Question: The trial balance of Shawn Merry, CPA,
The trial balance of Shawn Merry, CPA, is dated March 31, 2018:
During April, the business completed the following transactions:
Requirements:
1. Record the April transactions in the journal. Use the following accounts: Cash; Accounts Receivable; Office Supplies; Land; Furniture; Automobile; Accounts Payable; Unearned Revenue; Common Stock; Dividends; Service Revenue; Salaries Expense; and Rent Expense. Include an explanation for each entry.
2. Open the four-column ledger accounts listed in the trial balance, together with their balances as of March 31. Use the following account numbers: Cash, 11; Accounts Receivable, 12; Office Supplies, 13; Land, 14; Furniture, 15; Automobile, 16; Accounts Payable, 21; Unearned Revenue, 22; Common Stock, 31; Dividends, 33; Service Revenue, 41; Salaries Expense, 51; and Rent Expense, 52.
3. Post the journal entries to four-column accounts in the ledger, using dates, account numbers, journal references, and posting references. Assume the journal entries were recorded on page 5 of the journal.
4. Prepare the trial balance of Shawn Merry, CPA, at April 30, 2018.
Transcribed Image Text:
SHAWN MERRY, CPA Trial Balance March 31, 2018 Balance Account Title Debit Credit Cash $ 11.000 Accounts Receivable 16,500 Office Supplies 400 Land 30,000 Furniture Automobile Accounts Payable $ 3,800 Unearned Revenue Common Stock 52,300 Dividends Service Revenue 8,200 Salaries Expense 5,600 Rent Expense 800 Total $ 64,300 S 64,300 Apr. 4 Collected $2,500 cash from a client on account. 8. Performed tax services for a dient on account, $5,400. 13 Paid $3,000 on account. 14 Purchased furniture on account, S3,600. 15 Merry contributed his personal automobile to the business in exchange for common stock. The automobile had a market value of $9,500. 18 Purchased office supplies on account, $900. 19 Received $2,700 for tax services performed on April 8. 20 Paid cash dividends of $6,500. 21 Received $5,700 cash for consulting work completed. Received $2,400 cash for accounting services to be completed next month. 24 27 Paid office rent, $600. 28 Paid employee salary, $1,700.
> Consider the following independent situations at December 31: a. On October 1, a business collected $3,000 rent in advance, debiting Cash and crediting Unearned Revenue. The tenant was paying one year’s rent in advance. On December 31, the business must
> Consider the following situations: a. Business receives $3,200 on January 1 for 10-month service contract for the period January 1 through October 31. b. Total salaries for all employees is $3,600 per month. Employees are paid on the 1stand 15th of the
> How is net income calculated? Define revenues and expenses.
> Consider the facts presented in the following table for Tropical View: Complete the table by filling in the missing values. Situation A B D Beginning Prepaid Rent $1,400 $1,000 $ 200 $ 700 Payments for Prepaid Rent during the year 700 1,800 f Total
> Chef’s Catering completed the following selected transactions during May 2018: Chef’s Catering completed the following selected transactions during May 2018: Requirements: 1. Show whether each transaction would be
> Momentous Occasions is a photography business that shoots videos at college parties. The freshman class pays $1,000 in advance on March 3 to guarantee services for its party to be held on April 2. The sophomore class promises a minimum of $2,800 for film
> The net income of Steinbach & Sons, a landscaping company, decreased sharply during 2018. Mort Steinbach, owner and manager of the company, anticipates the need for a bank loan in 2019. Late in 2018, Steinbach instructs the company’s accountant to record
> One year ago, Tyler Stasney founded Swift Classified Ads. Stasney remembers that you took an accounting course while in college and comes to you for advice. He wishes to know how much net income his business earned during the past year in order to decide
> This problem continues the Canyon Canoe Company situation from Chapter 2. You will need to use the unadjusted trial balance and posted T-accounts that you prepared in Chapter 2. At December 31, the business gathers the following information for the adjus
> In 75 words or fewer, explain adjusting journal entries.
> Part of the Fry’s Electronics, Inc.’s experience involves providing technical support to its customers. This includes in-home Installations of electronics and also computer support at their retail store locations. Requirements: 1. Suppose Fry’s Electron
> Roland Foster Optical Dispensary completed the following transactions during thelatter part of March: Requirements: 1. Journalize the transactions of Roland Foster Optical Dispensary. Include an Explanation with each journal entry. 2. Open the followin
> Harper Sales Consultants completed the following transactions during the latter part of January: Journalize the transactions of Harper Sales Consultants. Include an explanation with each journal entry. Jan. 22 Performed services for customers on ac
> How does retained earnings increase? What are the two ways that retained earnings decreases?
