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Homework Chapter 01 02 03 04 05 06 07 08 09 10 11 12 13 Test 01 02 03 04 05 06 07 08 09 10 11 12 13 Final Exam 01 02 Project Office Accounting: Homework Chapter 1 General Questions & Answers Analyzing the effects of transactions on the accounting equation. LO 2-1, 2-2, 2-3 On July 1, Tommy Wrigley established Wrigley Home Appraisal Services, a firm that provides expert residential appraisals and represents clients in home appraisal hearings. TRANSACTIONS The owner invested $94,000 in cash to begin the business. Paid $19,150 in cash for the purchase of equipment. Purchased additional equipment for $13,200 on credit. Paid $11,200 in cash to creditors. The owner made an additional investment of $27,000 in cash. Performed services for $7,600 in cash. Performed services for $5,100 on account. Paid $3,400 for rent expense. Received $2,900 in cash from credit clients. Paid $5,860 in cash for office supplies. The owner withdrew $8,400 in cash for personal expenses. Record in equation form the changes that occur in assets, liabilities, and owner’s equity for the above transactions. Analyze: What is the ending balance of cash after all transactions have been recorded? 
What is the ending balance of cash after all transactions have been recorded? 
Analyzing the effects of transactions on the accounting equation. LO 2-1, 2-2, 2-3 Harold Joseph is a painting contractor who specializes in painting commercial buildings. At the beginning of June, his firm’s financial records showed the following assets, liabilities, and owner’s equity.
TRANSACTIONS Performed services for $6,750 on credit. Paid $1,770 in cash for new office chairs. Received $11,900 in cash from credit clients. Paid $950 in cash for telephone service. Sent a check for $5,900 in partial payment of the amount due creditors. Paid salaries of $8,000 in cash. Sent a check for $1,190 to pay electric bill. Performed services for $11,200 in cash. Paid $2,420 in cash for auto repairs. Performed services for $13,200 on account. Enter the above transactions in to the following accounting equations. Analyze: What is the amount of total assets after all transactions have been recorded? Enter the above transactions in to the following accounting equations. (Enter decreases to account balances with a minus sign.) 
What is the amount of total assets after all transactions have been recorded? 
Preparing a balance sheet. LO 2-5 Taylor Equipment Repair Service is owned by Jason Taylor.
Use the above figures to prepare a balance sheet dated February 28, 2019. Analyze: What is the net worth, or owner’s equity, at February 28, 2019, for Taylor Equipment Repair Service? 
What is the net worth, or owner’s equity, at February 28, 2019, for Taylor Equipment Repair Service? 
Preparing an income statement, a statement of owner's equity, and a balance sheet. LO 2-4, 2-5 The following equation shows the transactions of Cotton Cleaning Service during May. The business is owned by Taylor Cotton.
Required: Analyze each transaction carefully. Prepare an income statement and a statement of owner’s equity for the month. Prepare a balance sheet for May 31, 2019. Income Statement Prepare an income statement for the month of May 31, 2019. (List the expenses in detail on the income statement.) 
Prepare a statement of owner’s equity for the month of May 31, 2019. 
Prepare a balance sheet for May 31, 2019 
Which amount was transferred from the statement of owner’s equity? 
Indicate whether each of the following types of transactions will either (a) increase owner's equity or (b) decrease owner's equity. 1. Expenses Decrease 2. Owners Investments Increase 3. Owners Withdrawals Decrease 4. Revenues Increase Indicate whether each of the following is identified with (1) an asset, (2) a liability, or (3) owner's equity: a. Accounts Receivable Asset b. Accounts Payable Liability c. Cash Asset d. Fees Earned Owners Equity e. Land Asset f. Rent Expense Owners Equity g. Supplies Asset Describe how the following business transactions affect the three elements of the accounting equation. a. Invested Cash in Business. Increases assets and increases owners' equity b. Paid for utilities used in the business Decreases assets and decreases owners’ equity c. Purchased supplies for cash. Increases assets and decreases assets d. Purchased supplies on account. Increases assets and increases liability e. Received cash for services performed. Increases assets and increases owners' equity From the following list of selected items taken from the records of Rosewood Appliance Service as of a specific date, identify those that would appear on the balance sheet: 1. Accounts Payable Would Appear 2. Accounts Receivable Would Appear 3. Andrew King, Capital Would Appear 4. Cash Would Appear 5. Fees Earned Would NOT Appear 6. Land Would Appear 7. Rent Expense Would NOT Appear 8. Supplies Would Appear 9. Wages Expense Would NOT Appear 10. Wages Payable Would Appear From the following list of selected items taken from the records of Rosewood Appliance Service as of a specific date, identify those items that would appear on the income statement. 1. Accounts Payable Would NOT Appear 2. Accounts Receivable Would NOT Appear 3. Andrew King, Capital Would NOT Appear 4. Cash Would NOT Appear 5. Fees Earned Would Appear 6. Land Would NOT Appear 7. Rent Expense Would Appear 8. Supplies Would NOT Appear 9. Wages Expense Would Appear 10. Wages Payable Would NOT Appear Indicate the effect of each transaction on the accounting equation by choosing the appropriate letter from the following list: Increase in an asset, decrease in another asset. Increase in an asset, increase in a liability. Increase in an asset, increase in owner's equity. Decrease in an asset, decrease in a liability. Decrease in an asset, decrease in owner's equity. 