Extra Applications_Lecture Week 3

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 Answers

EXERCISE (2-9)

a. Cash........................................................................................... 12,750
M. Dexter, Capital.............................................................. 12,750
Owner invested in the business.

b. Office Supplies............................................................................ 375

Cash................................................................................... 375
Purchased supplies with cash.

c. Office Equipment........................................................................ 7,050

Accounts Payable.............................................................. 7,050
Purchased office equipment on credit.

d. Cash........................................................................................... 1,500
Fees Earned...................................................................... 1,500
Received cash from customer for services.

e. Accounts Payable....................................................................... 7,050

Cash................................................................................... 7,050
Made payment toward account payable.

f. Accounts Receivable.................................................................. 2,700

Fees Earned...................................................................... 2,700
Billed customer for services provided.

g. Rent Expense............................................................................. 525

Cash................................................................................... 525
Paid for this period’s rental charge.

h. Cash........................................................................................... 1,125
Accounts Receivable......................................................... 1,125
Received cash toward an account receivable.

i. M. Dexter, Withdrawals............................................................... 1,000

Cash................................................................................... 1,000
Owner withdrew cash for personal use.

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Exercise 2-9 (concluded)

Cash Accounts Payable

(a) 12,750 (b) 375 (e) 7,050 (c) 7,050
(d) 1,500 (e) 7,050 Balance 0
(h) 1,125 (g) 525
(i) 1,000
Balance 6,425 M. Dexter, Capital
(a) 12,750
Balance 12,750

Accounts Receivable M. Dexter, Withdrawals

(f) 2,700 (h) 1,125 (i) 1,000
Balance 1,575 Balance 1,000

Office Supplies Fees Earned

(b) 375 (d) 1,500
Balance 375 (f) 2,700
Balance 4,200

Office Equipment Rent Expense

(c) 7,050 (g) 525
Balance 7,050 Balance 525

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PROBLEM (2-1A)

Part 1
April 1 Cash.......................................................................101 100,000
Office Equipment....................................................163 24,000
G. Bauer, Capital...........................................301 124,000
Owner invested cash and equipment.

2 Prepaid Rent..........................................................131 7,200

Cash..............................................................101 7,200
Prepaid twelve months’ rent.

3 Office Equipment....................................................163 12,000

Office Supplies.......................................................124 2,400
Accounts Payable.........................................201 14,400
Purchased equip. & supplies on credit.

6 Cash.......................................................................101 2,000
Services Revenue.........................................403 2,000
Received cash for services.

9 Accounts Receivable..............................................106 8,000

Services Revenue.........................................403 8,000
Billed client for completed work.

13 Accounts Payable..................................................201 14,400

Cash..............................................................101 14,400
Paid balance due on account.

19 Prepaid Insurance..................................................128 6,000

Cash..............................................................101 6,000
Paid premium for insurance.

22 Cash.......................................................................101 6,400
Accounts Receivable.....................................106 6,400
Collected part of amount owed by client.

25 Accounts Receivable..............................................106 2,640

Services Revenue.........................................403 2,640
Billed client for completed work.

28 G. Bauer, Withdrawals...........................................302 6,200

Cash..............................................................101 6,200
Owner withdrew cash.

29 Office Supplies.......................................................124 800

Accounts Payable.........................................201 800
Purchased supplies on account.

30 Utilities Expense.....................................................690 700

Cash..............................................................101 700
Paid monthly utility bill.

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Part 2 (THIS PART IS SOVLED IN THE BALANCE COLUMN LEDGER ACCOUNTS FORMAT; HOWEVER,
WE WILL PUT IT IN A T-ACCOUNTS FORMAT, AND STUDENTS WILL HAVE TO FOLLOW THE SAME
FORMAT, T-ACCOUNT FORMAT, IN EXMAINATIONS).
Cash Acct. No. 101
Date Explanation PR Debit Credit Balance
April 1 G1 100,000 100,000
2 G1 7,200 92,800
6 G1 2,000 94,800
13 G1 14,400 80,400
19 G1 6,000 74,400
22 G1 6,400 80,800
28 G1 6,200 74,600
30 G1 700 73,900

Accounts Receivable Acct. No. 106

Date Explanation PR Debit Credit Balance
April 9 G1 8,000 8,000
22 G1 6,400 1,600
25 G1 2,640 4,240

Office Supplies Acct. No. 124

Date Explanation PR Debit Credit Balance
April 3 G1 2,400 2,400
29 G1 800 3,200

Prepaid Insurance Acct. No. 128

Date Explanation PR Debit Credit Balance
April 19 G1 6,000 6,000

Prepaid Rent Acct. No. 131

Date Explanation PR Debit Credit Balance
April 2 G1 7,200 7,200

Office Equipment Acct. No. 163

Date Explanation PR Debit Credit Balance
April 1 G1 24,000 24,000
3 G1 12,000 36,000

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 Accounts Payable Acct. No. 201
Date Explanation PR Debit Credit Balance
April 3 G1 14,400 14,400
13 G1 14,400 0
29 G1 800 800

G. Bauer, Capital Acct. No. 301

Date Explanation PR Debit Credit Balance
April 1 G1 124,000 124,000

G. Bauer, Withdrawals Acct. No. 302

Date Explanation PR Debit Credit Balance
April 28 G1 6,200 6,200

Services Revenue Acct. No. 403

Date Explanation PR Debit Credit Balance
April 6 G1 2,000 2,000
9 G1 8,000 10,000
25 G1 2,640 12,640

Utilities Expense Acct. No. 690

Date Explanation PR Debit Credit Balance
April 30 G1 700 700

Part 3

TECHNOLOGY CONSULTANTS
Trial Balance
April 30
Debit Credit

Cash ...................................................................... $ 73,900

Accounts receivable.............................................................. 4,240
Office supplies...................................................................... 3,200
Prepaid insurance................................................................. 6,000
Prepaid rent ...................................................................... 7,200
Office equipment................................................................... 36,000
Accounts payable................................................................. $ 800
G. Bauer, Capital.................................................................. 124,000
G. Bauer, Withdrawals.......................................................... 6,200
Services revenue.................................................................. 12,640
Utilities expense.................................................................... 700 _______
Total ...................................................................... $137,440 $137,440