> John Daniel opened a medical practice in Sacramento, California, and had the following transactions during the month of January. Journalize the transactions of John Daniel, M.D. Include an explanation with each entry. The business received $34,000
> For each account, identify whether the changes would be recorded as a debit (DR) or credit (CR). a. Increase to Accounts Receivable b. Decrease to Unearned Revenue c. Decrease to Cash d. Increase to Interest Expense e. Increase to Salaries Payable f. De
> Smithson Floor Coverings reported the following summarized data at December 31, 2018. Accounts appear in no particular order, and all have normal balances. Prepare the trial balance of Smithson Floor Coverings at December 31, 2018. Service Revenue
> Aladdin Carpet Care had the following total assets, liabilities, and equity as of October 31: Assets ……………………………………………………………………….…$ 200,000 Liabilities …………………………………………………………….……………30,000 Equity ……………………………………………………………….…………….170,000 What is Aladdin Ca
> Accounts Payable 6,000 21,000 May 1 500 May 5 May 2 May 22 11,500 8,500 May 15 500 May 23
> For each account, identify whether the normal balance is a debit (DR) or credit (CR). a. Notes Payable b. Dividends c. Service Revenue d. Land e. Unearned Revenue f. Common Stock g. Utilities Expense h. Office Supplies i. Advertising Expense j. Interest
> Consider the following accounts and identify each account as an asset (A), liability (L), or equity (E). a. Notes Receivable b. Common Stock c. Prepaid Insurance d. Notes Payable e. Rent Revenue f. Taxes Payable g. Rent Expense h. Furniture i. Dividends
> What is involved in the posting process?
> Explain the five steps in journalizing and posting transactions.
> What does a ledger show? What’s the difference between a ledger and the chart of accounts?
> What is the accounting equation? Briefly explain each of the three parts.
> What is the difference between the trial balance and the balance sheet?
> What is the calculation for the debt ratio? Explain what the debt ratio evaluates.
> If total debits equal total credits on the trial balance, is the trial balance error-free? Explain your answer.
> What is the purpose of the trial balance?
> What are the four parts of a journal entry?
> Where are transactions initially recorded?
> What are source documents? Provide examples of source documents that a business might use.
> Identify which types of accounts have a normal debit balance and which types of accounts have a normal credit balance.
> When are credits increases? When are credits decreases?
> When are debits increases? When are debits decreases?
> Explain the role of the International Accounting Standards Board (IASB) in relation to International Financial Reporting Standards (IFRS).
> What is a T-account? On which side is the debit? On which side is the credit? Where does the account name go on a T-account?
> Accounting uses a double-entry system. Explain what this sentence means.
> What is the purpose of the chart of accounts? Explain the numbering typically associated with the accounts.
> Identify the three categories of the accounting equation, and list at least four accounts associated with each category.
> The trial balance as of July 31, 2018, for Sheila Sanchez, Registered Dietician, is presented below: Requirements: 1. Prepare the income statement for the month ended July 31, 2018. 2. Prepare the statement of retained earnings for the month ended July
> The trial balance of Love to Learn Child Care does not balance. The following errors are detected: a. Cash is understated by $1,800. b. A $3,800 debit to Accounts Receivable was posted as a credit. c. A $1,000 purchase of office supplies on account was
> The trial balance of John Menning, CPA, is dated March 31, 2018: During April, the business completed the following transactions: Requirements: 1. Record the April transactions in the journal using the following accounts: Cash;Accounts Receivable; Offi
> Theodore McMahon opened a law office on April 1, 2018. During the first month of operations, the business completed the following transactions: Requirements: 1. Record each transaction in the journal, using the following account titles: Cash; Accounts
> Beth Stewart started her practice as a design consultant on November 1, 2018. During the first month of operations, the business completed the following transactions: Requirements: 1. Record each transaction in the journal using the following account t
> Victor Yang practices medicine under the business title Victor Yang, M.D. During March, the medical practice completed the following transactions: The business uses the following accounts: Cash; Accounts Receivable; Office Supplies; Land; Accounts Paya
> Financial statements in the United States are reported in U.S. dollars. What assumption supports this statement?
