Accounting 280 Week Two Individual

Topics: Balance sheet, Generally Accepted Accounting Principles, Liability Pages: 5 (757 words) Published: May 9, 2011
E1-1 Urlacher Company performs the following accounting tasks during the year. Communicates__Analyzing and interpreting information.
Records__Classifying economic events.
Communicates__Explaining uses, meaning, and limitations of data. Records__Keeping a systematic chronological diary of events. Records__Measuring events in dollars and cents.
Communicates__Preparing accounting reports.
Communicates__Reporting information in a standard format.
Identifies Identifies_Selecting economic activities relevant to the company. Records__Summarizing economic events.
Accounting is “an information system that identifies, records, and communicates the economic events of an organization to interested

E1-5 Meredith Cleaners has the following balance sheet items. Liability-Accounts payable
Asset-Accounts receivable
Liability-Notes payable
Asset-Cleaning equipment
Liability-Salaries payable
Asset-Cleaning supplies
Stockholders’ equity-Common Stock

Classify each item as an asset, liability, or stockholders’ equity.ommon stock

E1-12 The following information relates to Linda Stanley Co. for the year 2008.

Retained earnings, January 1, 2008 $ 48,000
Advertising expense $ 1,800
Dividends during 2008 6,000
Rent expense 10,400
Service revenue 62,500
Utilities expense 3,100
Salaries expense 30,000
After analyzing the data, prepare an income statement and a retained earnings statement for the year ending December 31, 2008.

Linda Stanley Co.
Income Statement
Year Ending December 31, 2008

Service Revenues$62,500

Advertising Expense$1,800
Rent Expense$10,400
Utilities Expense$3,100
Salaries Expense$30,000
Net Income$17,200

Linda Stanley Co.
Retained Earnings Statement
Year Ending Dec 31, 2008

Retained Earning$48,000
Add: Net Income$17,200

Less: Dividends$6,000
Retained Earnings 01/31$59,200

E1-13 Mary Close is the bookkeeper for Mendez Company. Mary has been trying to get the balance sheet of Mendez Company to balance. Mendez’s balance sheet is shown on page 37.

Balance Sheet
December 31, 2008
Assets Liabilities
Cash $15,000 Accounts payable $20,000 Supplies 8,000 Accounts receivable (8,500)
Equipment 46,000 Common stock 50,000
Dividends 10,000 Retained earnings 17,500
Total assets $79,000 Total liabilities and
stockholders’ equity $79,000

Mendez Company
Balance Sheet
December 31, 2008
Equipment $46,000
Total Assets$71,000

Accounts Payable $20,000
Common Stock $50,000 $70,000

E2-2 Selected transactions for D. Reyes, Inc., an interior decorating firm, in its first month of business, are as follows.
Jan. 2 Invested $10,000 cash in the business in exchange for common stock. a.Asset Credited/ Stock Holders Equity Debited
b.Debit cash / Credit Common Stock
c.Cash increased/
3 Purchased used car for $4,000 cash for use in business.
9 Purchased supplies on account for $500.
11 Billed customers $1,800 for services performed.
16 Paid $200 cash for advertising.
20 Received $700 cash from customers billed on January 11.
23 Paid creditor $300 cash on balance owed.

For each transaction indicate the following.
(a) The basic type of account debited and credited (asset, liability, stockholders’ equity). (b) The specific account debited and credited (cash, rent expense, service revenue, etc.). (c) Whether the specific account is increased or decreased.

(d) The normal balance of the specific account.


Date Account Titles and Explanation Debit Credit Jan 2Cash 10,000...
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