3 Beginning the Accounting Cycle

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1 Solutions Manual College Accounting A Practical Approach 13th Edition Slater Instantly completed downloadable package SOLUTIONS MANUAL for College Accounting: A Practical Approach 13th Edition by Jeffrey Slater Solutions Manual, Answer key, Instructor Manual, Working Pagers, Instructor's Resource manual for all chapters are included 13th-edition-solutions-manual-slater/ 3 Beginning the Accounting Cycle ANSWERS TO DISCUSSION QUESTIONS AND CRITICAL THINKING/ETHICAL CASE 1. Disagree; the accounting cycle represents a certain period of time a business has to perform the normal accounting procedures (usually one year). 2. Disagree; it is based on the income statement. 3. The calendar year runs from January 1 to December 31. The fiscal year is any 12 consecutive months. (A fiscal year could be a calendar year.) 4. Interim statements are financial statements prepared for parts of the fiscal period. 5. Disagree; transactions are first journalized in a book of original entry and then posted to the ledger, the book of final entry in all accounting systems, including computerized systems 6. The debit(s) and credit(s) parts of recording a transaction are located on the same page of the journal. In the ledger, they would be on separate pages. 7. The chart of accounts provides all the titles of the accounts that will be used in the debit and credit parts of recording each transaction in a journal. 8. A compound journal entry is a journal entry that requires three or more accounts. 9. Disagree; it means updating the ledger. 10. False. The side that increases the account is the normal balance. 11. Agree. 12. Cross-referencing updates the PR column in the journal after the ledger account has been updated. 13. Transposition is a rearrangement of digits: 5,132 5,312 Slide means adding or deleting: zeros: 4, The question in this case is whether Pete should be allowed to copy another company's software. I believe that there is something wrong with Pete asking his friend if he can copy his software. Software is protected under copyright laws. Maybe Pete should check with the manufacturer of the software for delayed billing. 3-1

2 SOLUTIONS TO CONCEPT CHECKS 1. a. f. Initial Investment by Owner b. Mar. g. $19,400 c. 2 h. $19,400 d. Cash and i. Page 1 Equipment e. B. Munro, Capital 2. A. Owner investment of cash and equipment B. Performed services for cash and on account C. Salary expense incurred but not paid 3. Cash 111 PR Dr. Cr. Dr. Cr. Mar. 6 GJ GJ GJ GJ PR column of cash tells us from which page of journal information came from. The Acct. #111 will be used to cross reference back to the PR column of the Journal to tell it was posted to Acct. #111 in the General Ledger. 3-2

3 4. KENNEDY COMPANY TRIAL BALANCE JULY 31, 5. Dr. Cash 13 Equipment 112 Accounts Payable 43 D. Kennedy, Capital 88 D. Kennedy, Withdrawals 5 Taxi Fees 18 Rent Expense 12 Advertising Expense 7 Totals Account Titles Dr. Cr. June 10 Telephone Expense 250 Repair Expense 250 Cr. A correcting entry may not be needed if the mistake is detected prior to posting. 3-3

4 SOLUTIONS TO SET A EXERCISES 3A-1. Account Titles and Description PR Dr. Cr. Apr 1 Cash Equipment J. Moore, Capital Owner investment 3 Building Accounts Payable Purchase of building on account 12 Truck Cash Purchase truck for cash 18 Supplies Accounts Payable Purchase of supplies on account 3-4

5 EXERCISES (CONTINUED) 3A-2. Account Titles and Description PR Dr. Cr. May 1 Cash R. Tarsia, Capital Owner investment 5 Equipment Cash Purchase of equipment for cash 8 Equipment Accounts Payable Purchase of equipment on account 14 Cash Service Revenue Collected cash revenue 18 Accounts Receivable Service Revenue Earned revenue on account 20 R. Tarsia, Withdrawals Cash Owner withdrawal 3-5

6 EXERCISES (CONTINUED) 3A-3. Account Titles and Description PR Dr. Cr. Feb. 6 Cash A. Kramer, Capital Cash investment 14 Equipment Cash Accounts Payable Purchase of equipment CASH ACCOUNT NO. 111 Feb. 6 GJ GJ EQUIPMENT ACCOUNT NO. 121 Feb. 14 GJ ACCOUNTS PAYABLE ACCOUNT NO. 211 Feb. 14 GJ A. KRAMER, CAPITAL ACCOUNT NO. 311 Feb. 6 GJ

