Name



Problem 3d: Journal Entries, Posting, and Trial Balance

Bernard Provencher opened the Provencher Photography Studio on April 1.

During April, the company engaged in the following transactions. By addition and subtraction, show the effects of the transactions on Provencher Photography Studio's resources and sources of resources. Notice that the first transaction has been processed for you.

April 1: Bernard started the business by depositing $8,000 cash in a bank account in the corporation's name in exchange for 8,000 shares of $1 par value per share common stock. The company's accounting system used only the following accounts: Cash, accounts receivable, photography supplies, prepaid rent, accounts payable, common stock, retained earnings, dividends, fees revenue, and telephone expense.

| | | |Sources of Owner |Sources of Management |

| | |Sources of Borrowed |Invested Resources |Generated Resources |

| | |Resources | | |

| |Resources | | | |

| |Assets |Liabilities |Stockholders’ Equity |

| |+ 8,000 | |+ $8,000 | |

The company’s receipt of cash increased its resources (assets). The company now has $8,000 more resources (cash) than it had before it received the cash. Since the company did not give up any resources to receive the cash, but received the cash from the owner, the company’s sources of owner invested resources (common stock) increased by $8,000.

1. April 5: Purchased $110 of photography supplies on credit. The company's accounting system used only the following accounts: Cash, accounts receivable, photography supplies, prepaid rent, accounts payable, common stock, retained earnings, dividends, fees revenue, and telephone expense.

| | | |Sources of Owner |Sources of Management |

| | |Sources of Borrowed |Invested Resources |Generated Resources |

| | |Resources | | |

| |Resources | | | |

| |Assets |Liabilities |Stockholders’ Equity |

|A) |+ $110 & - $110 | | | |

|B) |+ $110 |+ $110 | | |

|C) | |+ $110 | |- $110 |

|D) |+ $110 | |+ $110 | |

|E) |- $110 | | |- $110 |

2. April 9: Photographed KMV Inc. executives and billed them $500 for services. KMV Inc. promised to pay Provencher Photography Studio by May 9. The company's accounting system used only the following accounts: Cash, accounts receivable, photography supplies, prepaid rent, accounts payable, common stock, retained earnings, dividends, fees revenue, and telephone expense.

| | | |Sources of Owner |Sources of Management |

| | |Sources of Borrowed |Invested Resources |Generated Resources |

| | |Resources | | |

| |Resources | | | |

| |Assets |Liabilities |Stockholders’ Equity |

|A) |+ $500 & - $500 | | | |

|B) | |+ $500 | |+ $500 |

|C) |+ $500 |+ $500 | | |

|D) |+ $500 | |+ $500 | |

|E) |+ $500 | | |+ $500 |

3. April 11: Paid $220 cash to rent a photography studio for the month of April. The company's accounting system used only the following accounts: Cash, accounts receivable, photography supplies, prepaid rent, accounts payable, common stock, retained earnings, dividends, fees revenue, and telephone expense.

| | | |Sources of Owner |Sources of Management |

| | |Sources of Borrowed |Invested Resources |Generated Resources |

| | |Resources | | |

| |Resources | | | |

| |Assets |Liabilities |Stockholders’ Equity |

|A) |+ $220 |+ $220 | | |

|B) |- $220 | | |- $220 |

|C) |+ $220 & - $220 | | | |

|D) |- $220 | |- $220 | |

|E) |- $220 |- $220 | | |

4. April 14: Received $320 cash for photographing high school seniors today. The company's accounting system used only the following accounts: Cash, accounts receivable, photography supplies, prepaid rent, accounts payable, common stock, retained earnings, dividends, fees revenue, and telephone expense.

| | | |Sources of Owner |Sources of Management |

| | |Sources of Borrowed |Invested Resources |Generated Resources |

| | |Resources | | |

| |Resources | | | |

| |Assets |Liabilities |Stockholders’ Equity |

|A) |+ $320 |+ $320 | | |

|B) |+ $320 & - $320 | | | |

|C) |+ $320 | |+ $320 | |

|D) |+ $320 | | |+ $320 |

|E) |- $320 | | |- $320 |

5. April 17: Paid $250 cash for additional photography supplies. The company's accounting system used only the following accounts: Cash, accounts receivable, photography supplies, prepaid rent, accounts payable, common stock, retained earnings, dividends, fees revenue, and telephone expense.

