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Chapter 2: Q16RQ (page 90)
If total debits equal total credits on the trial balance, is the trial balance error-free? Explain your answer.
There could be an error in the trial balance even if the debits and credits are equal.
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Question:Preparing financial statements from the trial balance and calculating the debt ratio
Preparing financial statements from the trial balance and calculating the debt ratio
Account Title Debit Credit
Office Supplies 1,400
Cash 32,000
Accounts Receivable 9,100
Prepaid Insurance 2,600
Equipment 24,000
Accounts Payable 3,400
Unearned Revenue 1,296
Notes Payable 34,000
Common Stock 20,000
Dividends 3,000
Salaries Expense 1,600
Rent Expense 700
Utilities Expense 100
Service Revenue 15,804
Total Balance \( 74,500 \) 74,500
Requirements 1. Prepare the income statement for the month ended July 31, 2018
Before you begin this assignment, review the Tying It All Together feature in the chapter. Part of the Fry鈥檚 Electronics, Inc.鈥檚 experience involves providing technical support to its customers. This includes in-home installations of electronics and also computer support at their retail store locations.
Requirements
2. Assume Fry鈥檚 Electronics, Inc.鈥檚 Modesto, California, location received $24,000 for an annual contract to provide computer support to the local city government. How would Fry鈥檚 Electronics record this transaction? What financial statement(s) would this transaction affect?
Journalizing transactions, posting journal entries to four-column accounts, and preparing a trial balance
Theodore McMahon opened a law office on April 1, 2018. During the first month of operations, the business completed the following transactions:
Apr. 1 McMahon contributed \(70,000 cash to the business, Theodore McMahon, Attorney. The business issued common stock to McMahon.
3 Purchased office supplies, \)1,100, and furniture, \(1,300, on account.
4 Performed legal services for a client and received \)2,000 cash.
7 Purchased a building with a market value of \(150,000, and land with a market value of \)30,000. The business paid \(40,000 cash and signed a note payable to the bank for the remaining amount.
11 Prepared legal documents for a client on account, \)400.
15 Paid assistant鈥檚 semimonthly salary, \(1,200.
16 Paid for the office supplies purchased on April 3 on account. 18 Received \)2,700 cash for helping a client sell real estate.
19 Defended a client in court and billed the client for \(1,700.
25 Received a bill for utilities, \)650. The bill will be paid next month.
28 Received cash on account, \(1,100.
29 Paid \)3,600 cash for a 12-month insurance policy starting on May 1.
29 Paid assistant鈥檚 semimonthly salary, \(1,200.
30 Paid monthly rent expense, \)2,100.
30 Paid cash dividends of $3,200.
Requirements 1. Record each transaction in the journal, using the following account titles: Cash; Accounts Receivable; Office Supplies; Prepaid Insurance; Land; Building; Furniture; Accounts Payable; Utilities Payable; Notes Payable; Common Stock; Dividends; Service Revenue; Salaries Expense; Rent Expense; and Utilities Expense. Explanations are not required.
Question:Journalizing transactions, posting journal entries to four-column accounts, and preparing a trial balance The following transactions occurred during the month for Teresa Parker, CPA:
Jun. 1 Parker opened an accounting firm by contributing \(13,200 cash and office furniture with a fair market value of \)5,300 in exchange for common stock.
5 Paid monthly rent of \(1,300.
9 Purchased office supplies on account, \)600.
14 Paid employee鈥檚 salary, \(1,900.
18 Received a bill for utilities to be paid next month, \)370.
21 Paid \(500 of the accounts payable created on June 9.
25 Performed accounting services on account, \)5,700.
28 Paid cash dividends of $6,700
Requirements 2. Journalize the transactions, and then post the journal entries to the four-column accounts. Explanations are not required for the journal entries. Keep a running balance in each account. Assume the journal entries are recorded on page 10 of the journal.
What is the purpose of the trial balance?
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