Solution manual for college accounting 13th edition by scott

Solution Manual for College Accounting 13th Edition by Scott Asset, Liability, Owner’s Equity, Revenue, and Expense Accounts TEACHING TIPS New to this edition: This edition will provide students an opportunity to learn QuickBooks Online while they learn accounting Chapters 1–5 will introduce QuickBooks Online using the journal entry method, and Chapters 9–12 will introduce the forms-based approach QuickBooks Online features include: Accounting with QuickBooks Online and Review It with QuickBooks Online At the end of Chapter 12, students will have the opportunity to complete a comprehensive problem under Try It with QuickBooks Online Unlike QuickBooks Desktop software, QuickBooks Online involves automatic updates This means the "look and feel" of QuickBooks Online may change from time to time Most of the updates will be minor and students can use the Intuit weblink (www.qbo.intuit.com) to review the most recent releases However, sometimes there may be major QuickBooks Online updates deployed Therefore, this text will utilize the Cengage Learning companion site at CengageBrain.com for the QuickBooks Online Appendix, which includes Accounting with QuickBooks Online (a step-by-step guide to using QuickBooks Online) Review It with QuickBooks Online, and Try it with QuickBooks activities The QuickBooks Online Appendix will be listed by chapter, similar to the text Students can get started with QuickBooks Online by going to the Cengage Learning student companion site at CengageBrain.com Suggested in-class problems: ● ● ● ● Exercise 1-1 (accounting equation) Exercise 1-3 (accounting equation) Exercise 1-7 (transaction analysis) Demonstration Problem Suggested homework: ● ● Problem 1-1 (transaction analysis) Problem 1-4 (transaction analysis) Suggested in-class activity: Create a set of three note cards for each student; label the cards “Assets,” “Liabilities,” and “Owner’s Equity.” Call out different account names and ask students to raise the correct note card For example, if you call out “Prepaid Insurance,” the students should raise the note card labeled “Assets.” QuickBooks Online Activities: ● Complete the QuickBooks Online Appendix, Accounting with QuickBooks Online, Chapter 1, Getting Started The QuickBooks Online Appendix is available on the Cengage Learning companion site at CengageBrain.com LEARNING OBJECTIVES Define and identify asset, liability, and owner ’ s equity accounts Record, in column form, a group of business transactions involving changes in assets, liabilities, and owner’s equity Define and identify revenue and expense accounts Record, in column form, a group of business transactions involving all five elements of the fundamental accounting equation 1-1 © 2018 Cengage Learning All Rights Reserved May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part 80600_ch01_rev03_001-028.indd 12/28/16 8:15 PM Solution Manual for College Accounting 13th Edition by Scott CHAPTER Asset, Liability, Owner’s Equity, Revenue, and Expense Accounts ACCOUNTING LANGUAGE Account numbers Accounts Accounts Payable Accounts Receivable Assets Backups Business entity Capital Chart of accounts Cloud computing Computerized accounting system Creditor Double-entry accounting Equity Expenses Fair market value Fundamental accounting equation Liabilities Manual accounting system Owner’s equity QuickBooks Online Revenues Separate entity concept Sole proprietorship Withdrawal KEY POINTS There are five classifications of accounts: assets, liabilities, owner’s equity, revenue, and expenses After each transaction has been recorded, the total of one side of the fundamental accounting equation must equal the total of the other side LECTURE OUTLINE I II Illustrations, discussion questions, exercises, and problems can be referred to in class Students should consider their texts primary tools and record marginal notations to make the best possible use of the text Assets = Liabilities + Owner’s Equity: the fundamental accounting equation A Assets: property or things of value owned by an economic unit (examples: cash, equipment, building, land) B Liabilities: amounts owed to creditors C D E Creditor: one to whom money is owed Examples: Accounts Payable, Notes Payable, Mortgage Payable Owner’s equity: owner’s claim, investment, net worth, or proprietorship Example: owner’s name followed by the word Capital Relationship of the fundamental accounting equation Show how the amounts under each classification are determined and how a change in one classification affects the other classifications Accounts: