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BYP2-6 Mary Jansen is the assistant chief accountant at Casey Company, a manufacturer of computer chips and cellular phones. The company presently has total sales of $20 million. It is the end of the first quarter. Mary is hurriedly trying ..

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BYP2-6 Mary Jansen is the assistant chief accountant at Casey Company, a manufacturer of computer chips and cellular phones. The company presently has total sales of $20 million. It is the end of the first quarter. Mary is hurriedly trying to prepare a general ledger trial balance so that quarterly financial statements can be prepared and released to management and the regulatory agencies. The total credits on the trial balance exceed the debits by $1,000. In order to meet the 4 p.m. deadline, Mary decides to force the debits and credits into balance by adding the amount of the difference to the Equipment account. She chose Equipment because it is one of the larger account balances; percentage-wise, it will be the least misstated. Mary “plugs”
the difference! She believes that the difference will not affect anyone’s decisions. She wishes that she had another few days to find the error but realizes that the financial statements are already late.

Instructions
(a) Who are the stakeholders in this situation?
(b) What are the ethical issues involved in this case?
(c) What are Mary’s alternatives?

BYP2-5 Woderson’s Maid Company offers home cleaning service.Two recurring transactions for the company are billing customers for services rendered and paying employee salaries. For example, on March 15, bills totaling $6,000 were....

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BYP2-5 Woderson’s Maid Company offers home cleaning service.Two recurring transactions for the company are billing customers for services rendered and paying employee salaries. For example, on March 15, bills totaling $6,000 were sent to customers and $2,000 was paid in salariesto employees.

Instructions: Write a memo to your instructor that explains and illustrates the steps in the recording process
for each of the March 15 transactions. Use the format illustrated in the text under the heading, “The Recording Process Illustrated” (p. 61).

BYP2-4 Lisa Ortega Academy

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BYP2-4 Lisa Ortega is president of Ortega Riding Academy, Inc. The academy’s primary sources of revenue are riding fees and lesson fees, which are paid on a cash basis. Lisa also boards horses for owners, who are billed monthly for boarding fees. In a few cases, boarders pay in advance of expected use. For its revenue transactions, the academy maintains the following accounts: No. 1 Cash, No. 5 Boarding Accounts Receivable, No. 27 Unearned Boarding Revenue, No. 51 Riding Revenue, No. 52 Lesson Revenue, and No. 53 Boarding Revenue.

The academy owns 10 horses, a stable, a riding corral, riding equipment, and office equipment. These assets are accounted for in accounts No. 11 Horses, No. 12 Building, No. 13 Riding Corral, No. 14 Riding Equipment, and No. 15 Office Equipment. For its expenses, the academy maintains the following accounts: No. 6 Hay and Feed Supplies, No. 7 Prepaid Insurance, No. 21 Accounts Payable, No. 60 Salaries Expense, No. 61 Advertising Expense, No. 62 Utilities Expense, No. 63 Veterinary Expense, No. 64 Hay and Feed Expense, and No. 65 Insurance Expense. Ortega makes periodic payments of cash dividends to stockholders.To record stockholders’ equity transactions in the business, Ortega maintains three accounts: No. 50 Common Stock, No. 51 Retained Earnings, and No. 52 Dividends. During the first month of operations an inexperienced bookkeeper was employed. Lisa Ortega asks you to review the following eight entries of the 50 entries made during the month. In each case, the explanation for the entry is correct.

::::::TABLEEEEE:::::::::::::::

Instructions: With the class divided into groups, answer the following.
(a) Identify each journal entry that is correct. For each journal entry that is incorrect, prepare the entry that should have been made by the bookkeeper.
(b) Which of the incorrect entries would prevent the trial balance from balancing?
(c) What was the correct net income for May, assuming the bookkeeper reported net income of $4,500 after posting all 50 entries?
(d) What was the correct cash balance at May 31, assuming the bookkeeper reported a balance of $12,475 after posting all 50 entries (and the only errors occurred in the items listed above)?

BYP2-2 PepsiCo’s financial statements are presented in Appendix A. Coca-Cola’s financial statements are presented in Appendix B. Comparative Analysis Problem: PepsiCo, Inc. vs. The Coca-Cola Company

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Comparative Analysis Problem: PepsiCo, Inc. vs. The Coca-Cola Company
BYP2-2 PepsiCo’s financial statements are presented in Appendix A. Coca-Cola’s financial statements are presented in Appendix B.

