HOMEWORK- Chapter 2

Full Name: Trần Thị Thu Hiền

ID: Ds150054 Class: IB1503

1. Exercise
 2-6:
a.
Accounts Payable
Beginning Balance : $152.000
Purchases on account : $281.000

End Balance : $132.500

$132.000 = $281.000+ $152.000-X

=> X = $ 300.500
=> Payments on account : $300.500
b.
Account Receivable
Beginning balance : $102.500 Cash : $102.890

Ending balance: $89.000

$89.000=$102.500-$102.890+X
=> X = $89.390
=> Sales on account : $ 89.390
c.
Cash
Cash receipts : $102.500 Cash disbursements: $103.150

Ending balance : $18.600

$18.600=$102.500-$103.150 + X

=> X = $19.250
 => Beginning balance : $19.250
 2.11
 Transactions a, c, and e are not expenses for the following reasons:
+ a. This transaction decreased assets in settlement of a previously
existing liability, and equity did not change. Cash payment does not
mean the same as using up of assets (expense was recorded when the
supplies were used).
+c. This transaction involves the purchase of an asset. The form of the
company’s assets changed, but total assets did not change, and the equity
did not decrease.
+e. This transaction is a distribution of cash to the owner. Even though
equity decreased, the decrease did not occur in the process of providing
goods or services to customers.
 Transactions that created expenses: Date Account title Debit credit
+b. Salary Expense 1233 cash 1233
+d. Utilities Expense 870 cash 870
2. Problem
2-2A
a .Dr. Cash 101 $100.000
Dr. Office equipment 163 $5,000
Dr . Equipment 164 $60,000
Cr.J. Aracel, Capital 301 $165,000
b. Dr.Land 172 $49,000
Cr.Cash 101 $6,300
Cr.Note Payable 250 $42,700
c. Dr.Building 170 $55,000.00
Cr.Cash 101 $55,000.00
d. Dr.Prepaid insurance 108 $3,000
Cr. Cash 101 $3,000
e. Dr. Cash 101 $6,200
Cr. Engineering fees earned 402 $6,200
f. Dr.Drafting equipment 64 $20.000
Cr.Cash 101 $9,500
Cr. Note Payable 250 $10,500
g.Dr. Accounts receivable 106 $14,000
Cr.Engineering fees earned 402 $14,000
h.Dr.Office equipment 163 $1,150
Cr.Accounts payable 201 $1,150
i.Dr.Accounts receivable 106 $22,000
Cr.Engineering fees earned 402 $22,000
j.Dr.Equipment Rental Expepense 164 $1.333
Cr.Account Payable 201 $1.333

k.Dr. Cash 101 $7,000

 Cr.Account receivable 106 $7,000
l.Dr. Wages Expense 601 $1,200
Cr.Cash 101 $1,200
m.Dr. Account payable 201 $1,150
Cr.Cash 101 $1,150
n.Dr. Repairs Expense 604 $925
Cr.Cash 101 $925
0.Dr. J. Aracel, Withdrawals 302 $9,480
Cr.Cash 101 $9,480
p.Dr. Wages Expense 601 $1,200
Cr.Cash 101 $1,200
q.Dr. Advertising Expense 603 $2,500
Cr.Cash 101 $2,500

Aracel Engineering
Trial Balance
30-Jun
Particulars Debit Credit
Cash 22,945
Account Recevable 29,000
Prepaid Insurance 3,000
Office Equipment 6,150
Drafting Equipment 80,000
Building 55,000
Land 49,000
Accuont Payable 1,333
Notes Payable 53,200
Common Stock 165,000
Dividends 9,480
EngineeringFees earned 42,200
Wages Expense 2,400
E rental expense 1,333
Advertising Expense 2,500
Repairs Expense 950
Total 261,733 261,733

2-5A
 1.

NETTLE DISTRIBUTION
Balance sheet
December 31,2014
Assets Amounts Liabilities Amounts

Current Assets Current Liabilities

Cash $ 64,300 Accounts Payable $ 3,500
Accounts receivable $ 26,240 Non Current liabilities $0
Office supplies $ 3,160 Total liabilities $ 3,500
Non Current Assets Total Equity $ 282,200
Office Equipment $44,000
Trucks $ 148,000
Total Assets $285,700 Total liabilities and $ 285,700
equity

NETTLE DISTRIBUTION
Balance sheet
December 31,2015
Assets Amounts Liabilities Amounts

Current Assets Current Liabilities

Cash $ 15,640 Accounts Payable $ 33,500
Accounts receivable $ 19,390 Note payable $ 40,000
Office supplies $ 1,960
Non Current Assets
Office Equipment $44,000

Trucks $ 157,000 Total liabilities $ 73,500

Building 80,000 Equity
Land 60,000 Total Equity $ 304,490
Total Assets $377,990 Total liabilities and $ 377,990
equity
 2.
Equity, December 31, 2014 $282,200
Add: Owner's investment 35,000
Add: Net income 23,290

340,490
Less: Dividends 36,000

Equity, December 31, 2013 $304,490

3.
Debt ratio

Choose
/ Choose Denominator: = Debt ratio
Numerator:
Total liabilities / Total assets = Debt ratio

$73,500 / $377,990 = 19.4%

2-1B

Prepare general journal entries to record these transactions.
Date General Journal Debit Credit
Mar
Cash 38,000
01
Office equipment 15,000
Common stock 53,000

Mar
Prepaid rent 9,000
02
Cash 9,000

Mar
Office equipment 8,000
04
Office supplies 2,400
Accounts payable 10,400

Mar
Cash 3,280
08
Services revenue 3,280

Mar
Accounts receivable 15,400
12
Services revenue 15,400

Mar Accounts payable 10,400

13
Cash 10,400

Mar
Prepaid insurance 1,900
19
Cash 1,900

Mar
Cash 7,700
22
Accounts receivable 7,700

Mar
Accounts receivable 2,100
24
Services revenue 2,100

Mar
Dividends 5,300
28
Cash 5,300

Mar
Office supplies
29 550
Accounts payable 550

Mar
Utilities expense 860
30
Cash 860

VENTURE CONSULTANTS
Trial Balance
March 31
Debit Credit
Cash 21,520
Accounts
9,800
receivable
Office supplies 2,950
Prepaid insurance 1,900
Prepaid rent 9,000
Office equipment 23,000
Accounts payable 550
Common stock 53,000
Dividends 5,300
Services revenue 20,780
Utilities expense 860
Totals $74,330 $74,330