ACC/280 Principles of Accounting
Mr. Bobby Lon Nelson, CPA, MBA
May 20th, 2010
Individual Assignment Week Two
The answers from this exercise comes from the book Financial Accounting chapters 1,2, and 7.
Urlacher Company performs the following accounting tasks during the year. Answer:
__c___Analyzing and interpreting information.
____ r__Classifying economic events.
___c___Explaining uses, meaning, and limitations of data.
___r___Keeping a systematic chronological diary of events.
___r___Measuring events in dollars and cents.
____c__Preparing accounting reports.
___c_Reporting information in a standard format.
____i__Selecting economic activities relevant to the company. ___r___Summarizing economic events.
Accounting is “an information system that identifies, records, and communicates the economic events of an organization to interested users.”
Categorize the accounting tasks performed by Urlacher as relating to either the identification (I), recording (R), or communication (C) aspects of accounting. E1-5
Meredith Cleaners has the following balance sheet items.
Common stock-Stockholders’ Equity
Classify each item as an asset, liability, or stockholders’ equity.
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
Service Revenue: $62500
Retained Earnings Jan 1, 2008
Net Income: $17200
Less Dividends 08’: $6,000 17200-6000=11200
Retained Earnings: $59,200
After analyzing the data, prepare an income statement and a retained earnings statement for the year ending December 31, 2008.
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. MENDEZ COMPANY
December 31, 2008
Cash $15,000 Accounts payable $20,000
Accounts receivable (8,500)
Supplies 8,000 Equipment 46,000 Common stock 50,000 Retained earnings 7,50057,500 Total assets $77,500 Total liabilities and stockholders’ equity $77,500 Instructions
Prepare a correct balance sheet.
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. 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.
28 Declared and paid a $1,000 cash dividend.
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.Use the following...