Instructions
(a) Based on the information contained in the financial statements, determine the normal balance
of the listed accounts for each company.

Pepsi
  • 1. Inventory
  • 2. Property, Plant, and Equipment
  • 3. Accounts Payable
  • 4. Interest Expense
Co Coca-Cola
  • 1. Accounts Receivable.
  • 2. Cash and Cash Equivalents
  • 3. Cost of Goods Sold
  • 4. Sales (revenue)

(b) Identify the other account ordinarily involved when:
  • (1) Accounts Receivable is increased.
  • (2) Wages Payable is decreased.
  • (3) Property, Plant, and Equipment is increased.
  • (4) Interest Expense is increased.

BYP2-1 PepsiCo are presented in Appendix A

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Financial Reporting Problem: PepsiCo, Inc.
BYP2-1 The financial statements of PepsiCo are presented in Appendix A. The notes accompanying the statements contain the following selected accounts, stated in millions of dollars.
  • Accounts Payable $1,799
  • Income Taxes Payable $ 546
  • Accounts Receivable 3,261
  • Interest Expense 256
  • Property, Plant, and Equipment 8,681
  • Inventory 1,693
Instructions
(a) Answer the following questions.
  • (1) What is the increase and decrease side for each account?
  • (2) What is the normal balance for each account?
(b) Identify the probable other account in the transaction and the effect on that account when:
  • (1) Accounts Receivable is decreased.
  • (2) Accounts Payable is decreased.
  • (3) Inventory is increased.
(c) Identify the other account(s) that ordinarily would be involved when:
  • (1) Interest Expense is increased.
  • (2) Property, Plant, and Equipment is increased.

P2-5B The Quinn Theater, owned by Mike Quinn, will begin operations in March.The Quinn will be unique in that it will show only triple features of sequential theme movies. As of March 1, the ledger of Quinn showed...

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P2-5B The Quinn Theater, owned by Mike Quinn, will begin operations in March.The Quinn will be unique in that it will show only triple features of sequential theme movies. As of March 1, the ledger of Quinn showed:No. 101 Cash $16,000;No. 140 Land $42,000;No. 145 Buildings (concession stand, projection room, ticket booth, and screen) $18,000; No. 157 Equipment $16,000; No. 201 Accounts Payable $12,000; and No. 311 Common Stock $80,000. During the month of March the following events and transactions occurred.

Mar.
2 Rented the three Star Wars movies (Star Wars, The Empire Strikes Back, and The Return of the Jedi) to be shown for the first 3 weeks of March. The film rental was $6,000; $3,000 was paid in cash and $3,000 will be paid on March 10.
3 Ordered the first three Star Trek movies to be shown the last 10 days of March. It willcost $300 per night.
9 Received $6,500 cash from admissions.
10 Paid balance due on Star Wars movies rental and $4,000 on March 1 accounts payable.
11 Quinn Theater contracted with M. Brewer Company to operate the concession stand. Brewer is to pay 10% of gross concession receipts (payable monthly) for the right to operate the concession stand.
12 Paid advertising expenses $800.
20 Received $7,200 cash from customers for admissions.
20 Received the Star Trek movies and paid the rental fee of $3,000.
31 Paid salaries of $4,800.
31 Received statement from M. Brewer showing gross receipts from concessions of $8,000 and the balance due to Quinn Theater of $800 ($8,000 10%) for March. Brewer paid one-half the balance due and will remit the remainder on April 5.
31 Received $11,000 cash from customers for admissions.

In addition to the accounts identified above, the chart of accounts includes: No. 112 Accounts Receivable, No. 405 Admission Revenue, No. 406 Concession Revenue, No. 610 Advertising Expense, No. 632 Film Rental Expense, and No. 726 Salaries Expense.

Instructions
(a) Enter the beginning balances in the ledger. Insert a check mark (✓) in the reference column of the ledger for the beginning balance.
(b) Journalize the March transactions.
(c) Post the March journal entries to the ledger. Assume that all entries are posted from page 1of the journal.
(d) Prepare a trial balance on March 31, 2008.

P2-4B The trial balance of Don Kelso Co. shown below does not balance. Each of the listed accounts has a normal balance per the general ledger. An examination of the ledger and journal reveals the following errors.

