Week One Exercise AssignmentBasic Accounting Equations1. Recognition of normal b

Week One Exercise AssignmentBasic Accounting Equations1. Recognition of normal balances The following items appeared in the accounting records of Triguero s a retail music store that also sponsors concerts. Classify each of the items as an asset liability revenue or expense from the company s viewpoint. Also indicate the normal account balance of each item. a. The albums tapes and CDs held for sale to customers. b. A long-term loan owed to Citizens Bank. c. Promotional costs to publicize a concert. d. Daily sales of merchandise sold e. Amounts due from customers f. Land held as an investment g. A new fax machine purchased for office use. h. Amounts to be paid in 10 days to suppliers i. Amounts paid to a mall for rent.2. Basic journal entries The following April transactions pertain to the Jennifer Royall Company: Apr. 1 Jenni fer Royall invested cash of $15000 and land valued at $10000 into the business. Apr. 5 provided $1200 of services to Jason Ratchford a client on account. Apr. 9 paid $250 of salaries to an employee. Apr. 14 acquired a new computer for $3200 on account. Apr. 20 collected $800 from Jason Ratchford for services provided on April 5. Apr. 24 borrowed $7500 from BestBanc by securing a six-month loan. Prepare journal entries (and explanations) to record the preceding transactions and events.3. Balance sheet preparation. The following data relate to Preston Company as of December 31 20XX: Building $44000 Accounts receivable $24000 Cash 17000 Loan payable 30000 J. Preston Capital 65000 Land 21000 Accounts payable ? Prepare a balance sheet as of December 31 20XX. (See Exhibit 1.1 and 1.4)4. Basic transaction processing. On November 1 of the current year Richard Parker established a sole proprietorship. The following transactions occurred during the month: 1: Parker invested $19000 into the business for $19000 in common stock. 2: Paid $9000 to acquire a used minivan. 3: Purchased $1800 of office furniture on account. 4: Performed $2100 of consulting services on account. 5: Paid $300 of repair expenses. 6: Received $800 from clients who were previously billed in item 4. 7: Paid $500 on account to the supplier of office furniture in item 3. 8: Received a $150 electric bill to be paid next month. 9: Parker withdrew $600 from the business. 10: Received $250 in cash from clients for consulting services rendered. Instructions a. Arrange the following asset liability and owner s equity elements of the accounting equation: Cash Accounts Receivable Office Furniture Van Accounts Payable Common Stock/Dividends and Revenues/Expenses. (See Exhibit 1.5) b. Record each transaction on a separate line. After all transactions have been recorded compute the balance in each of the preceding items. c. Answer the following questions for Parker. (1) How much does the company owe to its creditors at month-end? On which financial statement(s) would this information be found? (2) Did the company have a good month from an accounting viewpoint? Briefly explain.5. Transaction analysis and statement preparation. The transactions that follow relate to Burton Enterprises for March 20X1 the company s first month of activity. 3/1: Joanne Burton the owner invested $20000 into the business for $20000 of Common Stock. 3/4: Performed $2400 of services on account. 3/7: Acquired a small parcel of land by paying $6000 cash. 3/12: Received $700 from a client who was billed previously on March 4. 3/15: Paid $800 to the Journal Herald for advertising expense. 3/18: Acquired $9000 of equipment from Park Central Outfitters by paying $7000 down and agreeing to remit the balance owed within the next 2 weeks (Accounts Payable). 3/22: Received $300 cash from clients for services. 3/24: Paid $1500 on account to Park Central Outfitters in partial settlement of the balance due from the transaction on March 18. 3/28: Rented a car from United Car Rental for use on March 28. Total charges amounted to $75 with United billing Burton for the amount due. 3/31: Paid $900 for March wages. 3/31: Processed a $600 cash withdrawal (dividend) from the business for Joanne Burton. Instructions a. Determine the impact of each of the preceding transactions on Burton s assets liabilities and owner s equity. See exhibit 1.5. Use the following format: Assets = Liabilities + Owner s Equity Cash Accounts Receivable Land Equipment Accounts Payable (+)Common Stock (+) Revenues (-) Dividends (-) Expenses a. Record each transaction on a separate line. Calculate balances only after the last transaction has been recorded. b. Prepare an income statement a statement of retained earnings and a balance sheet (See Exhibit 1.2 1.3 and 1.4).6. Entry and trial balance preparation. Lee Adkins is a portrait artist. The following schedule represents Lee s combined chart of accounts and trial balance as of May 31. Account number Account name Debit Credit 110 Cash $ 2700 120 Accounts Receivable 12100 130 Equipment and Supplies 2800 140 Studio 45000 210 Accounts Payable $2600 310 Lee Adkins Capital 57400 320 Lee Adkins Drawing 30000 410 Professional Fee Revenue 39000 510 Advertising Expense 2300 520 Salaries Expense 2100 540 Utilities Expense 2000 $99000 $99000 The general ledger also revealed account no. 530 Legal and Accounting Expense. The following transactions occurred during June: 6/2: Collected $7500 on account from customers. 6/7: Sold 25% of the equipment and supplies to a young artist for $700 for cash. 6/10: Received a $500 invoice from the accountant for preparing last quarter s financial statements. 6/15: Paid $2100 to creditors on account. 6/27: Adkins withdrew $1000 cash for personal use. 6/30: Billed a customer $3000 for a portrait painted this month. a. Record the necessary journal entries for June on page 2 of the company s general journal (See Exhibit 2.6). b. Open running balance ledger T accounts by entering account titles account numbers and May 31 balances (See exhibit 2.3 and 2.4). c. Post the journal entries to the T accounts. d. Prepare a trial balance as of June 30 (See exhibit 2.9).7. Journal entry preparation. On January 1 of the current year Peter Houston invested $100000 cash into his company MuniServ. The cash was obtained from an owner investment by Peter Houston of $70000 and a $30000 notes payable. Shortly thereafter the company acquired selected assets of a bankrupt competitor. The acquisition included land ($15000) a building ($40000) and vehicles ($10000). MuniServ paid $45000 at the time of the transaction and agreed to remit the remaining balance due of $20000 (an account payable) by February 15. During January the company had additional cash outlays for the following items: Purchases of store equipment $4600 Note payment 500 Salaries expense 2300 Advertising expense 700 The January utility bill of $200 was received on January 31 and will be paid next month. MuniServ rendered services to clients on account amounting to $9400. All customers have been billed; by month end $3700 had been received in settlement of account balances. Instructions a. Present journal entries that reflect MuniServ s January transactions including the $100000 raised from the owner investment and loan (See exhibit 2.6). b. Compute the total debits total credits and ending balance that would be found in the company s Cash account (Post to T Accounts see exhibit 2.3 and 2.4). c. Prepare a trail balance as of January 31 (See exhibit 2.9).