Reference no: EM131218193

Q1- Chart of accounts

Innerscape Interiors is owned and operated by Jackie Vargo, an interior decorator. In the ledger of Innerscape Interiors, the first digit of the account number indicates its major account classification (1-assets, 2-liabilities, 3-stockholders' equity, 4-revenues, 5-expenses). The second digit of the account number indicates the specific account within each of the preceding major account classifications.

Match each account number with its most likely account in the list that follows. The account numbers are 11, 12, 13, 21, 31, 32, 33, 41, 51, 52, and 53.

Accounts Payable            Land

Accounts Receivable        Miscellaneous Expense

Cash                              Retained Earnings

Common Stock               Supplies Expense

Dividends                       Wages Expense

Fees Earned

Q2- Chart of accounts

LeadCo School is a newly organized business that teaches people how to inspire and influence others. The list of accounts to be opened in the general ledger is as follows:

Accounts Payable          Prepaid Insurance

Accounts Receivable      Rent Expense

Cash                            Retained Earnings

Common Stock             Supplies

Dividends                     Supplies Expense

Equipment                    Unearned Rent

Fees Earned                 Wages Expense

Miscellaneous Expense

List the accounts in the order in which they should appear in the ledger of LeadCo School and assign account numbers. Each account number is to have two digits: the first digit is to indicate the major classification (1 for assets, etc.), and the second digit is to identify the specific account within each major classification (11 for Cash, etc.).

Q3- Journal entries and trial balance

On August 1, 2016, Bill Hudson established Heritage Realty, which completed the following transactions during the month:

a. Bill Hudson transferred cash from a personal bank account to an account to be used for the business in exchange for common stock,. $30,000.

b. Paid rent on office and equipment for the mouth, $3,250.

c. Purchased supplies on account, $2,150.

d. Paid creditor on account, $875.

e. Earned sales commissions, receiving cash, $14,440.

f. Paid automobile expenses (including rental charge) for month, $1,580, and miscellaneous expenses, $650.

g. Paid office salaries, $3,000.

h. Determined that the cost of supplies used was $1,300.

i. Paid dividends, $2,500.

Instructions-

1. Journalize entries for transactions (a) through (i), using the following account titles; Cash, Supplies, Accounts Payable, Common Stock, Dividends, Sales Commissions, Rent Expense, Office Salaries Expense, Automobile Expert , Supplies Expense, Miscellaneous Expense, Explanations may be omitted.

2. Prepare T accounts, using the account titles in (1). Post the journal entries to these accounts, placing the appropriate letter w the left of each amount to identify the transactions. Determine the account balances, after all posting is complete. Accounts containing only a single entry do not need a balance.

3. Prepare an unadjusted trial balance as of Augural 31, 2016.

4. Determine the following:

a. Amount of total revenue recorded in the ledger.

b. Amount of total expenses recorded in the ledger.

c. Amount of net income for August.

5. Determine the increase or decrease in retained earnings for August.

Q4- Journal entries and trial balance

On November 1, 2016, Patty Cosgrove established an interior decorating business, Classis Designs. During the month, Patty completed the following transactions related to the business:

Nov. 1. Patty transferred cash from a personal bank account to an account to be used for the business in exchange for common stock, $27,750.

1. Paid rent for period of November 1 to end cir month, $,4,000.

6. Purchased office equipment on account, $12,880.

8. Purchased a truck for $32,500 paying $6,500 cash and giving a note payable for the remainder.

10. Purchased supplies for cash, $1,860.

12. Received cash for job completed, $7,500.

15. Paid annual premiums on property and casualty insurance, $2,400,

23. Recorded jobs completed on account and sent invoices to customers, $12,440.

24. Received an invoice for truck expenses, to be paid in November, $1,100.

Enter the following transactions on Page 2 of the two-column journal:

29. Paid utilities expense, $3,660,

29. Paid miscellaneous expenses, $1,700.

30. Received cash from customers on account, $8,000.

30. Paid saes of employees, $4,750.

30. Paid creditor a portion of the amount owed for equipment purchased on November 6, $6,220.

30. Paid dividends, $2,000.

Instructions-

1. Journalize each transaction in a two-column journal beginning on Page 1, referring to the following chart of accounts in selecting the accounts to be debited and credited. (Do not insert the account numbers in the journal at this time.) Explanations may be omitted.

