College Accounting A Contemporary

Approach 3rd Edition Haddock Solutions

Manual

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CHAPTER 4
THE GENERAL JOURNAL AND THE GENERAL LEDGER
Chapter Opener: Thinking Critically
They would probably record (debit) the cost of the arm to their Equipment or Machinery account and
credit Accounts Payable. The robotic arm will be used for many years so its cost will be expensed over its
years of useful life.

Fast Facts
• William Boeing founded Pacific Aero Products Company in 1916; the name was changed to
Boeing in 1917.
• In 1917, the company employed 28 people. In 2013, Boeing employed more than 170,000 people
across the United States and in 70 countries.
• Boeing is the largest contractor working for NASA.
• Along with the ISS, the Boeing Company manufactures and services commercial airplanes,
military aircraft, helicopters, a variety of electronic defense systems, and advanced
communication systems.
• Boeing’s 2012 sales were $81.6 billion from customers in 150 countries. Seventy percent of
commercial airplane revenue historically from customers outside the United States.

Managerial Implications: Thinking Critically

Answers will vary but may include the following.
• Exposing the assets of the business to fraud and theft.
• Increasing the risk of producing inaccurate financial statements.
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 • Difficulty in auditing transactions.
• Research customer billing. (Customer says no invoice was received.)

Discussion Questions
Note to instructor: These questions are designed to check students’ understanding of new terms, concepts,
and procedures presented in the chapter.
1. Transfer of data from a journal to a ledger.
2. Groups of accounts.
3. Assets, liabilities, and owner’s equity first, followed by revenue accounts, then expenses. They are
in order of the financial statements.
4. Notations of the page number of the journal from which a figure comes; number of account to which
the figure was posted; to provide cross-references.
5. To record business transactions in chronological order.
6. Helps establish audit trail.
7. Record month, day, debited account/amount, credited account/amount, description.
8. Entry that includes more than a single debit and credit—two or more debits and/or credits.
9. Before entry posted: cross out incorrect item, write correct data above it. After posted: journalize
and post a correcting entry.
10. Chain of references; prevents fraud and errors.
11. Steps performed to classify, record, and summarize financial data for a business.

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EXERCISE 4.1

Debit Credit Debit Credit Debit Credit

1. 401 101 5. 202 101 8. 101 301
2. 517 101 6. 101 401 9. 121 202
3. 111 401 7. 101 111 10. 511 101
4. 131 101

EXERCISE 4.2

GENERAL JOURNAL PAGE 1

POST.
DATE DESCRIPTION REF. DEBIT CREDIT
1 2016 1
2 Sept. 1 Cash 60 0 0 0 00 2
3 Jewell Tucker, Capital 101 60 0 0 0 00 3
4 Beginning investment of owner 301 4
5 5
6 4 Equipment 131 6 5 0 0 00 6
7 Accounts Payable 202 6 5 0 0 00 7
8 Purchased equipment on credit from 8
9 Den, Inc., Invoice 9823, payable in 30 9
10 days 10

11 16 Automobile 141 14 5 0 0 00 11
12 Cash 101 14 5 0 0 00 12
13 Purchased an automobile, Check 1001 13
14 14
15 20 Supplies 121 5 2 0 00 15
16 Cash 101 5 2 0 00 16
17 Purchased supplies, Check 1002 17
18 18
19 23 Cash 101 1 7 0 00 19
20 Supplies 121 1 7 0 00 20
21 Returned damaged supplies and 21
22 received cash refund 22
23 23
24 30 Accounts Payable 202 4 2 0 0 00 24
25 Cash 101 4 2 0 0 00 25
26 Paid Den, Inc., on account for 26
27 Invoice 9823, Check 1003 27

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EXERCISE 4.2 (continued)
GENERAL JOURNAL PAGE 2

POST.
DATE DESCRIPTION REF. DEBIT CREDIT
1 2016 1
2 Sept. 30 Jewell Tucker, Drawing 302 3 0 0 0 00 2
3 Cash 101 3 0 0 0 00 3
4 Owner withdrew cash for personal use 4
5 5
6 30 Rent Expense 511 1 7 0 0 00 6
7 Cash 101 1 7 0 0 00 7
8 Paid October rent, Check 1004 8
9 9
10 30 Cash 101 2 7 5 0 00 10
11 Fees Income 401 2 7 5 0 00 11
12 Performed services for cash 12
13 13
14 30 Telephone Expense 517 4 3 5 00 14
15 Cash 101 4 3 5 00 15
16 Paid monthly telephone bill, Check 1005 16
17 17
18 18

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EXERCISE 4.3

GENERAL LEDGER
ACCOUNT Cash ACCOUNT NO. 101

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
Sept. 1 J1 60 0 0 0 00 60 0 0 0 00
16 J1 14 5 0 0 00 45 5 0 0 00
20 J1 5 2 0 00 44 9 8 0 00
23 J1 1 7 0 00 45 1 5 0 00
30 J1 4 2 0 0 00 40 9 5 0 00
30 J2 3 0 0 0 00 37 9 5 0 00
30 J2 1 7 0 0 00 36 2 5 0 00
30 J2 2 7 5 0 00 39 0 0 0 00
30 J2 4 3 5 00 38 5 6 5 00

ACCOUNT Accounts Receivable ACCOUNT NO. 111

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT

ACCOUNT Supplies ACCOUNT NO. 121

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
Sept. 20 J1 5 2 0 00 5 2 0 00
23 J1 1 7 0 00 3 5 0 00

ACCOUNT Equipment ACCOUNT NO. 131

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
Sept. 4 J1 6 5 0 0 00 6 5 0 0 00

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EXERCISE 4.3 (continued)

ACCOUNT Automobile ACCOUNT NO. 141

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
Sept. 16 J1 14 5 0 0 00 14 5 0 0 00

ACCOUNT Accounts Payable ACCOUNT NO. 202

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
Sept. 4 J1 6 5 0 0 00 6 5 0 0 00
30 J1 4 2 0 0 00 2 3 0 0 00

ACCOUNT Jewell Tucker, Capital ACCOUNT NO. 301

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
Sept. 1 J1 60 0 0 0 00 60 0 0 0 00