7 EXERCISES (CONTINUED) 3A-4 (a) PAGE 1 Account Titles and Description PR Dr. Cr. May 1 Cash J. Lucas, Capital Owner investment 4 Equipment Account Payable Purchase of equipment on account 15 Accounts Receivable Fees Earned Services performed on account 18 Cash Fees Earned Services performed for cash 24 Salaries Expense Cash Salaries paid 28 J. Lucas, Withdrawals Cash Owner withdrawal (b) CASH ACCOUNT NO. 111 May 1 GJ GJ GJ GJ

8 EXERCISES (CONTINUED) ACCOUNTS RECEIVABLE ACCOUNT NO. 112 May 15 GJ EQUIPMENT ACCOUNT NO. 121 May 4 GJ ACCOUNTS PAYABLE ACCOUNT NO. 211 May 4 GJ J. LUCAS, CAPITAL ACCOUNT NO. 311 May 1 GJ J. LUCAS, WITHDRAWALS ACCOUNT NO. 312 May 28 GJ FEES EARNED ACCOUNT NO. 411 May 15 GJ GJ

9 EXERCISES (CONTINUED) SALARIES EXPENSE ACCOUNT NO. 511 May 24 GJ (c) LUCAS COMPANY TRIAL BALANCE MAY 31, Cash Accounts Receivable Equipment Accounts Payable J. Lucas, Capital J. Lucas, Withdrawals Fees Earned Salaries Expense Totals Dr. Cr. 3A-5 SALT LAKE CO. TRIAL BALANCE OCTOBER 31, Dr. Cr. Cash Accounts Receivable Accounts Payable A. Salt Lake, Capital A. Salt Lake, Withdrawals Services Earned Concessions Earned Rent Expense Salaries Expense Miscellaneous Expense Totals

10 EXERCISES (CONTINUED) 3A-6. Since the journal entry has not yet been posted, Mark Sullivan should put a line through the current amount of the journal entry, the $800, and enter the correct amount of $1,200 along with his initials. 3-10

11 3B-1. SOLUTIONS TO SET B EXERCISES Account Titles and Description PR Dr. Cr. Apr. 1 Cash Equipment J. Dimon, Capital Owner investment 3 Building Accounts Payable Purchase of building on account 12 Truck Cash Purchase truck for cash 18 Supplies Accounts Payable Purchase of supplies on account 3-11

12 EXERCISES (CONTINUED) 3B-2. Account Titles and Description PR Dr. Cr. Apr. 1 Cash R. Savareses, Capital Owner investment 5 Equipment Cash Purchase of equipment for cash 8 Equipment Accounts Payable Purchase of equipment on account 14 Cash Service Revenue Collected cash revenue 18 Accounts Receivable Service Revenue Earned revenue on account 20 R. Savareses, Withdrawals Cash Owner withdrawal 3-12

13 EXERCISES (CONTINUED) 3B-3. Account Titles and Description PR Dr. Cr. Nov. 6 Cash A. Kingston, Capital Cash investment 14 Equipment Cash Accounts Payable Purchase of equipment CASH ACCOUNT NO. 111 Nov. 6 GJ GJ EQUIPMENT ACCOUNT NO. 121 Nov. 14 GJ ACCOUNTS PAYABLE ACCOUNT NO. 211 Nov. 14 GJ A. KINGSTON, CAPITAL ACCOUNT NO. 311 Nov. 6 GJ

14 EXERCISES (CONTINUED) 3B-4. (a) PAGE 1 Account Titles and Description PR Dr. Cr. Dec. 1 Cash J. Lowe, Capital Owner investment 4 Equipment Account Payable Purchase of equipment on account 15 Accounts Receivable Fees Earned Services performed on account 18 Cash Fees Earned Services performed for cash 24 Salaries Expense Cash Salaries paid 28 J. Lowe, Withdrawals Cash Owner withdrawal (b) CASH ACCOUNT NO. 111 Dec. 1 GJ GJ GJ GJ