1. Received cash from the owner as an additional investment, $25,000. Increase in an asset, increase in owner's equity. 2. Purchased supplies for cash, $750. Increase in an asset, decrease in another asset. 3. Paid rent for February, $3,000. Decrease in an asset, decrease in owner's equity. 4. Paid advertising expense, $1,500. Decrease in an asset, decrease in owner's equity. 5. Received cash for providing delivery services, $16,800. Increase in asset, increase in owner's equity. 6. Billed customers for delivery services on account, $32,500. Increase in an asset, increase in owner's equity. 7. Paid creditors on account, $1,400. Decrease in an asset, decrease in a liability. 8. Received cash from customers on account, $23,770. Increase in an asset, decrease in another asset. 9. Determined that the cost of supplies on hand was $275 and $475 Decrease in an asset, decrease in owner's equity. of supplies had been used during the month. 10. Paid cash to owner for personal use, $5,000. Decrease in an asset, decrease in owner's equity Consider the overall effects on Global Cleaning Service from selling and preforming services on account for $6,400 and paying expenses totaling $2,500. What is Global Cleaning Services net income or net loss? $3,900 6,400 - 2,500 = 3,900 At the end of a recent year, Global Cleaning Services, a full service house and office cleaning service, had total assets of $3,630 and equity of $2,280. How much were Global Cleaning Services Liabilities? $1,350 3,630 - 2,280 = 1,350 Assume that Global Cleaning Service preformed cleaning services for a department store on account for $180. How would this transaction affect Global Cleaning Services accounting equation? Increase both assets and equity by $180 Assume Global Cleaning Service had a net income of $570 for the year, Global Cleaning Service's beginning and ending total assets were $4,520 and $4,180, respectively. Calculate Global Cleaning Service's return on assets (ROA). 13.1% 570 / (4,520 + 4180 / 2) x 100 = 570 / 4350 x 100 = 0.13103 x 100 = 13.1% Your business purchased office supplies of $2,500 on account. The journal entry to record this transaction is as follows: Office Supplies 2,500 Accounts Payable 2,500 Sedlor Properties purchased office supplies on account for $800. Which journal entry records the payment of those office supplies? Accounts Payable 800 Cash 800 Nathville Laundry reported assets of $800 and equity of $480. What is Nathville's debt ration? 40% 320 / 800 = 0.4 or 40% Gee Fit Now gains a client who prepays $540 for a package of six physical training sessions. Get Fit Now collects the $540 in advance and will provide the training later. After four training sessions, what should Get Fit Now report on its income statement assuming it uses the accrual basis accounting method? Service revenue of $360 Assume that the weekly payroll of In the Woods Camping Supplies is $300. December 31, end of the year, falls on a Tuesday, and In the Woods will pay its employees on Friday for the week. What adjusting entry will In the Woods make on Tuesday, December 31? Salaries Expense 120 Salaries Payable 120 On February 1, Clovis Wilson Law Firm contracted to provide $3,000 of legal services for the next three months and received $3,000 cash from the client. Assuming Wilson records unearned revenues using the alternative treatment, what would be the adjusting entry recorded on February 28? Service Revenue 2,000 Unearned Revenue 2,000 Clean Water Softener Systems has Cash of $600 Accounts Receivable of $900 Office Supplies of $400 Clean owes $500 on Accounts Payable and Salaries Payable of $200. Cleans current ratio is: 2.71 600 + 900 + 400 = 1,900 500 + 200 = 700 1,900 / 700 = 2.71 Financial information related to Pegasus Products Company, a proprietorship, for the month ended April 30,2017, is as follows: Net income for April $161,000 Brian Walinsky's withdrawals during April 24,000 Brian Walinsky's capital, April 1, 2017. 373,000 A. Prepare a statement of owner's equity for the month ended April 30, 20Y7. B. Why is the statement of owner's equity prepared before the April 30, 20Y7, balance sheet? A. Pegasus Products Company Statement of Owners Liquity For the Month Ended April 30, 2017 Brian Walinsky, Capital, April 1, 2017 $373,000 Net Income for April $161,000 Withdrawals $24,000 Increase in Owners Equity $137,000 Brian Walinsky, Captial April 20, 2017. $510,000 B. The statement of owner's equity is prepared before the April 30, 2017, balance sheet because the Brian Walinsky, Capital account balance is needed for the balance sheet. Hermes Services was organized on August 1, 20Y2. A summary of the revenue and expense transactions for August follows: Fees earned $ 627,600 Wages expense $ 440,800 Rent expense $ 28,100 Supplies expense $ 6,800 Miscellaneous expense $ 9,300 Prepare an income statement for the month ended August 31. Hermes Services Income Statement For the Month Ended August 31, 2012 Fees Earned $ 627,600 Expenses: Wages Expense $ 440,800 Rent Expense $ 28,100 Supplies Expense $ 6,800 Miscellaneous expense $ 9,300 Total Expenses $ 485,00 Net Income $ 142,600 Indicate whether each of the following activities would be reported on the statement of cash flows as (a) an operating activity, (b) an investing activity, or (c) a financing activity: 1. Cash received from fees