Week One Exercise Solutions -Set a

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Week One Exercise Solutions -Set A
1. Recognition of normal balances | | | | | |
The following items appeared in the accounting records of Triguero's, a retail music store that also sponsors concerts. | Classify each of the items as an asset, liability; revenue; or expense from the company's viewpoint. Also indicate the normal account balance of each item.| | | | | | Classification| Normal Balance|

a.       The albums, tapes, and CDs held for sale to customers.| A| Debit| b.      A long-term loan owed to Citizens Bank.| | L| Credit| c.       Promotional costs to publicize a concert.| | E| Debit| d.      Daily sales of merchandise sold,| | | R| Credit| e.       Amounts due from customers,| | | A| Debit| f.       Land held as an investment,| | | | A| Debit| g.       A new fax machine purchased for office use.| | A| Debit| h.      Amounts to be paid in 10 days to suppliers,| | L| Credit| i.        Amounts paid to a mall for rent.| | | E| Debit|

2. Basic journal entries.The following transactions pertain to the Jennifer Royall Company:

Apr. 1Jennifer Royall invested cash of $15,000 and land valued at $10,000 into the business.

Cash15,000
Land10,000
Owners Equity25,000
(Investment by owner)

5Provided $1,200 of services to Jason Ratchford, a client, on account.
Ratchford agreed to pay $800 in 15 days and the remaining amount in May.
Accounts receivable1,200
Revenue1,200
(Services on account)

9Paid $250 of salaries to an employee.
Salary expense250
Cash250
(Paid salary expense for xx/xx/xxxx

14Acquired a new computer for $3,200 on account.
Computer equipment3,200
Accounts payable3,200
(Purchased computer on account)
20Collected $800 from Jason Ratchford for services provided on April 5.
Cash800
Accounts receivable800
(Received $800 of the $1,200 owed by Ratchford)

24Borrowed $7,500 from BestBanc by securing a six-month loan.
Cash7,500
Notes payable7,500
(Borrowed $7500 from BestBanc, 6 months, X%)

3. Balance sheet preparation. | | | | | | | |
The following data relate to Preston Company as of December 31, 20XX:| | | | | | | | | | | | |
Building| | $44,000 | | Accounts receivable| $24,000 | | | Cash| | 17,000| | Loan payable| 30,000| | |
J. Preston, capital| 65,000| | Land| | 21,000| | |
Accounts payable ?| | | | | | | |
| | | | | | | | |
Prepare a balance sheet in good form as of December 31, 20XX.| | | | | | | | | | | | | |
| | | | Preston Company| | | | |
| | | | Balance Sheet| | | | |
| | | | December 31, 20XX| | | | |
| | | | | | | | |
Assets| | | | | Liabilities| | | |
Current assets| | | | Current Liabilities:| | |
Cash| | | $17,000 | | Accounts payable| | $11,000 | Accounts receivable| | 24,000| | Total Current liabilities| | 11,000| Total Current Assets| | 41,000| | | | | |
| | | | | Long-Term Liabilities:| | |
| | | | | Loan payable| | | 30,000|
| | | | | Total Long-Term Liabilities| | 30,000|
Long-Term Assets:| | | | Total Liabilities| | | 41,000| Building| | | 44,000| | | | | |
Land| | | 21,000| | Capital| | | |
Total Long-Term Assets| | 65,000| | J. Preston Capital| | 65,000| Total Assets| | $ 106,000 | | Total Liabilities and Capital| | $ 106,000 | 4. Basic Transaction Processing|

On November 1 of the current year, Richard Parker established a sole proprietorship.| The following transactions occurred during the month:|
| |
1. Parker invested $19,000 into the business for $19,000 common stock.| 2. Paid $9,000 to acquire a used...
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