15 EXERCISES (CONTINUED) ACCOUNTS RECEIVABLE ACCOUNT NO. 112 Dec. 15 GJ EQUIPMENT ACCOUNT NO. 121 Dec. 4 GJ ACCOUNTS PAYABLE ACCOUNT NO. 211 Dec. 4 GJ J. LOWE, CAPITAL ACCOUNT NO. 311 Dec. 1 GJ J. LOWE, WITHDRAWALS ACCOUNT NO. 312 Dec. 28 GJ FEES EARNED ACCOUNT NO. 411 Dec. 15 GJ GJ

16 EXERCISES (CONTINUED) SALARIES EXPENSE ACCOUNT NO. 511 Dec. 24 GJ (c.) LOWE COMPANY TRIAL BALANCE DECEMBER 31, Cash Accounts Receivable Equipment Accounts Payable J. Lowe, Capital J. Lowe, Withdrawals Fees Earned Salaries Expense Totals Dr. Cr. 3B-5 SUNG CO. TRIAL BALANCE AUGUST 31, Dr. Cr. Cash Accounts Receivable Accounts Payable A. Sung, Capital A. Sung, Withdrawals Services Earned Concessions Earned Rent Expense Salaries Expense Miscellaneous Expense Totals

17 EXERCISES (CONCLUDED) 3B-6. Since the transaction has not yet been posted, Morris Sanford should put a line through the current amount of the journal entry, the $9.00, and change it to $1,000 along with his initials. 3-17

18 SOLUTIONS TO SET A PROBLEMS PROBLEM 3A-1 JASON S CLEANING SERVICE GENERAL JOURNAL PAGE 1 Account Titles and Description PR Dr. Cr. Oct. 1 Prepaid Rent Cash Rent paid in advance 6 Cleaning Equipment Accounts Payable Purchased equipment on account 12 Cleaning Supplies Cash Paid cash for supplies 14 Cash Cleaning Fees Earned Earned fee and received cash 20 Jason Lang, Withdrawals Cash Owner withdrawal 21 Advertising Expense Accounts Payable Received advertising bill 25 Electrical Expense Cash Paid electrical expense 28 Salaries Expense Cash Paid salaries 3-18

19 PROBLEM 3A-1 (CONCLUDED) JASON'S CLEANING SERVICE GENERAL JOURNAL PAGE 2 Account Titles and Description PR Dr. Cr. Oct. 29 Accounts Receivable Cleaning Fees Earned Earned fee on account 30 Accounts Payable Cash Paid on account 3-19

20 PROBLEM 3A-2 (a, b) BRENDA S ART STUDIO GENERAL JOURNAL PAGE 1 Account Titles and Description PR Dr. Cr. June 1 Cash B. Rennicke, Capital Owner investment 1 Prepaid Rent Cash Rent paid in advance 3 Equipment Accounts Payable Purchase of equipment on account 5 Cash Art Fees Earned Fee earned for cash 8 Art Supplies Cash Purchase of supplies for cash 9 Accounts Receivable Art Fees Earned Fee earned on account 10 Salaries Expense Cash Salaries paid 15 B. Rennicke, Withdrawals Cash Owner withdrawal 28 Electrical Expense Cash Paid electric bill 3-20

21 PROBLEM 3A-2 (CONTINUED) Accounts and June 29 Telephone Expense Cash Paid telephone bill GENERAL LEDGER OF BRENDA S ART STUDIO CASH ACCOUNT NO. 111 June 1 GJ GJ GJ GJ GJ GJ GJ GJ ACCOUNTS RECEIVABLE ACCOUNT NO. 112 June 9 GJ PREPAID RENT ACCOUNT NO. 114 June 1 GJ ART SUPPLIES ACCOUNT NO. 121 June 8 GJ

22 PROBLEM 3A-2 (CONTINUED) EQUIPMENT ACCOUNT NO. 131 June 3 GJ ACCOUNTS PAYABLE ACCOUNT NO. 211 June 3 GJ B. RENNICKE, CAPITAL ACCOUNT NO. 311 June 1 GJ B. RENNICKE, WITHDRAWALS ACCOUNT NO. 312 June 15 GJ ART FEES EARNED ACCOUNT NO. 411 June 5 GJ GJ

