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Short Exercises for Introductory Accounting

SE4. For each transaction below, tell which account is debited and which account is credited.

SE5. Set up T accounts and record each transaction in SE4. Determine the balance of each account.

SE6. From the T accounts created in SE5, prepare a trial balance dated May 31, 20x1.

SE9. Prepare ledger account forms like the ones in Exhibit 5 for the following accounts: Cash (111), Accounts Receivable (113), and Service Revenue (411). Post the transactions that are recorded in SE8 to the ledger accounts, at the same time making proper posting references.

SE8. Prepare a general journal form like the one in Exhibit 4 and label it Page 4. Record the following transactions in the journal.

E1. Which of the following events would be recognized and recorded in the accounting records of the Gugini Corporation on the date indicated?

E3. The following ledger accounts are for the Wonder Service Corporation:

a. Cash n. Utilities Expense
b. Wages Expense o. Fees Earned
c. Accounts Receivable p. Dividends
d. Common Stock q. Wages Payable
e. Service Revenue r. Unearned Revenue
f. Prepaid Rent s. Office Equipment
g. Accounts Payable t. Rent Payable
h. Investments in Stocks and Bonds u. Notes Receivable
i. Bonds Payable v. Interest Expense
j. Income Taxes Expense w. Notes Payable
k. Land x. Supplies
l. Supplies Expense y. Interest Receivable
m. Prepaid Insurance z. Rent Expense

Complete the following table, using Xs to indicate each accounts classification and normal balance (whether a debit or credit increases the account).

E7. Explain each transaction (a through h) entered in the following T accounts.

E9. Which of the following errors would cause a trial balance to have unequal totals? Explain your answers.

P1. The following accounts are applicable to Jackson Communications, Inc.:

1. Cash 8. Common Stock
2. Accounts Receivable 9. Retained Earnings
3. Supplies 10. Dividends
4. Prepaid Insurance 11. Service Revenue
5. Equipment 12. Rent Expense
6. Notes Payable 13. Repair Expense
7. Accounts Payable

P6. The following accounts are applicable to Omega Pool Service, Inc., a company that maintains swimming pools:

1. Cash 6. Accounts Payable 11. Wages Expense
2. Accounts Receivable 7. Common Stock 12. Rent Expense
3. Supplies 8. Retained Earnings 13. Utilities Expense
4. Prepaid Insurance 9. Dividends
5. Equipment 10. Pool Services Revenue

Solution Preview

SE4. For each transaction below, tell which account is debited and which account is credited.

May 2 Joe Hurley started a computer programming business, Hurley's Programming Service, Inc. by investing $5,000 in exchange for common stock.

debit Cash $5,000 - credit Common Stock $5,000

May 5 Purchased a computer for $2,500 in cash.

debit Computer $2,500 - credit Cash $2,500

May 7 Purchased supplies on credit for $300.

debit Supplies $300 - credit Accounts Payable $300

May 19 Received cash for programming services performed, $500.

debit Cash $500 - credit Earned Programming Fees $500

May 22 Received cash for programming services to be performed, $600.

debit Cash $600 - credit Unearned Programming Fees $600

May 25 Paid the rent for May, $650.

debit Rent Expense $650 - credit cash $650

May 31 Billed a customer for programming services performed, $250.

debit Accounts Receivable $250 - credit Earned Programming Fees $250

SE5. Set up T accounts and record each transaction in SE4. Determine the balance of each account.

Assets Liabilities

Cash Accounts Payable
----------------------------- -----------------------------
May 2 5000 | May 5 2500 | May 7 300
19 500 | 25 650 |
22 600 |
| Unearned Programming Fees
----------------------------- -----------------------------
6150 | 3150 | May 22 600
Balance 2950 | |

Computer Stockholders' Equity
-----------------------------
May 5 2500 | Common Stock
| -----------------------------
| May 2 5000

Supplies
----------------------------- Earned Programming Fees
May 7 300 | -----------------------------
| | May 19 500
| 31 250
-----------------------------
Accounts Receivable | 750
-----------------------------
May 31 250 |
| Rent Expense
-----------------------------
May 25 650 |
|

SE6. From the T accounts created in SE5, prepare a trial balance dated May 31, 20x1.

Hurley's Programming Service, Inc.
Trial Balance
May 31, 20x1
------------------------------------------------------
Cash | 2950 | |
Computer | 2500 | |
Supplies | 300 | |
Accounts Receivable | 250 | |
Accounts Payable | | 300 |
Unearned Programming Fees | | 600 |
Common Stock | | 5000 |
Earned Programming Fees | | 750 |
Rent Expense | 650 | |
------------------------------------------------------
| 6650 | 6650 |
===================

SE9. Prepare ledger account forms like the ones in Exhibit 5 for the following accounts: Cash (111), Accounts Receivable (113), and Service Revenue (411). Post the transactions that are recorded in SE8 to the ledger accounts, at the same time making proper posting references.

SE8. Prepare a general journal form like the one in Exhibit 4 and label it Page 4. Record the following transactions in the journal.

Sept. 6 Billed a customer for services ...

Solution Summary

10 exercises/problems worked out.

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