Question

1. The following selected transactions were completed during February of the current year:

1. Billed customers for fees earned, $41,730.
2. Purchased supplies on account, $1,800.
3. Received cash from customers on account, $39,150
4. Paid Creditors on account, $1,100.
5. Owner withdrew $12,000 for personal use
6. Paid $500 for this month Rent.
7. Paid $100 for this month Utility bill.
8. Paid Salary to employees $3,000
9. Purchase Equipment for Cash $5,000
10. Received Cash $2,500 for services performed.
11. Owner invested $75,000 in business

1. Prepare Journal accounts.
2. Prepare T-Account.
3. Prepare a trial balance

2. Indicate how each account should be classified in Paul’s Balance sheet and which account should be excluded from his balance sheet using the letters below;

Asset, Liability, Stockholders’ Equity, Exclude from, & Balance Sheet?

1. Equipment used in the business _______
2. Amounts owed to suppliers _______
3. Mortgage on Paul’s home ______
4. Sound equipment used in the reception area of Paul’s office ____
5. Amounts owed by client _____
6. Amounts due to suppliers for the purchase of office equipment ______
7. Paul’s original investment in the business _____
8. Amounts owed employees _______
1. Office buildings and land _________
10. Cleaning supplies used in Paul’s home ________
11. Golf clubs (kept in Paul’s office) _______

3. Match the following financial statement categories with the accounts listed.

Asset, Liability, Stockholders’ Equity, Revenue, & Expense.

1. Cost of Goods Sold _____
2. Accounts Receivable ___________
3. Land __________
4. Equipment ______
5. Supplies ________
6. Taxes Payable ________
7. Delivery Truck ______
8. Salary expense ________

4. The amount of assets created through performance of business operations is referred to as ______?
5. Which of the following represent categories which appear on the income statement?

1. Expenses, revenues, net income
2. Assets, liabilities, revenues, expenses
3. Revenues, expenses, liabilities, retained earnings
4. Retained earnings, net income, assets, liabilities
5. Liabilities, revenues, income taxes

Answer 1

a)
Date	Account Titles and Explanation	Debit	Credit
1)	Accounts Receivable	41730
	Service Revenue		41730
2)	Supplies	1800
	Accounts Payable		1800
3)	Cash	39150
	Accounts Recivables		39150
4)	Accounts Payable	1100
	Cash		1100
5)	Drawings	12000
	Cash		12000
6))	Rent	500
	Cash		500
7)	Utility Expense	100
	Cash		100
8)	Salaries Expenses	3000
	Cash		3000
9)	Equipment	5000
	Cash		5000
10)	Cash	2500
	Service Revenue		2500
11)	Cash	75000
	Owner's Capital		75000
b) T account
	Cash
3)	39150					Service Revenue
4)	1100	10)	2500				1)	41730
5)	12000	11)	75000				10)	2500
6)	500						bal.	44230
7)	100
8)	3000
9)	5000
Bal.	94950
	Accounts Receivable					Accounts Payable
1)	41730	2)	39150		4)	1100	2)	1800
Bal.	2580						bal.	700
	Supplies
2)	1800					Salaries
					8)	3000
	Drawing
5)	12000					Equipment
					9)	5000
	Rent
6)	500					Owner's Capital
							11)	75000
	Utilities
7)	100
c)
Trial Balance
		Debit	Credit
	Cash	94950
	Account Receivables	2580
	Supplies	1800
	Rent	500
	Utilities	100
	Salaries	3000
	Equipment	5000
	Drawings	12000
	Service Revenue		44230
	Accounts Payable		700
	Owner's Capital		75000
	Total	119930	119930