23 PROBLEM 3A-2 (CONCLUDED) ELECTRICAL EXPENSE ACCOUNT NO. 511 June 28 GJ SALARIES EXPENSE ACCOUNT NO. 521 June 10 GJ TELEPHONE EXPENSE ACCOUNT NO. 531 June 29 GJ (c) BRENDA'S ART STUDIO TRIAL BALANCE JUNE 30, Cash Accounts Receivable Prepaid Rent Art Supplies Equipment Accounts Payable B. Rennicke, Capital B. Rennicke, Withdrawals Art Fees Earned Electrical Expense Salaries Expense Telephone Expense Totals Dr. Cr. 3-23

24 PROBLEM 3A-3 (a, b) A. ONE'S PLACEMENT AGENCY GENERAL JOURNAL PAGE 1 Account Titles and Description PR Dr. Cr. Jun. 1 Cash A. One, Capital Owner investment 1 Equipment Accounts Payable Purchase of equipment on account 3 Accounts Receivable Placement Fees Earned Fee earned on account 5 A. One, Withdrawals Cash Owner withdrawal 7 Wage Expense Cash Wages paid 9 Cash Placement Fees Earned Fee earned for cash 15 Supplies Accounts Payable Purchase of supplies on account 28 Telephone Expense Cash Paid telephone bill 29 Advertising Expense Accounts Payable Received advertising bill 3-24

25 PROBLEM 3A-3 (CONTINUED) GENERAL LEDGER OF A. ONE'S PLACEMENT AGENCY CASH ACCOUNT NO. 111 June 1 GJ GJ GJ GJ GJ ACCOUNTS RECEIVABLE ACCOUNT NO. 112 June 3 GJ SUPPLIES ACCOUNT NO. 131 June 15 GJ EQUIPMENT ACCOUNT NO. 141 June 1 GJ

26 PROBLEM 3A-3 (CONTINUED) ACCOUNTS PAYABLE ACCOUNT NO. 211 June 1 GJ GJ GJ A. ONE, CAPITAL ACCOUNT NO. 311 June 1 GJ A. ONE, WITHDRAWALS ACCOUNT NO. 312 June 5 GJ PLACEMENT FEES EARNED ACCOUNT NO. 411 June 3 GJ GJ WAGE EXPENSE ACCOUNT NO. 511 June 7 GJ

27 PROBLEM 3A-3 (CONCLUDED) TELEPHONE EXPENSE ACCOUNT NO. 521 June 28 GJ ADVERTISING EXPENSE ACCOUNT NO. 531 June 29 GJ (c) A. ONE'S PLACEMENT AGENCY TRIAL BALANCE JUNE 30, Cash Accounts Receivable Supplies Equipment Accounts Payable A. One, Capital A. One, Withdrawals Placement Fees Earned Wage Expense Telephone Expense Advertising Expense Totals Dr. Cr. 3-27

28 PROBLEM 3B-1 SOLUTIONS TO B PROBLEMS JIMMY'S CLEANING SERVICE GENERAL JOURNAL Account Titles and Description PR Dr. Cr. Mar. 1 Prepaid Rent PAGE 1 Cash Rent paid in advance 6 Cleaning Equipment Account Payable Purchased equipment on account 12 Cleaning Supplies Cash Paid cash for supplies 14 Cash Cleaning Fees Earned Earned fee and received cash 20 Jimmy Cook, Withdrawals Cash Owner withdrawal 21 Advertising Expense Accounts Payable Received advertising bill 25 Electrical Expense Cash Paid electrical expense 28 Salaries Expense Cash Paid salaries 3-28

29 PROBLEM 3B-1 (CONCLUDED) JIMMY S CLEANING SERVICE GENERAL JOURNAL PAGE 2 Account Titles and Description PR Dr. Cr. Mar. 29 Accounts Receivable Cleaning Fees Earned Earned fee on account 30 Accounts Payable Cash Paid on account 3-29

