Week One Exercise Solutions -Set a

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. 1 Jennifer Royall invested cash of $15,000 and land valued at $10,000 into the business. Cash 15,000 Land 10,000 Owners Equity 25,000 (Investment by owner) 5 Provided $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 receivable 1,200 Revenue 1,200 (Services on account) 9 Paid $250 of salaries to an employee. Salary expense 250 Cash 250 (Paid salary expense for xx/xx/xxxx 14 Acquired a new computer for $3,200 on account. Computer equipment 3,200 Accounts payable 3,200 (Purchased computer on account)
20 Collected $800 from Jason Ratchford for services provided on April 5. Cash 800