Instructor: Wendy Tietz

Student: Alexander Richardson

Course: Spring 2024 Intro to Financial Assignment: Chapter 2 exercises
Date: 2/5/24
Accounting (ACCT-23020-001/002)

1. For each of the following​items, indicate whether that item would be considered to be a transaction at Gerbig Pet Grooming Corporation.

Item Transaction?
a. A customer, Layne Gracen, gives Gerbig a check for $620 to prepay for her dog's Yes
grooming appointments for the upcoming year.
b. Gerbig pays $310 for last month's electric bill. Yes
c. Gerbig selects a new supplier for its shampoos and conditioners. No
d. The controller for Gerbig pays the bill for a catered lunch at its annual training event Yes
for employees.
e. Gerbig files its articles of incorporation with the state. No
f. Gerbig acquires a new stainless steel tub by signing a note payable with PetStar, a Yes
supplier of pet grooming supplies and products.
g. Maggie Cramer, a customer, signs a contract for next year's dog grooming with Gerbig. No
h. Gerbig pays its employees an annual bonus on December 31. Yes

2. For each of the following​accounts, identify whether that item is an​asset, liability, or equity account.

Classification

a. Bonds payable Liability

b. Equipment Asset

c. Accounts payable Liability

d. Salaries payable Liability

e. Common stock Equity

f. Retained earnings Equity

g. Cash Asset

h. Accounts receivable Asset

i. Sales revenue Equity

j. Inventory Asset
3. Fill out the following chart to show the impact on the accounting equation from each transaction. ​(Select an​"X" in each applicable input
field. If an input field is not used in the​table, leave the field​empty.)

Assets Liabilities Stockholders' equity

Date Description Increase Decrease Increase Decrease Increase Decrease
Jan 2 Purchased office supplies on account for $500 X X
Jan 4 Issued common stock for cash for $5,000 X X
Jan 10 Performed services on account for $2,000. X X
Jan 15 Paid amount owed to vendor for the office X X
supplies purchased on account on January 2

Assets Liabilities Stockholders' equity

Date Description Increase Decrease Increase Decrease Increase Decrease
Jan 18 Performed services for cash $200 X X
Jan 21 Received cash for payment on account from X X
revenue on January 10
Jan 31 Paid employees for monthly payroll $1,500 X X
4. The following selected events were experienced by either Smith Eldercare​Services, Inc., a​corporation, or Tony​Smith, its major
stockholder.
1
​(Click the icon to view the​transactions.)
Requirement
1. State whether each event​(1) increased,​(2) decreased, or​(3) had no effect on the total assets of the business. Identify any specific
asset affected. ​(If an event has no effect on the total assets of the​business, choose the appropriate explanation in the
second​column.)

State whether each event​(1) increased,​(2) decreased, or​(3) had no effect on the total assets of the business. Identify any specific asset
affected. If no​effect, indicate the reason.
Effect on total Account affected or why total assets
Transaction assets remain unchanged
a. Paid $400 cash on accounts payable. Decreased Cash
b. Made a cash purchase of land for a building site for the No effect Increase in assets is same as decrease
business, $89,000. in assets
c. Sold land and received cash of $69,000 (the land was carried on No effect Increase in assets is same as decrease
the company's books at $69,000). in assets
d. Received $15,400 cash from customers on account. No effect Increase in assets is same as decrease
in assets
e. Purchased medical equipment and signed a $90,000 promissory Increased Equipment
note in payment.

Effect on total Account affected or why total assets

Transaction assets remain unchanged
f. Purchased a flat-screen TV for Smith's home. No effect Personal transaction
g. Paid Smith a cash dividend of $4,000. Decreased Cash
h. Purchased office supplies on account for $1,200. Increased Office Supplies
i. Borrowed $62,000 from the bank for use in the business. Increased Cash
j. Received $12,000 cash and issued stock to a stockholder. Increased Cash

1: More Info
a. Paid​$400 cash on accounts payable.
b. Made a cash purchase of land for a building site for the​business, $89,000.
c. Sold land and received cash of​$69,000 (the land was carried on the​company's books at​$69,000).
d. Received​$15,400 cash from customers on account.
e. Purchased medical equipment and signed a​$90,000 promissory note in payment.
f. Purchased a​flat-screen TV for​Smith's home.
g. Paid Smith a cash dividend of​$4,000.
h. Purchased office supplies on account for​$1,200.
i. Borrowed​$62,000 from the bank for use in the business.
j. Received​$12,000 cash and issued stock to a stockholder.
5. Shane​'s Catering began with cash of $8,000. Shane then bought supplies for $1,700 on account.​Separately, Shane paid $6,500 for
equipment. Answer these questions.
a. How much in total assets does Shane ​have?
b. How much in liabilities does Shane ​owe?

a. How much in total assets does Shane ​have?