| | | |Sources of Owner |Sources of Management |

| | |Sources of Borrowed |Invested Resources |Generated Resources |

| | |Resources | | |

| |Resources | | | |

| |Assets |Liabilities |Stockholders’ Equity |

|A) |+ $250 & - $250 | | | |

|B) |+ $250 |+ $250 | | |

|C) |+ $250 | | |+ $250 |

|D) |+ $250 | |+ $250 | |

|E) | |+ $250 | |- $250 |

6. April 21: Paid cash for April's telephone bill of $30. The company's accounting system used only the following accounts: Cash, accounts receivable, photography supplies, prepaid rent, accounts payable, common stock, retained earnings, dividends, fees revenue, and telephone expense.

| | | |Sources of Owner |Sources of Management |

| | |Sources of Borrowed |Invested Resources |Generated Resources |

| | |Resources | | |

| |Resources | | | |

| |Assets |Liabilities |Stockholders’ Equity |

|A) |+ $30 & - $30 | | | |

|B) |- $30 |- $30 | | |

|C) |- $30 | |- $30 | |

|D) |- $30 | | |- $30 |

|E) | |+ $30 | |- $30 |

7. April 23: Received $170 cash from KMV Inc. as partial payment for photography services provided to them on April 9. (On April 9, Provencher Photography Studio Photographed KMV Inc. executives and billed them $500 for services. KMV Inc. promised to pay Provencher Photography Studio by May 9.) The company's accounting system used only the following accounts: Cash, accounts receivable, photography supplies, prepaid rent, accounts payable, common stock, retained earnings, dividends, fees revenue, and telephone expense.

| | | |Sources of Owner |Sources of Management |

| | |Sources of Borrowed |Invested Resources |Generated Resources |

| | |Resources | | |

| |Resources | | | |

| |Assets |Liabilities |Stockholders’ Equity |

|A) |+ $170 | | |+ $170 |

|B) | |- $170 | |+ $170 |

|C) |+ $170 & - $170 | | | |

|D) |+ $170 |+ $170 | | |

|E) |+ $170 | |+ $170 | |

8. April 26: Declared and paid a cash dividend of $60. The company's accounting system used only the following accounts: Cash, accounts receivable, photography supplies, prepaid rent, accounts payable, common stock, retained earnings, dividends, fees revenue, and telephone expense.

| | | |Sources of Owner |Sources of Management |

| | |Sources of Borrowed |Invested Resources |Generated Resources |

| | |Resources | | |

| |Resources | | | |

| |Assets |Liabilities |Stockholders’ Equity |

|A) |+ $60 & - $60 | | | |

|B) |- $60 | | |- $60 |

|C) |- $60 |- $60 | | |

|D) |+ $60 | | |+ $60 |

|E) |- $60 | |- $60 | |

9. April 30: Paid $220 cash to rent the photography studio for the month of May. The company's accounting system used only the following accounts: Cash, accounts receivable, photography supplies, prepaid rent, accounts payable, common stock, retained earnings, dividends, fees revenue, and telephone expense.

| | | |Sources of Owner |Sources of Management |

| | |Sources of Borrowed |Invested Resources |Generated Resources |

| | |Resources | | |

| |Resources | | | |

| |Assets |Liabilities |Stockholders’ Equity |

|A) |- $220 | | |- $220 |

|B) |- $220 |- $220 | | |

|C) |- $220 | |- $220 | |

|D) |+ $220 |+ $220 | | |

|E) |+ $220 & - $220 | | | |

Record the Studio's transactions in its general journal. Notice that the first transaction has been processed for you.

April 1: Bernard started the business by depositing $8,000 cash in a bank account in the corporation's name in exchange for 8,000 shares of $1 par value per share common stock. The company's accounting system used only the following accounts: Cash, accounts receivable, photography supplies, prepaid rent, accounts payable, common stock, retained earnings, dividends, fees revenue, and telephone expense.

| |Description |Debits |Credits |

| |Cash |$8,000 | |

| | Common Stock | |$8,000 |

| |Owner's investment | | |

The company’s receipt of cash increased its cash asset by $8,000. Since assets increase with debits, cash is debited for $8,000. The cash was received from the owner and, in return, the owner received shares of common stock. Since debits equal credits, the company’s common stock must be credited for $8,000.

