Capital 20000 20000

2 Rent Expense 1100 18900

11 Unearned 1000 19900

Service

Revenue

20 Service Revenue 2100 22000

30 Salaries Expense 2800 19200

30 Accounts 2400 16800

Payable

2.Account Payable:

Date Accounts Debit Credit Balance

Debit Credit

3 Supplies 4000 4000

30 Cash 2400 1600

3.Account Recivable :

Date Accounts Debit Credit Balance

Debit Credit

10 Service 5100 5100

Revenue

4.Supplies:

Date Accounts Debit Credit Balance

Debit Credit

3 Accounts 4000 4000

Payable

5.Service Revenue :

Date Accounts Debit Credit Balance

Debit Credit

10 Account 5100 5100

receivable

20 Cash 2100 2100

6.Un-earned Service Revenue :

Date Accounts Debit Credit Balance

Debit Credit

11 Cash 1000 1000

7.Salaries Expenses :

Date Accounts Debit Credit Balance

Debit Credit

30 Cash 2800 2800

Math 6 (Page no of Book 66):

Journal:

Pioneer Advertising

General Journal

For the month October 2017

Date Account Ref Debit ($) Credit ($)

Oct. 1 Cash …Dr 10,000 10,000

Owner’s Capital…Cr
Oct. 1 Equipment ...Dr 5,000 5,000

Notes Payable …Cr

Oct. 2 Cash …Dr 1,200 1,200

Unearned Service Revenue …Cr

Oct. 3 Rent Expense …Dr 900 900

Cash …Cr
Oct. 4 Prepaid Insurance …Dr 600 600

Cash …Cr
Oct. 5 Supplies …Dr 2,500 2,500

Accounts Payable …Cr

Oct. 20 Owner’s Drawings …Dr 500 500

Cash …Cr
Oct 26 Salaries and Wages Expense …Dr 4,000 4,000

Cash …Cr
Oct. 31 Cash …Dr 10,000 10,000

Service Revenue …Cr

 Ledger

1.Cash:

Date Accounts Debit Credit Balance

Debit Credit

1 Owner’s Capital 10,000 10,000

2 Unearned Service 1,200 11,200

Revenue

3 Rent Expense 900 10,300

4 Prepaid Insurance 600 9,700

20 Owner’s Drawings 500 9,200

26 Salaries and 4,000 5,200

Wages Expense

31 Service Revenue 10,000 15,200

2.Supplies:

Date Accounts Debit Credit Balance

Debit Credit

Oct. Accounts 2,500 2,500

5 Payable
 3.Account Payable :

Data
Date Accounts Debit Credit Balance

Debit Credit

Oct. 5 Supplies 2,500 2,500

4.Unearned Service Revenue:

Date Accounts Debit Credit Balance

Debit Credit

Oct Cash 1,200 1,200

2

5.Service Revenue:
Date Accounts Debit Credit Balance

Debit Credit

Oct. Cash 10,000 10,000

31
Math 7: P2-5A (Book page no 85):
The Starr Theater, owned by Meg Vargo, will begin operations in
March. The Starr will be unique in that it will show only triple features
of sequential theme movies. As of March 1, the ledger of Starr showed:
No. 101 Cash $3,000, No. 140 Land $24,000, No. 145 Buildings
(concession stand, projection room, ticket booth, and screen) $10,000,
No. 157 Equipment $10,000, No. 201 Accounts Payable $7,000, and No.
301 Owner’s Capital $40,000. During the month of March, the following
events and transactions occurred.

Mar. 2 Rented the three Indiana Jones movies to be shown for the
first 3 weeks of March. The film rental was $3,500; $1,500 was paid in
cash and $2,000 will be paid on March 10.
3 Ordered the Lord of the Rings movies to be shown the last
10 days of March. It will cost $200 per night.
9 Received $4,300 cash from admissions.
10 Paid balance due on Indiana Jones movies rental and $2,100
on March 1 accounts payable.
11 Starr Theater contracted with Adam Ladd to operate the
concession stand. Ladd is to pay 15% of gross concession receipts,
payable monthly, for the rental of the concession stand.
12 Paid advertising expenses $900.
20 Received $5,000 cash from customers for admissions.
20 Received the Lord of the Rings movies and paid the rental
fee of $2,000.
31 Paid salaries of $3,100.
31 Received statement from Adam Ladd showing gross receipts
from concessions of $6,000 and the balance due to Starr Theater of
$900 ($6,000 3 15%) for March. Ladd paid one-half the balance due and
will remit the remainder on April 5.
31 Received $9,000 cash from customers for admissions.
Answer:
Company’s Name:- The Starr Theater

General Journal

For the months ended March 31.