> The trial balance as of July 31, 2018, for Sara Simon, Registered Dietician, is presented below: Requirements: 1. Prepare the income statement for the month ended July 31, 2018. 2. Prepare the statement of retained earnings for the month ended July 31,
> The trial balance of Beautiful Tots Child Care does not balance. The following errors are detected: a. Cash is understated by $1,500. b. A $4,100 debit to Accounts Receivable was posted as a credit. c. A $1,400 purchase of office supplies on account wa
> Terrence Murphy opened a law office on January 1, 2018. During the first month ofoperations, the business completed the following transactions: Requirements: 1. Record each transaction in the journal, using the following account titles:Cash; Accounts R
> Ann Simpson started her practice as a design consultant on September 1, 2018.During the first month of operations, the business completed the followingtransactions: Requirements: 1. Record each transaction in the journal using the following account tit
> Vince York practices medicine under the business title Vince York, M.D. During July,the medical practice completed the following transactions: The business uses the following accounts: Cash; Accounts Receivable; Office Supplies; Land; Accounts Payable;
> Consider the following transactional data for the first month of operations for Crystal Clear Cleaning. Requirements: 1. Journalize the transactions, using the following accounts: Cash; Accounts Receivable; Cleaning Supplies; Prepaid Rent; Prepaid Insu
> Roy Akins was the accounting manager at Zelco, a tire manufacturer, and he played golf with Hugh Stallings, the CEO, who was something of a celebrity in the community. The CEO stood to earn a substantial bonus if Zelco increased net income by year-end. R
> Refer to http://www.pearsonhighered.com/Horngren to view a link to Target Corporation’s Fiscal 2015 Annual Report. Requirements: 1. Calculate the debt ratio for Target Corporation as of January 30, 2016. 2. How did the debt ratio for Target Corporation
> The following trial balance of Joy McDowell Tutoring Service as of May 31, 2018, does not balance. Investigation of the accounting records reveals that the bookkeeper: a. Recorded a $400 cash revenue transaction by debiting Accounts Receivable. The cre
> Which concept states that accounting information should be complete, neutral, and free from material error?
> Let’s examine a case using Greg’s Tunes and Sal’s Silly Songs. It is now the end of the first year of operations, and the stockholders want to know how well each business came out at the end of the ye
> Elegant Decor Company’s management is trying to decide whether to eliminate Department 200, which has produced losses or low profits for several years. The company’s 2013 departmental income statement shows the followi
> Edgerron Company is able to produce two products, G and B, with the same machine in its factory. The following information is available. The company presently operates the machine for a single eight-hour shift for 22 working days each month. Management
> Harold Manufacturing produces denim clothing. This year, it produced 5,000 denim jackets at a manufacturing cost of $45 each. These jackets were damaged in the warehouse during storage. Management investigated the matter and identified three alternatives
> Haver Company currently produces component RX5 for its sole product. The current cost per unit to manufacture the required 50,000 units of RX5 follows. Direct materials . . . . . . . . . . . $ 5.00 Direct labor . . . . . . . . . . . . . . . . 8.00 Overh
> Calla Company produces skateboards that sell for $50 per unit. The company currently has the capacity to produce 90,000 skateboards per year, but is selling 80,000 skateboards per year. Annual costs for 80,000 skateboards follow. Direct materials . . .
> Merline, a one-product mail-order firm, buys its product for $75 per unit and sells it for $150 per unit. The sales staff receives a 10% commission on the sale of each unit. Its December income statement follows. Management expects Decemberâ€
> Jones Products manufactures and sells to wholesalers approximately 400,000 packages per year of underwater markers at $6 per package. Annual costs for the production and sale of this quantity are shown in the table. Direct materials . . . . . . . . . .
> Colt Company owns a machine that can produce two specialized products. Production time for Product TLX is two units per hour and for Product MTV is five units per hour. The machine’s capacity is 2,750 hours per year. Both products are s
> Marinette Company makes several products, including canoes. The company has been experiencing losses from its canoe segment and is considering dropping that product line. The following information is available regarding its canoe segment. Should manageme
> Suresh Co. expects its five departments to yield the following income for next year. Recompute and prepare the departmental income statements (including a combined total column) for the company under each of the following separate scenarios: Management
> WohChe Co. has four departments: materials, personnel, manufacturing, and packaging. In a recent month, the four departments incurred three shared indirect expenses. The amounts of these indirect expenses and the bases used to allocate them follow. Dep
> Varto Company has 7,000 units of its sole product in inventory that it produced last year at a cost of $22 each. This year’s model is superior to last year’s and the 7,000 units cannot be sold at last year’s regular selling price of $35 each. Varto has t
> Cobe Company has already manufactured 28,000 units of Product A at a cost of $28 per unit. The 28,000 units can be sold at this stage for $700,000. Alternatively, the units can be further processed at a $420,000 total additional cost and be converted int
> Gelb Company currently manufactures 40,000 units of a key component for its manufacturing process at a cost of $4.45 per unit. Variable costs are $1.95 per unit, fixed costs related to making this component are $65,000 per year, and allocated fixed costs