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P2-4B The trial balance of Don Kelso Co. shown below does not balance.


Each of the listed accounts has a normal balance per the general ledger. An examination of the ledger and journal reveals the following errors.
1. Cash received from a customer in payment of its account was debited for $470, and Accounts Receivable was credited for the same amount.The actual collection was for $740.
2. The purchase of a printer on account for $340 was recorded as a debit to Supplies for $340 and a credit to Accounts Payable for $340.
3. Services were performed on account for a client for $890. Accounts Receivable was debited for $890, and Service Revenue was credited for $89.
4. A debit posting to Salaries Expense of $600 was omitted.
5. A payment of a balance due for $206 was credited to Cash for $206 and credited to Accounts Payable for $260.
6. The payment of a $500 cash dividend was debited to Salaries Expense for $500 and credited to Cash for $500.

Instructions: Prepare a correct trial balance. (Hint: It helps to prepare the correct journal entry for the transaction described and compare it to the mistake made).

P2-3B Slocombe Services was formed on May 1, 2008. The following transactions took place during this month.

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P2-3B Slocombe Services was formed on May 1, 2008. The following transactions took place during the first month.

Transactions on May 1:
1. Stockholders invested $100,000 cash in the company in exchange for common stock.
2. Hired two employees to work in the warehouse.They will each be paid a salary of $3,000 per month.
3. Signed a 2-year rental agreement on a warehouse; paid $36,000 cash in advance for the first year.
4. Purchased furniture and equipment costing $60,000. A cash payment of $20,000 was made immediately; the remainder will be paid in 6 months.
5. Paid $3,000 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 $1,000 cash.
7. Purchased more office supplies for $3,000 on account.
8. Total revenues earned were $30,000—$10,000 cash and $20,000 on account.
9. Paid $800 to suppliers for accounts payable due.
10. Received $5,000 from customers in payment of accounts receivable.
11. Received utility bills in the amount of $400, to be paid next month.
12. Paid the monthly salaries of the two employees, totalling $6,000.

Instructions
(a) Prepare journal entries to record each of the events listed.
(b) Post the journal entries to T accounts.
(c) Prepare a trial balance as of May 31, 2008.

P2-2B Rosa Perez is a licensed architect. During the first month of the operation of her business, the following events and transactions occurred.

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P2-2B Rosa Perez is a licensed architect. During the first month of the operation of her business, the following events and transactions occurred.
April
1 Stockholders invested $30,000 cash in exchange for common stock.
1 Hired a secretary-receptionist at a salary of $500 per week payable monthly.
2 Paid office rent for the month $800.
3 Purchased architectural supplies on account from Halo Company $1,500.
10 Completed blueprints on a carport and billed client $1,200 for services.
11 Received $500 cash advance from R.Welk for the design of a new home.
20 Received $1,500 cash for services completed and delivered to P. Donahue.
30 Paid secretary-receptionist for the month $2,000.
30 Paid $600 to Halo Company for accounts payable due.

Rosa uses the following chart of accounts: No. 101 Cash, No. 112 Accounts Receivable, No. 126 Supplies, No. 201 Accounts Payable, No. 205 Unearned Revenue, No. 311 Common Stock, No. 400 Service Revenue, No. 726 Salaries Expense, and No. 729 Rent Expense.

Instructions
(a) Journalize the transactions.
(b) Post to the ledger accounts.
(c) Prepare a trial balance on April 30, 2008.

P2-1B Surepar Miniature Golf and Driving Range was opened on March 1 by Jerry Glover.

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P2-1B Surepar Miniature Golf and Driving Range was opened on March 1 by Jerry Glover.
The following selected events and transactions occurred during March.
Mar.
1 Invested $50,000 cash in the business in exchange for common stock.
3 Purchased Lee’s Golf Land for $38,000 cash.The price consists of land $23,000, building $9,000, and equipment $6,000. (Make one compound entry.)
5 Advertised the opening of the driving range and miniature golf course, paying advertising expenses of $1,600.
6 Paid cash $1,480 for a one-year insurance policy.
10 Purchased golf clubs and other equipment for $2,600 from Palmer Company payable in 30 days.
18 Received $800 in cash for golf fees earned.
19 Sold 100 coupon books for $15 each. Each book contains 10 coupons that enable the holder to play one round of miniature golf or to hit one bucket of golf balls.
25 Declared and paid a $2,000 cash dividend.
30 Paid salaries of $600.
30 Paid Palmer Company in full.
31 Received $500 cash for fees earned.