specific subheadings or breakdowns of assets, liabilities, and owner’s equity Withdrawals: taking of cash or other assets for personal use Recording business transactions Every transaction is recorded as increases and/or decreases in two or more accounts— the introduction of double-entry accounting One side of the equation is always equal to the other side of the equation Discuss with students the steps demonstrated in the chapter When working example exercises or problems, have students go through each of the steps Revenues: amounts of assets that a business gains (earns) from its operations; also called income Earnings in the form of cash Earnings in the form of other assets—usually as charge accounts (accounts receivable) that a firm maintains for its customers, to be received at a later time Examples: fees earned, rent income, income from selling merchandise, interest income 1-2 © 2018 Cengage Learning All Rights Reserved May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part 80600_ch01_rev03_001-028.indd 12/28/16 8:15 PM Solution Manual for College Accounting 13th Edition by Scott CHAPTER Asset, Liability, Owner’s Equity, Revenue, and Expense Accounts F Expenses: amounts of assets that a business uses up as a result of its operations Expenses in the form of cash Expenses in the form of liabilities: payment to be made at a later time Examples: wages to employees, rent to landlord, interest on a loan, supplies, insurance expired G Student input: III Have students list possible asset, liability, owner’s equity, revenue, and expense accounts for a car wash, an insurance office, and a travel agency Relationship of revenues and expenses to owner’s equity A Revenues: Revenues earned increases owner’s equity B Expenses: Expenses incurred decrease owner’s equity IV Chart of accounts: the official list of accounts tailor-made for the business A All transactions must be recorded using the official account titles The numbers preceding the accounting titles are the account numbers B In the numbering of accounts for a service business, the 100s are used for assets, the 200s for liabilities, the 300s for owner’s equity accounts, the 400s for revenue accounts, and the 500s for expense accounts DEMONSTRATION PROBLEM During November of this year, James Kirkland opened an accounting practice called James Kirkland, CPA The following transactions were completed during the first month a Deposited $13,500 in a bank account in the name of James Kirkland, CPA b Paid rent for the month, $1,600 (Rent Expense) c Bought office equipment, including a computer and a printer, for $9,500 from Bingham Company Paid $6,700 in cash, with the balance due in 30 days d Purchased office supplies and announcements for $970 from City Stationers Payment is due in 30 days e Billed clients $5,500 for services rendered (Client Fees) f Paid $1,450 salary to secretary/assistant for the month g Paid telephone bill of $210 (Telephone Expense) h Received cash from clients previously billed on account, $2,450 i Paid Bingham Company $970 to apply on account j Paid $275 for continuing education course (Miscellaneous Expense) k Kirkland withdrew $2,200 for personal use Instructions Record the transactions and the balance after each transaction, using the following headings Assets Cash Accounts + Receivable = + Supplies + Equip = Liabilities Accounts Payable + J Kirkland, + Capital – Owner’s Equity J Kirkland, Drawing + Revenue – Expenses Demonstrate that the total of one side of the equation equals the total of the other side of the equation 1-3 © 2018 Cengage Learning All Rights Reserved May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part 80600_ch01_rev03_001-028.indd 12/28/16 8:15 PM 80600_ch01_rev03_001-028.indd 11,900 6,700 5,200 5,200 5,200 1,450 3,750 210 3,540 2,450 5,990 970 5,020 275 4,745 2,200 2,545 Bal (c) – Bal (d) Bal (e) Bal (f) – Bal (g) – Bal (h) + Bal (i) – Bal (j) – Bal (k) – Bal + 3,050 + + 3,050 + + 3,050 – + + + + + + 5,500 2,450 3,050 5,500 5,500 5,500 Accounts Receivable Assets + + + + + + + + Left Side of Equals Sign: Cash Accounts Receivable Supplies Equipment 13,500 1,600 (a) + (b) – Cash SOLUTION 970 970 + + + + 970 970 + + + + + + + 970 970 970 970 970 Supplies $16,065 $ 2,545 3,050 970 9,500 9,500 9,500 9,500 9,500 9,500 9,500 9,500 9,500 9,500 9,500 Equipment = = = = = = = = = = = = – + + 2,800 2,800 3,770 970 2,800 3,770 3,770 3,770 3,770 2,800 2,800 970 Accounts Payable Liabilities 13,500 13,500 13,500 13,500 13,500 13,500 13,500 13,500 13,500 13,500 13,500 J Kirkland, Capital – – + 2,200 2,200 + + + + + + + + + 5,500 5,500 5,500 