ACC205 Week 1 Assignment
Week One Exercise Solutions -Set B
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.
Amounts paid to a mall for rent.
E
Debit
b.
Amounts to be paid in 10 days to suppliers.
L
Credit
c.
A new fax machine purchased for office use.
A
Debit
d.
Land held as an investment.
A
Debit
e.
Amounts due from customers.
A
Debit
f.
Daily sales of merchandise sold.
R
Credit
g.
Promotional costs to publicize a concert.
E
Debit
h.
A long-term loan owed to Citizens Bank.
L
Credit
i.
The albums, tapes, and CDs held for sale to customers.
A
Debit
2. Basic journal entries. The following transactions pertain to the Jennifer Royall Company: May 1 Jennifer Royall invested cash of $25,000 and land valued at $15,000 into the business. Cash 25,000 Land 15,000 Owners Equity 40,000 (Investment by owner) 5 Provided $1,000 of services to Jason Ratchford, a client, on account. Ratchford agreed to pay $800 in 15 days and the remaining amount in June. Accounts receivable 1,000 Revenue 1,000 (Services on account) 9 Paid $1250 of salaries to an employee. Salary expense 1,250 Cash 1,250 (Paid salary expense for xx/xx/xxxx 14 Acquired a new computer for $4,200 on account. Computer equipment 4,200 Accounts payable 4,200 (Purchased computer on account)
20 Collected $800 from Jason Ratchford for services provided on May 5. Cash 800 Accounts receivable 800 (Received $800 of the $1,000 owed by Ratchford) 24 Borrowed
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.
Amounts paid to a mall for rent.
E
Debit
b.
Amounts to be paid in 10 days to suppliers.
L
Credit
c.
A new fax machine purchased for office use.
A
Debit
d.
Land held as an investment.
A
Debit
e.
Amounts due from customers.
A
Debit
f.
Daily sales of merchandise sold.
R
Credit
g.
Promotional costs to publicize a concert.
E
Debit
h.
A long-term loan owed to Citizens Bank.
L
Credit
i.
The albums, tapes, and CDs held for sale to customers.
A
Debit
2. Basic journal entries. The following transactions pertain to the Jennifer Royall Company: May 1 Jennifer Royall invested cash of $25,000 and land valued at $15,000 into the business. Cash 25,000 Land 15,000 Owners Equity 40,000 (Investment by owner) 5 Provided $1,000 of services to Jason Ratchford, a client, on account. Ratchford agreed to pay $800 in 15 days and the remaining amount in June. Accounts receivable 1,000 Revenue 1,000 (Services on account) 9 Paid $1250 of salaries to an employee. Salary expense 1,250 Cash 1,250 (Paid salary expense for xx/xx/xxxx 14 Acquired a new computer for $4,200 on account. Computer equipment 4,200 Accounts payable 4,200 (Purchased computer on account)
20 Collected $800 from Jason Ratchford for services provided on May 5. Cash 800 Accounts receivable 800 (Received $800 of the $1,000 owed by Ratchford) 24 Borrowed