Exercise For Chapter 2

Exercise for chapter 2
Exercise 1
Dr JJ has been practicing as a family doctor for three years. Dr JJ’s account balances as of April 1 20X0
(all normal balances) are listed as follows:
Account Balance ($)

Cash 4,123
Account Receivable 6,725
Supplies 290
Prepaid Insurance 465
PPE 19,745
Account Payable 765
Capital 30,583
During April,20X0, Dr JJ completed the following transactions:
April 1. Paid office rent for April, $800
3. Purchased equipment on account, $2,100
5. Received cash from patients who owe the business, $3,150
8. Purchased supplies on account, $245
12. Paid cash to equipment payable, $1,250
17. Paid cash for renewal of a six-month property insurance policy, $370
24. Paid cash for laboratory tests, $545
27. Paid cash for personal and family expenses, $1,250
30. Recorded the cash received in payment of services performed to patients during April, $1,720
30. Paid salaries of receptionist and nurses, $1,725
30. Paid various utility expenses, $360
30. Recorded fees charged to patients on account for services performed in April, $5,145
30. Paid miscellaneous expenses, $132
Requirements:
i. Journalise the transactions during April 20X0

ii. Determine the balances of accounts at the end of April 20X0
Exercise 2
Lolita S., an architect, opened an office on March 1 of the current year. During the month, she completed
the following transactions connected with her practice:
Opening balnace:
- Cash: $10,000
- Capital: $6,000
- AP: $4,000
a. Transferred cash from a personal bank account to an account to be used for the business, $15,000
b. Paid March rent for office and workroom, $2,000
c. Purchased used car for $11,500, paying $2,500 cash and took a bank loan for the remainder
d. Purchased office and computer equipment on account, $5,500
e. Paid cash for supplies, $750
f. Paid cash for annual insurance policies, $1,050
g. Paid cash for miscellaneous expenses, $75
h. Paid cash to creditors, $2,950
i. Paid instalment due on the bank loan, $400
j. Received invoice for printing service, due in April, $525
k. Recorded fee earned on plans delivered, payment to be received in April, $4,150
l. Paid salaries of assistant, $1,200
m. Paid petrol and repairs on car for March, $150
Requirement:
Journalise the transactions during the month.
Post T-account
Make TB
Exercise 3
On June 5 of the current year, Adam established an interior decorating business, AA Designs. During the
remainder of the month, Adam completed the following transactions related to the business:
June 5. Adam transferred cash from a personal bank account to an account to be used for the business,
$18,000
6. Paid rent for period of June 6 to end of the month, $2,000
7. Purchased office equipment on account, $10,500
8. Purchased a used truck for $18,000, paying $10,000 cash and taking a bank loan for the
remainder
10. Purchased supplies for cash $1,315
12. Received cash for job completed, $7,300
20. Paid annual premium on property insurance, $1,200
23. Recorded jobs completed on account and sent invoices to customers, $4,950
24. Received an invoice for truck expenses, to be paid in July, $450
29. Paid utilities expense, $750
29. Paid miscellaneous expense, $210
30. Received cash from customers who owe, $2,200
30. Paid salaries of employees, $3,000
30. Paid creditor a portion of the amount owed for equipment purchased on June 7, $1,800
30. Withdrew cash for personal use, $3,500
Requirement: Journalise the transactions during the month.
Exercise 4
JJ company’s account balances as of May 1 20X0 (all normal balances) are listed as follows:
Account Balance ($)

Cash 10,000
Account Receivable 1,000
Supplies 2,900
Prepaid Insurance 4,650
PPE 19,500
Account Payable 7,650
Capital 30,400
During May,20X0, Dr JJ completed the following transactions:
April 1. Paid car rent for May, $400
3. Purchased goods on account, $2,100
5. Received cash from customers $1,000
8. Purchased supplies on account, $2450
9. One of the goods purchased on May 3 was defective. It was returned with the permission of the
supplier, who agreed to reduce the account for the amount of the item, $300
12. Paid cash to account payable, $1,250
17. Paid cash for renewal of a six-month property insurance policy, $3200
24. Paid cash for interest expense, $55
30. Recorded the cash received in payment of services performed to customer during May, $4,000
30. Paid salaries, $1,000
30. Paid various utility expenses, $260
30. Paid miscellaneous expenses, $132
Requirements:
i. Journalise the transactions during May 20X0

ii. Determine the balances of accounts at the end of May 20X0
Exercise 5
DK company has Opening balnace in March:
- Cash: $10,000
- Capital: $6,000
- AP: $4,000
a. Transferred cash from a personal bank account to an account to be used for the business, $25,000
b. Paid March rent for office, $1,000
c. Purchased car for $11,500, paying $2,500 cash and took a bank loan for the remainder
d. Purchased equipment on account, $5,000
e. Paid cash for supplies, $650
f. Paid cash for annual insurance policies, $1,000
g. Received cash from, $3,100
h. Paid cash for miscellaneous expenses, $75
i. Paid cash to creditors, $2,500
j. Paid instalment due on the bank loan, $500
k. Received invoice for printing service, due in April, $525
l. Recorded revenue which payment to be received in April, $4,500
m. Paid salaries of assistant, $1,200
n. Paid petrol and repairs on car for March, $250

Exercise 6
In the beginning of June, Adam’s company has following transactions:
June 5. Adam transferred cash from a personal bank account to an account to be used for the business,
$15,000
6. Paid office rent for period of June, $1,000
7. Purchased office equipment by cash, $10,000
8. Purchased a new truck for $18,000, paying $12,000 cash and taking a bank loan for the
remainder
10. Purchased supplies on account $1,300
12. Received cash from clients, $7,300
20. Paid annual premium on property insurance, $2,400
23. Recorded jobs completed on account and sent invoices to customers, $5,000
24. Received an invoice for truck expenses, to be paid in August, $400
29. Paid utilities expense, $700
29. Paid miscellaneous expense, $200
30. Received cash from customers, $2,200
30. Paid salaries of employees, $3,000
30. Paid creditor a portion of the amount owed for equipment purchased on June 7, $1,800
30. Withdrew cash for personal use, $3,500

Exercise For Chapter 2

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Exercise for chapter 2

Account Balance ($)

i. Journalise the transactions during April 20X0

Account Balance ($)

i. Journalise the transactions during May 20X0

Requirement: Journalise the transactions during the month.

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