The following items appeared in the accounting records of Triguero’s, a retail music store that also sponsors concerts. Classify each of the items as an asset, liability; revenue; or expense from the company’s viewpoint. Also indicate the normal account balance of each item.a. Amounts paid to a mall for rent. b. Amounts to be paid in 10 days to suppliers. c. A new fax machine purchased for office use. d. Land held as an investment. e. Amounts due from customers. f. Daily sales of merchandise sold. g. Promotional costs to publicize a concert. h. A long-term loan owed to Citizens Bank. i. The albums, tapes, and CDs held for sale to customers. 2. Basic journal entriesThe following transactions pertain to the Jennifer Royall Company:May 1 JenniÂ¬fer Royall invested cash of $25,000 and land valued at $15,000 into the business.5 Provided $1,000 of services to Jason Ratchford, a client, on account.9 Paid $1,250 of salaries to an employee.14 Acquired a new computer for $4,200, on account.20 Collected $800 from Jason Ratchford for services provided on May 5.24 Borrowed $2,500 from BestBanc by securing a six-month loan.Prepare journal entries (and explanations) to record the preceding transactions and events.3. Balance sheet preparation. The following data relate to Preston Company as of December 31, 20XX:Building $40,000 Accounts receivable $24,000Cash 21,000 Loan payable 30,000J. Preston, Capital 65,000 Land 21,000Accounts payable ?Prepare a balance sheet as of December 31, 20XX. (See Exhibit 1.1 and 1.4)4. Basic transaction processing. On November 1 of the current year, Richard Simmons established a sole proprietorship. The following transactions occurred during the month:1: Simmons invested $32,000 into the business for $32,000 in common stock.2: Paid $5,000 to acquire a used minivan.3: Purchased $1,800 of office furniture on account.4: Performed $2,100 of consulting services on account.5: Paid $300 of repair expenses.6: Received $800 from clients who were previously billed in item 4.7: Paid $500 on account to the supplier of office furniture in item 3.8: Received a $150 electric bill, to be paid next month.9: Simmons withdrew $800 from the business.10: Received $250 in cash from clients for consulting services rendered.Instructionsa. Arrange the following asset, liability, and ownerâs equity elements of the accountÂ¬ing equation: Cash, Accounts Receivable, Office Furniture, Van, Accounts Payable, Common Stock/Dividends, and Revenues/Expenses. (See Exhibit 1.5)b. Record each transaction on a separate line. After all transactions have been recorded, compute the balance in each of the preceding items.c. Answer the following questions for Simmons.(1) How much does the company owe to its creditors at month-end? On which financial statement(s) would this information be found?(2) Did the company have a âgoodâ month from an accounting viewpoint? Briefly explain.5. Transaction analysis and statement preparation. The transactions that followrelate to Burton Enterprises for March 20X1, the companyâs first month of activity.3/1 Joanne Burton, the owner, invested $20,000 cash into the business.3/4 Performed $2,400 of services on account.3/7 Acquired a small parcel of land by paying $6,000 cash3/12 Received $500 from a client who was billed previously on March 4.3/15 Paid $200 to the Journal Herald for advertising expense.3/18 Acquired 9,000 of equipment from Park Central Outfitters by Paying$7,000 down and agreeing to remit the balance owed within two weeks (A/P).3/22 Received $300 cash from clients for services.3/24 Paid $1,500 on account to Park Central Outfitters in partial settlement ofthe balance due from the transaction on March 18.3/28 Rented a car from United Car Rental for use on March 28. Total chargesamounted to $125, with United billing Burton for the amount due.3/31 Paid $600 for March wages3/31 Processed a $600 cash withdrawal (dividend) from the business for Joanne BurtonInstructionsa. Determine the impact of each of the preceding transactions on Burtonâs assets,liabilities, and ownerâs equity. See exhibit 1.5. Use the following format:Assets = Liabilities + Ownerâs EquityCash, Accounts Receivable, Land, Equipment Accounts Payable (+)Common Stock (+) Revenues(-) Dividends (-) Expensesa. Record each transaction on a separate line. Calculate balances only after the last transaction has been recorded.b. Prepare an income statement, a statement of retained earnings, and a balance sheet, (See Exhibit 1.2, 1.3 and 1.4)6. Entry and trial balance preparation. Lee Adkins is a portrait artist. The following schedule represents Leeâs combined chart of accounts and trial balance as of May 31.Account number Account name Debit Credit110 Cash $ 2,700120 Accounts Receivable 12,100130 Equipment and Supplies 2,800140 Studio 45,000210 Accounts Payable $2,600310 Lee Adkins, Capital 57,400320 Lee Adkins, Drawing 30,000410 Professional Fee Revenue 39,000510 Advertising Expense 2,300520 Salaries Expense 2,100540 Utilities Expense 2,000$99,000 $99,000The general ledger also revealed account no. 530, Legal and Accounting Expense. The following transactions occurred during June:6/2 Collected $3,000 on account from customers6/7 Sold 25% of the equipment and supplies to a young artist for $700 cash6/10 Received a $300 invoice from the accountant for preparing last quarter’s financial Statements.6/15 Paid $1,900 to creditors on account. 6/27 Adkins withdrew $2,000 cash for personal use.6/30 Billed a customer $3,000 for a portrait painted this month.a. Record the necessary journal entries for June on page 2 of the companyâs general journal. (See Exhibit 2.6)b. Open running balance ledger âTâ accounts by entering account titles, account numÂ¬bers, and May 31 balances. (See exhibit 2.3 and 2.4)c. Post the journal entries to the âTâ accounts.d. Prepare a trial balance as of June 30. (See exhibit 2.9)7. Journal entry preparation. On January 1 of the current year, Peter Houston invested $80,000 cash into his company MuniServ. The cash was obtained from an owner investment by Peter Houston of $50,000 and a $30,000 bank loan. Shortly thereafter, the company acÂ¬quired selected assets of a bankrupt competitor. The acquisition included land ($10,000), a building ($40,000), and vehicles ($10,000). MuniServ paid $45,000 at the time of the transaction and agreed to remit the remaining balance due of $15,000 (an account payable) by February 15.During January, the company had additional cash outlays for the followÂ¬ing items:Purchases of store equipment $4,600Note payment 500Salaries expense 2,300Advertising expense 700The January utility bill of $200 was received on January 31 and will be paid next month. MuniServ rendered services to clients on account amounting to $9,400. All customers have been billed; by month end, $3,700 had been received in settlement of account balances.Instructionsa. Present journal entries that reflect MuniServ’s January transactions, including the $80,000 raised from the owner investment and loan. (See exhibit 2.6)b. Compute the total debits, total credits, and ending balance that would be found in the company’s Cash account. (Post to âTâ Accounts, see exhibit 2.3 and 2.4)c. Determine the amount that would be shown on the January 31 trial balance for AccountsPayable. Is the balance a debit or a credit?
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