Accounting 4th edition

SOLUTIONS TO PROBLEM SET A

PROBLEM SET A 2.1

(b)
Service Revenue

$19,000
Expenses:

Salaries Expense
$1,200

Rent Expense
400

Advertising Expense 1,300 2,900 Profit

$16,100

OR

Increase in Retained Earnings ($15,700 - $0)

$15,700
Add: Dividends

400
Profit

$16,100

PROBLEM SET A 2.2
(a)
Bell Consulting Pty Ltd

Assets

Liabilities

Equity

Date
Cash
+
Accounts Receivable
+
Supplies
+
Office Equipment
=
Bank Loan
+
Accounts Payable
+
Share Capital
+
Retained Earnings

HAD GIVEN IN CLASS.

$13,800
+
$1,000
+
$500
+
$2,400
=
$5,000
+
$2,400
+
$10,000
+
$300

(b)
Bell Consulting Pty Ltd
Income Statement for the month ended 31 May 2008

Profit

$500

(c)
Bell Consulting Pty Ltd
Balance Sheet as at 31 May 2008

Cash

Accounts receivable

Supplies

Office equipment

Total assets

$17,700

Accounts payable

Bank loan

Total liabilities

Shareholders’ equity

Share capital

Retained Earnings

Total liabilities and shareholders’ equity

$17,700

PROBLEM SET A 2.3
(a)
Straight Law Pty Ltd

Assets

Liabilities

Equity

Cash
+
Accounts Receivable
+
Supplies
+
Office Equipment
=
Bank Loan
+
Accounts Payable
+
Share Capital
+
Retained Earnings

Bal.

1.

2

3.

(a)

4.

5.

(b)

(c)

(d)

6.

(e)