ACCOUNT Jewell Tucker, Drawing ACCOUNT NO. 302

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
Sept. 30 J2 3 0 0 0 00 3 0 0 0 00

ACCOUNT Fees Income ACCOUNT NO. 401

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
Sept. 30 J2 2 7 5 0 00 2 7 5 0 00

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EXERCISE 4.3 (continued)

ACCOUNT Rent Expense ACCOUNT NO. 511

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
Sept. 30 J2 1 7 0 0 00 1 7 0 0 00

ACCOUNT Salaries Expense ACCOUNT NO. 514

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT

ACCOUNT Telephone Expense ACCOUNT NO. 517

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
Sept. 30 J2 4 3 5 00 4 3 5 00

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EXERCISE 4.4
GENERAL JOURNAL PAGE

POST.
DATE DESCRIPTION REF. DEBIT CREDIT
1 2016 1
2 Nov. 5 Cash 19 0 0 0 00 2
3 Accounts Receivable 21 0 0 0 00 3
4 Fees Income 40 0 0 0 00 4
5 Performed services for Job Search 5
6 receiving part of fees in cash with 6
7 remainder due in 60 days 7
8 8
9 18 Equipment 4 2 5 00 9
10 Supplies 5 7 5 00 10
11 Cash 1 0 0 0 00 11
12 Purchased graphing calculator and 12
13 supplies, Check 1008 13
14 14
15 23 Automobile Expense 2 1 0 0 00 15
16 Cash 1 0 5 0 00 16
17 Accounts Payable 1 0 5 0 00 17
18 Received Invoice 1602 from Automotive 18
19 Technicians Repair, issued Check 1009 19
20 for half the amount, balance due in 30 days 20
21 21

EXERCISE 4.5
GENERAL JOURNAL PAGE

POST.
DATE DESCRIPTION REF. DEBIT CREDIT
1 2016 1
2 July 30 Telephone Expense 1 0 0 0 00 2
3 Utilities Expense 1 0 0 0 00 3
4 To correct July 9 error charging 4
5 telephone bill to Utilities Expense 5
6 6

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EXERCISE 4.6
GENERAL JOURNAL PAGE

POST.
DATE DESCRIPTION REF. DEBIT CREDIT
1 2016 1
2 Oct. 1 Repair Expense 8 0 0 00 2
3 Truck 8 0 0 00 3
4 To correct September 16 error charging 4
5 truck charges to the Truck account 5
6 6

PROBLEM 4.1A
GENERAL JOURNAL PAGE 1

POST.
DATE DESCRIPTION REF. DEBIT CREDIT
1 2016 1
2 Sept. 1 Rent Expense 1 9 0 0 00 2
3 Cash 1 9 0 0 00 3
4 Paid September rent, Check 1169 4
5 5
6 5 Cash 3 0 0 0 00 6
7 Fees Income 3 0 0 0 00 7
8 Performed services for cash 8
9 9
10 6 Accounts Receivable 1 8 5 0 00 10
11 Fees Income 1 8 5 0 00 11
12 Performed services on credit 12
13 13
14 10 Telephone Expense 7 0 0 00 14
15 Cash 7 0 0 00 15
16 Paid monthly telephone bill, Check 1170 16
17 17
18 11 Equipment Repair Expense 9 4 0 00 18
19 Cash 9 4 0 00 19
20 Paid for repairs, Check 1171 20
21 21
22 12 Cash 3 7 0 0 00 22
23 Accounts Receivable 3 7 0 0 00 23
24 Received cash on account 24

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PROBLEM 4.1A (continued)

GENERAL JOURNAL PAGE 2

POST.
DATE DESCRIPTION REF. DEBIT CREDIT
1 2016 1
2 Sept. 15 Salaries Expense 4 7 0 0 00 2
3 Cash 4 7 0 0 00 3
4 Paid semimonthly salaries, Checks 1172-1177 4
5 5
6 18 Supplies 2 5 0 0 00 6
7 Cash 2 5 0 0 00 7
8 Paid for supplies, Check 1178 8
9 9
10 19 Equipment 2 7 5 0 00 10
11 Accounts Payable 2 7 5 0 00 11
12 Purchased tennis rackets from The Tennis 12
13 Supply Shop, Invoice 3108, payable in 30 days 13
14 14
15 20 Equipment 2 8 6 0 00 15
16 Cash 2 8 6 0 00 16
17 Purchased nets, Check 1179 17
18 18
19 21 Cash 1 0 5 0 00 19
20 Accounts Receivable 1 0 5 0 00 20
21 Received cash on account 21
22 22
23 21 Cash 5 5 0 00 23
24 Equipment 5 5 0 00 24
25 Returned damaged net for cash refund 25
26 26
27 22 Cash 3 3 6 0 00 27
28 Fees Income 3 3 6 0 00 28
29 Performed services for cash 29
30 30
31 23 Accounts Receivable 4 9 5 0 00 31
32 Fees Income 4 9 5 0 00 32
33 Performed services on account 33
34 34
35 26 Supplies 5 6 0 00 35
36 Cash 5 6 0 00 36
37 Paid for supplies, Check 1180 37

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PROBLEM 4.1A (continued)

GENERAL JOURNAL PAGE 3

POST.
DATE DESCRIPTION REF. DEBIT CREDIT
1 2016 1
2 Sept. 28 Utilities Expense 2 3 5 0 00 2
3 Cash 2 3 5 0 00 3
4 Paid monthly electric bill, Check 1181 4
5 5
6 30 Salaries Expense 4 7 0 0 00 6
7 Cash 4 7 0 0 00 7
8 Paid semimonthly salaries, Check 1182-1187 8
9 9
10 30 Selena Cantu, Drawing 4 7 0 0 00 10
11 Cash 4 7 0 0 00 11
12 Owner withdrew cash for personal use, 12
13 Check 1188 13

Analyze: Check 1189 would be included in the journal entry description.