Jerry Glover uses the following accounts: Cash; Prepaid Insurance; Land; Buildings; Equipment; Accounts Payable; Unearned Revenue; Common Stock; Dividends; Golf Revenue; Advertising Expense; and Salaries Expense.

Instructions: Journalize the March transactions.

P2-5A The Lake Theater opened on April 1. All facilities were completed on March 31. At this time, the ledger showed: No. 101 Cash $6,000; No. 140 Land $10,000; No. 145 Buildings (concession stand, projection room, ticket booth, and screen) $8,000; No. 157 Equipment $6,000; No. 201 Accounts Payable $2,000;No. 275 Mortgage Payable $8,000; and No. 311 Common Stock $20,000. During April, the following events and transactions occurred.

Price: $2.50


The Lake Theater opened on April 1. All facilities were completed on March 31. At this time, the ledger showed: No. 101 Cash $6,000; No. 140 Land $10,000; No. 145 Buildings (concession stand, projection room, ticket booth, and screen) $8,000; No. 157 Equipment $6,000; No. 201 Accounts Payable $2,000;No. 275 Mortgage Payable $8,000; and No. 311 Common Stock $20,000. During April, the following events and transactions occurred.

Apr. 2 Paid film rental of $800 on first movie.
3 Ordered two additional films at $1,000 each.
9 Received $2,800 cash from admissions.
10 Made $2,000 payment on mortgage and $1,000 for accounts payable due.
11 Lake Theater contracted with R. Wynns Company to operate the concession stand. Wynns is to pay 17% of gross concession receipts (payable monthly) for the right to operate the concession stand.
12 Paid advertising expenses $500.
20 Received one of the films ordered on April 3 and was billed $1,000. The film will be shown in April.
25 Received $5,200 cash from admissions.
29 Paid salaries $2,000.
30 Received statement from R.Wynns showing gross concession receipts of $1,000 and the balance due to The Lake Theater of $170 ($1,000 17%) for April.Wynns paid one-half of the balance due and will remit the remainder on May 5.
30 Prepaid $900 rental on special film to be run in May.

In addition to the accounts identified above, the chart of accounts shows: No. 112 Accounts
Receivable,No. 136 Prepaid Rentals,No. 405 Admission Revenue,No. 406 Concession Revenue,
No. 610 Advertising Expense, No. 632 Film Rental Expense, and No. 726 Salaries Expense.

Instructions:
(a) Enter the beginning balances in the ledger as of April 1. Insert a check mark (✓) in the reference column of the ledger for the beginning balance.
(b) Journalize the April transactions.
(c) Post the April journal entries to the ledger. Assume that all entries are posted from page 1 of the journal.
(d) Prepare a trial balance on April 30, 2008.

P2-4A The trial balance of the Sterling Company shown below does not balance. Your review of the ledger reveals that each account has a normal balance.You also discover the following 1. The totals of the debit sides of Prepaid Insurance.....

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P2-4A The trial balance of the Sterling Company shown below does not balance.


Your review of the ledger reveals that each account has a normal balance.You also discover the following
1. The totals of the debit sides of Prepaid Insurance, Accounts Payable, and Property Tax Expense were each understated $100.
2. Transposition errors were made in Accounts Receivable and Service Revenue. Based on postings made, the correct balances were $2,570 and $6,960, respectively.
3. A debit posting to Salaries Expense of $200 was omitted.
4. A $1,000 cash dividend was debited to Common Stock for $1,000 and credited to Cash for $1,000.
5. A $520 purchase of supplies on account was debited to Equipment for $520 and credited to Cash for $520.
6. A cash payment of $450 for advertising was debited to Advertising Expense for $45 and credited to Cash for $45.
7. A collection from a customer for $210 was debited to Cash for $210 and credited to Accounts Payable for $210.

Instructions
Prepare a correct trial balance. Note that the chart of accounts includes the following:
Dividends, and Supplies. (Hint: It helps to prepare the correct journal entry for the transaction
described and compare it to the mistake made.)

P2-3A Jack Shellenkamp owns and manages a computer repair service, which had the following trial balance on December 31, 2007 (the end of its fiscal year). Byte Repair service Inc.

