Chapter 1 2 problems

Problem 1
Account classifications include assets, liabilities, stockholders equity, dividends, revenues, and
expenses.
Account
Classificatio
ns

Accounts

Related Transactions

1.

Accounts
Receivable

Provide services on
account.

2.

Land

Purchase land for

operations.

3.

Prepaid Rent

Purchase rent in advance.

4.

Salaries Expense Pay for cost of salaries.

5.

Utilities Expense Pay for cost of utilities.

6.

Service Revenue Provide services to

customers.

7.

Accounts
Payable

Purchase materials on
account.

8.

Notes Payable

Borrow from the bank.

9.

Dividends

Distribute cash to
stockholders.

1
0.

Common Stock

Issue stock to
stockholders.

Required:
Indicate the account classification for each account name.
Problem 2
Tiffanys provides financial services related to investment selections, retirement planning, and
general insurance needs. For the current year, the company reports the following amounts:
Advertising Expense
Buildings
Salaries Expense
Accounts Payable
Cash

$ 31,200
108,000
67,800
6,300
6,400

Service Revenue
Interest Expense
Utilities Expense
Equipment
Notes Payable

$129,300
3,500
14,500
25,700
30,000

In addition, the company had common stock of $60,000 at the beginning of the year and issued
an additional $15,000 during the year. The company also had retained earnings of $20,000 at the
beginning of the year and paid dividends of $3,500.

Required:
Prepare the income statement, statement of stockholders equity, and balance sheet for Tiffanys.

Chapter 2 1 problem
Problem 1
Wolverine Incorporated had the following trial balance at the beginning of
April.
Account Title

Debits

Cash
Accounts receivable
Supplies
Equipment
Accounts payable

$ 2,800
900
3,600
9,100

Notes payable
Common stock
Retained earnings

Credit
s

$
2,200
3,600
9,000
1,600

The following transactions occur in April:

April 1
Issue common stock in exchange for $15,000 cash.
April 2
Purchase equipment with a long-term note for $4,500 from Hoosier
Corporation.
April 4
Purchase supplies for $1,500 on account.
April 10
Provide services to customers on account for $9,000.
April 15
Pay creditors on account, $1,200.
April 20
Pay employees $2,300 for the first half of the month.
April 22
Provide services to customers for $11,500 cash.
April 24
Pay $1,300 on the note from Hoosier Corporation.
April 26
Collect $7,100 on account from customers.
April 28
Pay $1,700 to the local utility company for April gas and electricity.
April 30
Pay $3,200 rent for the April.
Required:
1. Record each transaction (journal entry).
2. Post each transaction to the appropriate T-accounts (ledger).
3. Calculate the balance of each account at April 30. (Hint: Be sure to include
the balance at the beginning of April in each T-account.)
4. Prepare a trial balance as of April 30.

Chapter 3 1 problem
Problem 1
Davids Services provides general home maintenance to customers. The companys fiscal yearend is December 31. The December 31, 2012, trial balance (before any adjusting entries) appears
below.
Accounts
Cash
Accounts Receivable
Supplies
Prepaid Insurance
Equipment
Accumulated Depreciation
Accounts Payable
Salaries Payable
Utilities Payable
Interest Payable
Notes Payable
Common Stock
Retained Earnings
Dividends
Maintenance Revenue
Salaries Expense
Depreciation Expense
Insurance Expense
Supplies Expense
Utilities Expense
Interest Expense
Totals

Debits
$ 18,100
16,200
20,400
15,000
95,000

Credits

$ 27,200
10,500
-0-0-040,000
24,000
10,500
2,500
224,900
158,500
-0-0-011,400
-0$337,100

$337,100

Information necessary to prepare the year-end adjusting entries appears below.

a. Depreciation on the equipment for the year is $13,600.
b. Employee salaries are paid every two weeks. The last pay period ended on December 23.
Salaries earned from December 24 through December 31, 2012, are $4,200.
c. On August 1, 2012, Davids borrows $40,000 from a local bank and signs a note. The note
requires interest to be paid annually on August 1 at 12%. The principal is due in four years.
d. On April 1, 2012, the company purchases insurance for $15,000 for a one-year policy to cover
possible injury to workers. The entire $15,000 is debited to Prepaid Insurance at the time of the
purchase.
e. $3,000 of supplies remains on hand at December 31, 2012.
f. On December 30, Davids receives a utility bill of $1,900 for the month. The bill will not be
paid until early January, 2013, and no entry is recorded when the bill is received.

Required:
Required:
Complete the following steps:
1. Enter the unadjusted balances from the trial balance into T-accounts.
2. Prepare the necessary adjusting entries on December 31, 2012.
3. Post the adjusting entries to the accounts.
4. Prepare an adjusted trial balance.
5. Prepare an income statement and a statement of shareholders equity for
the year ended December 31, 2012, and a classified balance sheet as of
December 31, 2012. Assume that no common stock is issued during the
year.
6. Record closing entries.
7. Post the closing entries to the accounts.
8. Prepare a post-closing trial balance.