PROBLEM 4.2A
GENERAL JOURNAL PAGE 1

POST.
DATE DESCRIPTION REF. DEBIT CREDIT
1 2016 1
2 Oct. 1 Cash 101 60 0 0 0 00 2
3 Satillo Richey, Capital 301 60 0 0 0 00 3
4 Beginning investment of owner 4
5 5
6 2 Rent Expense 514 3 0 0 0 00 6
7 Cash 101 3 0 0 0 00 7
8 Paid October rent, Check 1001 8
9 9
10 5 Office Equipment 141 15 0 0 0 00 10
11 Accounts Payable 202 15 0 0 0 00 11
12 Purchased equipment from Office Furniture 12
13 Mart, Inc., Invoice 6704, payable in 60 days 13

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PROBLEM 4.2A (continued)

GENERAL JOURNAL PAGE 2

POST.
DATE DESCRIPTION REF. DEBIT CREDIT
1 2016 1
2 Oct. 6 Art Equipment 151 3 2 0 0 0 2
3 Cash 101 3 2 0 0 0 3
Purchased art equipment, Check 1002

4 4
5 7 Supplies 121 1 5 5 0 00 5
6 Cash 101 1 5 5 0 00 6
7 Purchased supplies, Check 1003 7
8 8
9 10 Office Cleaning Expense 511 6 0 0 00 9
10 Cash 101 6 0 0 00 10
11 Paid for office cleaning, Check 1004 11
12 12
13 12 Cash 101 4 1 0 0 00 13
14 Accounts Receivable 111 1 9 0 0 00 14
15 Fees Income 401 6 0 0 0 00 15
16 Performed services for cash and on credit 16
17 17
18 15 Cash 101 4 0 0 00 18
19 Supplies 121 4 0 0 00 19
20 Returned damaged supplies for cash refund 20
21 21
22 18 Office Equipment 141 3 0 0 0 00 22
23 Cash 101 1 7 5 0 00 23
24 Accounts Payable 202 1 2 5 0 00 24
25 Purchased equip. from Office Furniture Mart, Inc., 25
26 Invoice 7108; Check 1005; balance due in 30 days 26
27 27
28 20 Accounts Payable 202 7 5 0 0 00 28
29 Cash 101 7 5 0 0 00 29
30 Paid Office Furniture Mart, Inc., on account, 30
31 Invoice 6704; Check 1006 31

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PROBLEM 4.2A (continued)

GENERAL JOURNAL PAGE 3

POST.
DATE DESCRIPTION REF. DEBIT CREDIT
1 2016 1
2 Oct. 26 Accounts Receivable 111 4 4 0 0 0 2
3 Fees Income 401 4 4 0 0 0 3
Performed services on credit

4 4
5 27 Telephone Expense 520 3 2 5 00 5
6 Cash 101 3 2 5 00 6
7 Paid monthly telephone bill, Check 1007 7
8 8
9 30 Cash 101 3 7 0 0 00 9
10 Accounts Receivable 111 3 7 0 0 00 10
11 Received cash on account 11
12 12
13 30 Utilities Expense 523 4 0 0 00 13
14 Cash 101 4 0 0 00 14
15 Paid monthly utility bill, Check 1008 15
16 16
17 30 Salaries Expense 517 8 0 0 0 00 17
18 Cash 101 8 0 0 0 00 18
19 Paid monthly salaries, Checks 1009-1011 19
20 20

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PROBLEM 4.2A (continued)

GENERAL LEDGER
ACCOUNT Cash ACCOUNT NO. 101

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
Oct. 1 J1 60 0 0 0 00 60 0 0 0 00
2 J1 3 0 0 0 00 57 0 0 0 00
6 J1 3 2 0 0 00 53 8 0 0 00
7 J1 1 5 5 0 00 52 2 5 0 00
10 J1 6 0 0 00 51 6 5 0 00
12 J1 4 1 0 0 00 55 7 5 0 00
15 J1 4 0 0 00 56 1 5 0 00
18 J2 1 7 5 0 00 54 4 0 0 00
20 J2 7 5 0 0 00 46 9 0 0 00
27 J3 3 2 5 00 46 5 7 5 00
30 J3 3 7 0 0 00 50 2 7 5 00
30 J3 4 0 0 00 49 8 7 5 00
30 J3 8 0 0 0 00 41 8 7 5 00

ACCOUNT Accounts Receivable ACCOUNT NO. 111

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
Oct. 12 J1 1 9 0 0 00 1 9 0 0 00
26 J3 4 4 0 0 00 6 3 0 0 00
30 J3 3 7 0 0 00 2 6 0 0 00

ACCOUNT Supplies ACCOUNT NO. 121

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
Oct. 7 J1 1 5 5 0 00 1 5 5 0 00
15 J1 4 0 0 00 1 1 5 0 00

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PROBLEM 4.2A (continued)

GENERAL LEDGER
ACCOUNT Office Equipment ACCOUNT NO. 141

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
Oct. 5 J1 15 0 0 0 00 15 0 0 0 00
18 J2 3 0 0 0 00 18 0 0 0 00

ACCOUNT Art Equipment ACCOUNT NO. 151

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
Oct. 6 J1 3 2 0 0 00 3 2 0 0 00

ACCOUNT Accounts Payable ACCOUNT NO. 202

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
Oct. 5 J1 15 0 0 0 00 15 0 0 0 00
18 J2 1 2 5 0 00 16 2 5 0 00
20 J2 7 5 0 0 00 8 7 5 0 00

ACCOUNT Saltillo Richey, Capital ACCOUNT NO. 301

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
Oct. 1 J1 60 0 0 0 00 60 0 0 0 00

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PROBLEM 4.2A (continued)

GENERAL LEDGER
ACCOUNT Wilson Adams, Drawing ACCOUNT NO. 302

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT

ACCOUNT Fees Income ACCOUNT NO. 401

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
Oct. 12 J1 6 0 0 0 00 6 0 0 0 00
26 J3 4 4 0 0 00 10 4 0 0 00

ACCOUNT Office Cleaning Expense ACCOUNT NO. 511

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
Oct. 10 6 0 0 00 6 0 0 00

ACCOUNT Rent Expense ACCOUNT NO. 514

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
Oct. 2 J1 3 0 0 0 00 3 0 0 0 00

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PROBLEM 4.2A (continued)

GENERAL LEDGER
ACCOUNT Salaries Expense ACCOUNT NO. 517

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
Oct. 30 J3 8 0 0 0 00 8 0 0 0 00

ACCOUNT Telephone Expense ACCOUNT NO. 520

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
Oct. 27 J3 3 2 5 00 3 2 5 00

ACCOUNT Utilities Expense ACCOUNT NO. 523

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
Oct. 30 J3 4 0 0 00 4 0 0 00

Analyze: General ledger account 202 has an $8,750 credit balance.

