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Chapter 2 Math For Practice

The document provides information about selected transactions for three different companies - Sophie's Dog Care, Adventures Travel Agency, and Beyers Security Company. It includes details of cash receipts and payments, purchases, expenses, revenues and other transactions for each company during a given time period. The user is instructed to journalize the transactions for each company without explanations and prepare any required additional accounting records like T-accounts or a trial balance.

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ehratul.bag
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73 views

Chapter 2 Math For Practice

The document provides information about selected transactions for three different companies - Sophie's Dog Care, Adventures Travel Agency, and Beyers Security Company. It includes details of cash receipts and payments, purchases, expenses, revenues and other transactions for each company during a given time period. The user is instructed to journalize the transactions for each company without explanations and prepare any required additional accounting records like T-accounts or a trial balance.

Uploaded by

ehratul.bag
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Problem 1 Selected transactions for Sophie’s Dog Care are as follows during the month of March.

March 1 Paid monthly rent of $1,200.


3 Performed services for $160 on account.
5 Performed services for cash of $75.
8 Purchased equipment for $600. The company paid cash of $90 and the balance was on account.
12 Received cash from customers billed on March 3.
14 Paid salaries and wages to employees of $525.
22 Paid utilities of $72.
24 Borrowed $1,500 from Grafton State Bank by signing a note.
27 Paid $220 to repair service for plumbing repairs.
28 Paid balance amount owed from equipment purchase on March 8.
30 Paid $1,800 for six months of insurance.
Instructions
Journalize the transactions. (Omit explanations.)

Problem 2 On April 1, Adventures Travel Agency began operations. The following transactions were
completed during the month.
1. Owner invested $24,000 in the business.
2. Obtained a bank loan for $7,000 by issuing a note payable.
3. Paid $11,000 cash to buy equipment.
4. Paid $1,200 cash for April office rent.
5. Paid $1,450 for supplies.
6. Purchased $600 of advertising in the Daily Herald, on account.
7. Performed services for $18,000: cash of $2,000 was received from customers, and the balance of
$16,000 was billed to customers on account.
8. Cash withdrawal of $400 by owner for personal use.
9. Paid the utility bill for the month, $2,000.
10. Paid Daily Herald the amount due in transaction (6).
11. Paid $40 of interest on the bank loan obtained in transaction (2).
12. Paid employees’ salaries and wages, $6,400.
13. Received $12,000 cash from customers billed in transaction (7).
Instructions
Journalize the transactions. (Omit explanations).

Problem 3 Beyers Security Company provides security services. Selected transactions for Beyers are presented below.
Oct. 1 Invested $66,000 cash in the business.
2 Hired part-time security consultant. Salary will be $2,000 per month. First day of work will be October 15.
4 Paid one month of rent for building for $2,000.
7 Purchased equipment for $18,000, paying $4,000 cash and the balance on account.
8 Paid $500 for advertising.
10 Received bill for equipment repair cost of $390.
12 Provided security services for event for $3,200 on account.
16 Purchased supplies for $410 on account.
21 Paid balance due from October 7 purchase of equipment.
24 Received and paid utility bill for $148.
27 Received payment from customer for October 12 services performed.
31 Paid employee salaries and wages of $5,100.
Instructions
a. Journalize the transactions. Do not provide explanations.
b. Post the transactions to T-accounts.
c. Prepare a trial balance at October 31, 2020. (Hint: Compute ending balances of T-accounts first.)

Problem 4 Holz Disc Golf Course was opened on March 1 by Ian Holz. The following selected
events and transactions occurred during March.
Mar. 1 Invested $20,000 cash in the business.
3 Purchased Rainbow Golf Land for $15,000 cash. The price consists of land $12,000, shed $2,000, and equipment
$1,000. (Make one compound entry.)
5 Paid advertising expenses of $900.
6 Paid cash $600 for a one-year insurance policy.
10 Purchased golf discs and other equipment for $1,050 from Stevenson Company payable in 30 days.
18 Received $1,100 in cash for golf fees (Holz records golf fees as service revenue).
19 Sold 150 coupon books for $10 each. Each book contains 4 coupons that enable the holder to play one round of disc
golf.
25 Withdrew $800 cash for personal use.
30 Paid salaries of $250.
30 Paid Stevenson Company in full.
31 Received $2,700 cash for golf fees.
Holz Disc Golf uses the following accounts: Cash, Prepaid Insurance, Land, Buildings, Equipment,
Accounts Payable, Unearned Service Revenue, Owner’s Capital, Owner’s Drawings, Service Revenue,
Advertising Expense, and Salaries and Wages Expense.

Instructions
Journalize the March transactions.

Problem 5 Maquoketa Services was formed on May 1, 2020. The following


transactions took
place during the first month.
Transactions on May 1:
1. Jay Bradford invested $40,000 cash in the company, as its sole owner.
2. Hired two employees to work in the warehouse. They will each be paid a salary of
$3,050 per month.
3. Signed a 2-year rental agreement on a warehouse; paid $24,000 cash in advance for
the first year.
4. Purchased furniture and equipment costing $30,000. A cash payment of $10,000 was
made immediately; the remainder will be paid in 6 months.
5. Paid $1,800 cash for a one-year insurance policy on the furniture and equipment.
Transactions during the remainder of the month:
6. Purchased basic office supplies for $420 cash.
7. Purchased more office supplies for $1,500 on account.
8. Total revenues earned were $20,000—$8,000 cash and $12,000 on account.
9. Paid $400 to suppliers for accounts payable due.
10. Received $3,000 from customers in payment of accounts receivable.
11. Received utility bills in the amount of $380, to be paid next month.
12. Paid the monthly salaries of the two employees, totaling $6,100.

Instructions
a. Prepare journal entries to record each of the events listed. (Omit explanations.)
b. Post the journal entries to T-accounts.
c. Prepare a trial balance as of May 31, 2020.

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