10. April 5: Purchased $110 of photography supplies on credit. The company's accounting system used only the following accounts: Cash, accounts receivable, photography supplies, prepaid rent, accounts payable, common stock, retained earnings, dividends, fees revenue, and telephone expense.

| |Description |Debits |Credits |

|A) |Photography Supplies |$110 | |

| |Cash | |$110 |

| |Supplies purchase | | |

| | | | |

|B) |Photography Supplies |$110 | |

| |Common Stock | |$110 |

| |Supplies purchase | | |

| | | | |

|C) |Photography Supplies |$110 | |

| |Accounts Payable | |$110 |

| |Supplies purchase | | |

| | | | |

|D) |Photography Supplies |$110 | |

| |Retained Earnings | |$110 |

| |Supplies purchase | | |

| | | | |

|E) |Accounts Payable |$110 | |

| |Photography Supplies | |$110 |

| |Supplies purchase | | |

11. April 9: Photographed KMV Inc. executives and billed them $500 for services. KMV Inc. promised to pay Provencher Photography Studio by May 9. The company's accounting system used only the following accounts: Cash, accounts receivable, photography supplies, prepaid rent, accounts payable, common stock, retained earnings, dividends, fees revenue, and telephone expense.

| |Description |Debits |Credits |

|A) |Accounts Receivable |$500 | |

| |Fees Revenue | |$500 |

| |KMV Inc. | | |

| | | | |

|B) |Accounts Payable |$500 | |

| |Fees Revenue | |$500 |

| |KMV Inc. | | |

| | | | |

|C) |Cash |$500 | |

| |Accounts Receivable | |$500 |

| |KMV Inc. | | |

| | | | |

|D) |Fees Revenue |$500 | |

| |Accounts Receivable | |$500 |

| |KMV Inc. | | |

| | | | |

|E) |Cash |$500 | |

| |Fees Revenue | |$500 |

| |KMV Inc. | | |

12. April 11: Paid $220 cash to rent a photography studio for the month of April. The company's accounting system used only the following accounts: Cash, accounts receivable, photography supplies, prepaid rent, accounts payable, common stock, retained earnings, dividends, fees revenue, and telephone expense.

| |Description |Debits |Credits |

|A) |Retained Earnings |$220 | |

| |Cash | |$220 |

| |April rent payment | | |

| | | | |

|B) |Cash |$220 | |

| |Prepaid Rent | |$220 |

| |April rent payment | | |

| | | | |

|C) |Accounts Payable |$220 | |

| |Cash | |$220 |

| |April rent payment | | |

| | | | |

|D) |Prepaid Rent |$220 | |

| |Cash | |$220 |

| |April rent payment | | |

| | | | |

|E) |Cash |$220 | |

| |Retained Earnings | |$220 |

| |April rent payment | | |

13. April 14: Received $320 cash for photographing high school seniors today. The company's accounting system used only the following accounts: Cash, accounts receivable, photography supplies, prepaid rent, accounts payable, common stock, retained earnings, dividends, fees revenue, and telephone expense.

| |Description |Debits |Credits |

|A) |Cash |$320 | |

| |Accounts Receivable | |$320 |

| |High school seniors | | |

| | | | |

|B) |Accounts Receivable |$320 | |

| |Fees Revenue | |$320 |

| |High school seniors | | |

| | | | |

|C) |Cash |$320 | |

| |Common Stock | |$320 |

| |High school seniors | | |

| | | | |

|D) |Retained Earnings |$320 | |

| |Cash | |$320 |

| |High school seniors | | |

| | | | |

|E) |Cash |$320 | |

| |Fees Revenue | |$320 |

| |High school seniors | | |

14. April 17: Paid $250 cash for additional photography supplies. The company's accounting system used only the following accounts: Cash, accounts receivable, photography supplies, prepaid rent, accounts payable, common stock, retained earnings, dividends, fees revenue, and telephone expense.