PROBLEM 4.3A

April 1: The debit should be to Accounts Receivable, not Accounts Payable.

April 2: The debit and credit amounts are reversed. Telephone Expense should be debited and Cash
should be credited.
April 3: The two debit amounts and the credit amount in the entry are not equal because of a math error.
The credit for Cash should be $8,000.

Analyze: After correcting the three entries, the assets are increased by $11,800 ($12,400 - $1,000 + $400).

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PROBLEM 4.4A
GENERAL JOURNAL PAGE 1

POST.
DATE DESCRIPTION REF. DEBIT CREDIT
1 2016 1
2 Nov. 1 Cash 101 55 0 0 0 00 2
3 Tools 131 2 0 0 0 00 3
4 Dennis Ortiz, Capital 301 57 0 0 0 00 4
5 Beginning investment of owner 5
6 6
7 2 Equipment 151 2 0 5 0 00 7
8 Office Supplies 121 5 5 0 00 8
9 Cash 101 7 0 0 00 9
10 Accounts Payable 202 1 9 0 0 00 10
11 Purchased equipment and office supplies from 11
12 Office Depot, Invoice 501; issued Check 100 12
13 for a down payment, balance payable in 30 days 13
14 14
15 10 Cash 101 1 0 0 0 00 15
16 Accounts Receivable 111 1 9 0 0 00 16
17 Fees Income 401 2 9 0 0 00 17
18 Services for cash and credit 18
19 19
20 20 Machinery 141 4 0 0 0 00 20
21 Cash 101 1 5 0 0 00 21
22 Accounts Payable 202 2 5 0 0 00 22
23 Purchased machinery from Craft Machinery Inc., 23
24 Invoice 709; issued Check 101 24
25 for a down payment, balance due in 30 days 25
26 26

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PROBLEM 4.4A (continued)

GENERAL LEDGER
ACCOUNT Cash ACCOUNT NO. 101

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
Nov. 1 J1 55 0 0 0 00 55 0 0 0 00
2 J1 7 0 0 00 54 3 0 0 00
10 J1 1 0 0 0 00 55 3 0 0 00
20 J1 1 5 0 0 00 53 8 0 0 00

ACCOUNT Accounts Receivable ACCOUNT NO. 111

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
Nov. 10 J1 1 9 0 0 00 1 9 0 0 00

ACCOUNT Office Supplies ACCOUNT NO. 121

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
Nov. 2 J1 5 5 0 00 5 5 0 00

ACCOUNT Tools ACCOUNT NO. 131

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
Nov. 1 J1 2 0 0 0 00 2 0 0 0 00

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distribution in any manner. 4-18
PROBLEM 4.4A (continued)

GENERAL LEDGER
ACCOUNT Machinery ACCOUNT NO. 141

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
Nov. 20 J1 4 0 0 0 00 4 0 0 0 00

ACCOUNT Equipment ACCOUNT NO. 151

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
Nov. 2 J1 2 0 5 0 00 2 0 5 0 00

ACCOUNT Accounts Payable ACCOUNT NO. 202

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
Nov. 2 J1 1 9 0 0 00 1 9 0 0 00
20 J1 2 5 0 0 00 4 4 0 0 00

ACCOUNT Dennis Ortiz, Capital ACCOUNT NO. 301

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
Nov. 1 J1 57 0 0 0 00 57 0 0 0 00

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distribution in any manner. 4-19
PROBLEM 4.4A (continued)

GENERAL LEDGER
ACCOUNT Fees Income ACCOUNT NO. 401

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
Nov. 10 J1 2 9 0 0 00 2 9 0 0 00

Analyze: The business owes $4,400 as of November 30.

PROBLEM 4.1B
GENERAL JOURNAL PAGE 1

POST
DATE DESCRIPTION REF. DEBIT CREDIT
1 2016 1
2 Sept. 1 Cash 50 0 0 0 00 2
3 Charles Brown, Capital 50 0 0 0 00 3
4 Beginning investment of owner 4
5 5
6 5 Cash 6 0 0 0 00 6
7 Fees Income 6 0 0 0 00 7
8 Performed services for cash 8
9 9
10 6 Rent Expense 2 5 0 0 00 10
11 Cash 2 5 0 0 00 11
12 Paid for September, Check 1000 12
13 13
14 7 Accounts Receivable 6 3 0 0 00 14
15 Fees Income 6 3 0 0 00 15
16 Performed services on credit 16
17 17
18 9 Telephone Expense 6 4 0 00 18
19 Cash 6 4 0 00 19
20 Paid telephone bill, Check 1001 20

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distribution in any manner. 4-20
PROBLEM 4.1B (continued)

GENERAL JOURNAL PAGE 2

POST.
DATE DESCRIPTION REF. DEBIT CREDIT
1 2016 1
2 Sept. 10 Equipment Repair Expense 6 7 5 00 2
3 Cash 6 7 5 00 3
4 Paid for equipment repairs, Check 1002 4
5 5
6 12 Cash 1 0 9 0 00 6
7 Accounts Receivable 1 0 9 0 00 7
8 Received cash on account 8
9 9
10 14 Salaries Expense 12 5 0 0 00 10
11 Cash 12 5 0 0 00 11
12 Paid semimonthly salaries to employees, 12
13 Checks 1003-1004 13
14 14
15 18 Cleaning Supplies Expense 8 0 0 00 15
16 Cash 8 0 0 00 16
17 Paid for cleaning supplies, Check 1005 17
18 18
19 19 Office Supplies Expense 9 5 0 00 19
20 Cash 9 5 0 00 20
21 Paid for office supplies, Check 1006 21
22 22
23 20 Equipment 10 0 0 0 00 23
24 Cash 2 0 0 0 00 24
25 Accounts Payable 8 0 0 0 00 25
26 Purchase from Razor Equipment, Inc., 26
27 Invoice 1012; issued Check 1007 for down 27
28 payment, balance due in 30 days 28
29 29
30 22 Cash 4 8 0 0 00 30
31 Fees Income 4 8 0 0 00 31
32 Performed services for cash 32
33 33
34 24 Utilities Expense 9 5 0 00 34
35 Cash 9 5 0 00 35
36 Paid utility bill, Check 1008 36

