Acc 205 Week 1 Assignment

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Basic Accounting Equations
Angela M. Hill-McBride
ACC 205
Professor Ivory
December 17, 2012

Basic Accounting Equations
1. Basic concepts. Jean's Marine Supply specializes in the sale of boating equipment and accessories. Identify the items that follow as an asset (A), liability (L), revenue (R), or expense (E) from the firm's viewpoint. a. The inventory of boating supplies owned by the company. (A) b. Monthly rental charges paid for store space. (L)

c. A loan owed to Citizens Bank.(L)
d. New computer equipment purchased to handle daily record keeping.(A) e. Daily sales made to customers.(R)
f. Amounts due from customers.(R)
g. Land owned by the company to be used as a future store site.(A) h. Weekly salaries paid to salespeople.(E)
2. Analysis of transactions.
Set up the following headings across a piece of paper:
Assets = Liabilities + Owner's Equity
By using "+" and "-," indicate the effect of each of the following transactions on total assets, liabilities, and owner's equity: | Asset=| Liabilities+| Owner’s Equity|
a) Processed a $5,000 cash withdrawal for the owner.| -| -| -| b) Recorded the receipt of May's utility bill, to be paid in June| +| +| -| c) Provided services to customers on account.| +| +| +| d) Paid the current month's advertising charges.| -| +| -| e) Purchased a $27,000 delivery truck by paying $5,000 down and securing a loan for the remaining balance.| +| -| -| f) Received $11,000 cash from the owner as an investment in the business.| +| -| +| g) Returned a new computer and printer purchased earlier in the month on account. The bill had not as yet been paid.| -| -| +| h) Paid the utility bill recorded previously in (b)| +| +| -|

3. Balance sheet preparation.
The following data relate to Preston Company as of December 31, 19XX: Preston Company
Balance Sheet
December 31, 19XX
Assets| | | Liabilities| | |
Cash| 17,000| | Loan Payable| 30,000| |
Building| 44,000| | Accounts Payable| ?| |
J Preston Capital| 65,000| | | | |
Land| 21,000| | | | |
Accounts Receivable| 24,000| | | | |
Total Assets| 171,000| | Total Liabilities| 30,000| |

4. Statement preparation
The following information is taken from the accounting records of Grimball Cardiology at the close of business on December 31, 19X1: GRIMBALL CARDIOLOGY
Income Statement
December 31, 19X1

Revenue

Surgery Revenue$175,000
Accounts Receivable$135,000310,000
Cash$ 60,000370,000
Total Revenue$370,000
Less:
Surgical Expenses$80,000
Loan Payable$10,300-$90,300
Utilities Expense$5,000-$95,300
Salary Expense$30,000-$125,300
Rent Expense$15,000-$140,300
Surgical Equipment$ 37,000-$177,300
Office Equipment$118,000-$295,300
Total Deductions-$295,300
Total Revenue $74,700

All equipment was acquired just prior to year-end. Conversations with the practice's bookkeeper revealed the data that follow.

Rose Grimball
Income Statement
January 1, 19X1

Revenues
Capital$300,000
Owner Investments$ 2,000$302,000
Expenses
Owner Withdrawal-22,000
Net Income$280,000

Prepare a statement of owner's equity in good form.

Rose Grimball
Statement of Retained Earnings
January 1, 19X1
Beginning Balance-January 1, 19X1$300,000
Plus: Owner Investments$ 2,000
_________________
$302,000
Less: Owner Withdrawal 22,000
__________________
Ending Balance-January 31, 19X! $280,000

Prepare Grimball's balance sheet in good form.
Rose Grimball
Balance Sheet
January 1, 19X1

| Assets| Liabilities|
Capital| $300,000| |
Owner Investment| $2,000| |
Owner Withdrawal| | $22,000|
| $302,000| $22,000|
Ending Balance| $280,000| |

5. Recognition...
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