Exercises 3-1,3-8
Exercise 3-1
Beverly Crusher is a licensed CPA. During the first month of operations of her business (a sole proprietorship), the following events and transactions occurred.
April 2 Invested $32,000 cash and equipment valued at $14,000 in the business.
2 Hired a secretary-receptionist at a salary of $290 per week payable monthly.
3 Purchased supplies on account $700. (Debit an asset account.)
7 Paid office rent of $600 for the month.
11 Completed a tax assignment and billed client $1,100 for services rendered. (Use Service Revenue account.)
12 Received $3,200 advance on a management consulting engagement.
17 Received cash of $2,300 for services completed for Ferengi Co.
21 Paid insurance expense $110.
30 Paid secretary-receptionist $1,160 for the month.
30 A count of supplies indicated that $120 of supplies had been used.
30 Purchased a new computer for $6,100 with personal funds. (The computer will be used exclusively for business purposes.)
Journalize the transactions in the general journal. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)
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Date
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Account Titles and Explanation
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Debit
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Credit
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Apr. 2
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Apr. 2
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Apr. 3
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Apr. 7
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Apr. 11
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Apr. 12
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Apr. 17
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Apr. 21
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Apr. 30
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Apr. 30
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Apr. 30
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Exercise 3-8
Andy Roddick is the new owner of Ace Computer Services. At the end of August 2014, his first month of ownership, Roddick is trying to prepare monthly financial statements. Below is some information related to unrecorded expenses that the business incurred during August.
(a) At August 31, Roddick owed his employees $1,900 in salaries and wages that will be paid on September 1.
(a) At August 31, Roddick owed his employees $1,900 in salaries and wages that will be paid on September 1.
(b) At the end of the month, he had not yet received the month’s utility bill. Based on past experience, he estimated the bill would be approximately $600.
(c) On August 1, Roddick borrowed $30,000 from a local bank on a 15-year mortgage. The annual interest rate is 8%.
(d) A telephone bill in the amount of $117 covering August charges is unpaid at August 31.
Prepare the adjusting journal entries as of August 31, 2014, suggested by the information above. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)
TUTORIAL PREVIEW
Apr. 2 Cash................................................................................. 32,000
Equipment ..................................................................... 14,000
Beverly Crusher, Capital.................................. 46,000
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