> Gilberto Company currently manufactures one of its crucial parts at a cost of $4.45 per unit. This cost is based on a normal production rate of 65,000 units per year. Variable costs are $1.95 per unit, fixed costs related to making this part are $65,000
> Goshford Company produces a single product and has capacity to produce 100,000 units per month. Costs to produce its current sales of 80,000 units follow. The regular selling price of the product is $100 per unit. Management is approached by a new custom
> Farrow Co. expects to sell 150,000 units of its product in the next period with the following results. Sales (150,000 units) . . . . . . . . . . . . . . $2,250,000 Costs and expenses Direct materials . . . . . . . . . . . . . . . . 300,000 Direct labor
> Aztec Company sells its product for $180 per unit. Its actual and projected sales follow. All sales are on credit. Recent experience shows that 20% of credit sales is collected in the month of the sale, 50% in the month after the sale, 28% in the secon
> A company must decide between scrapping or reworking units that do not pass inspection. The company has 22,000 defective units that cost $6 per unit to manufacture. The units can be sold as is for $2.50 each, or they can be reworked for $4.50 each and th
> Xinhong Company is considering replacing one of its manufacturing machines. The machine has a book value of $45,000 and a remaining useful life of 5 years, at which time its salvage value will be zero. It has a current market value of $52,000. Variable m
> Childress Company produces three products, K1, S5, and G9. Each product uses the same type of direct material. K1 uses 4 pounds of the material, S5 uses 3 pounds of the material, and G9 uses 6 pounds of the material. Demand for all products is strong, bu
> L’Orealreports the following for a recent year for the major divisions in its Cosmetics branch. 1. Compute profit margin for each division. State your answers as percents, rounded to two decimal places. Which L’Oreal
> Fill in each of the blanks below with the correct term. 1. A arises from a past decision and cannot be avoided or changed; it is irrelevant to future decisions. 2.refer to the incremental revenue generated from taking one particular action over another.
> KTM is considering eliminating one of its stores in a large U.S. city. What are some factors that it should consider in making this decision?
> Identify the incremental costs incurred by Applefor shipping one additional iPod from a warehouse to a retail store along with the store’s normal order of 75 iPods.
> Identify some qualitative factors that should be considered when making managerial decisions.
> Assume that Polarismanufactures and sells 60,000 units of a product at $11,000 per unit in domestic markets. It costs $6,000 per unit to manufacture ($4,000 variable cost per unit, $2,000 fixed cost per unit). Can you describe a situation under which the
> Piaggio must confront sunk costs. Why are sunk costs irrelevant in deciding whether to sell a product in its present condition or to make it into a new product through additional processing?
> Arctic Cat has many types of costs. What is an out-of-pocket cost? What is an opportunity cost? Are opportunity costs recorded in the accounting records?
> During the last week of August, Oneida Company’s owner approaches the bank for a $100,000 loan to be made on September 2 and repaid on November 30 with annual interest of 12%, for an interest cost of $3,000. The owner plans to increase
> Why are sunk costs irrelevant in deciding whether to sell a product in its present condition or to make it into a new product through additional processing?
> What is a relevant cost? Identify the two types of relevant costs.
> USA Airlines uses the following performance measures. Classify each of the performance measures below into the most likely balanced scorecard perspective it relates to. Label your answers using C (customer), P (internal process), I (innovation and growth
> Is nonfinancial information ever useful in managerial decision making?
> Identify the five steps involved in the managerial decisionmaking process.
> Restaurants are often adding and removing menu items. Visit a restaurant and identify a new food item. Make a list of costs that the restaurant must consider when deciding whether to add that new item. Also, make a list of nonfinancial factors that the r
> Charlie Fyffe of Charlie’s Browniesmakes brownies and other sweets. Charlie must decideon the best sales mix for his products. Assume that his company has a capacity of 400 hours of processing time available each month and it makes two
> Break into teams and identify costs that an airline such as Delta Airlineswould incur on aflight from Green Bay to Minneapolis. (1) Identify the individual costs as variable or fixed. (2) Assume that Delta is trying to decide whether to drop this fligh
> Many companies must determine whether to internally produce their component parts or to outsource them. Further, some companies now outsource key components or business processes to international providers. Access the Website BizBrim.com and review the a
> Assume that you work for Greeble’s Department Store, and your manager requests that you outline the pros and cons of discontinuing its hardware department. That department appears to be generating losses, and your manager believes that discontinuing it w
> Bert Asiago, a salesperson for Convertco, received an order from a potential new customer for 50,000 units of Convertco’s single product at a price $25 below its regular selling price of $65. Asiago knows that Convertco has the capacity to produce this o
> Keggler’s Supply is a merchandiser of three different products. The company’s February 28 inventories are footwear, 20,000 units; sports equipment, 80,000 units; and apparel, 50,000 units. Management believes that exce