Date Account Ref Debit ($) Credit ($)

Mar 2 Rental Expense ……Dr 3,500

Cash …..Cr 1,500

Accounts Payable ……Cr 2,000

Mar 3 No Transaction

Mar 9 Cash ……Dr 4,300

Admission Revenue ……Cr 4,300

Mar Accounts Payable ….Dr 4,100

10
Cash ……Cr 4,100

Mar No Transaction
11

Mar Advertising Payable ……Dr 900

12
Cash ……Cr 900

Mar Cash ……Dr 5,000

20
 Admission Revenue ……Cr 5,000

Mar Rental Expense ……Dr 2,000

20
Cash ……Cr 2,000

Mar Salaries Expense …..Dr 3,100

31
Cash …..Cr 3,100

Mar Cash …...Dr 450

31
Accounts Receivable .…..Dr 450

Rent Revenue …..Cr 900

Mar Cash …...Dr 9,000

31
Admission Revenue .…..Cr 9,000

Total Total

32,800 32,800

Ledger
2. Cash
Date Accounts Debit Credit Balance

Debit Credit

Mar 2 Rental Expense 7,000 7,000

and Accounts
Payable

Mar 9 Admission 4,300 2,700

Revenue

Mar 10 Accounts Payable 4,100 6,800

Mar 12 Advertising 900 7,700

Payable

Mar 20 Admission 5,000 2,700

Revenue

Mar 20 Rental Expense 2,000 4,700

Mar 31 Salaries Expense 3,100 7,800

Mar 31 Accounts 1,800 6,000

Receivable and

Rent Revenue

Mar 31 Admission 9,000 (-)3,000

Revenue
3.Account Payable :

Date Accounts Debit Credit Balance

Debit Credit

Oct. Cash and Rent 1,800 1,800

5 Revenue

4. Accounts Receivable:
Date Accounts Debit Credit Balance

Debit Credit

Mar 2 Rental Expense 7,000 7,000

and Cash

Mar Cash 4,100 2,900

10
 5. Admission Revenue:

Date Accounts Debit Credit Balance

Debit Credit

Mar Cash 4,300 4,300

9

Mar Cash 5,000 9,300

20

Mar Cash 9,000 18,300

31
 Adjusting Entries

Page: 103

Adjusting Entries for Deferrals

The ledger of Hammond Company, on March 31, 2017,
includes these selected accounts before adjusting entries
are prepared.
Debit
Credit
Prepaid Insurance $ 3,600
Supplies 2,800
Equipment 25,000
Accumulated Depreciation—Equipment $5,000
Unearned Service Revenue 9,200
An analysis of the accounts shows the following.
1. Insurance expires at the rate of $100 per month.
2. Supplies on hand total $800.
3. The equipment depreciates $200 a month.
4. During March, services were performed for one-half of
the unearned service revenue.
Prepare the adjusting entries for the month of March.
Answer:
Hammond Company
March 31
Adjusting Entries
Ref
Date Account Debit Credit
($) ($)
March 31,
2017
1.Insurance Expense …Dr 100
Prepaid Insurance …Cr 100
(3,600-100=3,500)
March 31,
2017
2. Supplies Expense …Dr 2,000
Supplies …Cr
(2,800-800=2,000) 2,000
March 31, 3. Depreciation Expense 200
2017
…Dr 200
Accumulated Depreciation—
Equipment …Cr

March 4. Unearned Service 4,600

31, 2017
Revenue…Dr 4,600
Service Revenue ...Cr
(9,200/2=4,600)
Page: 126
Adjusting Entries for Deferrals
The Green Thumb Lawn Care Company began operations on
April 1. At April 30, the trial balance shows the following
balances for selected accounts.
Prepaid Insurance $ 3,600
Equipment $ 28,000
Notes Payable $ 20,000
Unearned Service Revenue $ 4,200
Service Revenue $ 1,800
Analysis reveals the following additional data.
1. Prepaid insurance is the cost of a 2-year insurance policy,
effective April 1.
2. Depreciation on the equipment is $500 per month.
3. The note payable is dated April 1. It is a 6-month, 12% notes.
4. Seven customers paid for the company’s 6-month lawn
service package of $600 beginning in April. The company
performed services for these customers in April.
5. Lawn services performed for other customers but not recorded
at April 30 totaled $1,500.
Answer:
The Green Thumb Lawn Care Company
Adjusting Entries
April 30
Date Account Ref Debit ($) Credit ($)