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Jack Shellenkamp owns and manages a computer repair service, which had the following trial balance on December 31, 2007 (the end of its fiscal year).


Summarized transactions for January 2008 were as follows:
1. Advertising costs, paid in cash, $1,000.
2. Additional repair parts inventory acquired on account $4,000.
3. Miscellaneous expenses, paid in cash, $2,000.
4. Cash collected from customers in payment of accounts receivable $14,000.
5. Cash paid to creditors for accounts payable due $15,000.
6. Repair parts used during January $4,000. (Hint: Debit this to Repair Parts Expense.)
7. Repair services performed during January: for cash $6,000; on account $9,000.
8. Wages for January, paid in cash, $3,000.
9. Dividends paid in January were $3,000.

Instructions
(a) Open T accounts for each of the accounts listed in the trial balance, and enter the opening
balances for 2008.
(b) Prepare journal entries to record each of the January transactions.
(c) Post the journal entries to the accounts in the ledger. (Add accounts as needed.)
(d) Prepare a trial balance as of January 31, 2008.

P2-2A Jane Kent is a licensed CPA. During the first month of operations of her business, Jane Kent, Inc., the following events and transactions occurred.

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P2-2A Jane Kent is a licensed CPA. During the first month of operations of her business, Jane Kent, Inc., the following events and transactions occurred.
May
1 Stockholders invested $25,000 cash in exchange for common stock.
2 Hired a secretary-receptionist at a salary of $2,000 per month.
3 Purchased $2,500 of supplies on account from Read Supply Company.
7 Paid office rent of $900 cash for the month.
11 Completed a tax assignment and billed client $2,100 for services provided.
12 Received $3,500 advance on a management consulting engagement.
17 Received cash of $1,200 for services completed for H. Arnold Co.
31 Paid secretary-receptionist $2,000 salary for the month.
31 Paid 40% of balance due Read Supply Company.

Jane uses the following chart of accounts: No. 101 Cash, No. 112 Accounts Receivable, No. 126 Supplies,No. 201 Accounts Payable,No. 205 Unearned Revenue,No. 311 Common Stock,No. 400
Service Revenue, No. 726 Salaries Expense, and No. 729 Rent Expense.

Instructions
(a) Journalize the transactions.
(b) Post to the ledger accounts.
(c) Prepare a trial balance on May 31, 2008.

P2-1A Frontier Park was started on April 1 by C. J. Mendez and associates. The following selected events and transactions occurred during April.

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P2-1A Frontier Park was started on April 1 by C. J. Mendez and associates. The following selected events and transactions occurred during April.
Apr.
1 Stockholders invested $40,000 cash in the business in exchange for common stock.
4 Purchased land costing $30,000 for cash.
8 Incurred advertising expense of $1,800 on account.
11 Paid salaries to employees $1,500.
12 Hired park manager at a salary of $4,000 per month, effective May 1.
13 Paid $1,500 cash for a one-year insurance policy.
17 Declared and paid a $1,000 cash dividend.
20 Received $5,700 in cash for admission fees.
25 Sold 100 coupon books for $25 each. Each book contains 10 coupons that entitle the holder to one admission to the park.
30 Received $8,900 in cash admission fees.
30 Paid $900 on balance owed for advertising incurred on April 8.

Mendez uses the following accounts: Cash; Prepaid Insurance; Land; Accounts Payable; Unearned Admission Revenue; Common Stock; Dividends; Admission Revenue; Advertising Expense; and Salaries Expense.

Instructions: Journalize the April transactions.

E2-14 The accounts in the ledger of Sanford Delivery Service contain the following balances on July 31, 2008.

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E2-14 The accounts in the ledger of Sanford Delivery Service contain the following balances on July 31, 2008.
  • Accounts Receivable $ 7,642
  • Prepaid Insurance 1,968
  • Accounts Payable 8,396
  • Repair Expense 961
  • Cash   ?
  • Service Revenue 10,610
  • Delivery Equipment 49,360
  • Dividends 700
  • Gas and Oil Expense 758
  • Common Stock 40,000
  • Insurance Expense 523
  • Salaries Expense 4,428
  • Notes Payable 18,450
  • Salaries Payable 815
  • Retained Earnings 4,636

Instructions: Prepare a trial balance with the accounts arranged as illustrated in the chapter and fill in the
missing amount for Cash.