| |Description |Debits |Credits |

|A) |Accounts Payable |$250 | |

| |Cash | |$250 |

| |Photography supplies purchase | | |

| | | | |

|B) |Photography Supplies |$250 | |

| |Cash | |$250 |

| |Photography supplies purchase | | |

| | | | |

|C) |Photography Supplies |$250 | |

| |Accounts Payable | |$250 |

| |Photography supplies purchase | | |

| | | | |

|D) |Retained Earnings |$250 | |

| |Cash | |$250 |

| |Photography supplies purchase | | |

| | | | |

|E) |Photography Supplies |$250 | |

| |Accounts Receivable | |$250 |

| |Photography supplies purchase | | |

15. April 21: Paid cash for April's telephone bill of $30. The company's accounting system used only the following accounts: Cash, accounts receivable, photography supplies, prepaid rent, accounts payable, common stock, retained earnings, dividends, fees revenue, and telephone expense.

| |Description |Debits |Credits |

|A) |Cash |$30 | |

| |Telephone Expense | |$30 |

| |April telephone bill | | |

| | | | |

|B) |Telephone Expense |$30 | |

| |Accounts Payable | |$30 |

| |April telephone bill | | |

| | | | |

|C) |Accounts Payable |$30 | |

| |Cash | |$30 |

| |April telephone bill | | |

| | | | |

|D) |Retained Earnings |$30 | |

| |Cash | |$30 |

| |April telephone bill | | |

| | | | |

|E) |Telephone Expense |$30 | |

| |Cash | |$30 |

| |April telephone bill | | |

16. April 23: Received $170 cash from KMV Inc. as partial payment for photography services provided to them on April 9. (On April 9, Provencher Photography Studio Photographed KMV Inc. executives and billed them $500 for services. KMV Inc. promised to pay Provencher Photography Studio by May 9.) The company's accounting system used only the following accounts: Cash, accounts receivable, photography supplies, prepaid rent, accounts payable, common stock, retained earnings, dividends, fees revenue, and telephone expense.

| |Description |Debits |Credits |

|A) |Accounts Receivable |$170 | |

| |Cash | |$170 |

| |KMV Inc. 4/9 | | |

| | | | |

|B) |Cash |$170 | |

| |Fees Revenue | |$170 |

| |KMV Inc. 4/9 | | |

| | | | |

|C) |Accounts Receivable |$170 | |

| |Fees Revenue | |$170 |

| |KMV Inc. 4/9 | | |

| | | | |

|D) |Cash |$170 | |

| |Accounts Receivable | |$170 |

| |KMV Inc. 4/9 | | |

| | | | |

|E) |Fees Revenue |$170 | |

| |Cash | |$170 |

| |KMV Inc. 4/9 | | |

17. April 26: Declared and paid a cash dividend of $60. The company's accounting system used only the following accounts: Cash, accounts receivable, photography supplies, prepaid rent, accounts payable, common stock, retained earnings, dividends, fees revenue, and telephone expense.

| |Description |Debits |Credits |

|A) |Accounts Payable |$60 | |

| |Cash | |$60 |

| |April dividends | | |

| | | | |

|B) |Common Stock |$60 | |

| |Cash | |$60 |

| |April dividends | | |

| | | | |

|C) |Dividends |$60 | |

| |Cash | |$60 |

| |April dividends | | |

| | | | |

|D) |Retained Earnings |$60 | |

| |Cash | |$60 |

| |April dividends | | |

| | | | |

|E) |Cash |$60 | |

| |Dividends | |$60 |

| |April dividends | | |

18. April 30: Paid $220 cash to rent the photography studio for the month of May. The company's accounting system used only the following accounts: Cash, accounts receivable, photography supplies, prepaid rent, accounts payable, common stock, retained earnings, dividends, fees revenue, and telephone expense.