April Insurance Expense ……Dr 150

30 Prepaid Insurance ……Cr 150
2017 (3600/24 = 150)
Depreciation Expense ……Dr 500
Accumulated Depreciation
(Equipment) ……Cr 500
Interest Expense ……Dr 400
Interest Payable ……Cr 400
(20,000*(12/100)*(1/6)
Unearned Service Revenue 100
……Dr 100
Service Revenue ……Cr
($600 / 6 = $100)

Accounts Receivable ……Dr 1,500

Service Revenue ……Cr 1,500
Page: 133
Adjusting Entries for Deferrals
(Ex: E3-7)
The ledger of Passehl Rental Agency on March 31 of the current
year includes the selected accounts, shown below, before
adjusting entries have been prepared.
Accounts Debit ($) Credit ($)
Prepaid Insurance 3,600
Supplies 2,800
Equipment
25,000
Accumulated
Depreciation—Equipment
8,400
Notes Payable
20,000
Unearned Rent Revenue
10,200
Rent Revenue
60,000
Interest Expense
0
Salaries and Wages Expense
14,000

An analysis of the accounts shows the following.

1. The equipment depreciates $400 per month.
2. One-third of the unearned rent revenue was earned during the
quarter.
3. Interest of $500 is accrued on the notes payable.
4. Supplies on hand total $750.
5. Insurance expires at the rate of $300 per month.
Answer:
Passehl Rental Agency
Adjusting Entries
March 31,2012

Date Account Ref Debit ($) Credit ($)

March Depreciation Expense ……Dr 400

31, 2012 Accumulated Depreciation 400
(Equipment) ……Cr

Unearned Rent Revenue ……Dr 3400

Rent Revenue ……Cr 3400
(10,200*1/3= 3400)

Interest Expense ……Dr 500

Interest Payable ……Cr 500

Supplies Expense ……Dr 2,050

Supplies ……Cr 2,050
(2,800-750=2,050)

Insurance Expense ……Dr 300

Prepaid Insurance ……Cr 300
P3-1A
(Book page no 138):
Logan Krause started her own consulting firm, Krause Consulting, on May 1,
2017. The trial balance at May 31 is as follows.
KRAUSE CONSULTING
Trial Balance
May 31, 2017
Account Number Debit ($) Credit ($)
101 Cash 4,500
112 Accounts Receivable 6,000
126 Supplies 1,900
130 Prepaid Insurance 3,600
149 Equipment 11,400
201 Accounts Payable 4,500
209 Unearned Service Revenue 2,000
301 Owner’s Capital 18,700
400 Service Revenue 9,500
726 Salaries and Wages Expense 6,400
729 Rent Expense 900
$34,700 $34,700

In addition to those accounts listed on the trial balance, the chart of accounts for
Krause Consulting also contains the following accounts and account numbers: No.
150 Accumulated Depreciation—Equipment, No.212 Salaries and Wages Payable,
No.631 Supplies Expense, No.717 Depreciation Expense, No.722 Insurance
Expense, and No.732 Utilities Expense.
Other data:
1. $900 of supplies has been used during the month.
2. Utilities expense incurred but not paid on May 31, 2017, $250.
3. The insurance policy is for 2 years.
4. $400 of the balance in the unearned service revenue account remains unearned
at the end of the month.
5. May 31 is a Wednesday, and employees are paid on Fridays. Krause Consulting
has two employees, who are paid $920 each for a 5-day work week.
6. The office furniture has a 5-year life with no salvage value. It is being
depreciated at $190 per month for 60 months.
7. Invoices representing $1,700 of services performed during the month have not
been recorded as of May 31.
Answer:
KRAUSE CONSULTING
Trial Balance
May 31, 2017
Adjusting Entries