E2-13 The bookkeeper for Sam Kaplin Equipment Repair made a number of errors in journalizing and posting, as described below.

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E2-13 The bookkeeper for Sam Kaplin Equipment Repair made a number of errors in journalizing
and posting, as described below.

1. A credit posting of $400 to Accounts Receivable was omitted.
2. A debit posting of $750 for Prepaid Insurance was debited to Insurance Expense.
3. A collection from a customer of $100 in payment of its account owed was journalized and posted as a debit to Cash $100 and a credit to Service Revenue $100.
4. A credit posting of $300 to Property Taxes Payable was made twice.
5. A cash purchase of supplies for $250 was journalized and posted as a debit to Supplies $25 and a credit to Cash $25.
6. A debit of $475 to Advertising Expense was posted as $457.

Instructions: For each error:
(a) Indicate whether the trial balance will balance.
(b) If the trial balance will not balance, indicate the amount of the difference.
(c) Indicate the trial balance column that will have the larger total.
Consider each error separately. Use the following form, in which error (1) is given as an example.


E2-12 Selected transactions for Tina Cordero Company during its first month in business are presented below. Sept 1 Invested $10,000 cash in the business in exchange for common stock.

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Selected transactions for Tina Cordero Company during its first month in business are
presented below.
Sept. 1 Invested $10,000 cash in the business in exchange for common stock.
5 Purchased equipment for $12,000 paying $5,000 in cash and the balance on account.
25 Paid $3,000 cash on balance owed for equipment.
30 Declared and paid a $500 cash dividend.
Cordero’s chart of accounts shows: No. 101 Cash, No. 157 Equipment, No. 201 Accounts Payable,
No. 311 Common Stock, No. 332 Dividends.

Instructions
(a) Journalize the transactions on page J1 of the journal.
(b) Post the transactions using the standard account form.

E2-11 Presented below and on the next page is the ledger for Heerey Co. Instructions (a) Reproduce the journal entries for the transactions that occurred on October 1, 10, and 20,and provide explanations for each.

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E2-11 Presented below and on the next page is the ledger for Heerey Co.



Instructions
(a) Reproduce the journal entries for the transactions that occurred on October 1, 10, and 20,and provide explanations for each.
(b) Determine the October 31 balance for each of the accounts above, and prepare a trial balance at October 31, 2008.

E2-10 The T accounts below summarize the ledger of Simon Landscaping Company at the end of the first month of operations.

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E2-10 The T accounts below summarize the ledger of Simon Landscaping Company at the end of the first month of operations.


Instructions
(a) Prepare the complete general journal (including explanations) from which the postings to
Cash were made.
(b) Prepare a trial balance at April 30, 2008.

E2-9 Selected transactions from the journal of Teresa Gonzalez, investment broker, are presented below. Instructions (a) Post the transactions to T accounts...

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E2-9 Selected transactions from the journal of Teresa Gonzalez, investment broker, are presented
below.


 Aug. 1  Cash  5,000
   Common stock  5,000
 10 Cash  2,400
   Service revenue  2,400
 12 Office equipment  5,000
   Cash  1,000
   Notes payable  4,000
 25 Accounts receivable  1,600
   Service revenue  1,600
 31 Cash  900
   Accounts receivable  900

Instructions
(a) Post the transactions to T accounts.
(b) Prepare a trial balance at August 31, 2008.

E2-8 Josie Feeney has prepared the following list of statements about the general ledger. 1. The general ledger contains all the asset and liability accounts, but no stockholders’ equity...

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E2-8 Josie Feeney has prepared the following list of statements about the general ledger.
1. The general ledger contains all the asset and liability accounts, but no stockholders’ equity
accounts.
2. The general ledger is sometimes referred to as simply the ledger.
3. The accounts in the general ledger are arranged in alphabetical order.
4. Each account in the general ledger is numbered for easier identification.
5. The general ledger is a book of original entry.

Instructions: 
Identify each statement as true or false. If false, indicate how to correct the statement.

E2-7 Rowand Enterprises had the following selected transactions. 1. Aaron Rowand invested $4,000 cash in the business in exchange for common stock.

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Rowand Enterprises had the following selected transactions.
1. Aaron Rowand invested $4,000 cash in the business in exchange for common stock.
2. Paid office rent of $1,100.
3. Performed consulting services and billed a client $5,200.
4. Paid a $700 cash dividend.