30 PROBLEM 3B-2 (a, b) BETH'S ART STUDIO GENERAL JOURNAL PAGE 1 Account Titles and Description PR Dr. Cr. Apr. 1 Cash Beth Orth, Capital Owner investment 1 Prepaid Rent Cash Rent paid in advance 3 Equipment Accounts Payable Purchase of equipment on account 5 Cash Art Fees Earned Fees earned for cash 8 Art Supplies Cash Purchase of supplies for cash 9 Accounts Receivable Art Fees Earned Fees earned on account 10 Salaries Expense Cash Salaries paid 15 Beth Orth, Withdrawals Cash Owner withdrawal 28 Electrical Expense Cash Paid electrical bill 29 Telephone Expense Cash Paid telephone bill 3-30

31 PROBLEM 3B-2 (CONTINUED) GENERAL LEDGER OF BETH'S ART STUDIO CASH ACCOUNT NO. 111 Apr. 1 GJ GJ GJ GJ GJ GJ GJ GJ ACCOUNTS RECEIVABLE ACCOUNT NO. 112 Apr. 9 GJ PREPAID RENT ACCOUNT NO. 114 Apr. 1 GJ ART SUPPLIES ACCOUNT NO. 121 Apr. 8 GJ

32 PROBLEM 3B-2 (CONTINUED) EQUIPMENT ACCOUNT NO. 131 Apr. 3 GJ ACCOUNTS PAYABLE ACCOUNT NO. 211 Apr. 3 GJ BETH ORTH, CAPITAL ACCOUNT NO. 311 Apr. 1 GJ BETH ORTH, WITHDRAWALS ACCOUNT NO. 312 Apr. 15 GJ ART FEES EARNED ACCOUNT NO. 411 Apr. 5 GJ GJ

33 PROBLEM 3B-2 (CONCLUDED) ELECTRICAL EXPENSE ACCOUNT NO. 511 Apr. 28 GJ SALARIES EXPENSE ACCOUNT NO. 521 Apr. 10 GJ TELEPHONE EXPENSE ACCOUNT NO. 531 Apr. 29 GJ (c) BETH'S ART STUDIO TRIAL BALANCE April 30, Dr. Cr. Cash Accounts Receivable Prepaid Rent Art Supplies Equipment Accounts Payable Beth Orth, Capital Beth Orth, Withdrawals Art Fees Earned Electrical Expense Salaries Expense Telephone Expense Totals

34 PROBLEM 3B-3 (a, b) A. FRENCH'S PLACEMENT AGENCY GENERAL JOURNAL PAGE 1 Account Titles and Description PR Dr. Cr. Apr. 1 Cash A. French, Capital Owner investment 1 Equipment Accounts Payable Purchase of equipment on account 3 Accounts Receivable Placement Fees Earned Fee earned on account 5 A. French, Withdrawals Cash Owner withdrawal 7 Wage Expense Cash Wages paid 9 Cash Placement Fees Earned Fee earned for cash 15 Supplies Accounts Payable Purchase of supplies on account 28 Telephone Expense Cash Paid telephone bill 29 Advertising Expense Accounts Payable Received advertising bill 3-34

35 PROBLEM 3B-3 (CONTINUED) GENERAL LEDGER OF A. FRENCH'S PLACEMENT AGENCY CASH ACCOUNT NO. 111 Apr. 1 GJ GJ GJ GJ GJ ACCOUNTS RECEIVABLE ACCOUNT NO. 112 Apr. 3 GJ SUPPLIES ACCOUNT NO. 131 Apr. 15 GJ EQUIPMENT ACCOUNT NO. 141 Apr. 1 GJ

36 PROBLEM 3B-3 (CONTINUED) ACCOUNTS PAYABLE ACCOUNT NO. 211 Apr. 1 GJ GJ GJ A. FRENCH, CAPITAL ACCOUNT NO. 311 Apr. 1 GJ A. FRENCH, WITHDRAWALS ACCOUNT NO. 312 Apr. 5 GJ PLACEMENT FEES EARNED ACCOUNT NO. 411 Apr. 3 GJ GJ WAGE EXPENSE ACCOUNT NO. 511 Apr. 7 GJ

37 PROBLEM 3B-3 (CONCLUDED) TELEPHONE EXPENSE ACCOUNT NO. 521 Apr. 28 GJ ADVERTISING EXPENSE ACCOUNT NO. 531 Apr. 29 GJ (c) A. FRENCH'S PLACEMENT AGENCY TRIAL BALANCE APRIL 30, Cash Accounts Receivable Supplies Equipment Accounts Payable A. French, Capital A. French, Withdrawals Placement Fees Earned Wage Expense Telephone Expense Advertising Expense Totals Dr. Cr. 3-37