Date Account Re Debit Credit

f ($) ($)
May Supplies Expense ……Dr 900
31 Supplies ……Cr 900
Utility Expense ……Dr 250
Utility Payable ……Cr 250
Insurance Expense ……Dr 150
Prepaid Insurance ……Cr 150
(3,600/24)
Unearned Service Revenue 1,600
……Dr 1,600
Service Revenue ……Cr
(2,000-400=1600)
Salaries Expense ……Dr 1,104
Salaries Payable ……Cr 1,104
(920/5=185;
185*3=552;552*2=1104)
Depreciation Expense ……Dr 190
Accumulated Depreciation 190
(Office Furniture) ……Cr
Accounts Receivable ……Dr 1,700
Service Revenue …..Cr 1,700
Page: 163

Adjusting Entries for Deferrals

Answer:
MAC’S MOTEL
Trial Balance
May 31, 2017
Adjusting Entries

Date Account Ref Debit ($) Credit ($)

May Insurance Expense ……Dr 200
31 Prepaid Insurance ……Cr 200
(2,400/12=200)
Supplies Expense ……Dr 1330
Supplies ……Cr 1130
(2080-750=1330)
Depreciation Expense ……Dr 250
Accumulated Depreciation (on the
building) ……Cr 250
(3000/12=250)
Depreciation Expense 125
(Equipment)…Dr 125
Depreciation Expense
(Equipment)…Cr
(1500/12=125)

interest Expense... Dr 4800

Interest payable... Cr 4800
(40,000*12/100=4800)

Unearned Service Revenue ……Dr 2200

Service Revenue ……Cr
(3300*2/3=2200) 2200

Salaries Expense... Dr 750

Salaries…Cr 750
Page no 141:
P3-5A
On November 1, 2017, the account balances of Hamm Equipment Repair were as
follows.

No. Debit ($) Credit ($)

101 Cash 2,400
154 Accumulated Depreciation—Equipment 2,000
112 Accounts Receivable 4,250
201 Accounts Payable 2,600
126 Supplies 1,800
209 Unearned Service Revenue 1,200
153 Equ
ipment 12,000
212 Salaries and Wages Payable 700
301 Owner’s Capital 13,950
$20,450 $20,450

During November, the following summary transactions were completed.

Nov. 8 Paid $1,700 for salaries due employees, of which $700 is for October
salaries.
10 Received $3,620 cash from customers on account.
12 Received $3,100 cash for services performed in November.
15 Purchased equipment on account $2,000.
17 Purchased supplies on account $700.
20 Paid creditors on account $2,700.
22 Paid November rent $400.
25 Paid salaries $1,700.
27 Performed services on account and billed customers for these services
$2,200.
29 Received $600 from customers for future service.

Adjustment data consist of:

1. Supplies on hand $1,400.
2. Accrued salaries payable $350.
3. Depreciation for the month is $200.
4. Services related to unearned service revenue of $1,220 were performed.
Answer:
Hamm Equipment Repair
November 1, 2017
Adjusting Entries

Date Account Ref Debit ($) Credit ($)

Nov 30 Supplies Expense ……Dr 400

Supplies ……Cr 400
(1,800-1,400=400)

Salaries Expense ……Dr 350

Salaries Payable ……Cr 350

Depreciation Expense ……Dr 200

Accumulated Depreciation (Equipment)
……Cr 200

Unearned Service Revenue ……Dr 1,220

Service Revenue ……Cr 1,220

***
The company's weekly payroll is $8,750 paid each Friday
for a 5day work week.
December 31st, 2005 falls on Monday, but the employee
will not be paid their wages until Friday, January 4, 2006.
Give adjustment entry at December 31st, 2005

Date Account Ref Debit ($) Credit ($)

Dec Salaries Expense ……Dr 1750

31st 1750
Salaries Payable ……Cr
(8750 /5=1750)
Question: Emily Valley is a licensed dentist. During the first month of the
operation of her
business, the following events and transactions occurred.
April 1 Invested $20,000 cash in her business.
1 Hired a secretary-receptionist at a salary of $700 per week payable monthly.
2 Paid office rent for the month $1,100.
3 Purchased dental supplies on account from Dazzle Company $4,000.
10 Performed dental services and billed insurance companies $5,100.
11 Received $1,000 cash advance from Leah Mataruka for an implant.
20 Received $2,100 cash for services performed from Michael Santos.
30 Paid secretary-receptionist for the month $2,800.
30 Paid $2,400 to Dazzle for accounts payable due.
Emily uses the following chart of accounts: No. 101 Cash, No. 112 Accounts
Receivable,
No. 126 Supplies, No. 201 Accounts Payable, No. 209 Unearned Service Revenue,
No. 301
Owner’s Capital, No. 400 Service Revenue, No. 726 Salaries and Wages Expense,
and
No. 729 Rent Expense.
Instructions
(a) Journalize the transactions.
(b) Post to the ledger accounts.

