Scribd Logo
Upload

Welcome to Scribd!

  • 60 views

    Removals Exam.

    Uploaded by

    Hashanyska Juni
    1. The document records various transactions of a business including an initial investment of $2 million in owner's capital, purchase of $1 million in equipment, taking out a $500,000 bank loan, prepaying $160,000 for insurance, earning $6 million in service fees, collecting $1.8 million in accounts receivable, paying $1.2 million in salaries and $500,000 in utilities, prepaying $120,000 for supplies, and distributing $1.4 million in owner's drawings. 2. It provides an unadjusted trial balance showing assets of $8.5 million equal to liabilities and equity of $8.5 million. 3. It records

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Removals Exam.

    Uploaded by

    Hashanyska Juni
    60 views4 pages
    1. The document records various transactions of a business including an initial investment of $2 million in owner's capital, purchase of $1 million in equipment, taking out a $500,000 bank loan, prepaying $160,000 for insurance, earning $6 million in service fees, collecting $1.8 million in accounts receivable, paying $1.2 million in salaries and $500,000 in utilities, prepaying $120,000 for supplies, and distributing $1.4 million in owner's drawings. 2. It provides an unadjusted trial balance showing assets of $8.5 million equal to liabilities and equity of $8.5 million. 3. It records

    Original Description:

    quiz

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    1. The document records various transactions of a business including an initial investment of $2 million in owner's capital, purchase of $1 million in equipment, taking out a $500,000 bank loan, prepaying $160,000 for insurance, earning $6 million in service fees, collecting $1.8 million in accounts receivable, paying $1.2 million in salaries and $500,000 in utilities, prepaying $120,000 for supplies, and distributing $1.4 million in owner's drawings. 2. It provides an unadjusted trial balance showing assets of $8.5 million equal to liabilities and equity of $8.5 million. 3. It records

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    60 views4 pages

    Removals Exam.

    Uploaded by

    Hashanyska Juni
    1. The document records various transactions of a business including an initial investment of $2 million in owner's capital, purchase of $1 million in equipment, taking out a $500,000 bank loan, prepaying $160,000 for insurance, earning $6 million in service fees, collecting $1.8 million in accounts receivable, paying $1.2 million in salaries and $500,000 in utilities, prepaying $120,000 for supplies, and distributing $1.4 million in owner's drawings. 2. It provides an unadjusted trial balance showing assets of $8.5 million equal to liabilities and equity of $8.5 million. 3. It records

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 4

    Hashanyska Q.

    Juni
    BSBA-MM2

    Requirement A

    Cash 2,000,000
    1 Owner’s Capital 2,000,000
    to record the owner’s investment to
    the business
    Equipment 1,000,000
    2 Cash 1,000,000
    to record the acquisition of equipment
    for cash
    Cash 500,000
    3 Notes Payable 500,000
    to record the bank loan
    Prepaid Insurance 160,000
    4 Cash 160,000
    to record the payment of insurance

    Cash (6Mx1/3) 2,000,000


    5 Accounts Receivable 4,000,000
    Service Fees 6,000,000
    to record service fees
    Cash 1,800,000
    6 Accounts Receivable 1,800,000
    to record collection of accounts
    receivable
    Salaries Expense 1,200,000
    7 Cash 1,200,000
    To record salaries expense
    Utilities Expense 500,000
    8 Cash 500,000
    to record utilities expense
    Prepaid Supplies 120,000
    9 Cash 120,000
    to record purchase of supplies
    Owner’s drawings 1,400,000
    10 Cash 1,400,000
    to record owner’s drawings
    Requirement B
    Assets Accounts Receivable

    CASH (5) 4,000,000


    ( 1) 2,000,000 1,800,000 (6)
    (3) 500,000 1,000,000 (2) 2,200,000 end
    (5) 2,000,000 160,000 (4)
    (6) 1,800,000 1,200,000 (7) Equipment
    500,000 (8)
    120,000 (9) (2) 1,000,000
    1,400,000 (10)
    1,920,000 end 1,000,000 end

    Prepaid Supplies Prepaid Insurance


    (9) 120,000 (4) 160,000
    120,000 end 160,000 end

    LIABILITIES EQUITY
    NOTES PAYABLE Owner’s Capital
    500,000 (3) 2,000,000 (1)
    500,000 end 2,000,000 end

    INCOME Owner’s drawings


    Service fees 1,400,000
    6,000,000 (5) 1,400,000 end
    6,000,000 end

    EXPENSE
    Salaries Expense
    1,200,000
    1,200,000 end

    UTILITIES EXPENSE
    500,000
    500,000 end
    Requirement C: Unadjusted Trial Balance

    Entity A
    Unadjusted Trial Balance

    ACCOUNTS DEBITS CREDITS


    Cash 1,920,000
    Accounts Receivable 2,200,000
    Prepaid Insurance 160,000
    Prepaid Supplies 120,000
    Equipment 1,000,000
    Notes Payable 500,000
    Owner’s Capital 2,000,000
    Owner’s Drawings 1,400,000
    Service fees 6,000,000
    Salaries expense 1,200,000
    Utilities Expense
    TOTALS: 8,500,000 8,500,000

    Requirement D

    Depreciation expense 100,000


    (1,000,000/10years)
    i Accumulated Depreciation 100,000
    to record the depreciation expense for
    the year
    Interest Expense (500,000) 30,000
    Interest Payable 30,000
    ii to accrue interest expense

    Insurance expense 40,000


    (160,000 x 12%6/12) 40,000
    iii Prepaid Insurance
    to record insurance expense

    Supplies Expense (120,000-40,000) 80,000


    Prepaid Supplies 80,000
    iv to record supplies expense
    Requirement E

    December 31 Service fees 6,000,000


    Salaries Expense 1,200,000
    Utilities Expense 500,000
    Depreciation Expense 100,000
    Interest Expense 30,000
    Insurance Expense 40,000
    Supplies Expense 80,000
    Income Summary 4,050,000
    December 31 Income Summary 4,050,000
    Owner’s Equity 4,050,000

    December 31 Owner’s Dr Equity 1,400,000


    Owner’s Drawings 1,400,000

    You might also like