5,500 5,500 5,500 5,500 (Client Fees) 5,500 Revenue Owner’s Equity J Kirkland, Drawing Right Side of Equals Sign: Accounts Payable J Kirkland, Capital J Kirkland, Drawing Revenue Expenses + + + + + + + + + + + + – – – – – – – – – – – 1,600 1,600 1,450 3,050 210 3,260 275 – – $ 2,800 13,500 2,200 5,500 3,535 $16,065 3,535 3,535 (Misc Expense) + 3,260 3,260 (Telephone Expense) + (Salary Expense) + 1,600 1,600 1,600 (Rent Expense) + Expenses CHAPTER Solution Manual for College Accounting 13th Edition by Scott Asset, Liability, Owner’s Equity, Revenue, and Expense Accounts © 2018 Cengage Learning All Rights Reserved May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part 1-4 12/28/16 8:15 PM Solution Manual for College Accounting 13th Edition by Scott CHAPTER Asset, Liability, Owner’s Equity, Revenue, and Expense Accounts DISCUSSION QUESTIONS Suggested Responses Assets represent cash, properties, and other things of value owned by a business Liabilities are debts or amounts owed to creditors Owner’s equity is the owner’s right to or investment in a business or the excess of assets over liabilities Revenues are the amounts a business earns as a result of selling a product or service to customers Expenses are the costs involved in the earning of revenue The separate entity concept means that a business is treated as a separate economic accounting unit or entity from the owner The business is independent, or stands by itself; it is separate from its owners, creditors, and customers Accounts Payable represents the amounts the business owes its creditors Accounts Receivable represents the amounts due from charge customers or the amount the company is expected to receive from customers Two ways to increase owner’s equity are (1) to make additional investments and (2) to earn revenues Two ways to decrease owner’s equity are (1) to make personal withdrawals and (2) to incur expenses The purchase of supplies on account results in an increase in Supplies (an asset) and an increase in Accounts Payable (a liability) Had the purchase been made with a cash payment, there would have been a decrease in cash (an asset) instead of an increase in Accounts Payable Therefore, purchasing supplies on account or with cash has no effect on owner’s equity The owner’s equity account will not change until the supplies are actually used In a withdrawal, the owner is reducing his or her investment, hoping that the reduction will be offset by net income A Wages Expense account is used to record the cost of work or labor performed by employees of a company, not owner withdrawals The chart of accounts is a company’s official list of accounts The list is designed especially for the business Usually, for a service business, the 100s are used for asset accounts, the 200s for liability accounts, the 300s for owner’s equity accounts, the 400s for revenue accounts, and the 500s for expense accounts (Note: Answers to the question will vary.) Assets 111 Cash 113 Accounts Receivable 124 Equipment Liabilities 221 Accounts Payable Owner’s Equity 311 W Sanders, Capital 312 W Sanders, Drawing Revenue 411 Tour Income Expenses 511 Wages Expense 512 Rent Expense 513 Supplies Expense 516 Miscellaneous Expense 1-5 © 2018 Cengage Learning All Rights Reserved May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part 80600_ch01_rev03_001-028.indd 12/28/16 8:15 PM Solution Manual for College Accounting 13th Edition by Scott CHAPTER Asset, Liability, Owner’s Equity, Revenue, and Expense Accounts SOLUTIONS TO EXERCISES AND PROBLEMS Exercise 1-1 a b c $22,800 $40,000 $12,000 A – L = OE L + OE = A A – OE = L $40,000 $18,000 $27,000 – + – $17,200 $22,000 $15,000 = $22,800 = $40,000 = $12,000 $26,300 $35,200 $40,280 A – OE = L A – L = OE L + OE = A $60,800 $57,000 $11,780 – – + $34,500 $21,800 $28,500 = $26,300 = $35,200 = $40,280 Exercise 1-2 a b c Exercise 1-3 Assets = Liabilities + Owner’s Equity Assets = $2,995 + $63,000 + $8,450 Liabilities = $3,816 + $3,728 Assets – Liabilities = Owner’s Equity Thus, Assets $74,445 = Liabilities $7,544 + Owner's Equity $66,901 Exercise 1-4 Examples of correct answers: a Buy an asset on account (Buy an office building using a mortgage.) b Pay a creditor on account (Make a monthly cash loan payment to the bank.) c Pay a bill with cash (Pay the cell phone bill with cash.) d Owner invests cash or other assets in the business (Owner invests cash in the business.) e Sell an asset for cash or buy an asset for cash (Sell a company building for cash.) f Sell services either for cash or on account (An accountant does the tax return for a client and the