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distribution in any manner. 4-21
PROBLEM 4.1B (continued)

GENERAL JOURNAL PAGE 3

POST.
DATE DESCRIPTION REF. DEBIT CREDIT
1 2016 1
2 Sept. 26 Accounts Receivable 7 2 0 0 00 2
3 Fees Income 7 2 0 0 00 3
4 Performed services on account 4
5 5
6 30 Salaries Expense 12 5 0 0 00 6
7 Cash 12 5 0 0 00 7
8 Paid semimonthly salaries, 8
9 Checks 1009-1010 9
10 10
11 30 Charles Brown, Drawing 6 0 0 0 00 11
12 Cash 6 0 0 0 00 12
13 Owner withdrew cash for personal use, 13
14 Check 1011 14
15 15

Analyze: Eight transactions affected expense accounts.

PROBLEM 4.2B
GENERAL JOURNAL PAGE 1

POST.
DATE DESCRIPTION REF. DEBIT CREDIT
1 2016 1
2 June 1 Cash 101 18 0 0 0 00 2
3 Carolyn Davis, Capital 301 18 0 0 0 00 3
4 Beginning investment of owner 4
5 5
6 2 Rent Expense 514 1 2 5 0 00 6
7 Cash 101 1 2 5 0 00 7
8 Paid rent for June, Check 1001 8
9 9
10 5 Office Equipment 141 7 5 0 0 00 10
11 Accounts Payable 202 7 5 0 0 00 11
12 Purchased office equipment fromDeSoto, 12
13 Inc., Invoice 5312, payable in 60 days 13
14 14

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distribution in any manner. 4-22
PROBLEM 4.2B (continued)

GENERAL JOURNAL PAGE 2

POST.
DATE DESCRIPTION REF. DEBIT CREDIT
1 2016 1
2 June 6 Photographic Equipment 151 1 9 0 0 00 2
3 Cash 101 1 9 0 0 00 3
4 Purchased photo equipment, Check 1002 4
5 5
6 7 Supplies 121 5 3 8 00 6
7 Cash 101 5 3 8 00 7
8 Purchased supplies, Check 1003 8
9 9
10 10 Office Cleaning Expense 511 4 0 0 00 10
11 Cash 101 4 0 0 00 11
12 Paid for office cleaning, Check 1004 12
13 13
14 12 Cash 101 1 3 0 0 00 14
15 Accounts Receivable 111 1 3 0 0 00 15
16 Fees Income 401 2 6 0 0 00 16
17 Performed services for cash and credit 17
18 18
19 15 Cash 101 1 5 0 00 19
20 Supplies 121 1 5 0 00 20
21 Returned damaged supplies for cash 21
22 22
23 18 Office Equipment 141 1 8 5 0 00 23
24 Cash 101 5 0 0 00 24
25 Accounts Payable 202 1 3 5 0 00 25
26 Purchase from Denison Office Supply, 26
27 Invoice 304; issued Check 1005 for down 27
28 payment, balance payable in 30 days 28
29 29
30 20 Accounts Payable 202 2 5 0 0 00 30
31 Cash 101 2 5 0 0 00 31
32 Paid DeSoto, Inc., on account, Invoice 32
33 5312, Check 1006 33
34 34
35 26 Accounts Receivable 111 2 0 0 0 00 35
36 Fees Income 401 2 0 0 0 00 36
37 Performed services on credit 37

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PROBLEM 4.2B (continued)

GENERAL JOURNAL PAGE 3

POST.
DATE DESCRIPTION REF. DEBIT CREDIT
1 2016 1
2 June 27 Telephone Expense 520 5 8 0 00 2
3 Cash 101 5 8 0 00 3
4 Paid monthly phone bill, Check 1007 4
5 5
6 30 Cash 101 2 1 0 0 00 6
7 Accounts Receivable 111 2 1 0 0 00 7
8 Received cash on account 8
9 9
10 30 Utilities Expense 523 5 7 5 00 10
11 Cash 101 5 7 5 00 11
12 Paid monthly utility bill, Check 1008 12
13 13
14 30 Salaries Expense 517 5 6 0 0 00 14
15 Cash 101 5 6 0 0 00 15
16 Paid monthly salaries to employees, 16
17 Checks 1009-1011 17
18 18

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PROBLEM 4.2B (continued)

GENERAL LEDGER
ACCOUNT Cash ACCOUNT NO. 101

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
June 1 J1 18 0 0 0 00 18 0 0 0 00
2 J1 1 2 5 0 00 16 7 5 0 00
6 J1 1 9 0 0 00 14 8 5 0 00
7 J1 5 3 8 00 14 3 1 2 00
10 J1 4 0 0 00 13 9 1 2 00
12 J1 1 3 0 0 00 15 2 1 2 00
15 J1 1 5 0 00 15 3 6 2 00
18 J2 5 0 0 00 14 8 6 2 00
20 J2 2 5 0 0 00 12 3 6 2 00
27 J3 5 8 0 00 11 7 8 2 00
30 J3 2 1 0 0 00 13 8 8 2 00
30 J3 5 7 5 00 13 3 0 7 00
30 J3 5 6 0 0 00 7 7 0 7 00

ACCOUNT Accounts Receivable ACCOUNT NO. 111

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
June 12 J1 1 3 0 0 00 1 3 0 0 00
26 J2 2 0 0 0 00 3 3 0 0 00
30 J3 2 1 0 0 00 1 2 0 0 00

ACCOUNT Supplies ACCOUNT NO. 121

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
June 7 J1 5 3 8 00 5 3 8 00
15 J1 1 5 0 00 3 8 8 00

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PROBLEM 4.2B (continued)

GENERAL LEDGER
ACCOUNT Office Equipment ACCOUNT NO. 141

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
June 5 J1 7 5 0 0 00 7 5 0 0 00
18 J2 1 8 5 0 00 9 3 5 0 00

ACCOUNT Photographic Equipment ACCOUNT NO. 151

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
June 6 J1 1 9 0 0 00 1 9 0 0 00