Instructions:
(a) Indicate the effect each transaction has on the basic accounting equation
(Assets = Liabilities +Stockholders’ Equity), using plus and minus signs.
(b) Journalize each transaction.

E2-6 Konerko Industries had the following transactions. 1. Borrowed $5,000 from the bank by signing a note.2. Paid $2,500 cash for a computer....

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E2-6 Konerko Industries had the following transactions.
1. Borrowed $5,000 from the bank by signing a note.
2. Paid $2,500 cash for a computer.
3. Purchased $700 of supplies on account.

Instructions
(a) Indicate what accounts are increased and decreased by each transaction.
(b) Journalize each transaction.

E2-5 Transaction data for Hanshew Real Estate Agency are presented in E2-4. Instructions: Journalize the transactions. (You may omit explanations.)

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E2-5 Transaction data for Hanshew Real Estate Agency are presented in E2-4.

Instructions:
Journalize the transactions. (You may omit explanations.)

(data from E2-4)
Oct. 1 Pete Hanshew begins business as a real estate agent with a cash investment of $15,000
in exchange for common stock.
2 Hires an administrative assistant.
3 Purchases office furniture for $1,900, on account.
6 Sells a house and lot for B. Kidman; bills B. Kidman $3,200 for realty services provided.
27 Pays $700 on the balance related to the transaction of October 3.

30 Pays the administrative assistant $2,500 in salary for October

E2-4 Presented below is information related to Hanshew Real Estate Agency.Oct 1 Pete Hanshew begins business as a real estate agent with a cash investment of $15,000 in exchange for common stock...

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E2-4 Presented below is information related to Hanshew Real Estate Agency.
Oct.:
1 Pete Hanshew begins business as a real estate agent with a cash investment of $15,000 in exchange for common stock.
2 Hires an administrative assistant.
3 Purchases office furniture for $1,900, on account.
6 Sells a house and lot for B. Kidman; bills B. Kidman $3,200 for realty services provided.
27 Pays $700 on the balance related to the transaction of October 3.
30 Pays the administrative assistant $2,500 in salary for October.

Instructions:
Prepare the debit-credit analysis for each transaction as illustrated on pages 61–66.

E2-3 Data for D. Reyes, Inc., interior decorating, are presented in E2-2. Instructions: Journalize the transactions using journal page J1. (You may omit explanations.)

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Selected transactions for D. Reyes, Inc., an interior decorating firm, in its first month of
business, are as follows.

Jan. 2 Invested $10,000 cash in the business in exchange for common stock.
3 Purchased used car for $4,000 cash for use in business.
9 Purchased supplies on account for $500.
11 Billed customers $1,800 for services performed.
16 Paid $200 cash for advertising.
20 Received $700 cash from customers billed on January 11.
23 Paid creditor $300 cash on balance owed.
28 Declared and paid a $1,000 cash dividend

Instructions
Journalize the transactions

E2-2 Selected transactions for D. Reyes, Inc., an interior decorating firm, in its first month of business, are as follows. Jan. 2 Invested $10,000 cash in the business in exchange for common stock...

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E2-2 Selected transactions for D. Reyes, Inc., an interior decorating firm, in its first month of business, are as follows.
Jan.
2 Invested $10,000 cash in the business in exchange for common stock.
3 Purchased used car for $4,000 cash for use in business.
9 Purchased supplies on account for $500.
11 Billed customers $1,800 for services performed.
16 Paid $200 cash for advertising.
20 Received $700 cash from customers billed on January 11.
23 Paid creditor $300 cash on balance owed.
28 Declared and paid a $1,000 cash dividend.

Instructions: For each transaction indicate the following.
(a) The basic type of account debited and credited (asset, liability, stockholders’ equity).
(b) The specific account debited and credited (cash, rent expense, service revenue, etc.).
(c) Whether the specific account is increased or decreased.
(d) The normal balance of the specific account.

Use the following format, in which the January 2 transaction is given as an example

E2-1 Josh Cephus has prepared the following list of statements about accounts. 1. An account is an accounting record of either a specific asset or a specific liability

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E2-1 Josh Cephus has prepared the following list of statements about accounts.
1. An account is an accounting record of either a specific asset or a specific liability.
2. An account shows only increases, not decreases, in the item it relates to.
3. Some items, such as Cash and Accounts Receivable, are combined into one account.
4. An account has a left, or credit side, and a right, or debit side.
5. A simple form of an account consisting of just the account title, the left side, and the right side, is called a T-account.