11 Cash                                                         31 Common Stock

12 Accounts Receivable                                   33 Dividends

13 Supplies                                                    41 Fees Earned

14 Prepaid Insurance                                      51 Wages Expense

16 Equipment                                                 53 Rent Expense

18 Truck                                                        54 Utilities Expense

21 Notes Payable                                            55 Truck Expense

22 Accounts Payable                                       59 Miscellaneous Expense

2. Post the journal to a ledger of four-column accounts, inserting appropriate posting references as each item is posted. Extend the balances to the appropriate balance columns after each transaction is posted.

3. Prepare an unadjusted trial balance for Classic Designs as of November 30, 2016.

4. Determine the excess of revenues over expenses for November.

5. Can you think of any reason why the amount determined in (4) might not be the net income for November?

Q5. Accounting equation

The total assets and total liabilities (in millions) of Dollar Tree Inc. and Target Corporation follow:

	Dollar Tree	Target Corporation
Assets	$2,329	$46,630
Liabilities	984	30,809

Determine the stockholders' equity of each company.

Q6. Transactions and T accounts

The following selected transactions were completed during August of the current year:

1. Billed customers for fees earned, $73,900.

2. Purchased supplies on account, $1,960.

3. Received cash from customers on account, $62,770.

4. Paid creditors on account, $820.

a. Journalize these transactions in a two-column journal, using the appropriate number to identify the transactions. Journal entry explanations may be omitted.

b. Post the entries prepared in (a) to the following T accounts: Cash, Supplies, accounts Receivable, Accounts Payable, Fees Earned. To the left of each amount posted in the accounts, place the appropriate number to identify the transactions.

c. Assume that the unadjusted trial balance on August 31 shows a credit balance for Accounts Receivable. Does this credit balance mean an error has occurred?

Q7. Adjusting entries

On March 31, 2016, the following data were accumulated to assist the accountant in preparing the adjusting entries for Potomac Realty:

a. The supplies account balance on March 31 is $5,620. The supplies on hand on March 31 are $1,290.

b. The unearned rent account balance on March 31 is $5,000 representing the receipt of an advance payment on March 1 of four months' rent from tenants.

c. Wages accrued but not paid at March 31 are $2,290.

d. Fees accrued but unbilled at March 31 are $16,825.

e. Depredation of office equipment is $4,600.

Instructions-

1. Journalize the adjusting entries required at March 31, 2016.

2. Briefly explain the difference between adjusting entries and entries that would be made to correct errors.

Q8. Adjusting entries and adjusted trial balances

Rowland Company is a small editorial services company owned and operated by Marlene Rowland. On August 31, 2016, the end of the current year, Rowland Company's accounting clerk prepared the following unadjusted trial balance:

Rowland Company Unadjusting Trial Balance August 31, 2016
	Debit Balance	Credit Balance
Cash	7,500
Accounts Receivable	38,400
Prepaid Insurance	7,200
Supplies	1,980
Land	112,500
Building	150,250
Accumulated Depreciation-Building		87,550
Equipment	135,300
Accumulated Depreciation-Equipment		97,950
Accounts payable		12,150
Unearned Rent		6,750
Common Stock		75,000
Retained Earnings		146,000
Dividends	15,000
Fees Earned		324,600
Salaries and Wages Expense	193,370
Utilities Expense	42,375
Repairs Expense	22,800
Repairs Expense	17,250
Miscellaneous Expense	6,075
	750,000	750,000

The data needed, to determine year-end adjustments are as follows:

a. Unexpired insurance at August 31, $6,000.

b. Supplies on hand at August 31, $480.

c. Depreciation of building for the year, $7,500.

d. Depreciation of equipment for the year, $4,150.

e. Rent unearned at August 31, $1,550,

f. Accrued salaries and wages at August 31. $3,200.

g. Fees earned but unbilled on August 31, $11,330.

Instructions-

1. Journalize thy adjusting entries using the following additional accounts: Salaries and Wages Payable; Rent Revenue; Insurance Expense; Depreciation Expense-Building Depreciation Expense--Equipment; and Supplies Expense.

2. Determine the balances of the accounts affected by the adjusting entries, and prepare an adjusted trial balance.