ACCOUNT Accounts Payable ACCOUNT NO. 202

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
June 5 J1 7 5 0 0 00 7 5 0 0 00
18 J2 1 3 5 0 00 8 8 5 0 00
20 J2 2 5 0 0 00 6 3 5 0 00

ACCOUNT Carolyn Davis, Capital ACCOUNT NO. 301

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
June 1 J1 18 0 0 0 00 18 0 0 0 00

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PROBLEM 4.2B (continued)

GENERAL LEDGER
ACCOUNT Wallace King, Drawing ACCOUNT NO. 302

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT

ACCOUNT Fees Income ACCOUNT NO. 401

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
June 12 J1 2 6 0 0 00 2 6 0 0 00
26 J2 2 0 0 0 00 4 6 0 0 00

ACCOUNT Office Cleaning Expense ACCOUNT NO. 511

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
June 10 4 0 0 00 4 0 0 00

ACCOUNT Rent Expense ACCOUNT NO. 514

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
June 2 J1 1 2 5 0 00 1 2 5 0 00

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PROBLEM 4.2B (continued)

GENERAL LEDGER
ACCOUNT Salaries Expense ACCOUNT NO. 517

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
June 30 J3 5 6 0 0 00 5 6 0 0 00

ACCOUNT Telephone Expense ACCOUNT NO. 520

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
June 27 J3 5 8 0 00 5 8 0 00

ACCOUNT Utilities Expense ACCOUNT NO. 523

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
June 30 J3 5 7 5 00 5 7 5 00

Analyze: The Cash account balance after the June 27 transaction was $11,782.

PROBLEM 4.3B

January 1: The debit should be to Accounts Receivable, not Accounts Payable.

January 2: The debit and credit amounts are reversed. Telephone Expense should be
debited and Cash should be credited.
January 3: The two debit amounts and the credit amount in the entry are not equal
because of a mathematical error. The credit for Cash should be $580.

Analyze: The assets decreased by $80.

(Accounts Receivable + $100; Cash - $150 [$75 x 2]; Cash - $30)

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PROBLEM 4.4B
GENERAL JOURNAL PAGE 1

POST.
DATE DESCRIPTION REF. DEBIT CREDIT
1 2016 1
2 Dec. 3 Cash 101 20 0 0 0 00 2
3 James Boynton, Capital 301 20 0 0 0 00 3
4 Beginning investment of owner 4
5 5
6 4 Computers 131 2 4 0 0 00 6
7 Cash 101 2 4 0 0 00 7
8 Paid cash for computer 8
9 9
10 5 Furnitures and Fixtures 151 6 5 0 0 00 10
11 Accounts Payable 202 6 5 0 0 00 11
12 Purchased office furniture on credit 12
13 13
14 6 Office Equipment 141 2 1 5 0 00 14
15 Cash 101 2 1 5 0 00 15
16 Paid cash for equipment 16
17 17
18 10 Accounts Receivable 111 2 6 0 0 00 18
19 Fees Income 401 2 6 0 0 00 19
20 Rendered services on account 20
21 21
22 11 Office Supplies 121 9 5 0 00 22
23 Cash 101 9 5 0 00 23
24 Paid cash for supplies 24
25 25
26 15 Accounts Payable 202 6 5 0 0 00 26
27 Cash 101 6 5 0 0 00 27
28 Paid invoice for furniture purchased on 28
29 December 5 29

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PROBLEM 4.4B (continued)

GENERAL LEDGER
ACCOUNT Cash ACCOUNT NO. 101

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
Dec. 3 J1 20 0 0 0 00 20 0 0 0 00
4 J1 2 4 0 0 00 17 6 0 0 00
6 J1 2 1 5 0 00 15 4 5 0 00
11 J1 9 5 0 00 14 5 0 0 00
15 J1 6 5 0 0 00 8 0 0 0 00

ACCOUNT Accounts Receivable ACCOUNT NO. 111

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
Dec. 10 J1 2 6 0 0 00 2 6 0 0 00

ACCOUNT Office Supplies ACCOUNT NO. 121

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
Dec. 11 J1 9 5 0 00 9 5 0 00

ACCOUNT Computers ACCOUNT NO. 131

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
Dec. 4 J1 2 4 0 0 00 2 4 0 0 00

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PROBLEM 4.4B (continued)

GENERAL LEDGER
ACCOUNT Office Equipment ACCOUNT NO. 141

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
Dec. 6 J1 2 1 5 0 00 2 1 5 0 00

ACCOUNT Furniture and Fixtures ACCOUNT NO. 151

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
Dec. 5 J1 6 5 0 0 00 6 5 0 0 00

ACCOUNT Accounts Payable ACCOUNT NO. 202

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
Dec. 5 J1 6 5 0 0 00 6 5 0 0 00
15 J1 6 5 0 0 00 − 0 −

ACCOUNT James Boynton, Capital ACCOUNT NO. 301

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
Dec. 3 J1 20 0 0 0 00 20 0 0 0 00

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PROBLEM 4.4B (continued)

GENERAL LEDGER
ACCOUNT Fees Income ACCOUNT NO. 401

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
Dec. 10 J1 2 6 0 0 00 2 6 0 0 00

Analyze: Two postings were recorded, one debit and one credit.

CRITICAL THINKING PROBLEM 4.1

Income Statement Errors:

1. The third line of the heading is incorrect; this line must indicate the time period covered by the income
statement.
2. Drawing is not an expense but a reduction of owner’s equity and is included in the calculation of
ending owner’s equity, not on the income statement.
3. Arithmetic errors were made in adding column of expenses and in subtracting total expenses from
revenue.

Balance Sheet Errors:

1. The third line of the heading is incorrect; the balance sheet is identified by the last day of the
accounting period.
2. Accounts Payable and Accounts Receivable are classified incorrectly; they should be interchanged.
Accounts Payable is a liability and Accounts Receivable is an asset.
3. The assets are not listed in the correct order.
4. The amount for Owner’s Equity on the balance sheet should be the ending owner’s equity, not the
beginning owner’s equity. A statement of owner’s equity should be prepared to compute ending
owner’s equity.