client pays cash.) Exercise 1-5 a Company received $18,200 cash from the owner, who was investing in the business b Company paid $1,375 cash to buy professional equipment c Company bought office equipment costing $640 and promised to pay that amount in the future (on account) d Company bought professional equipment costing $7,000, paid $2,200 in cash, and promised to pay the remaining $4,800 in the future (on account) e Company paid $1,000 cash to a creditor to pay an amount owed on account 1-6 © 2018 Cengage Learning All Rights Reserved May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part 80600_ch01_rev03_001-028.indd 12/28/16 8:15 PM Solution Manual for College Accounting 13th Edition by Scott CHAPTER Asset, Liability, Owner’s Equity, Revenue, and Expense Accounts Exercise 1-6 a b c d e A R A OE L f g h i j R OE A A E Exercise 1-7 a Paid the rent for the month, $1,050 b Bought advertising on account for $835 c Sold services on account for $372 d Owner withdrew $410 for personal use e Bought equipment for $1,850, paying $850 in cash and placing the balance of $1,000 on account f Customers paid $1,650 of the amount owed on account Exercise 1-8 a Company received $25,000 in cash and $4,500 in equipment from the owner, who was investing in the business b Company paid the rent for the month, $1,250 c Company sold services on account, $2,000 d Company bought equipment for $16,000, paying $3,700 in cash and placing the balance of $12,300 on account e Owner withdrew $2,500 for personal use 1-7 © 2018 Cengage Learning All Rights Reserved May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part 80600_ch01_rev03_001-028.indd 12/28/16 8:15 PM 80600_ch01_rev03_001-028.indd 10,592 = 10,592 = 357 + 357 + 357 + 25,157 + 1,050 24,107 + 3,295 27,402 + 1,250 26,152 + Bal (j) + Bal (k) – Bal See the summary of accounts on the next page 10,592 = 10,592 = 10,592 = 357 + 357 + 10,592 = 357 + + 357 + 357 8,956 8,956 886 9,842 – + 8,956 8,956 8,956 8,956 9,842 886 8,956 + + + + + 25,000 25,000 25,000 25,000 25,000 25,000 25,000 + + 25,000 25,000 25,000 25,000 J Larkin, Capital + + + = 8,956 8,956 = 1,636 10,592 = Bal (i) – + + + Accounts Payable + = + Liabilities = Office Equipment 26,425 + 886 25,539 + 382 357 357 + Bal (g) – Bal (h) – 24,050 357 + 23,693 + 25,000 950 Supplies = 23,693 + 750 22,943 + 3,482 + – + Assets Bal (c) – Bal (d) Bal (e) – Bal (f) + (a) (b) Cash Problem 1-1A – – + 1,250 1,250 J Larkin, Drawing + + + + + + + + + 6,777 6,777 (Professional Fees) 3,482 3,295 3,482 3,482 3,482 (Professional Fees) 3,482 Revenue Owner ’s Equity – – – – – – – – – – – 2,382 2,382 2,382 1,332 1,050 (Salary Expense) + 950 382 950 950 950 950 950 950 (Utilities Expense) + + Full file at https://TestbankDirect.eu/Solution-Manual-for-College-Accounting-13th-Edition-by-Sc (Rent Expense) Expenses CHAPTER Solution Manual for College Accounting 13th Edition by Scott Asset, Liability, Owner’s Equity, Revenue, and Expense Accounts © 2018 Cengage Learning All Rights Reserved May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part 1-8 12/28/16 8:15 PM Solution Manual for College Accounting 13th Edition by Scott CHAPTER Asset, Liability, Owner’s Equity, Revenue, and Expense Accounts Problem 1-1A (concluded) Right Side of Equals Sign: Left Side of Equals Sign: Cash Supplies Office Equipment Accounts Payable $26,152 $ 8,956 J Larkin, Capital 357 10,592 J Larkin, Drawing – 1,250 Revenue 6,777 – 2,382 Expenses $37,101 25,000 $37,101 1-9 © 2018 Cengage Learning All Rights Reserved May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part 80600_ch01_rev03_001-028.indd 12/28/16 8:15 PM 80600_ch01_rev03_001-028.indd 10 30,481 + 1,150 29,331 + 3,868 33,199 + 1,800 31,399 + Bal (i) – Bal (j) + Bal (k) – Bal + + 362 + 362 362 + + 362 362 + + + 362 362 362 362 362 Supplies 2,890 2,890 2,890 2,890 2,890 2,890 2,890 2,890 Office + Equipment Assets See the summary of accounts on the next page 31,548 + 700 30,848 + 367 Bal (g) – Bal (h) – 28,200 362 + 27,838 + 30,000 1,800 27,838 + 890 26,948 + 4,600 + – + Bal (c) – Bal (d) Bal (e) – Bal (f) + (a) (b) Cash Problem 1-2A + + + + + + + + + 18,000 18,000 18,000 18,000 18,000 18,000 18,000 18,000 18,000 Professional + Equipment = = = = = = = = – + 19,300 + 19,300 + 19,300 + 19,300 + 20,000 + 700 19,300 + 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 18,000 18,000 + 2,000 20,000 + 30,000 R Green, Capital = + + + 30,000 + Accounts Payable Liabilities = = = – – + + + + + + + + + 8,468 8,468 (Professional Fees) 4,600 3,868 4,600 4,600 (Professional Fees) 4,600 Revenue Owner’s Equity 1,800 1,800 R Green, Drawing – – – – – – – – – – – + 3,317 3,317 3,317 (Salary Expense) 2,167 1,150 1,800 367 1,800 1,800 1,800 1,800 1,800 1,800 (Rent Expense) (Utilities Expense) + + Expenses CHAPTER Solution Manual for College Accounting 13th Edition by Scott Asset, Liability, Owner’s Equity, Revenue, and Expense Accounts © 2018 Cengage Learning All Rights Reserved May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part 1-10 12/28/16 8:15 PM 80600_ch01_rev03_001-028.indd 14 18,357 185 18,172 18,172 + 248 17,924 + 17,924 + 2,649 20,573 + 1,550 19,023 + 1,150 17,873 + Bal (g) – Bal (h) Bal (i) – Bal (j) Bal (k) + Bal (l) – Bal (m) – Bal 4,307 4,307 4,307 4,307 4,307 4,307 4,307 Accounts Receivable + + + + + + + + + 185 185 185 185 185 185 185 185 + + + + + 400 400 400 400 400 400 400 + + 400 400 400 + + + + + + + + + + 26,329 26,329 26,329 26,329 26,329 26,329 26,329 26,329 26,329 + + 26,329 26,329 26,329 26,329 Truck + + + + Prepaid + Insurance + Assets Supplies See the summary of accounts on the next page 15,745 400 15,345 3,012 Bal (e) – Bal (f) + + 17,000 1,255 25,000 8,000 17,000 + (a) + (b) – Bal (c) Bal (d) – Cash Problem 1-4A + + + + + + + + + + + + + 3,795 3,795 3,795 3,795 3,795 3,795 3,795 3,795 3,795 3,795 3,795 3,795 Catering Equipment = = = = = = = = = = = = = = + + + + + 22,252 + 22,252 + 22,252 + 22,252 + 22,124 + 128 22,124 + 22,124 + 22,124 + 22,124 + 22,124 + + 18,329 18,329 + 3,795 22,124 + Accounts Payable Liabilities 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 – – 1,550 1,550 + 1,550 + + + + + + + + + + + 9,968 9,968 9,968 (Catering Income) 7,319 2,649 7,319 7,319 (Catering Income) 3,012 4,307 3,012 (Catering Income) 3,012 Revenue Owner’s Equity B Gervais, B Gervais, Capital – Drawing + – – – – – – – – – – – 2,781 1,631 1,150 (Salary Expense) + 1,631 1,631 1,503 128 (Gas and Oil Expense) + 1,255 248 1,255 1,255 1,255 1,255 1,255 (Utilities Expense) + + (Rent Expense) Expenses CHAPTER Solution Manual for College Accounting 13th Edition by Scott Asset, Liability, Owner’s Equity, Revenue, and Expense Accounts © 2018 Cengage Learning All Rights Reserved May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part 1-14 12/28/16 8:15 PM Solution Manual for College Accounting 13th Edition by Scott CHAPTER Asset, Liability, Owner’s Equity, Revenue, and Expense Accounts Problem 1-4A (concluded) Right Side of Equals Sign: Left Side of Equals Sign: Cash Accounts Receivable $17,873 Accounts Payable $22,252 4,307 B Gervais, Capital 25,000 Supplies 185 B Gervais, Drawing – 1,550 Prepaid Insurance 400 Revenue 9,968 – 2,781 Truck Catering Equipment Expenses 26,329 3,795 $52,889 $52,889 1-15 © 2018 Cengage Learning All Rights Reserved May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part 80600_ch01_rev03_001-028.indd 15 12/28/16 8:15 PM 80600_ch01_rev03_001-028.indd 16 68,000 Bal (c) Bal (d) – Bal (e) – Bal (f) 71,350 + 280 71,070 + 71,070 + 2,680 68,390 + 3,500 71,890 + 4,000 67,890 + Bal (i) – Bal (j) Bal (k) – Bal (l) + Bal (m) – Bal 4,700 4,700 4,700 4,700 4,700 4,700 4,700 4,700 4,700 150 + + + + + + + + 150 150 150 150 150 150 150 150 150 + + 150 150 + + + + + + + + + + + + 2,400 2,400 2,400 2,400 2,400 2,400 2,400 2,400 2,400 2,400 Prepaid + Insurance Assets + Supplies See the summary of accounts on the next page 63,100 + 8,250 63,100 + + Accounts + Receivable Bal (g) Bal (h) + 68,000 2,500 65,500 2,400 63,100 70,000 2,000 + – (a) (b) Cash Problem 1-5A Truck + 23,500 + 23,500 + 23,500 + 23,500 + 23,500 + 23,500 + 23,500 + 23,500 + 23,500 + 23,500 + 23,500 + + + + + + + + + 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 Office + Equipment = = = = = = = = = = = = = = + + + + + 22,530 + 22,530 + 22,530 + 22,530 + 22,400 + 130 22,400 + 21,150 + 1,250 22,400 + 21,150 + 70,000 70,000 70,000 70,000 70,000 70,000 70,000 70,000 70,000 70,000 70,000 70,000 70,000 J Rodriguez, Capital + + + 150 150 + 21,000 21,150 + Accounts Payable Liabilities – + 4,000 4,000 + + + + + + + + + + + 16,450 16,450 (Service Income) 12,950 3,500 12,950 12,950 12,950 (Service Income) 4,700 8,250 4,700 (Service Income) 4,700 Revenue Owner’s Equity J Rodriguez, Drawing + – – – – – – – – – – – – – – 2,280 130 2,410 2,680 5,090 5,090 5,090 (Wages Expense) + (Gas and Oil Expense) + 2,000 280 2,000 2,000 2,000 2,000 2,000 2,000 2,000 (Utilities Expense) + + (Rent Expense) Expenses CHAPTER Solution Manual for College Accounting 13th Edition by Scott Asset, Liability, Owner’s Equity, Revenue, and Expense Accounts © 2018 Cengage Learning All Rights Reserved May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part 1-16 12/28/16 8:15 PM Solution Manual for College