SOLUTIONS TO PROBLEMS

PROBLEM 2-1A

J1
Date Account Titles and Explanation Ref. Debit Credit
Mar. 1 Cash.......................................................... 20,000
Owner’s Capital............................... 20,000
(Owner’s investment of cash
in business)

3 Land.......................................................... 12,000
Buildings.................................................. 2,000
Equipment................................................ 1,000
Cash.................................................. 15,000
(Purchased Rainbow’s Golf Land)

5 Advertising Expense............................... 900

Cash.................................................. 900
(Paid for advertising)

6 Prepaid Insurance.................................... 600

Cash.................................................. 600
(Paid for one-year insurance
policy)

10 Equipment................................................ 1,050
Accounts Payable........................... 1,050
(Purchased equipment on
account)

18 Cash.......................................................... 1,100
Service Revenue.............................. 1,100
(Received cash for services
performed)

19 Cash.......................................................... 1,500
Unearned Service Revenue............ 1,500
(Received cash for coupon
books sold)
PROBLEM 2-1A (Continued)

Date Account Titles and Explanation Ref. Debit Credit

Mar. 25 Owner’s Drawings............................... 800
Cash.............................................. 800
 (Withdrew cash for personal
  use)

30 Salaries and Wages Expense............. 250

Cash.............................................. 250
 (Paid salaries)

30 Accounts Payable................................ 1,050

Cash.............................................. 1,050
 (Paid creditor on account)

31 Cash...................................................... 2,700
Service Revenue.......................... 2,700
 (Received cash for services
  performed)
 PROBLEM 2-2A

(a)
J1
Date Account Titles and Explanation Ref. Debit Credit
Apr. 1 Cash......................................................... 101 20,000
Owner’s Capital.............................. 301 20,000
(Owner’s investment of cash
in business)

1 No entry—not a transaction.

2 Rent Expense.......................................... 729 1,100

Cash................................................ 101 1,100
(Paid monthly office rent)

3 Supplies................................................... 126 4,000

Accounts Payable.......................... 201 4,000
(Purchased supplies on
account from Dazzle Company)

10 Accounts Receivable............................. 112 5,100

Service Revenue............................ 400 5,100
(Billed clients for services
performed)

11 Cash......................................................... 101 1,000

Unearned Service Revenue........... 209 1,000
(Received cash for future
service)

20 Cash......................................................... 101 2,100

Service Revenue............................ 400 2,100
(Received cash for services
performed)

30 Salaries and Wages Expense................ 726 2,800

Cash................................................ 101 2,800
(Paid monthly salary)
PROBLEM 2-2A (Continued)

Date Account Titles and Explanation Ref. Debits Credit

Apr. 30 Accounts Payable............................... 201 2,400
Cash............................................. 101 2,400
(Paid Dazzle Company on
account)

(b)

Cash No. 101

Date Explanation Ref. Debit Credit Balance
Apr. 1 J1 20,000 20,000
2 J1 1,100 18,900
11 J1 1,000 19,900
20 J1 2,100 22,000
30 J1 2,800 19,200
30 J1 2,400 16,800

Accounts Receivable No. 112

Date Explanation Ref. Debit Credit Balance
Apr. 10 J1 5,100 5,100

Supplies No. 126

Date Explanation Ref. Debit Credit Balance
Apr. 3 J1 4,000 4,000

Accounts Payable No. 201

Date Explanation Ref. Debit Credit Balance
Apr. 3 J1 4,000 4,000
30 J1 2,400 1,600

Unearned Service Revenue No. 209

Date Explanation Ref. Debit Credit Balance
Apr. 11 J1 1,000 1,000
PROBLEM 2-2A (Continued)

Owner’s Capital No. 301

Date Explanation Ref. Debit Credit Balance
Apr. 1 J1 20,000 20,000

Service Revenue No. 400

Date Explanation Ref. Debit Credit Balance
Apr. 10 J1 5,100 5,100
20 J1 2,100 7,200

Salaries and Wages Expense No. 726

Date Explanation Ref. Debit Credit Balance
Apr. 30 J1 2,800 2,800

Rent Expense No. 729

Date Explanation Ref. Debit Credit Balance
Apr. 2 J1 1,100 1,100

(c) EMILY VALLEY, DENTIST

Trial Balance
April 30, 2017

Debit Credit
Cash...................................................................... $16,800
Accounts Receivable.......................................... 5,100
Supplies................................................................ 4,000
Accounts Payable................................................ $ 1,600
Unearned Service Revenue................................ 1,000
Owner’s Capital................................................... 20,000
Service Revenue.................................................. 7,200
Salaries and Wages Expense............................. 2,800
Rent Expense....................................................... 1,100        
$29,800 $29,800