Instructions:
Identify each statement as true or false. If false, indicate how to correct the statement.

BE2-10 An inexperienced bookkeeper prepared the following trial balance. Prepare a correct trial balance, assuming all account balances are normal. Cheng Company trial balance December 31, 2008....

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BE2-10 An inexperienced bookkeeper prepared the following trial balance. Prepare a correct trial balance, assuming all account balances are normal.

BE2-9 From the ledger balances given below, prepare a trial balance for P. J. Farve Company at June 30, 2008. List the accounts in the order shown on page 60 of the text.All account balances are normal.

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BE2-9 From the ledger balances given below, prepare a trial balance for P. J. Farve Company at June 30, 2008. List the accounts in the order shown on page 60 of the text.All account balances are normal.
Accounts Payable $9,000, Cash $6,800, Common Stock $20,000, Dividends $1,200, Equipment $17,000, Service Revenue

BE2-8 Selected journal entries for Gilles Company are presented in BE2-7. Post the transactions using the standard form of account.

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BE2-8 Selected journal entries for Gilles Company are presented in BE2-7. Post the transactions using the standard form of account.

BE2-7 Selected transactions for Gilles Company are presented in journal form below. Post the transactions to T accounts. Make one T account for each item and determine each account’s ending balance.

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BE2-7 Selected transactions for Gilles Company are presented in journal form below. Post the transactions to T accounts. Make one T account for each item and determine each account’s ending balance.

BE2-6 Using the data in BE2-5, journalize the transactions. (You may omit explanations.)

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BE2-6 Using the data in BE2-5, journalize the transactions. (You may omit explanations.)

BE2-5 J. A. Motzek Inc. has the following transactions during August of the current year. Indicate (a) the effect on the accounting equation and (b) the debit-credit analysis illustrated on pages 61–66 of the text.

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BE2-5 J. A. Motzek Inc. has the following transactions during August of the current year. Indicate (a) the effect on the accounting equation and (b) the debit-credit analysis illustrated on pages 61–66 of the text.
Aug.
1 Opens an office as a financial advisor, investing $5,000 in cash in exchange for common
stock.
4 Pays insurance in advance for 6 months, $1,800 cash.
16 Receives $800 from clients for services provided.
27 Pays secretary $1,000 salary.

BE2-3 Using the data in BE2-2, journalize the transactions. (You may omit explanations.)

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BE2-3 Using the data in BE2-2, journalize the transactions. (You may omit explanations.)

BE2-2 Transactions for Kaustav Sen Company, which provides welding services, for the month of June are presented below. Identify the accounts to be debited and credited for each transaction.

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BE2-2 Transactions for Kaustav Sen Company, which provides welding services, for the month of June are presented below. Identify the accounts to be debited and credited for each transaction.
June:
1 Kaustav Sen invests $4,000 cash in exchange for shares of common stock in a small welding business.
2 Purchases equipment on account for $900.
3 Pays $800 cash to landlord for June rent.
12 Bills J. Kronsnoble $300 for welding work done on account.

BE2-1 For each of the following accounts indicate the effects of (a) a debit or a credit on the accounts and (b) the normal balance of the account.

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BE2-1 For each of the following accounts indicate the effects of (a) a debit or a credit on the accounts and (b) the normal balance of the account.

1. Accounts Payable.
2. Advertising Expense.
3. Service Revenue.
4. Accounts Receivable.
5. Common Stock.
6. Dividends.

BYP1-3 This exercise will familiarize you with skill requirements, job descriptions, and salaries for accounting careers. Exploring the Web

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BYP1-3 This exercise will familiarize you with skill requirements, job descriptions, and salaries for accounting careers.
Address: www.careers-in-accounting.com, or go to www.wiley.com/college/weygandt

Instructions:
Go to the site shown above. Answer the following questions.
(a) What are the three broad areas of accounting (from “Skills and Talents Required”)?
(b) List eight skills required in accounting.
(c) How do the three accounting areas differ in terms of these eight required skills?
(d) Explain one of the key job functions in accounting.
(e) Based on the Smart Money survey, what is the salary range for a junior staff accountant with
Deloitte & Touche?