ACCT 211 Homework 2 Accounting for Business Transactions Problems Assignment solutions answers

ACCT 211 Homework 2 Accounting for Business Transactions Problems Assignment solutions complete answers 

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Karla Tanner opened a Web consulting business called Linkworks and completed the following transactions in its first month of operations.
  

April 1
Tanner invested $140,000 cash along with office equipment valued at $33,600 in the company in exchange for common stock.
April 2
The company prepaid $7,200 cash for 12 months’ rent for office space. Hint: Debit Prepaid Rent for $7,200.
April 3
The company made credit purchases for $16,800 in office equipment and $3,360 in office supplies. Payment is due within 10 days.
April 6
The company completed services for a client and immediately received $2,000 cash.
April 9
The company completed a $11,200 project for a client, who must pay within 30 days.
April 13
The company paid $20,160 cash to settle the account payable created on April 3.
April 19
The company paid $6,000 cash for the premium on a 12-month prepaid insurance policy. Hint: Debit Prepaid Insurance for $6,000.
April 22
The company received $8,960 cash as partial payment for the work completed on April 9.
April 25
The company completed work for another client for $2,640 on credit.
April 28
The company paid a $6,200 cash dividend.
April 29
The company purchased $1,120 of additional office supplies on credit.
April 30
The company paid $700 cash for this month’s utility bill.
  
Required:
1. Prepare general journal entries to record these transactions using the following titles: Cash (101); Accounts Receivable (106); Office Supplies (124); Prepaid Insurance (128); Prepaid Rent (131); Office Equipment (163); Accounts Payable (201); Common Stock (307); Dividends (319); Services Revenue (403); and Utilities Expense (690).
2. Post the journal entries from part 1 to the ledger accounts.
3. Prepare a trial balance as of April 30.

 

Aracel Engineering completed the following transactions in the month of June.

a.   J. Aracel, the owner, invested $195,000 cash, office equipment with a value of $5,700, and $75,000 of drafting equipment to launch the company in exchange for common stock.

b.   The company purchased land worth $56,000 for an office by paying $6,100 cash and signing a note payable for $49,900.

c.   The company purchased a portable building with $53,000 cash and moved it onto the land acquired in b.

d.   The company paid $2,400 cash for the premium on an 18-month insurance policy.

e.   The company provided services to a client and collected $8,100 cash.

f.     The company purchased $31,000 of additional drafting equipment by paying $9,800 cash and signing a note payable for $21,200.

g.   The company completed $15,000 of services for a client. This amount is to be received in 30 days.

h.   The company purchased $1,550 of additional office equipment on credit.

i.     The company completed $25,000 of services for a customer on credit.

j.     The company purchased $1,620 of TV advertising on credit.

k.   The company collected $6,000 cash in partial payment from the client described in transaction g.

l.     The company paid $1,700 cash for employee wages.

m. The company paid $1,550 cash to settle the account payable created in transaction h.

n.   The company paid $985 cash for repairs.

o.   The company paid a $10,890 cash dividend.

p.   The company paid $1,800 cash for employee wages.

q.   The company paid $2,700 cash for advertisements on the Web during June.

 
Required:
1. Prepare general journal entries to record these transactions using the following titles: Cash (101); Accounts Receivable (106); Prepaid Insurance (108); Office Equipment (163); Drafting Equipment (164); Building (170); Land (172); Accounts Payable (201); Notes Payable (250); Common Stock (307); Dividends (319); Services Revenue (403); Wages Expense (601); Advertising Expense (603); and Repairs Expense (604).
2. Post the journal entries from part 1 to the ledger accounts.
3. Prepare a trial balance as of the end of June.

 

Business transactions completed by Hannah Venedict during the month of September are as follows.

a.   Venedict invested $88,000 cash along with office equipment valued at $22,000 in a new business named HV Consulting in exchange for common stock.

b.   The company purchased land valued at $45,000 and a building valued at $160,000. The purchase is paid with $25,000 cash and a note payable for $180,000.

c.   The company purchased $2,400 of office supplies on credit.

d.   Venedict invested an automobile in the company in exchange for more common stock. The automobile has a value of $16,600.

e.   The company purchased $5,400 of additional office equipment on credit.

f.     The company paid $1,900 cash salary to an assistant.

g.   The company provided services to a client and collected $7,200 cash.

h.   The company paid $650 cash for this month’s utilities.

i.     The company paid $2,400 cash to settle the account payable created in transaction c.

j.     The company purchased $20,200 of new office equipment by paying $20,200 cash.

k.   The company completed $6,750 of services on credit for a client, who must pay within 30 days.

l.     The company paid $1,900 cash salary to an assistant.

m. The company received $3,500 cash in partial payment on the receivable created in transaction k.

n.   The company paid a $2,700 cash dividend.


Required:
1. Prepare general journal entries to record these transactions using the following titles: Cash (101); Accounts Receivable (106); Office Supplies (108); Office Equipment (163); Automobiles (164); Building (170); Land (172); Accounts Payable (201); Notes Payable (250); Common Stock (307); Dividends (319); Consulting Revenue (403); Salaries Expense (601); and Utilities Expense (602).
2. Post the journal entries from part 1 to the ledger accounts.
3. Prepare a trial balance as of the end of September.

 

The accounting records of Nettle Distribution show the following assets and liabilities as of December 31 for Year 1 and Year 2.
 

December 31
Year 1
Year 2
Cash
$ 48,151
$ 8,256
Accounts receivable
26,137
20,492
Office supplies
4,123
3,020
Office equipment
126,563
134,813
Trucks
49,526
58,526
Building
0
165,098
Land
0
41,198
Accounts payable
68,715
34,081
Note payable
0
106,296
Required:
1. Prepare balance sheets for the business as of December 31 for Year 1 and for Year 2. Hint: Report only total equity on the balance sheet and remember that total equity equals the difference between assets and liabilities.

 

2. Compute net income for Year 2 by comparing total equity amounts for these two years and using the following information: During Year 2, the owner invested $36,000 additional cash in the business in exchange for common stock, and the company paid a $26,400 cash dividend.

 

3. Compute the Year 2 year-end debt ratio.

 

Yi Min started an engineering firm called Min Engineering. He began operations and completed seven transactions in May, which included his initial investment of $20,000 cash. After those seven transactions, the ledger included the following accounts with normal balances.
 

Cash
$ 44,118
Office supplies
900
Prepaid insurance
4,900
Office equipment
11,800
Accounts payable
11,800
Common stock
20,000
Dividends
3,042
Services revenue
40,000
Rent expense
7,040
Required:
1. Prepare a trial balance for this business as of the end of May.

 

The following seven transactions produced the account balances shown above.

a.   Y. Min invested $20,000 cash in the business in exchange for common stock.

b.   Paid $7,040 cash for monthly rent expense for May.

c.   Paid $4,900 cash in advance for the annual insurance premium beginning the next period.

d.   Purchased office supplies for $900 cash.

e.   Purchased $11,800 of office equipment on credit (with accounts payable).

f.     Received $40,000 cash for services provided in May.

g.   The company paid a $3,042 cash dividend.

2. Prepare a Cash T-account for the above transactions, and compute the ending Cash balance. Code each entry with one of the transaction codes a through g.