Given Data P02-02A:

Problem 2-2A Preparing and posting journal entries; preparing a trial balance C4 C5 A1 P1 P2 Denzel Brooks opens a Web consulting business called Venture Consultants and completes the following transactions in March, 2008 March 1 Brooks invested $180,000 cash along with $30,000 of office equipment in the company. 2 The company prepaid $8,000 cash for six months rent for an office. (Hint: Debit Prepaid Rent for $8,000.) 3 The company made credit purchases of office equipment for $3,300 and office supplies for $1,400. Payment is due within 10 days. 6 The company completed services for a client and immediately received $6,000 cash. 9 The company completed a $9,200 project for a client, who must pay within 30 days. 12 The company paid $4,700 cash to settle the account payable created on March 3. 19 The company paid $7,500 cash for the premium on a 12-month insurance policy. 22 The company received $4,300 cash as partial payment for the work completed on March 9. 25 The company completed work for another client for $3,590 on credit. 29 Brooks withdrew $4,900 cash from the company for personal use. 30 The company purchased $1,700 of additional office supplies on credit. 31 The company paid $500 cash for this months utility bill. Required 1. Prepare general journal entries to record these transactions (use the account titles listed in part 2). 2. Open the following ledger accountstheir account numbers are in parentheses (use the balance column format): Cash (101); Accounts Receivable (106); Office Supplies (124); Prepaid Insurance (128); Prepaid Rent (131); Office Equipment (163); Accounts Payable (201); D. Brooks, Capital (301); D. Brooks, Withdrawals (302); Services Revenue (403); and Utilities Expense (690). Post the journal entries from part 1 to the ledger accounts and enter the balance after each posting. 3. Prepare a trial balance as of the end of March. 4. Prepare Income Statement, Statement of Owner's Equity, and balance sheets for the business as of March 31, 2008.

Student Name: Instructor Class: McGraw-Hill/Irwin Problem 02-02A VENTURE CONSULTANTS General Journal Explanation Debit

Date

Credit

VENTURE CONSULTANTS General Ledger Cash Date Explanation Debit Account No. Credit Balance

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Accounts Receivable Date Explanation Debit

Account No. Credit Balance

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Office Supplies Date Explanation Debit

Account No. Credit Balance

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Prepaid Insurance Date Explanation Debit

Account No. Credit Balance

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Prepaid Rent Date Explanation Debit

Account No. Credit Balance

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Office Equipment Date Explanation Debit

Account No. Credit Balance

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Accounts Payable Date Explanation Debit

Account No. Credit Balance

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D. Brooks, Capital Date Explanation Debit

Account No. Credit Balance

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D. Brooks, Withdrawals Date Explanation Debit

Account No. Credit Balance

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Services Revenue Date Explanation Debit

Account No. Credit Balance

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Utilities Expense Date Explanation Debit

Account No. Credit Balance

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Account Title

VENTURE CONSULTANTS Trial Balance March 31 Debits

Credits

VENTURE CONSULTANTS

Income Statement For the Month ended March 31, 2008

VENTURE CONSULTANTS Statement of Owner's Equity For the Month ended March 31, 2008

VENTURE CONSULTANTS Balance Sheet March 31, 2008 ASSETS

Problem 2-4A Computing net income from equity analysis, preparing a balance sheet, and computing the debt ratio C3 A1 A2 P3 The accounting records of Faviana Shipping show the following assets and liabilities as of December 31, 31-Dec 2008 2009 Cash . . . . . . . . . . . . . . . . . . $47,867 $8,154 Accounts receivable . . . . . . . 25,983 20,370 Office supplies . . . . . . . . . . . 4,098 3,002 Office equipment . . . . . . . . . 125,816 134,018 Trucks . . . . . . . . . . . . . . . . . 49,236 58,236 Building . . . . . . . . . . . . . . . . 0 164,124 Land . . . . . . . . . . . . . . . . . . . 0 40,956 Accounts payable . . . . . . . . . 68,310 33,879 Note payable . . . . . . . . . . . . 0 85,080 Late in December 2009, the business purchased a small office building and land for $205,080. It paid $12 purchase and an $85,080 note payable was signed for the balance. Ms. Faviana had to invest $34,000 cash enable it to pay the $120,000 cash. The owner withdraws $2,400 cash per month for personal use. Required 1. Prepare balance sheets for the business as of December 31, 2008 and 2009. (Hint: Report only total equ sheet and remember that total equity equals the difference between assets and liabilities.) 2. By comparing equity amounts from the balance sheets and using the additional information presented i prepare a calculation to show how much net income was earned by the business during 2009. 3. Compute the 2009 year-end debt ratio for the business.

sis, preparing a balance sheet, and computing the debt ratio

ing show the following assets and liabilities as of December 31, 2008 and 2009.

chased a small office building and land for $205,080. It paid $120,000 cash toward the s signed for the balance. Ms. Faviana had to invest $34,000 cash in the business to wner withdraws $2,400 cash per month for personal use.

as of December 31, 2008 and 2009. (Hint: Report only total equity on the balance ls the difference between assets and liabilities.) balance sheets and using the additional information presented in this problem, net income was earned by the business during 2009. for the business.

Student Name: Instructor Class: McGraw-Hill/Irwin Problem 02-04A FAVIANA SHIPPING Balance Sheet December 31, 2008 Assets Cash Accounts receivable Office supplies Office equipment Trucks Total assets Liabilities Accounts payable Owner's Equity Total equity Total liabilities and equity $47,867 25,983 4,098 125,816 49,236 $253,000

$68,310 184,690 $253,000

Correct!

FAVIANA SHIPPING Balance Sheet December 31, 2009 Assets Cash Accounts receivable Office supplies Office equipment Trucks Building Land Total Assets Liabilities Accounts payable Notes payable Total liabilities Owner's Equity Total equity Total liabilities and equity $8,154 20,370 3,002 134,018 58,236 164,124 40,956 $428,860

33,879 85,080 $ 118,959 309,901 $428,860

Correct!

FAVIANA SHIPPING Computation of 2009 Net Income Equity, December 31, 2008 Equity, December 31, 2009 $184,690 (309,901)

Increase in equity during 2009 Owner's investments Deduct owner's withdrawals Net income earned in 2009

$125,211 34,000 (28,800) $120,011

Correct!

FAVIANA SHIPPING Debt Ratio Calculation Debt Ratio 27.7%

Correct!

Total liabilities/Total Assets