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CRITICAL THINKING PROBLEM 4.1 (continued)

Sarah's Beauty Supply

Income Statement
Month Ended April 30, 2016
Revenue
Fees Income 36 6 0 0 00
Expenses
Salaries Expense 9 0 0 0 00
Rent Expense 1 8 0 0 00
Repair Expense 3 0 0 00
Utilities Expense 1 7 0 0 00
Total Expenses 12 8 0 0 00
Net Income 23 8 0 0 00

Sarah's Beauty Supply

Statement of Owner's Equity
Month Ended April 30, 2016
Sarah Davis, Capital, April 1, 2016 49 2 0 0 00
Net Income for April 23 8 0 0 00
Less Withdrawals for April 4 0 0 0 00
Increase in Capital 19 8 0 0 00
Sarah Davis, Capital, April 30, 2016 69 0 0 0 00

Sarah's Beauty Supply

Balance Sheet April
30, 2016
Assets Liabilities
Cash 15 0 0 0 00 Accounts Payable 5 0 0 0 00
Accounts Receivable 7 0 0 0 00
Land 12 0 0 0 00 Owner's Equity
Building 40 0 0 0 00 Sarah Davis, Capital 69 0 0 0 00
Total Assets 74 0 0 0 00 Total Liabilities & Owner's Equity 74 0 0 0 00

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CRITICAL THINKING PROBLEM 4.2

GENERAL JOURNAL PAGE 1

POST.
DATE DESCRIPTION REF. DEBIT CREDIT
1 2016 1
2 June 1 Cash 101 30 0 0 0 00 2
3 Ashley Jackson, Capital 301 30 0 0 0 00 3
4 Beginning investment of owner 4
5 5
6 2 Rent Expense 514 1 8 0 0 00 6
7 Cash 101 1 8 0 0 00 7
8 Paid rent for June, Check 201 8
9 9
10 3 Office Furniture 141 12 0 0 0 00 10
11 Cash 101 2 0 0 0 00 11
12 Accounts Payable 202 10 0 0 0 00 12
13 Purchased furniture from Lowe's 13
14 Office Supply, Invoice 5103; issued 14
15 Check 202, balance due in 30 days 15
16 16
17 4 Supplies 121 1 5 0 0 00 17
18 Cash 101 1 5 0 0 00 18
19 Purchased supplies, Check 203 19
20 20
21 6 Cash 101 6 0 0 0 00 21
22 Fees Income 401 6 0 0 0 00 22
23 Performed services for cash 23
24 24
25 7 Advertising Expense 511 2 0 0 0 00 25
26 Cash 101 2 0 0 0 00 26
27 Paid for advertising, Check 204 27
28 28
29 8 Recording Equipment 151 15 0 0 0 00 29
30 Cash 101 5 0 0 0 00 30
31 Accounts Payable 202 10 0 0 0 00 31
32 Purchased equipment from Special 32
33 Moves, Inc., Invoice 2122; 33
34 issued Check 205, balance due in 30 days 34
35 35
36 10 Accounts Receivable 111 4 5 0 0 00 36
37 Fees Income 401 4 5 0 0 00 37
38 Performed services on account 38

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CRITICAL THINKING PROBLEM 4.2 (continued)

GENERAL JOURNAL PAGE 2

POST.
DATE DESCRIPTION REF. DEBIT CREDIT
1 2016 1
2 June 11 Accounts Payable 202 3 0 0 0 00 2
3 Cash 101 3 0 0 0 00 3
4 Paid Lowe's Office Supply on account 4
5 for Invoice 5103, Check 206 5
6 6
7 12 Cash 101 9 0 0 0 00 7
8 Fees Income 401 9 0 0 0 00 8
9 Performed services for cash 9
10 10
11 15 Salaries Expense 517 5 0 0 0 00 11
12 Cash 101 5 0 0 0 00 12
13 Paid semimonthly salary, Check 207 13
14 14
15 18 Cash 101 4 0 0 0 00 15
16 Accounts Receivable 111 4 0 0 0 00 16
17 Received payment on account 17
18 18
19 20 Accounts Payable 202 6 0 0 0 00 19
20 Cash 101 6 0 0 0 00 20
21 Paid Special Moves, Inc., 21
22 on account, Invoice 2122, Check 208 22
23 23
24 25 Telephone Expense 520 3 5 0 00 24
25 Cash 101 3 5 0 00 25
26 Paid telephone bill, Check 209 26
27 27
28 27 Utilities Expense 523 8 0 0 00 28
29 Cash 101 8 0 0 00 29
30 Paid utility bill, Check 210 30
31 31
32 28 Ashley Jackson, Drawing 302 4 0 0 0 00 32
33 Cash 101 4 0 0 0 00 33
34 Owner withdrew cash for personal use, 34
35 Check 211 35
36 36
37 30 Salaries Expense 517 5 0 0 0 00 37
38 Cash 101 5 0 0 0 00 38
39 Paid semimonthly salary, Check 212 39

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CRITICAL THINKING PROBLEM 4.2 (continued)

GENERAL LEDGER
ACCOUNT Cash ACCOUNT NO. 101

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
June 1 J1 30 0 0 0 00 30 0 0 0 00
2 J1 1 8 0 0 00 28 2 0 0 00
3 J1 2 0 0 0 00 26 2 0 0 00
4 J1 1 5 0 0 00 24 7 0 0 00
6 J1 6 0 0 0 00 30 7 0 0 00
7 J1 2 0 0 0 00 28 7 0 0 00
8 J1 5 0 0 0 00 23 7 0 0 00
11 J2 3 0 0 0 00 20 7 0 0 00
12 J2 9 0 0 0 00 29 7 0 0 00
15 J2 5 0 0 0 00 24 7 0 0 00
18 J2 4 0 0 0 00 28 7 0 0 00
20 J2 6 0 0 0 00 22 7 0 0 00
25 J2 3 5 0 00 22 3 5 0 00
27 J2 8 0 0 00 21 5 5 0 00
28 J2 4 0 0 0 00 17 5 5 0 00
30 J2 5 0 0 0 00 12 5 5 0 00

ACCOUNT Accounts Receivable ACCOUNT NO. 111

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
June 10 J2 4 5 0 0 00 4 5 0 0 00
18 J2 4 0 0 0 00 5 0 0 00

ACCOUNT Supplies ACCOUNT NO. 121

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
June 4 J1 1 5 0 0 00 1 5 0 0 00

