LO 3.2Assuming the following account balances, what is the missing value?
LO 3.2LO 3.4Identify the financial statement on which each of the following account categories would appear: the balance sheet (BS), the income statement (IS), or the retained earnings statement (RE).
|Financial statement||Normal balance|
LO 3.4Indicate what impact (+ for increase; – for decrease) the following transactions would have on the accounting equation, Assets = Liabilities + Equity.
|Transaction||Impact 1||Impact 2|
|A.||Paid balance due for accounts payable|
|B.||Charged clients for legal services provided|
|C.||Purchased supplies on account|
|D.||Collected legal service fees from clients for current month|
|E.||Issued stock in exchange for a note receivable|
LO 3.4Indicate how changes in these types of accounts would be recorded (Dr for debit; Cr for credit).
|Debit or credit?|
LO 3.4Identify the normal balance (Dr for Debit; Cr for Credit) and type of account (A for asset, L for liability, E for equity, E-rev for revenue, E-exp for expense, and E-eq for equity) for each of the following accounts.
|Normal balance||Account type|
LO 3.4Indicate the net effect (+ for increase; – for decrease; 0 for no effect) of each of the following transactions on each part of the accounting equation, Assets = Liabilities + Equity. For example, for payment of an accounts payable balance, A (–) = L (–) + E (0).
- Payment of principal balance of note payable
- Purchase of supplies for cash
- Payment of dividends to stockholders
- Issuance of stock for cash
- Billing customer for physician services provided
LO 3.5Prepare journal entries to record the following transactions. Create a T-account for Cash, post any entries that affect the account, and calculate the ending balance for the account. Assume a Cash beginning balance of $37,400.
- May 12, collected balance due from customers on account, $16,000
- June 10, purchased supplies for cash, $4,444
LO 3.5Prepare journal entries to record the following transactions. Create a T-account for Accounts Payable, post any entries that affect the account, and calculate the ending balance for the account. Assume an Accounts Payable beginning balance of $7,500.
- May 12, purchased merchandise inventory on account. $9,200
- June 10, paid creditor for part of previous month’s purchase, $11,350
LO 3.5Prepare journal entries to record the following transactions that occurred in April:
- on first day of the month, issued common stock for cash, $15,000
- on eighth day of month, purchased supplies, on account, $1,800
- on twentieth day of month, billed customer for services provided, $950
- on twenty-fifth day of month, paid salaries to employees, $2,000
- on thirtieth day of month, paid for dividends to shareholders, $500
LO 3.5Prepare journal entries to record the following transactions that occurred in March:
- on first day of the month, purchased building for cash, $75,000
- on fourth day of month, purchased inventory, on account, $6,875
- on eleventh day of month, billed customer for services provided, $8,390
- on nineteenth day of month, paid current month utility bill, $2,000
- on last day of month, paid suppliers for previous purchases, $2,850
LO 3.5Post the following November transactions to T-accounts for Accounts Payable, Inventory, and Cash, indicating the ending balance. Assume no beginning balances in Accounts Payable and Inventory, and a beginning Cash balance of $21,220.
- purchased merchandise inventory on account, $9,900
- paid vendors for part of inventory purchased earlier in month, $6,500
- purchased merchandise inventory for cash, $4,750
LO 3.5Post the following July transactions to T-accounts for Accounts Receivable, Sales Revenue, and Cash, indicating the ending balance. Assume no beginning balances in these accounts.
- sold products to customers for cash, $7,500
- sold products to customers on account, $12,650
- collected cash from customer accounts, $9,500