E 2-6

E 2-6
Req. 1

Cash				Accounts Receivable
Mar. 1	55,000	Mar. 4	40,000	Mar. 17	1,600	Mar. 23	1,200
6	3,000	9	100	Mar. 31	400
23	1,200	31	1,700
Mar. 31	17,400

Office Supplies		Building
Mar. 2	200	Mar. 4	40,000
Mar. 31	200	Mar. 31	40,000

Accounts Payable				Joy Liebermann, Capital
Mar. 9	100	Mar. 2	200		Mar. 1	55,000
		Mar. 31	100		Mar. 31	55,000

Service Revenue			Salary Expense
	Mar. 6	3,000	Mar. 31	1,200
	17	1,600	Mar. 31	1,200
	Mar. 31	4,600

Rent Expense
Mar. 31	500
Mar. 31	500

(continued) E 2-6

Req. 2

New Balance Spa
Trial Balance
March 31, 20X3
ACCOUNT	DEBIT	CREDIT
Cash	$17,400
Accounts receivable	400
Office supplies	200
Building	40,000
Accounts payable		$ 100
Joy Liebermann, capital		55,000
Service revenue		4,600
Salary expense	1,200
Rent expense	500	_________
Total	$59,700	$59,700

.E 2-9

Flores Security Company
Trial Balance
April 30, 20X4
ACCOUNT	DEBIT	CREDIT
Cash	$ 7,000
Supplies	400
Equipment	6,000
Land	56,000
Accounts payable		$ 400
Note payable		7,000
Tony Flores, capital	__________	62,000
Total	$69,400	$69,400

E 2-12

Cash				Accounts Receivable
(a)	12,400	(b)	1,500	(f)	1,600
		(d)	1,800	Bal.	1,600
		(e)	400
		(g)	7,000
Bal.	1,700

Office Supplies		Office Furniture
(c)	700	(a)	5,400
Bal.	700	Bal.	5,400

Accounts Payable				Cole Gates, Capital
(e)	400	(c)	700		(a)	17,800
		Bal.	300		Bal.	17,800

Cole Gates, Withdrawals		Service Revenue
(g)	7,000		(f)	1,600
Bal.	7,000		Bal.	1,600

Salary Expense		Rent Expense
(d)	1,800	(b)	1,500
Bal.	1,800	Bal.	1,500

E 2-16

Net income for March – Given as follows:

Owner, Capital
		Feb. 28 Bal.	9,000
March		March
withdrawals	7,000	Net income	X
		Mar. 31 Bal.	15,000

$9,000 + X ! $7,000 = $15,000

X = $13,000

Total cash paid during March:

Cash
Feb. 28 Bal.	7,000
March receipts	61,000	March payments	X
Mar. 31 Bal.	2,000

$7,000 + $61,000 ! X = $ 2,000

X = $66,000

(continued) E 2-16

Cash collections from customers during March:

Accounts Receivable
Feb. 28 Bal.	24,000
March revenues
on account	76,000	March collections	X
Mar. 31 Bal.	26,000

$24,000 + $76,000 ! X = $26,000

X = $74,000

Cash paid on a note payable during March:

Note Payable

Feb. 28 Bal.

11,000

March

March

Payments on note

X

New borrowing

7,500

Mar. 31 Bal.

16,000

$11,000 + $7,500 ! X = $16,000

X = $ 2,500

(20-30 min.) E 2-17

	Effect on Trial Balance	Account(s) Misstated		Relevant Journal Entries (Not Required)
a.	Total debits = Total credits	Cash	a.	Entry	Cash	1,800
		$1,000 too high		made:	Service Revenue		1,800
		Service Revenue		Correct	Cash	800
		$1,000 too high		Entry:	Service Revenue		800

b.	Total debits = Total credits	Supplies	b.	Entry	Supplies	210
		$90 too high		made:	Accounts Payable		210
		Accounts Payable		Correct	Supplies	120
		$90 too high		entry:	Accounts Payable		120
		($210 ! $120 = $90)

c.	Total debits > Total credits	Note Payable $40,000 too low,
		on the trial balance only

d.	Total debits < Total credits	Utility Expense $630 too low
		($700 ! $70 = $630)

e.	Total debits = Total credits	Cash	e.	Entry	Supplies	400
		$400 too high		made:	Accounts Payable		400
		Supplies		Correct	Accounts Payable	400
		$400 too high		entry:	Cash		400
		Accounts Payable
		$800 too high

P 2-3A
Req. 1 (journal entries; explanations not required)

Journal
DATE		ACCOUNTS AND EXPLANATIONS	POST. REF.	DEBIT	CREDIT
Sept.	3	Cash		43,000
		Terence Larkin, Capital			43,000

	4	Supplies		200
		Furniture		1,800
		Accounts Payable			2,000

	6	Cash		4,000
		Service Revenue			4,000

	7	Land		15,000
		Cash			15,000

	10	Accounts Receivable		800
		Service Revenue			800

	14	Accounts Payable		1,800
		Cash			1,800

	15	Salary Expense		600
		Cash			600

	17	Cash		500
		Accounts Receivable			500

	20	Accounts Receivable		800
		Service Revenue			800

(continued) P 2-3A

Req. 1 (journal entries; explanations not required)

Journal (Continued)
DATE		ACCOUNTS AND EXPLANATIONS	POST. REF.	DEBIT	CREDIT
Sept.	28	Cash		1,500
		Service Revenue			1,500

	30	Salary Expense		600
		Cash			600

	30	Rent Expense		500
		Cash			500

	30	Terence Larkin, Withdrawals		2,900
		Cash			2,900

(continued) P 2-3A

Req. 2 (ledger accounts)

Cash				Accounts Receivable
Sept. 3	43,000	Sept. 7	15,000	Sept.10	800	Sept. 17	500
6	4,000	14	1,800	20	800
17	500	15	600	Bal.	1,100
28	1,500	30	600
		30	500	Supplies
		30	2,900	Sept. 4	200
Bal.	27,600			Bal.	200

Furniture		Land
Sept. 4	1,800	Sept. 7	15,000
Bal.	1,800	Bal.	15,000

Accounts Payable				Terence Larkin, Capital
Sept. 14	1,800	Sept. 4	2,000		Sept. 3	43,000
		Bal.	200		Bal.	43,000

Terence Larkin, Withdrawals		Service Revenue
Sept. 30	2,900		Sept. 6	4,000
Bal.	2,900		10	800
			20	800
			28	1,500
			Bal.	7,100

Salary Expense		Rent Expense
Sept. 15	600	Sept. 30	500
30	600	Bal.	500
Bal.	1,200

(continued) P 2-3A

Req. 3

Terence Larkin, Attorney
Trial Balance
September 30, 20XX
ACCOUNT	DEBIT	CREDIT
Cash	$27,600
Accounts receivable	1,100
Supplies	200
Furniture	1,800
Land	15,000
Accounts payable		$ 200
Terence Larkin, capital		43,000
Terence Larkin, withdrawals	2,900
Service revenue		7,100
Salary expense	1,200
Rent expense	500	_________
Total	$50,300	$50,300

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Note Payable
		Feb. 28 Bal.	11,000
March		March
Payments on note	X	New borrowing	7,500
		Mar. 31 Bal.	16,000