Ch 1 4 Review Problems For each account listed below 1 Indicate the account type Current Asset CA LT Investment LTI Property Plant Equipment PPE Intangible Asset IA Current Liability CL LT Liability LTL Stockholders Equity SE Dividend DIV Revenue REV or Expense EXP 2 Financial statement where it would be located Income Statement IS Stmt Of Retained Earnings SORE or Balance Sheet BS Accounts Dividends Maintenance Salaries wages payable expense exp Accounts Equipment Mortgages Salaries Wages receivable payable payable Accum Franchises Office Sales Deprec Build expense Accum Furniture Patents Sales revenue Deprec Equip Accum Goodwill Pension Service revenue Deprec Furn liabilities Advertising Income tax Prepaid ST investments expense expense advertising Bonds payable Income tax Prepaid ST notes payable payable expenses Building Insurance Prepaid ST notes expense insurance receivable Cash Interest Prepaid rent Stock investments expense Common stock Interest Printing Supplies payable expense Copyrights Interest Real estate Supplies expense revenue invest Cost of goods Inventory Rent Trademarks names sold expense Current Land Rent Unearned revenue maturities of LT revenue debt Deferred Lease Repairs Utilities expense income tax liabilities expense Delivery FreightLT notes Retained Out expense payable earnings Depreciation expense Dividend income 1 What is the basic accounting equation What is the expanded accounting equation What are the Debit Credit rules How do the following transactions impact the accounting equation Which financial statements are impacted 1 Issue shares of stock for cash 2 Company pays for an expense 3 Company incurs an expense on account 4 Company receives payment in advance for services not yet performed 5 Company pays a dividend 6 Company provides services to a client on account 7 Company purchases supplies on account 8 Company pays off an amount due to a vendor 2 How does Net Income impact Stockholders Equity What about Net Loss If assets increased by 12 000 liabilities decreased by 5 000 how much did stockholders equity change by Tipco Industries has assets of 450 000 and liabilities of 300 000 What is their equity balance If they have common stock of 10 000 then what else do we know about their equity balance Rust Company s retained earnings increased by 100 000 from Jan 1 to Dec 31 If they paid out 10 000 in dividends during this period what was their net income loss for the period Based on the following information what is the amount of current assets LT investments net PP E intangible assets current liabilities LT liabilities Stock investments plan to hold over 1 year 2 000 Land 5 000 Accounts Payable 3 000 Furniture 1 000 Notes Payable due more than 1 year from now 4 000 Patents 6 000 Wages payable Buildings Investments plan to hold less than 1 year Inventory Accounts Receivable Total Accumulated Depreciation Prepaid insurance rent expense Notes receivable due in less than 1 year 3 000 9 000 2 000 4 000 3 000 7 000 4 000 3 000 Cash Equipment Unearned Revenue 4 000 3 000 5 000 3 Indicate if the accounts are increased by a credit or a debit i e what is the account s NORMAL balance Cash Retained earnings Building Dividends Revenues Expenses Accounts payable Accumulated depreciation Wages payable Accounts receivable Unearned service revenue Patent Common stock Prepaid insurance rent other Supplies Entertainment Plus Co has a concert scheduled in July Tickets were available for order in May and customers paid for their tickets in June When does the company recognize the revenue What are the journal entries for these transactions how do they impact the accounting equation What is the impact if we fail to record these entries 1 Received 5 000 of printing services but haven t received a bill or paid the printing company 2 Pre pay next year s rent for 10 000 3 Receive a 7 000 payment from a customer for an amount owed to you 4 Receive a bill for repair work completed last month that your company will pay next month 5 Record 5 000 of depreciation on the company s building 6 Perform 6 000 of services for a client on account 7 8 000 of supplies were on hand at the beginning of the period At the end of the period only 2 000 of supplies remain on hand 4 Answer the following questions using the below trial balance 1 How much is net income 2 How much is ending retained earnings 3 How much is total stockholders equity JONES CO ADJUSTED TRIAL BALANCE 12 31 08 DEBIT 30 500 15 000 2 500 3 000 42 500 Cash Accounts Receivable Supplies on Hand Prepaid Insurance Equipment Accumulated Depreciation Accounts Payables Wages Payable Unearned Revenues Long Term Notes Payable Common Stock Retained Earnings 1 1 08 Dividends Sales Cost of Goods Sold Rent Expense Insurance Expense Depreciation Expense Wages Expense Supplies Expense Interest Expense Income Tax Expense CREDIT 20 000 6 000 3 500 6 000 10 000 33 000 3 000 1 000 97 000 34 000 13 000 5 500 3 500 14 000 2 000 3 000 9 000 Total 178 500 178 500 5 ABC Corp is a new company Record the following journal entries post them to the ledgers using T Accounts and prepare a trial balance 1 July 1 Issued common stock in exchange for 35 000 cash from investors 2 July 4 Purchased equipment for 8 000 paying 2 000 down and the balance still due on account 3 July 7 Performed services on account for 9 000 4 July 10 Paid salaries of 2 000 5 July 12 Paid remainder of amount owned on July 4 equipment purchase 6 July 13 Received full payment from customer in July 7 entry 7 July 14 Purchased 3 000 of supplies on account 8 July 30 Paid 200 cash dividends 6