Accounting 13th Edition by Scott CHAPTER Asset, Liability, Owner’s Equity, Revenue, and Expense Accounts Problem 1-5A (concluded) Right Side of Equals Sign: Left Side of Equals Sign: Cash Accounts Receivable Supplies Prepaid Insurance Truck Office Equipment Accounts Payable $67,890 J Rodriguez, Capital 4,700 150 $22,530 70,000 J Rodriguez, Drawing – 4,000 2,400 Revenue 23,500 1,250 Expenses 16,450 – 5,090 $99,890 $99,890 1-17 © 2018 Cengage Learning All Rights Reserved May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part 80600_ch01_rev03_001-028.indd 17 12/28/16 8:15 PM 80600_ch01_rev03_001-028.indd 18 + – 25,419 + 340 25,079 + 455 24,624 + 435 24,189 + 1,500 22,689 Bal (h) – Bal (i) – Bal (j) – Bal (k) – Bal + + 375 + 375 375 + + + 375 375 375 + + + + 6,300 6,300 6,300 6,300 6,300 6,300 6,300 6,300 6,300 Office Equipment See the summary of accounts on the next page 26,919 + 1,500 Bal (g) – 375 375 22,975 + 22,975 + 3,944 375 375 Supplies Assets 23,350 375 + 22,975 + 24,000 650 + Bal (f) + Bal (c) – Bal (d) Bal (e) (a) (b) Cash Problem 1-1B = = = = = = = = – – + 4,800 4,800 5,255 455 4,800 5,255 6,755 1,500 6,755 + + + + + + + + + 6,300 6,300 455 = + + + + + Accounts Payable Liabilities = = = 24,000 24,000 24,000 24,000 24,000 24,000 24,000 24,000 24,000 24,000 24,000 M Wallace, Capital – – + 1,500 1,500 M Wallace, Drawing 3,944 3,944 + 3,944 + + 3,944 3,944 3,944 (Service Income) 3,944 Revenue + + + + + Owner’s Equity – – – – – – – – – – – 1,880 1,880 1,445 435 (Truck Maint Exp.) + 1,445 1,105 340 (Utilities Expense) + 1,105 1,105 650 455 650 650 650 (Rent Expense) (Advertising Expense) + + Expenses CHAPTER Solution Manual for College Accounting 13th Edition by Scott Asset, Liability, Owner’s Equity, Revenue, and Expense Accounts © 2018 Cengage Learning All Rights Reserved May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part 1-18 12/28/16 8:15 PM Solution Manual for College Accounting 13th Edition by Scott CHAPTER Asset, Liability, Owner’s Equity, Revenue, and Expense Accounts Problem 1-1B (concluded) Right Side of Equals Sign: Left Side of Equals Sign: Cash Supplies Office Equipment $22,689 375 6,300 Accounts Payable $ 4,800 M Wallace, Capital 24,000 M Wallace, Drawing – 1,500 Revenue 3,944 – 1,880 Expenses $29,364 $29,364 1-19 © 2018 Cengage Learning All Rights Reserved May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part 80600_ch01_rev03_001-028.indd 19 12/28/16 8:15 PM 80600_ch01_rev03_001-028.indd 20 + – – – + Bal (d) Bal (e) Bal (f) Bal (g) Bal (h) Bal (i) Bal (j) + 57,608 + 3,500 54,108 + 47,412 + 10,196 49,150 + 1,738 49,622 + 472 52,622 + 3,000 43,662 + 8,960 2,138 43,662 + + 1,955 1,955 2,138 + 1,955 1,955 1,955 1,955 1,955 1,955 2,138 + 2,138 + 2,138 + 2,138 + 2,138 + + 2,138 + 2,138 2,138 Supplies 43,662 + 45,800 2,138 + 48,000 2,200 Cash Office Equipment Assets See the summary of accounts on the next page – – Bal (c) Bal (k) Bal + – (a) (b) Problem 1-2B + + + + + + + + + + 18,000 18,000 18,000 18,000 18,000 = = = = = = = 18,000 18,000 = = = = 18,000 18,000 Professional Equipment = – + + 16,955 16,955 16,955 16,955 16,955 19,955 3,000 18,000 18,000 1,955 19,955 Accounts Payable Liabilities + + + + + + + + + + + + + 48,000 48,000 48,000 48,000 48,000 48,000 48,000 48,000 48,000 48,000 48,000 K Haas, Capital – – + + + + + + + + + + – – 19,156 – – – – – – – – – 19,156 (Professional Fees) 8,960 10,196 8,960 8,960 8,960 (Professional Fees) 8,960 Revenue Owner’s Equity 3,500 3,500 K Haas, Drawing 4,410 4,410 4,410 2,672 1,738 (Salary Expense) + 2,200 472 2,200 2,200 2,200 2,200 2,200 2,200 (Utilities Expense) + + (Rent Expense) Expenses CHAPTER Solution Manual for College Accounting 13th Edition by Scott Asset, Liability, Owner’s Equity, Revenue, and Expense Accounts © 2018 Cengage Learning All Rights Reserved May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part 1-20 12/28/16 8:15 PM Solution Manual for College Accounting 13th Edition by Scott CHAPTER Asset, Liability, Owner’s Equity, Revenue, and Expense Accounts Problem 1-2B (concluded) Right Side of Equals Sign: Left Side of Equals Sign: Cash Supplies Office Equipment Professional Equipment $54,108 Accounts Payable 2,138 $16,955 K Haas, Capital 1,955 18,000 K Haas, Drawing – 3,500 Revenue 19,156 – 4,410 Expenses $76,201 48,000 $76,201 1-21 © 2018 Cengage Learning All Rights Reserved May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part 80600_ch01_rev03_001-028.indd 21 12/28/16 8:15 PM 80600_ch01_rev03_001-028.indd 22 25,000 1,700 23,300 418 22,882 944 21,938 8,518 30,456 1,820 28,636 388 28,248 368 27,880 9,260 37,140 2,670 34,470 