Total assets = $ 9,700

b. How much in liabilities does Shane ​owe?

Liabilities owed = $ 1,700

6. Helen Drysdale​, ​MD, opened a medical practice. The business completed the following​transactions:
July 1 Drysdale invested $28,000 cash to start her medical practice. The business issued common stock to Drysdale.
July 2 Purchased medical supplies on account totaling $8,500.
July 3 Paid monthly office rent of $5,500.
July 6 Recorded $9,600 revenue​(in cash) for service rendered to patients.

After these​transactions, how much cash does the business have to work​with? Use a​T-account to show your answer.

Begin by posting the​transactions, using the date as a posting reference.Then, label and calculate the ending​balance, using​"Bal" as the
posting reference.

Cash
July 1 28,000 July 3 5,500
July 6 9,600
Bal 32,100
7. After operating for several​months, architect Bruce Raney completed the following transactions during the latter part of October​:
2
​(Click the icon to view the​transactions.)

Journalize the transactions of Bruce Raney​, Architect. Include an explanation with each journal entry.

On October ​15, Bruce Raney borrowed $63,000 from the​bank, signing a note payable. ​(Record debits​first, then credits. Select the
explanation on the last line of the journal entry​table.)

Journal Entry

Date Accounts and Explanations Debit Credit

Oct 15 Cash 63,000
Note Payable 63,000

Borrowed money from the bank.

On October ​22, performed services for clients on account totaling $17,600.

Journal Entry

Date Accounts and Explanations Debit Credit

Oct 22 Accounts Receivable 17,600
Service Revenue 17,600

Performed services on account.

On October ​28, received $15,000 cash on account from clients.

Journal Entry

Date Accounts and Explanations Debit Credit

Oct 28 Cash 15,000
Accounts Receivable 15,000

Received cash on account.

On October ​29, received and paid a utility bill of $1,800.

Journal Entry

Date Accounts and Explanations Debit Credit

Oct 29 Utilities Expense 1,800
Cash 1,800

Paid utility bill.

On October ​31, paid monthly salaries of $12,000 to employees.

 Journal Entry

Date Accounts and Explanations Debit Credit

Oct 31 Salary Expense 12,000
Cash 12,000

Paid salary expense.

2: More Info

Oct 15 Borrowed $63,000 from the​bank, signing a note payable.

Oct 22 Performed services on account for clients totaling $17,600.
Oct 28 Received $15,000 cash on account from clients.
Oct 29 Received and paid a utility bill of $1,800.
Oct 31 Paid monthly salaries of $12,000 to employees.
8. The accounts of Custom Pool ​Service, Inc., follow with their normal balances at April ​30, 2021. The accounts are listed in no particular
order.
3
​(Click the icon to view the​accounts.)

Read the requirements4.

Requirement 1. Prepare the​company's trial balance at April ​30, 2021​, listing accounts in proper sequence. For​example, Accounts
Receivable comes before Equipment. List the expense with the largest balance​first, the expense with the next largest balance​second,
and so on.

Select the accounts that will be listed on the trial​balance; enter the account balances and finally total the debits and ​credits. Remember to
list the accounts in the proper sequence​;​assets first, then ​liabilities followed ​by ​stockholders' equity​(including revenue and
expense accounts). List the expenses last with the​largest balance first, the expense with the next largest balance​second, and so on.

Custom Pool Service, Inc.

Trial Balance
April 30, 2021
Balance
Account Debit Credit
Cash $ 19,200
Accounts receivable 5,200
Equipment 30,800
Accounts payable $ 4,000
Note payable 20,500
Common stock 17,000
Retained earnings 8,100
Dividends 3,700
Service revenue 20,800
Salary expense 9,000
Utilities expense 1,900

Delivery expense 600

$ 70,400 $ 70,400
Total

Requirement 2. Prepare the financial statement for the month ended April ​30, 2021​, which will show the company the results of
operations for the month.

