Week 2 Exercise 1 Copy

NAME
Week 2, Exercise 1
November 16, 2014
XACC/290

Week 2, Exercise 1

(a)
1. Stockholders invested $20,000 cash in the business.
2. Purchased equipment for $5,000, paying $1,000 in cash and the balance of $4,000 on account.
3. Paid $750 in cash for supplies.
4. Earned $9,500 in revenue, receiving $4,100 in cash and $5,400 on A/R.
5. Paid $1,500 in cash on accounts Payable.
6. Paid $2,000 in cash dividends to stockholders.
7. Paid $800 in cash as expenses (rent).
8. Earned $450 in cash from consumers on account.
9. Paid $3,000 as salaries.
10. Incurred $300 of utilities expense on account.
(b)
Service Revenue 9,500
Dividends
-2,000
Rent Expense
-800
Salaries Expense
-3,000
Utilities Expense
-300
Total Equity Increase
3,400

(c)
Service Revenue 9,500
Rent Expense
-800
Salaries Expense
-3,000
Utilities Expense
-300
Net Income
5,400

General Journal
Date
Account Titles
Debit
Credit
May 4
Accounts Payable
700

Cash

700

7
Accounts Receivable
6800

Service Revenue

6800

8
Supplies
850

Accounts Payable

850

9
Equipment
1000

Cash

1000

17
Expense
530

Cash

530

22
Expense
900

Accounts Payable

900

29
Accounts Payable
1200

Cash

1200

(a)

General Journal
Date
Account Titles
Debit
Credit
Apr. 1
Cash
18,000

Common Stock

18,000

(Issued shares of stock for cash)

1
No entry—not a transaction.

2
Rent Expense 900

Cash

900

(Paid monthly office rent)

3
Supplies
1,300

Accounts Payable

1,300

(Purchased supplies on account from Spring Green Company)

10
Accounts Receivable 1,900

Service Revenue

1,900

(Billed clients for services rendered)

11
Cash
700

Unearned Service Revenue

700

(Received cash advance for future service)

20
Cash
2,800

Service Revenue

2,800

(Received cash for revenue earned)

30
Salaries and Wages Expense 1,500

Cash

1,500

(Paid monthly salary)

30
Accounts Payable 300

Cash

300