Answer:
Emily Valley Business

General Journal

For the month April 30,2017

Data Account Reference Debit ($) Credit ($)

April ,1 Cash…Dr 20,000 20,000

Owners Capital...Cr

1 No Transaction

2 Rent Expenses…Dr 1100 1100

Cash…Cr

3 Supplies…Dr 4000 4000

Account Payable…Cr

10 Accounts 5100 5100

Receivable…Dr

11 Cash…Dr 1000 1000

Unearned Service
Revenue…Cr

20 Cash…Dr 2100 2100

Service Revenue…Cr

30 Salaries Expenses…Dr 2800 2800

Cash…Dr

30 Accounts payable…Dr 2400 2400

Cash…Cr

Total: 38500$ 38500$

Ledger
Cash:

Data Accounts Debit Credit Balance

Debit Credit

1 Capital 20000 20000

2 Rent Expense 1100 18900

11 Unearned 1000 19900

Service
Revenue
20 Service Revenue 2100 22000
30 Salaries Expense 2800 19200
30 Accounts 2400 16800
Payable
Account Payable:

Data Accounts Debit Credit Balance

Debit Credit

3 Supplies 4000 4000

30 Cash 2400 1600

Accounts Recievable :

Data Accounts Debit Credit Balance

Debit Credit
10 Service 5100 5100
Revenue
Supplies:

Date Accounts Debit Credit Balance

Debit Credit
3 Accounts 4000 4000
Payable

Service Revenue :
Data Accounts Debit Credit Balance
Debit Credit

10 Account 5100 5100

receivable
20 Cash 2100 2100
Un-earned Service Revenue :
Date Accounts Debit Credit Balance
Debit Credit
11 Cash 1000 1000

Salary Expenses :
Date Accounts Debit Credit Balance
Debit Credit
30 Cash 2800 2800
Break Even Point:
Question 1:
Selling point price per unit =10
Variable cost per unit = 5$
Fixed expense = 10,000$
(a) Find out contribution margin per unit.
(b) Find out BEP (in unit) and BEP (in seller dollar) in contribution margin
method.
(c) Find out BEP (in unit) and BEP (in seller) in equation method.

Answer:

(a) Contribution margin

= Selling Price (per unit) – Variable Cost (per unit)
= (10-5) $
= 5$
(b) Contribution Margin Method
BEP
CM ratio
𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒 (𝑝𝑒𝑟 𝑢𝑛𝑖𝑡)− 𝑉𝑎𝑟𝑖𝑎𝑏𝑙𝑒 𝐶𝑜𝑠𝑡 (𝑝𝑒𝑟 𝑢𝑛𝑖𝑡)
= ∗ 100
𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒 (𝑝𝑒𝑟 𝑢𝑛𝑖𝑡)
 (10−5)
= ∗ 100 = 50%
10

BEP (in unit)

𝐹𝑖𝑥𝑒𝑑 𝐶𝑜𝑠𝑡
=
𝑆𝑒𝑙𝑙𝑖𝑛𝑔 𝑃𝑟𝑖𝑐𝑒 (𝑝𝑒𝑟 𝑢𝑛𝑖𝑡) –𝑉𝑎𝑟𝑖𝑎𝑏𝑙𝑒 𝐶𝑜𝑠𝑡 (𝑝𝑒𝑟 𝑢𝑛𝑖𝑡)

$ 10,000
=
$ (10−5)

(c) Equation Method:

BEP (in unit)
 Profit = Selling Price – Variable Cost – Fixed Cost
 0 = [S.P. (per unit) * Q] – [V.C. (per unit) * Q] – F.C.
 0 = ($10 * Q) – ($5 * Q) - $10,000
 0 = $5 * Q - $10,000
 Q = 2,000 unit


B.E.P (in sales dollar)

= Selling Price (per unit) * BEP (per unit)
= $10 * 2,000
= 20,000$.