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Page 33
Accounting in Action
1 - 33
Ex. 182
Compute the missing amount in each category of the accounting equation.
Assets
Liabilities
Owner's Equity
(a)
$349,000
$
?
$143,000
(b)
$223,000
$
79,000
$
?
(c)
$
?
$253,000
$325,000
Solution 182
(5 min.)
(a)
$206,000 ($349,000 – $143,000 = $206,000).
(b)
$144,000 ($223,000 – $79,000 = $144,000).
(c)
$578,000 ($253,000 + $325,000 = $578,000).
Ex. 183
From the following list of selected accounts taken from the records of Grayson Clinic, identify
those that would appear on the balance sheet.
a. Meg Grayson, Capital
f.
Accounts Payable
b. Patient Revenue
g. Cash
c. Land
h. Rent Expense
d. Wages Expense
i.
Medical Supplies
e. Notes Payable
j.
Utilities Expense
Solution 183
(5 min.)
a, c, e, f, g, i
Ex. 184
For each of the following, indicate whether the transaction affects revenue (R), expense (E),
owner's drawing (D), owner's investment (I), or no effect on owner's equity (NOE).
1.
Made an investment to start the business.
2.
Billed customers for services performed.
3. Purchased equipment on account.
4. Paid monthly rent.
5.
Withdrew cash for personal use.
Solution 184
(5 min.)
1. Investment (I)
2. Revenue (R)
3. No effect (NOE)
4. Expense (E)
5. Drawing (D)


Page 34
Test Bank for Accounting Principles, Eighth Edition
1 - 34
Ex. 185
Presented below is a balance sheet for Jim Dixon Lawn Service at December 31, 2008.
JIM DIXON LAWN SERVICE
Balance Sheet
December 31, 2008
Assets
Liabilities and Owner's Equity
Cash
$13,000
Liabilities
Accounts receivable
6,000
Accounts payable
$ 8,000
Supplies
9,000
Notes payable
15,000
Equipment
11,000
Owner's equity
Jim Dixon, Capital
16,000
Total assets
$39,000
Total liabilities & owner’s equity
$39,000
The following additional data are available for the year which began on January 1: All expenses
(excluding supplies expense) total $6,000. Supplies on January 1, were $11,000 and $5,000 of
supplies were purchased during the year. Net income for the year was $8,000 and drawings were
$6,000.
Instructions
Determine the following:
(Show all computations.)
1.
Supplies used during the year.
2.
Total expenses for the year.
3.
Service revenues for the year.
4.
Jim Dixon's capital balance on January 1.
Solution 185
(10 min.)
1. Computation of Supplies Used:
Beginning Supplies, Jan. 1
$11,000
Add: Purchases
5,000
Less: Ending Supplies, Dec. 31
(9,000
)
Equals: Supplies Used
$
7,000
2. Computation of Total Expenses:
All Expenses (excluding supplies expense)
$
6,000
Plus: Supplies Used
7,000
Total Expenses
$13,000
3. Computation of Revenues:
Net Income
$
8,000
Plus: Total Expenses
13,000
Total Revenues
$21,000
4.
Computation of Dixon, Capital on January 1:
Capital, December 31
$16,000
Plus: Drawings
6,000
Less: Net Income
(8,000
)
Capital, January 1
$14,000


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