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Exercise 3.1 Setting up T accounts. LO 3-1
Anderson Cleaning Service has the following account balances on December 31, 2019.
 

Cash	$	18,800			Accounts Payable	$	24,000
Equipment	$	45,800			Charles Anderson, Capital	$	40,600

Enter the above balances on the proper side of the T account.
 

   
Exercise 3.2 Using T accounts to analyze transactions. LO 3-2

Derrick Wells decided to start a dental practice.
The first five transactions for the business follow.
  
Derrick invested $85,000 cash in the business.
Paid $25,000 in cash for equipment.
Performed services for cash amounting to $8,500.
Paid $3,300 in cash for advertising expense.
Paid $2,500 in cash for supplies.

(1) Select which two accounts are affected in each of the above transactions.
(2&3) Post the above transactions into the appropriate T accounts.
Complete this question by entering your answers in the tabs below.
Req 1
Select which two accounts are affected in each of the above transactions.

 
 
Req 2 and 3
Post the above transactions into the appropriate T accounts.
 

 
   
Exercise 3.5 Determining account balances. LO 3-3
The following T accounts show transactions that were recorded by Residential Relocators, a firm that
specializes in local housing rentals.
The entries for the first transaction are labeled with the letter (a), the entries for the second
transaction with the letter (b), and so on. 

 
Determine the balance of each account.
 

 
Exercise 3.6 Preparing a trial balance and an income statement. LO 3-5, 3-6
The following T accounts show transactions that were recorded by Residential Relocators,
a firm that specializes in local housing rentals.   
 

Required:
Prepare a trial balance and an income statement for Residential Relocators.
The trial balance is for December 31, 2019, and the income statement is for the month ended December 31, 2019.
Complete this question by entering your answers in the tabs below.
Trial Balance
Prepare a trial balance for Residential Relocators for the month of December 31, 2019.
 

 
Income Statement
Prepare an income statement for Residential Relocators for the month ended December 31, 2019.
 

   
Exercise 3.7 Preparing a statement of owner's equity and a balance sheet. LO 3-6
The following T accounts show transactions that were recorded by Residential Relocators,
a firm that specializes in local housing rentals. 
 

 
Required: 
Prepare a statement of owner’s equity and a balance sheet for Residential Relocators as of December 31, 2019. 
Complete this question by entering your answers in the tabs below.
Statement of Owners Equity
 

 
Prepare a statement of owner’s equity for Residential Relocators as of December 31, 2019.
Balance Sheet
Prepare a balance sheet for Residential Relocators as of December 31, 2019.
 

   
Exercise 3.3 Determining debit and credit balances. LO 3-3
Indicate whether each of the following accounts normally has a debit balance or a credit balance.
 

   
Exercise 3.4 Identifying debits and credits. LO 3-3
In each of the following sentences, select the appropriate answer option as debit or credit.


   
Exercise 3.8 Preparing a chart of accounts. LO 3-7
The accounts that will be used by Dad & Sons Moving Company follow.
 

Salaries Expense	Office Supplies
Prepaid Rent	Accounts Payable
Fees Income	Cash
Accounts Receivable	Utilities Expense
Telephone Expense	Office Equipment
Nelson Sullivan, Capital	Nelson Sullivan, Drawing

 

   
Select whether each of the following accounts normally has a debit balance or a credit balance
 
Cash                                           Debit
Blaine Brownell, Capital           Credit
Fees income                              Credit
Accounts payable                      Credit
Supplies                                      Debit
Equipment                                   Debit
Accounts receivable                   Debit
Salaries expense                        Debit

 
The Richey Company purchased new equipment for $40,400 from Office Supplies, Inc., to be paid in 30 days. Journal entry?
 
Dr Equipment 40,400
Cr Accounts Payable 40,400
 

Equipment is increased, accounts payable is increased
Cash                                      30,800
Accounts Payable             20,000
Jack Carter, Capital          60,000
Equipment                          ??????
Supplies                               9,200
 
Equipment 40,000
 
30,800 + 9,200 + x = 20,000 + 60,000
40,000 + x = 80,000
x = 40,000
   
The company owner took $5,000 cash for personal use. What is the entry for this transaction?
 
Debit Caleb Parker, Drawing 5,000
Credit Cash 5,000
   
T Account
 
A type of account, resembling a T, used to analyze the effects of a business transaction
   
Temporary Account
 
An account whose balance is transferred to another account at the end of an accounting period
   
Transposition
 
An accounting error involving misplaced digits in a number
   
Trial Balance
 
A statement to test the accuracy of total debits and credits after transactions have been recorded
   
Account Balance is:
 
The difference between the amounts recorded on the two sides of an account
   
Accounts:
 
Written records of the assets, liabilities, and owner's equity of a business
   
Chart of Accounts
 
A list of the accounts used by a business to record its financial transactions
   
Classisfications
 
A means of identifying each account as an asset, liability, or owner's equity
   
Credit
 
An entry on the right side of an account
   
Debit
 
An entry on the left side of an account
   
Double-Entry System
 
An accounting system that involves recording the effects of each transaction as debits and credits
   
Drawing Account
 
A special type of owner's equity account set up to record the owner's withdrawal of cash from the business
   
Footing
 
A small pencil figure written at the base of an amount column showing the sum of the entries in the column
   
Normal Balance
 
The increase side of an account
   
Permanent Account
 
An account that is kept open from one accounting period to the next
   
Slide
 
An accounting error involving a misplaced decimal point