Begin by selecting the labels for the financial statement​header, then in the next step complete the financial statement.

Custom Pool Service, Inc.

Income Statement
For the Month Ended April 30, 2021

Service revenue $ 20,800

Expenses
Utilities expense $ 1,900
Delivery expense 600

Salary expense 9,000

Total expenses 11,500

Net income $ 9,300

3: Data Table
 Account Balance Account Balance

Dividends $ 3,700 Common stock $ 17,000

Utilities expense 1,900 Accounts payable 4,000
Accounts receivable 5,200 Service revenue 20,800
Delivery expense 600 Equipment 30,800
Retained earnings 8,100 Note payable 20,500
Salary expense 9,000 Cash 19,200

4: Requirements
1. Prepare the​company's trial balance at April ​30, 2021​, listing accounts in proper sequence. For​example, Accounts Receivable comes
before Equipment. List the expense with the largest balance​first, the expense with the next largest balance​second, and so on.
2. Prepare the financial statement for the month ended April ​30, 2021​, which will show the company the results of operations for the month

YOU​ANSWERED: Service revenue 20800

Expenses
Utilities expense 1900
Delivery expense 600

nothing 233000

Total expenses 23300

18,300,
Net income
9. Assume that Old Boardwalk Company reported the following summarized data at December​31, 2021. Accounts appear in no
particular​order; dollar amounts are in millions.
5
​(Click the icon to view the​data.)
Prepare the trial balance of Old Boardwalk Company at December​31, 2021. List the accounts in their proper order. How much was the
​company's net income or net​loss?

Prepare the trial balance of Old Boardwalk Company at December​31, 2021. List the accounts in their proper order. ​(Enter amounts in
millions as provided to you in the problem​statement.)

Old Boardwalk Company

Trial Balance
December 31, 2021
Balance (in millions)
Account Title Debit Credit
Cash $ 6
Other assets 20
Accounts payable $ 7
Other liabilities 4
Stockholders' equity 5
Revenues 39

Expenses 29

$ 55 $ 55
Total

Compute Old Boardwalk​'s net income or net loss. ​(Enter a loss with a minus sign or​parentheses.)

Net income (loss) in millions = $ 10

5: Data Table

Other liabilities $ 4

Other assets 20

Expenses 29
Stockholders' equity 5
Revenues 39
Cash 6

Accounts payable 7
10. Orangeberry​, ​Inc.'s, trial balance​follows:
6
​(Click the icon to view the trial​balance.)
Read the requirements7.

1. Compute the total assets for the business. ​(If an input field is not used in the table leave the field​empty; do not select a label or enter
a​zero.)

Account Amount
Cash $ 4,000
Accounts receivable 16,000
Supplies 4,500
Land 47,000
Equipment 24,000

$ 95,500
Total assets

2. Compute the total liabilities for the business. ​(If an input field is not used in the table leave the field​empty; do not select a label or enter
a​zero.)

Account Amount
Accounts payable $ 54,000
Note payable 26,000

$ 80,000
Total liabilities

3. Select the labels and compute the net income or net loss during October. ​(Use parentheses or a minus sign when entering a net​loss.)

Total revenues - Total expenses = Net income (net loss)

$ 33,100 - $ 38,600 = $ (5,500)

6: Data Table
 Orangeberry, Inc.
Trial Balance
October 31, 2021
Balance
Account Title Debit Credit

Cash $ 4,000
Accounts receivable 16,000
Supplies 4,500
Land 47,000
Equipment 24,000
Accounts payable $ 54,000
Note payable 26,000
Common stock 7,000
Retained earnings 14,000
Service revenue 33,100
Salary expense 28,000
Rent expense 9,000

Utilities expense 1,600

$ 134,100 $ 134,100
Total

7: Requirements
Compute these amounts for the​business:
1. Total assets
2. Total liabilities
3. Net income or net loss during October

YOU​ANSWERED: Total revenues - Total expenses = Net income (net loss)

33100 - 17400 = 15700