38 FINANCIAL REPORT PROBLEM SOLUTION 2013 Kellogg s Annual Report Year Net Sales (2013) $14,792 million (2012) 14,197 million Increase $ 595 million Inward flows of cash and accounts receivable could result from net sales. 3-38

39 ON THE JOB: SMITH COMPUTER CENTER SOLUTION SMITH COMPUTER CENTER GENERAL JOURNAL PAGE 1 Account Titles and Description PR Dr. Cr. 9/1 Prepaid Rent Cash Cash Service Revenue Cash Service Revenue Accounts Payable Cash Cash Accounts Receivable Accounts Payable Cash Computer Shop Equipment Cash Phone Expense Accounts Payable Utilities Expense Accounts Payable Cash Service Revenue Accounts Receivable Service Revenue

40 CASH ACCOUNT NO /31 balance forward /1 GJ GJ GJ GJ GJ GJ GJ GJ

41 ACCOUNTS RECEIVABLE ACCOUNT NO /31 balance forward /12 GJ GJ PREPAID RENT ACCOUNT NO /1 GJ SUPPLIES ACCOUNT NO /31 balance forward COMPUTER SHOP EQUIPMENT ACCOUNT NO /31 balance forward /17 GJ

42 OFFICE EQUIPMENT ACCOUNT NO /31 balance forward ACCOUNTS PAYABLE ACCOUNT NO /31 balance forward /8 GJ GJ GJ GJ FELDMAN, CAPITAL ACCOUNT NO /31 balance forward FELDMAN, WITHDRAWALS ACCOUNT NO /31 0 balance forward

43 SERVICE REVENUE ACCOUNT NO /31 balance forward /2 GJ GJ GJ GJ ADVERTISING EXPENSE ACCOUNT NO /31 balance forward RENT EXPENSE ACCOUNT NO /31 balance forward

44 UTILITIES EXPENSE ACCOUNT NO /31 balance forward /22 GJ PHONE EXPENSE ACCOUNT NO /31 balance forward /20 GJ SUPPLIES EXPENSE ACCOUNT NO

45 INSURANCE EXPENSE ACCOUNT NO /31 balance forward POSTAGE EXPENSE ACCOUNT NO /31 balance forward SMITH COMPUTER CENTER TRIAL BALANCE SEPTEMBER 30, Dr. Cr. Cash Accounts Receivable Prepaid Rent Supplies Computer Shop Equipment Office Equipment Accounts Payable Feldman, Capital Fedman, Withdrawals Service Revenue Advertising Expense Rent Expense Utilities Expense Phone Expense Insurance Expense age Expense Totals

46 SMITH COMPUTER CENTER INCOME STATEMENT FOR THE QUARTER ENDED SEPTEMBER 30, Revenue: Service Revenue $ Operating Expenses Advertising Expense $ Rent Expense Utilities Expense Phone Expense Insurance Expense age Expense Total Operating Expenses Net Income $ SMITH COMPUTER CENTER STATEMENT OF OWNER'S EQUITY FOR THE QUARTER ENDED SEPTEMBER 30, Feldman, Capital July 1, $ 0 00 Investment in July Total Investment in July thru September Net Income $ Less: Withdrawals for July thru September ( ) Net Increase in Capital Feldman, Capital September 30, $

47 SMITH COMPUTER CENTER BALANCE SHEET SEPTEMBER 30, ASSETS LIABILITIES AND OWNER S EQUITY Cash $ Liabilities: Accounts Receivable Accounts Payable $ Prepaid Rent Supplies Owner s Equity Computer Shop Equipment Feldman, Capital Office Equipment Total Liabilities Total Assets $ and Owner's Equity $ More download links: college accounting a practical approach 13th edition answer key college accounting a practical approach 13th edition pdf college accounting 13th edition slater answer key college accounting a practical approach answer key college accounting a practical approach pdf college accounting 13th edition answers college accounting 13th edition slater pdf college accounting 13th edition slater solutions 3-47