Module 3 Accounting

Start by reading and following these instructions:

1. Quickly skim the questions or assignment below and the assignment rubric to help you focus.

2. Read the required chapter(s) of the textbook.  Some answers may require you to do additional research on the Internet or in other reference sources.  Choose your sources carefully.

3. Consider the discussion and the any insights you gained from it.

4. Produce the Assignment submission in a single Microsoft Word or Open Office document.  Be sure to cite your sources, use APA style as required, check your spelling.

Assignment:

1. From the following trial balance, identify which statement each title will appear on:

a. Income statement (IS)

b. Statement of owner’s equity (OE)

c. Balance sheet (BS)

Bradford Co.

Trial Balance

Nov. 30, 201X

                                                            Debits             Credits

 A.  Cash                                              600

 B. Computer                                       100

 C. Computer Equipment                 1,000

 D. Accounts Payable                                                 800

 E.  L. Bradford, Capital                                               200

 F. L. Bradford, Withdrawals                500

G.  Legal Fees Earned                                              1,500

 H. Consulting Fees Earned                                         300

 I.   Wage Expense                               200

 J. Supplies Expense                           250

 K. Internet Advertising Expense         150

 Totals                                               2,800               2,800

2. SANCHEZ COMPUTER CENTER

The Sanchez Computer Center created its chart of accounts as follows:

Chart of Accounts as of July 1, 201X

 Assets                                                      Revenue

 1000  Cash                                                4000 Service Revenue

 1020  Accounts Receivable                      Expenses

 1030  Supplies                                          5010 Advertising Expense

 1080  Computer Shop Equipment            5020 Rent Expense

 1090  Office Equipment                           5030 Utilities Expense

 Liabilities                                                 5040 Phone Expense

 2000  Accounts Payable                           5050 Supplies Expense

 Owner’s Equity                                        5060 Insurance Expense

 3000  Freedman, Capital                          5070 Postage Expense

 3010  Freedman, Withdrawals

You will use this chart of accounts to complete the continuing problem.

The following problem continues. The balances as of July 31 have been brought forward in the working papers that accompany this text.

Tasks

 a. Set up T accounts in a ledger.

 b. Record transactions k through s in the appropriate T accounts.

 c. Foot and take the balances of the T accounts where appropriate.

 d. Prepare a trial balance at the end of August.

 e. Prepare from the trial balance an income statement, statement of owner’s equity, and a balance sheet for the two months ending with August 31, 201X.

• • Received the phone bill for the month of July, $155.
  • Paid $150 (check #8099) for insurance for the month.
  • Paid $200 (check #8100) of the amount due from transaction d in Chapter 1.
  • Paid advertising expense for the month, $1,400 (check #8101).
  • Billed a client (Jeannine Sparks) for services rendered, $850.
  • Collected $900 for services rendered.
  • Paid the electric bill in full for the month of July (check #8102, transaction h, Chapter 1).
  • Paid cash (check #8103) for $50 in stamps.
  • Purchased $200 worth of supplies from Computer Connection on credit.

3. The chart of accounts of Annis’ Delivery Service is as follows: Cash, 111; Accounts Receivable, 112; Office Equipment, 121; Delivery Trucks, 122; Accounts Payable, 211; Avery Annis, Capital, 311; Avery Annis, Withdrawals, 312; Delivery Fees Earned, 411; Advertising Expense, 511; Gas Expense, 512; Salaries Expense, 513; and Telephone Expense, 514. Annis’ Delivery Service completed the following transactions during the month of August:

Transaction A: Avery invested $17,000 in the delivery service from her personal savings account.

Transaction B: Bought delivery trucks on account, $11,000.

Transaction C: Bought office equipment for cash, $600.

Transaction D: Paid advertising expense, $350.

Transaction E: Collected cash for delivery services rendered, $3,500.

Transaction F: Paid drivers’ salaries, $900.

Transaction G: Paid gas expense for trucks, $1,700.

Transaction H: Performed delivery services for a customer on account, $1,600.

Transaction I: Telephone expense due but unpaid, $600.

Transaction J: Received $400 as partial payment of transaction H.

Transaction K: Avery withdrew cash for personal use, $250.

As Avery’s newly hired accountant, you must perform the following:

a. The T accounts in the ledger have been set up for you. Record transactions in the T accounts. (Place the letter of the transaction next to the entry.)

b. Foot the T accounts where appropriate.

c. Prepare a trial balance at the end of August.

d. Prepare from the trial balance, in proper form, (a) an income statement for the month of August, (b) a statement of owner’s equity, and (c) a balance sheet as of August 31, 201X.

4. From the trial balance of Gail Lucas, Attorney-at-Law (below) prepare

a. An income statement for the month of May

b. A statement of owner’s equity for the month ended May 31, and

c. A balance sheet at May 31, 201X.

Gail Lucas, Attorney-At-Law

Trial Balance

May 31, 201X

                                                        Debits                   Credits

 A.  Cash                                      6,000.00

 B. Accounts Receivable               750.00

 C. Office Equipment                  1,250.00

 D. Accounts Payable                                                  6,200.00

 E.  Sales Payable                                                           770.00

 F. G. Lucas, Capital                                                    1,180.00

 G. G. Lucas, Withdrawals                800.00

 H. Revenue from Legal Fees                                       1,800.00

 I.   Utilities Expense                       150.00

 J. Rent Expense                           500.00

 K. Salaries Expense                      500.00

 Totals                                          9,950.00                   9,950.00

 

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