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CRITICAL THINKING PROBLEM 4.2 (continued)

GENERAL LEDGER
ACCOUNT Office Furniture ACCOUNT NO. 141

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
June 3 J1 12 0 0 0 00 12 0 0 0 00

ACCOUNT Recording Equipment ACCOUNT NO. 151

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
June 8 J1 15 0 0 0 00 15 0 0 0 00

ACCOUNT Accounts Payable ACCOUNT NO. 202

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
June 3 J1 10 0 0 0 00 10 0 0 0 00
8 J1 10 0 0 0 00 20 0 0 0 00
11 J2 3 0 0 0 00 17 0 0 0 00
20 J2 6 0 0 0 00 11 0 0 0 00

ACCOUNT Ashley Jackson, Capital ACCOUNT NO. 301

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
June 1 J1 30 0 0 0 00 30 0 0 0 00

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CRITICAL THINKING PROBLEM 4.2 (continued)

GENERAL LEDGER
ACCOUNT Ashley Jackson, Drawing ACCOUNT NO. 302
4
POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
June 28 J2 4 0 0 0 00 4 0 0 0 00

ACCOUNT Fees Income ACCOUNT NO. 401

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
June 6 J1 6 0 0 0 00 6 0 0 0 00
10 J2 4 5 0 0 00 10 5 0 0 00
12 J2 9 0 0 0 00 19 5 0 0 00

ACCOUNT Advertising Expense ACCOUNT NO. 511

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
June 7 J1 2 0 0 0 00 2 0 0 0 00

ACCOUNT Rent Expense ACCOUNT NO. 514

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
June 2 J1 1 8 0 0 00 1 8 0 0 00

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CRITICAL THINKING PROBLEM 4.2 (continued)

GENERAL LEDGER
ACCOUNT Salaries Expense ACCOUNT NO. 517

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
June 15 J2 5 0 0 0 00 5 0 0 0 00
30 J2 5 0 0 0 00 10 0 0 0 00

ACCOUNT Telephone Expense ACCOUNT NO. 520

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
June 25 J2 3 5 0 00 3 5 0 00

ACCOUNT Utilities Expense ACCOUNT NO. 523

POST BALANCE
DATE DESCRIPTION REF. DEBIT CREDIT DEBIT CREDIT
2016
June 27 J2 8 0 0 00 8 0 0 00

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CRITICAL THINKING PROBLEM 4.2 (continued)

Leadership Talent Agency

Trial Balance
June 30, 2016

Cash 12 5 5 0 00
Accounts Receivable 5 0 0 00
Supplies 1 5 0 0 00
Office Furniture 12 0 0 0 00
Recording Equipment 15 0 0 0 00
Accounts Payable 11 0 0 0 00
Ashley Jackson, Capital 30 0 0 0 00
Ashley Jackson, Drawing 4 0 0 0 00
Fees Income 19 5 0 0 00
Advertising Expense 2 0 0 0 00
Rent Expense 1 8 0 0 00
Salaries Expense 10 0 0 0 00
Telephone Expense 3 5 0 00
Utilities Expense 8 0 0 00
Totals 60 5 0 0 00 60 5 0 0 00

Leadership Talent Agency

Income Statement
Month Ended June 30, 2016
Revenue
Fees Income 19 5 0 0 00
Expenses
Advertising Expense 2 0 0 0 00
Rent Expense 1 8 0 0 00
Salaries Expense 10 0 0 0 00
Telephone Expense 3 5 0 00
Utilities Expense 8 0 0 00
Total Expenses 14 9 5 0 00
Net Income 4 5 5 0 00

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distribution in any manner. 4-40
CRITICAL THINKING PROBLEM 4.2 (continued)

Leadership Talent Agency

Statement of Owner's Equity
Month Ended June 30, 2016
Ashley Jackson, Capital, June 1, 2016 30 0 0 0 00
Net Income for June 4 5 5 0 00
Less Withdrawals for June 4 0 0 0 00
Increase in Owner's Equity 5 5 0 00
Ashley Jackson, Capital, June 30, 2016 30 5 5 0 00

Leadership Talent Agency

Balance Sheet
June 30, 2016
Assets Liabilities
Cash 12 5 5 0 00 Accounts Payable 11 0 0 0 00
Accounts Receivable 5 0 0 00
Supplies 1 5 0 0 00
Office Furniture 12 0 0 0 00 Owner's Equity
Recording Equipment 15 0 0 0 00 Ashley Jackson, Capital 30 5 5 0 00
Total Assets 41 5 5 0 00 Total Liabilities & 41 5 5 0 00
Owner's Equity

Analyze: There were 16 postings in the Cash account.

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SOLUTIONS TO BUSINESS CONNECTIONS

Managerial Focus:
1. Inefficient flow of information; errors and insufficient information.
2. For prompt and accurate journalizing of all transactions.
3. To assure accuracy and safeguards against fraud.
4. Journal: detailed chronological record. Ledger: permanent, classified record of all financial events.

Ethical Dilemma:
You must check to see if the cash account is going down because of her actions. Is Mesia keeping the
cash from the reversed sales because she has made so many errors? Is this something she does each
month? It is unethical to accept a dinner for fixing her error.

Financial Statement Analysis:

1. Debit the Property and Equipment account, credit Accounts Payable.
2. Invoice from the supplier.
3. Dates for equipment purchases, posting reference, purchase amount, and account balance.

Analyze Online:
Answers will vary depending on the year.

Teamwork:
Answers will vary. Journal Entry to General Ledger to Trial Balance to Financial Statement.

Internet Connection:
Sites that might be displayed are: www.careerbank.com , www.careersinaccounting.com ,
www.account.com .
Suggested experience would require 5 years or more, with an AA degree. Skills would include good
communication skills, detailed and multi-task oriented.

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distribution in any manner. 4-42
 SOLUTIONS TO PRACTICE TEST
Part A Matching
1. a
2. f
3. b
4. j
5. i
6. h
7. d
8. e
9. c
10. g

Part B Completion
1. ledger
2. posting references
3. brief or concise
4. credit
5. debit
6. debit
7. year
8. chronological or date
9. assets or balance sheet accounts
10. posted

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distribution in any manner. 4-43