2,500 31,970 Bal (e) – Bal (f) – Bal (g) + Bal (h) – Bal (i) – Bal (j) – Bal (k) + Bal (l) – Bal (m) – Bal 418 418 418 + + 418 418 418 + + + + 418 418 + + 418 418 Supplies + + + + + + + + + + + + + + Library + + 944 944 + + + + + + + 944 944 944 944 944 944 944 + + + + + + 9,670 + + + + 9,670 9,670 9,670 9,670 9,670 + + 9,670 9,670 + + + + 9,670 9,670 9,670 9,670 9,670 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 = = = = = = = = = = = = = + = Office Equipment Assets Prepaid Insurance See the summary of accounts on the next page 25,000 25,000 (a) + (b) Bal (c) Bal (d) – Cash Problem 1-3B – + 7,000 9,670 2,670 7,000 9,670 9,670 9,670 9,670 9,670 9,670 9,670 9,670 9,670 9,670 Accounts Payable Liabilities + + + + + + + + + + + + + + + + 27,800 27,800 27,800 27,800 27,800 27,800 27,800 27,800 27,800 27,800 25,000 2,800 27,800 25,000 P Schwartz, Capital – – + 2,500 2,500 + + + + + + + + + + 17,778 17,778 17,778 (Professional Fees) 8,518 9,260 8,518 8,518 8,518 (Professional Fees) 8,518 Revenue Owner’s Equity P Schwartz, Drawing – – – – – – – – – – – 4,276 4,276 4,276 4,276 3,908 368 (Utilities Expense) + 3,520 388 (Telephone Expense) + 1,700 1,820 (Salary Expense) + 1,700 1,700 1,700 1,700 (Rent Expense) + Expenses CHAPTER Solution Manual for College Accounting 13th Edition by Scott Asset, Liability, Owner’s Equity, Revenue, and Expense Accounts © 2018 Cengage Learning All Rights Reserved May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part 1-22 12/28/16 8:15 PM Solution Manual for College Accounting 13th Edition by Scott CHAPTER Asset, Liability, Owner’s Equity, Revenue, and Expense Accounts Problem 1-3B (concluded) Right Side of Equals Sign: Left Side of Equals Sign: Cash Accounts Payable $31,970 $ 7,000 Supplies 418 P Schwartz, Capital Prepaid Insurance 944 P Schwartz, Drawing – 2,500 Revenue 17,778 – 4,276 Office Equipment Library 9,670 2,800 Expenses $45,802 27,800 $45,802 1-23 © 2018 Cengage Learning All Rights Reserved May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part 80600_ch01_rev03_001-028.indd 23 12/28/16 8:15 PM 80600_ch01_rev03_001-028.indd 24 25,787 301 25,486 1,200 24,286 349 23,937 23,937 23,937 + 4,612 28,549 + 3,958 24,591 + 1,250 23,341 + Bal (f) – Bal (g) – Bal (h) – Bal (i) Bal (j) Bal (k) + Bal (l) – Bal (m) – Bal + + 3,603 + + 3,603 3,603 3,603 3,603 + + + + + + 301 301 301 301 301 301 301 301 301 Supplies See the summary of accounts on the next page 18,860 6,927 Bal (e) + + 19,860 1,000 25,000 5,140 19,860 Accounts + Receivable (a) + (b) – Bal (c) Bal (d) – Cash Problem 1-4B + + + + + + + + + 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 Prepaid Insurance Assets + + + + + + + + + + + + + + 15,140 15,140 15,140 15,140 15,140 15,140 15,140 15,140 15,140 15,140 15,140 15,140 15,140 Truck + + + + + + + + + + + + + 3,450 3,450 3,450 3,450 3,450 3,450 3,450 3,450 3,450 3,450 3,450 3,450 Equipment = = = = = = = = = = = = = = + + + 13,668 + 13,668 + 13,668 + 13,668 + 13,668 + 13,450 + 218 13,450 + 13,450 + 13,450 + 13,450 + + + + 10,000 10,000 + 3,450 13,450 + Accounts Payable Liabilities 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 T Carter, Capital – – + 1,250 1,250 + + + 15,142 15,142 15,142 10,530 4,612 (Service Income) + + 6,927 3,603 6,927 6,927 6,927 6,927 (Service Income) + + + + + + 6,927 Revenue (Service Income) + + Owner’s Equity T Carter, Drawing – – – – – – – – – – – 5,525 5,525 1,567 3,958 (Wages Expense) + 1,567 1,567 1,349 218 (Gas and Oil Expense) + 1,000 349 (Utilities Expense) + 1,000 1,000 1,000 1,000 (Rent Expense) + Expenses CHAPTER Solution Manual for College Accounting 13th Edition by Scott Asset, Liability, Owner’s Equity, Revenue, and Expense Accounts © 2018 Cengage Learning All Rights Reserved May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part 1-24 12/28/16 8:15 PM Solution Manual for College Accounting 13th Edition by Scott CHAPTER Asset, Liability, Owner’s Equity, Revenue, and Expense Accounts Problem 1-4B (concluded) Right Side of Equals Sign: Left Side of Equals Sign: Cash Accounts Receivable Supplies Prepaid Insurance Truck Equipment Accounts Payable $23,341 $13,668 T Carter, Capital 3,603 301 25,000 T Carter, Drawing – 1,250 1,200 Revenue 15,140 3,450 Expenses 15,142 – 5,525 $47,035 $47,035 1-25 © 2018 Cengage Learning All Rights Reserved May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part 80600_ch01_rev03_001-028.indd 25 12/28/16 8:15 PM 80600_ch01_rev03_001-028.indd 26 23,800 Bal (c) Bal (d) – Bal (e) – Bal (f) 27,450 + 150 27,300 + 27,300 + 1,400 25,900 + 4,200 30,100 + 2,000 28,100 + Bal (i) – Bal (j) Bal (k) – Bal (l) + Bal (m) – Bal + + 5,000 + + + + + + 225 225 225 225 225 225 225 225 225 + 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 225 + See the summary of accounts on the next page 21,400 + 6,050 21,400 + + 225 225 + + + + + + + + + + + + 1,400 1,400 1,400 1,400 1,400 1,400 1,400 1,400 1,400 1,400 Prepaid + Insurance Assets Accounts + Receivable + Supplies Bal (g) Bal (h) + 23,800 1,000 22,800 1,400 21,400 25,000 1,200 + – (a) (b) Cash Problem 1-5B Truck + 18,000 + 18,000 + 18,000 + 18,000 + 18,000 + 18,000 + 18,000 + 18,000 + 18,000 + 18,000 + 18,000 + + + + + + + + + 2,300 2,300 2,300 2,300 2,300 2,300 2,300 2,300 Office + Equipment = = = = = = = = = = = = = = + + + + + + + 19,605 + 19,605 + 19,605 + 19,605 + 19,525 + 80 19,525 + 17,225 + 2,300 19,525 + 17,225 + + 225 225 + 17,000 17,225 + Accounts Payable Liabilities 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 A Nguyen, Capital – + 2,000 2,000 + 15,250 15,250 11,050 4,200 11,050 11,050 11,050 (Service Income) 5,000 6,050 5,000 (Service Income) 5,000 (Service Income) + + + + + + + + + + Revenue Owner’s Equity A Nguyen, – Drawing + – – – – – – – – – – – – – 1,200 1,350 80 1,430 1,400 2,830 2,830 2,830 (Wages Expense) + (Gas and Oil Expense) + 1,200 150 1,200 1,200 1,200 1,200 1,200 1,200 (Utilities Expense) + + (Rent Expense) Expenses CHAPTER Solution Manual for College Accounting 13th Edition by Scott Asset, Liability, Owner’s Equity, Revenue, and Expense Accounts © 2018 Cengage Learning All Rights Reserved May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part 1-26 12/28/16 8:15 PM Solution Manual for College Accounting 13th Edition by Scott CHAPTER Asset, Liability, Owner’s Equity, Revenue, and Expense Accounts Problem 1-5B (concluded) Right Side of Equals Sign: Left Side of Equals Sign: Cash Accounts Receivable Supplies Prepaid Insurance Truck Office Equipment $28,100 Accounts Payable $19,605 5,000 A Nguyen, Capital 25,000 A Nguyen, Drawing – 2,000 1,400 Revenue 18,000 2,300 Expenses 15,250 – 2,830 225 $55,025 $55,025 1-27 © 2018 Cengage Learning All Rights Reserved May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part 80600_ch01_rev03_001-028.indd 27 12/28/16 8:15 PM Solution Manual for College Accounting 13th Edition by Scott CHAPTER Asset, Liability, Owner’s Equity, Revenue, and Expense Accounts SOLUTIONS TO ACTIVITIES WHY DOES IT MATTER? Suggested Response Cash: Asset Accounts Receivable: Asset Supplies: Asset Equipment: Asset Furniture: Asset Accounts Payable: Liabilities Capital: Owner’s Equity Drawing: Owner’s Equity Catering Fees: Owner’s Equity Wages Expense: Owner’s Equity Rent Expense: Owner’s Equity Utilities Expense: Owner’s Equity Advertising Expense: Owner’s Equity Miscellaneous Expense: Owner’s Equity WHAT WOULD YOU SAY? Suggested Response Explain to your friend that the separate entity concept demands a separate business checking account The separate entity concept states that a business is treated as a separate economic or accounting entity The business stands by itself, separate from its owners, creditors, and customers Mixing together and confusing personal and business funds is one of the most common reasons that small businesses fail WHAT DO YOU THINK? Suggested Response J Perrault, Supervisor TO: FROM: Your Name July 31, 20-DATE: SUBJECT: Calculations for Richter Co The calculations you requested are as follows: The checkbook balance of cash for Richter Company of $13,364 does tie to (match) the Cash account balance The following calculation confirms this: Total assets of $43,560 minus noncash assets totaling $30,196 (Professional Equipment of $24,375 plus Office Equipment of $3,896 plus Prepaid Insurance of $1,925) equals $13,364 Cash Richter Company’s owner’s equity is $35,618 The following calculation confirms this: Total assets of $43,560 minus liabilities of $7,942 equals $35,618 1-28 © 2018 Cengage Learning All Rights Reserved May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part 80600_ch01_rev03_001-028.indd 28 12/28/16 8:15 PM ... https://TestbankDirect.eu /Solution- Manual- for- College- Accounting- 13th- Edition- by- Sc (Rent Expense) Expenses CHAPTER Solution Manual for College Accounting 13th Edition by Scott Asset, Liability,... 80600_ch01_rev03_001-028.indd 12/28/16 8:15 PM Solution Manual for College Accounting 13th Edition by Scott CHAPTER Asset, Liability, Owner’s Equity, Revenue, and Expense Accounts SOLUTIONS TO EXERCISES AND PROBLEMS.. .Solution Manual for College Accounting 13th Edition by Scott CHAPTER Asset, Liability, Owner’s Equity, Revenue, and Expense Accounts ACCOUNTING LANGUAGE Account numbers