Exercise 2-4 Identifying type and normal balances of accounts LO C4
For each of the following (1) identify the type of account as an asset, liability, equity, revenue, or expense, (2) identify the normal balance of the account, and (3) enter debit (Dr.) or credit (Cr.) to identify the kind of entry that would increase the account balance.
Exercise 2-6 Analyzing effects of transactions on accounts LO A1
Groro Co. bills a client $62,000 for services provided and agrees to accept the following three items in full payment: (1) $10,000 cash, (2) computer equipment worth $80,000, and (3) to assume responsibility for a $28,000 note payable related to the computer equipment. The entry Groro makes to record this transaction includes which one or more of the following? (Select all that apply.)
Exercise 2-7 Preparing general journal entries LO P1
Following are transactions of a new company called Pose-for-Pics.
Madison Harris, the owner, invested $6,500 cash and $33,500 of photography equipment in the company in exchange for common stock.
|2||The company paid $2,100 cash for an insurance policy covering the next 24 months.|
|5||The company purchased office supplies for $880 cash.|
|20||The company received $3,331 cash in photography fees earned.|
|31||The company paid $675 cash for August utilities.|
Prepare general journal entries for the above transactions.
Exercise 2-9 Recording effects of transactions in T-accounts LO A1
|The transactions of Spade Company:|
|a.||Kacy Spade, owner, invested $100,750 cash in the company in exchange for common stock.|
|b.||The company purchased office supplies for $1,250 cash.|
|c.||The company purchased $10,050 of office equipment on credit.|
|d.||The company received $15,500 cash as fees for services provided to a customer.|
|e.||The company paid $10,050 cash to settle the payable for the office equipment purchased in transaction c.|
|f.||The company billed a customer $2,700 as fees for services provided.|
|g.||The company paid $1,225 cash for the monthly rent.|
|h.||The company collected $1,125 cash as partial payment for the account receivable created in transaction f.|
|i.||The company paid $10,000 cash in dividends to Spade (sole shareholder).|
Prepare general journal entries to record the transactions below for Spade Company by using the following accounts: Cash; Accounts Receivable; Office Supplies; Office Equipment; Accounts Payable; Common Stock; Dividends; Fees Earned; and Rent Expense.
Problem 2-2A Preparing and posting journal entries; preparing a trial balance LO C3, C4, A1, P1, P2
[The following information applies to the questions displayed below.]
Denzel Brooks opens a Web consulting business called Venture Consultants and completes the following transactions in March.
Brooks invested $150,000 cash along with $22,000 in office equipment in the company in exchange for common stock.
The company prepaid $6,000 cash for six months’ rent for an office. (Hint: Debit Prepaid Rent for $6,000.)
The company made credit purchases of office equipment for $3,000 and office supplies for $1,200. Payment is due within 10 days.
|6||The company completed services for a client and immediately received $4,000 cash.|
|9||The company completed a $7,500 project for a client, who must pay within 30 days.|
|12||The company paid $4,200 cash to settle the account payable created on March 3.|
|19||The company paid $5,000 cash for the premium on a 12-month insurance policy. (Hint: Debit Prepaid Insurance for $5,000.)|
|22||The company received $3,500 cash as partial payment for the work completed on March 9.|
|25||The company completed work for another client for $3,820 on credit.|
|29||The company paid $5,100 cash in dividends.|
|30||The company purchased $600 of additional office supplies on credit.|
|31||The company paid $500 cash for this month’s utility bill.|
Problem 2-3A Preparing and posting journal entries; preparing a trial balance LO C3, C4, A1, P1, P2
Karla Tanner opens a Web consulting business called Linkworks and completes the following transactions in its first month of operations.
Tanner invests $80,000 cash along with office equipment valued at $26,000 in the company in exchange for common stock.
|2||The company prepaid $9,000 cash for 12 months’ rent for office space. (Hint: Debit Prepaid Rent for $9,000.)|
The company made credit purchases for $8,000 in office equipment and $3,600 in office supplies. Payment is due within 10 days.
The company completed services for a client and immediately received $4,000 cash.
The company completed a $6,000 project for a client, who must pay within 30 days.
|13||The company paid $11,600 cash to settle the account payable created on April 3.|
|19||The company paid $2,400 cash for the premium on a 12-month insurance policy. (Hint: Debit Prepaid Insurance for $2,400.)|
The company received $4,400 cash as partial payment for the work completed on April 9.
|25||The company completed work for another client for $2,890 on credit.|
|28||The company paid $5,500 cash in dividends.|
|29||The company purchased $600 of additional office supplies on credit.|
|30||The company paid $435 cash for this month’s utility bill.|
Prepare general journal entries to record these transactions.
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