| |Description |Debits |Credits |

|A) |Prepaid Rent |$220 | |

| |Cash | |$220 |

| |May rent payment | | |

| | | | |

|B) |Cash |$220 | |

| |Retained Earnings | |$220 |

| |May rent payment | | |

| | | | |

|C) |Retained Earnings |$220 | |

| |Cash | |$220 |

| |May rent payment | | |

| | | | |

|D) |Cash |$220 | |

| |Prepaid Rent | |$220 |

| |May rent payment | | |

| | | | |

|E) |Accounts Payable |$220 | |

| |Cash | |$220 |

| |May rent payment | | |

19. Using the data in the Provencher Photography Studio's trial balance, determine the company's net income for April.

|Provencher Photography Studio |

|Trial Balance |

|April 30 |

|Account Name |Debits | |Credits |

|Cash |$7,710 | | |

|Accounts Receivable |$330 | | |

|Photography Supplies |$360 | | |

|Prepaid Rent |$440 | | |

|Accounts Payable | | |$110 |

|Common Stock | | |$8,000 |

|Retained Earnings | | |$0 |

|Dividends |$60 | | |

|Fees Revenue | | |$820 |

|Telephone Expense |$30 | | |

| Totals |$8,930 | |$8,930 |

|A) |$8,930 |

|B) |$790 |

|C) |$820 |

|D) |$730 |

|E) |$7,710 |

20. Using the data in the Provencher Photography Studio's trial balance, determine the company's total assets on April 30.

|Provencher Photography Studio |

|Trial Balance |

|April 30 |

|Account Name |Debits | |Credits |

|Cash |$7,710 | | |

|Accounts Receivable |$330 | | |

|Photography Supplies |$360 | | |

|Prepaid Rent |$440 | | |

|Accounts Payable | | |$110 |

|Common Stock | | |$8,000 |

|Retained Earnings | | |$0 |

|Dividends |$60 | | |

|Fees Revenue | | |$820 |

|Telephone Expense |$30 | | |

| Totals |$8,930 | |$8,930 |

|A) |$8,930 |

|B) |$7,710 |

|C) |$8,000 |

|D) |$8,730 |

|E) |$8,840 |

21. Using the data in the Provencher Photography Studio's trial balance, determine the company's total liabilities on April 30.

|Provencher Photography Studio |

|Trial Balance |

|April 30 |

|Account Name |Debits | |Credits |

|Cash |$7,710 | | |

|Accounts Receivable |$330 | | |

|Photography Supplies |$360 | | |

|Prepaid Rent |$440 | | |

|Accounts Payable | | |$110 |

|Common Stock | | |$8,000 |

|Retained Earnings | | |$0 |

|Dividends |$60 | | |

|Fees Revenue | | |$820 |

|Telephone Expense |$30 | | |

| Totals |$8,930 | |$8,930 |

|A) |$110 |

|B) |$8,930 |

|C) |$330 |

|D) |$8,840 |

|E) |$790 |

22. Using the data in the Provencher Photography Studio's trial balance, determine the company's total stockholders' equity on April 30.

|Provencher Photography Studio |

|Trial Balance |

|April 30 |

|Account Name |Debits | |Credits |

|Cash |$7,710 | | |

|Accounts Receivable |$330 | | |

|Photography Supplies |$360 | | |

|Prepaid Rent |$440 | | |

|Accounts Payable | | |$110 |

|Common Stock | | |$8,000 |

|Retained Earnings | | |$0 |

|Dividends |$60 | | |

|Fees Revenue | | |$820 |

|Telephone Expense |$30 | | |

| Totals |$8,930 | |$8,930 |

|A) |$8,930 |

|B) |$8,000 |

|C) |$8,820 |

|D) |$8,730 |

|E) |$8,840 |

23. Determine the dollar amount of the Provencher Photography Studio’s total resources on April 30.

|A) |$8,000 |

|B) |$8,730 |

|C) |$8,840 |

|D) |$8,930 |

|E) |$7,710 |

24. Determine the dollar amount of April 30 resources that the Provencher Photography Studio obtained through borrowing.

|A) |$8,930 |

|B) |$330 |

|C) |$8,840 |

|D) |$790 |

|E) |$110 |

25. Determine the dollar amount of April 30 resources that the Provencher Photography Studio obtained from the owner.

|A) |$8,000 |

|B) |$8,730 |

|C) |$8,840 |

|D) |$8,930 |

|E) |$7,710 |

26. Determine the net dollar amount of resources that the Provencher Photography Studio generated through management operations in April.

|A) |$7,710 |

|B) |$8,930 |

|C) |$790 |

|D) |$820 |

|E) |$730 |

27. Determine the dollar amount of April 30 resources that the Provencher Photography Studio generated through management operations and kept in the business.

|A) |$7,710 |

|B) |$730 |

|C) |$790 |

|D) |$8,730 |

|E) |$8,840 |

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