A tabular analysis of the transactions made during August 2010 by Witten Company during its first month of operations is shown below. Each increase and decrease in stockholders' equity is explained.
Assets = Liabilities + Stockholders' Equity
Cash + Accounts Receivable + Supplies + Office Equipment = Accounts Payable + Common Stock + Retained Earnings
Rev. - Exp. - Div.
1. $20,000 $20,000 Com. Stock
2. -1,000 $5,000 $4,000
3. -750 $750
4. 4,400 $5,400 $9,800 Serv. Rev
5. -1,500 -1,500
6. -2,000 -2,000 Div.
7. -800 -800 Rent Exp.
8. 450 -450
9. -3,000 -3,000 Sal. Exp.
10. 500 -500 Util. Exp.
Determine how much stockholders' equity increased for the month.
$
Compute the net income for the month.
$
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Question 2
This information relates to Pickert Real Estate Agency.
Oct. 1 Stockholders invested $30,000 in exchange for common stock of the corporation.
Oct. 2 Hires an administrative assistant at an annual salary of $42,000.
Oct. 3 Buys office furniture for $4,600, on account.
Oct. 6 Sells a house and lot for M.E. Petty; commissions due from Petty, $10,800 (not paid by Petty at this time).
Oct. 10 Receives cash of $140 as commission for acting as rental agent renting an apartment.
Oct. 27 Pays $700 on account for the office furniture purchased on October 3.
Oct. 30 Pays the administrative assistant $3,500 in salary for October.
Post the transactions to T-accounts and complete the following trial balance. (If answer is zero, please enter 0, do not leave any fields blank.)
PICKERT REAL ESTATE AGENCY
Trial Balance
October 31, 2010
Debit Credit
Cash $
$
Accounts receivable
Office furniture
Accounts payable
Common stock
Service revenue
Salaries expense
$
$
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Question 3
Sunflower Architects incorporated as licensed architects on April 1, 2010. During the first month of the operation of the business, these events and transactions occurred:
April 1 Stockholders invested $15,000 cash in exchange for common stock of the corporation.
1 Hired a secretary-receptionist at a salary of $375 per week, payable monthly.
2 Paid office rent for the month $900.
3 Purchased architectural supplies on account from Spring Green Company $1,000.
10 Completed blueprints on a carport and billed client $1,500 for services.
11 Received $500 cash advance from J. Madison to design a new home.
20 Received $2,300 cash for services completed and delivered to M. Svetlana.
30 Paid secretary-receptionist for the month $1,500.
30 Paid $300 to Spring Green Company for accounts payable due.
Journalize the transactions. (If no entry is required type No entry for the account and 0 for the amount.)
Date Account/Description Debit Credit
April 1
April 1
April 2
April 3
April 10
April 11
April 20
April 30
April 30
Question 4
This is the trial balance of Slocombe Company on September 30.
SLOCOMBE COMPANY
Trial Balance
September 30, 2010
Debit Credit
Cash $8,300
Accounts Receivable 2,600
Supplies 2,100
Equipment 8,000
Accounts Payable $5,100
Unearned Revenue 900
Common Stock 15,000
$21,000 $21,000
The October transactions were as follows.
Oct. 5 Received $1,300 in cash from customers for accounts receivable due.
10 Billed customers for services performed $5,100.
15 Paid employee salaries $1,400.
17 Performed $600 of services for customers who paid in advance in August.
20 Paid $1,500 to creditors for accounts payable due.
29 Paid a $300 cash dividend.
31 Paid utilities $500.
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Journalize the transactions.
Date Account/Description Debit Credit
Oct. 5
Oct. 10
Oct. 15
Oct. 17
Oct. 20
Oct. 29
Oct. 31
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Post to ledger accounts and then complete the following trial balance. (If answer is zero please enter 0, do not leave any fields blank.)
SLOCOMBE COMPANY
Trial Balance
October 31, 2010
Debit Credit
Cash $
$
Accounts receivable
Supplies
Equipment
Accounts payable
Unearned Revenue
Common stock
Dividends
Service Revenue
Salaries Expense
Utilities Expense
$
$
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********* DISCUSSION QUESTION ***********
Write a 350- to 500-word summary on the below discussion questions, discuss the objectives; how do they relate to the practice of accounting and its uses in business?
• Identify the four basic financial statements.
• Classify transactions using the rules of debit and credit.
• Journalize basic transactions.
• Discuss how financial statements would be useful to external users such as investors and creditors.
Accounting 4 questions and discussion question