earned. operating activity 2. Cash paid for expenses. operating activity 3. Cash paid for land. investing activity 4. Cash paid to owner for personal use. financing activity The organization that has the final say on financial accounting issues faced by publicly owned corporations is the: a. Federal Trade Commission. b. Securities and Exchange Commission. c. Internal Revenue Service. d. U.S. Treasury. b. Securities and Exchange Commission. All of the following are users of accounting information except: a. owners and managers. b. banks and suppliers. c. search engines on a website. d. tax authorities and regulatory agencies. c. search engines on a website. Fraud is intentional or reckless acts that result in the confiscation of a firm's assets or the misrepresentation of the firm's accounting data. True False Generally accepted accounting principles are accounting standards that are changed and refined in response to changes in the environment in which businesses operate. True False Generally accepted accounting principles are not needed to ensure that financial information is fairly presented in the operating results and financial positions of firms. True False An organization that has two or more owners who are legally responsible for the debts and taxes of the business is a: a. social entity. b. partnership. c. sole proprietorship. d. corporation. Which of the following is not a requirement to become a certified bookkeeper? a. Pass the national certified bookkeeper exam b. Sign a code of ethics c. Complete a number of required college courses d. Submit evidence of work experience The review of financial statements to assess their fairness and adherence to GAAP is: a. auditing. b. accounting. c. accounting system. d. management advisory services. Which of the following is not a common internal control and fraud prevention policy? a. requiring written proof that transactions are authorized b. separating duties among employees c. requiring written proof that payments are authorized d. preventing multiple payments to a single creditor from being made in a single day Which of the following is not a service typically provided by a public accounting firm? a. Auditing b. Tax accounting c. Management advisory services d. Investing services Accounting is called: a. the language of economics. b. the language of finance. c. the language of business. d. the language of commerce. Financial statements are: a. accumulated financial data summarized in periodic reports. b. accumulated transactions of the firm's sales activities. c. a summary of records and procedures that make up the accounting system. d. a summarized description of a firm's accounting system. The entity that has final authority over the financial reporting of publicly owned corporations is the a. Securities and Exchange Commission (SEC). b. Financial Accounting Standards Board (FASB). c. Federal Trade Commission (FTC). d. Internal Revenue Service (IRS). Which of the following is not a provision of the Sarbanes-Oxley Act? a. The Sarbanes-Oxley Act allows accountants to offer a broad range of consulting services to publicly traded companies that they audit. b. The Sarbanes-Oxley Act requires accounting firms to change the lead audit or coordinating partner and the reviewing partner for a company every five years. c. It is a felony to "knowingly" destroy or create documents to "impede, obstruct or influence" any existing or contemplated federal investigation. d. Wall Street investment firms are prohibited from retaliating against analysts who criticize investment-banking clients of the firm. Which of the following is a user of financial information who is considered to be inside the business? a. owners b. suppliers c. customers d. unions The following are all characteristics of a sole proprietorship except: a. The owner of a sole proprietorship is legally responsible for the debts of the business. b. A sole proprietorship is legally separate from its owner. c. The owner's income and the income of the business are combined to compute the total tax responsibility of the owner. d. The life of the business ends when the owner is no longer willing or able to keep the business going. Which of the following is not considered to be a social entity? a. public school b. city c. for-profit business d. public hospital Which of the following is not a characteristic of an S Corporation? a. the corporation's owners are personally responsible for the debts of the business b. the corporation pays no income tax c. the corporation is a separate entity from its owners d. the corporation has an indefinite life What is the purpose of a discussion memorandum written by the FASB? a. to describe a proposed statement of financial accounting standards b. to summarize the opinions of interested parties expressed at public hearings c. to explain the topic being considered in anticipation of an upcoming statement of financial accounting standards d. to evaluate public comments about the proposed statement Which of the following is not accurate regarding the auditor's report? a. It contains the auditor's opinion about the fair presentation of the operating results and financial position of the business. b. It confirms that the financial information is prepared in conformity with generally accepted accounting principles. c. It is made available to the public. d. It is excluded from the financial statements. Homework Chapter 01 02 03 04 05 06 07 08 09 10 11 12 13 Test 01 02 03 04 05 06 07 08 09 10 11 12 13 Final Exam 01 02 Project
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