Exercise 2-2

a. Cash
Cash receipt 104,750
Cash disbursement (101,607)
Cash - balance Oct31 17,069

Cash - balance Sep30 13,926

b. AR
AR - balance Sep30 83,250
Collection from customer (75,924)
AR - balance Oct31 85,830

Sales on account in Oct 78,504

c. AP
AP - balance Sep30 148,000
AP - balance Oct31 137,492
Purchase on account 271,876

Cash paid 282,384

Exercise 2-4 and 2-5

General Journal
Aug
1 Cash 14,250
Photography equipment 61,275
Capital 75,525
Owner's investment

2 Prepaid insurance 3,300

Cash 3,300
Purchase of 24-month insurance coverage

5 Supplies 2,707
Cash 2,707
Purchase of supplies
20 Cash 3,250
Photography fees earned 3,250
Collected photography fee

31 Utility expense 871

Cash 871
Paid utility expense

T-account

Cash Office supplies

(1) 14,250 (2) 3,300 (5) 2,707
(20) 3,250 (5) 2,707
(31) 871
Balance 10,622

Capital Prepaid insurance

(1) 75,525 (2) 3,300

Utility expense
(31) 871

SPECIAL PICS
Trial balance
August 31
Debit Credit
Cash 10,622
Office supplies 2,707
Prepaid insurance 3,300
Photography equipment 61,275
Capital 75,525
Revenue 3,250
Utility expense 871
Total 78,775 78,775
Exercise 2-13
a.
Asset - beg. 131,000
Asset - end 180,000
Liabilities - beg 56,159
Liabilites - end 72,900

Equity - beg 74,841

Equity - Ending balance 107,100
Changes in equity 32,259

Net income 32,259

b. 12-month withdrawal 7,800

Net income 40,059

c. Investment 45,000
Net loss (12,741)

d. Investment 25,000
12-month withdrawal 7,800
Net income 15,059

Problem 2-2A
General Journal
Mar 1 Cash 180,000
Equipment 30,000
Capital 210,000

2 Prepaid rent 8,000

Cash 8,000

3 Office equipment 3,300

Office supplies 1,400
Account Payable 4,700

6 Cash 6,000
 Revenue 6,000

9 Account receivable 9,200

Revenue 9,200

12 Account payable 4,700

Cash 4,700

19 Prepaid insurance 7,500

Cash 7,500

22 Cash 4,300
Account receivable 4,300

25 Account receivable 3,590

Revenue 3,590

29 Withdrawal 4,900
Cash 4,900

30 Office supplies 1,700

Account payable 1,700

31 Utility expense 500

Cash 500

VENTURE CONSULTANTS
General Ledger

Cash Account No. 101

Date Explanation Debit Credit Balance

1 Investment by 180,000 180,000
2 8,000 172,000
6 6,000 178,000
12 4,700 173,300
19 7,500 165,800
22 4,300 170,100
29 4,900 165,200
31 500 164,700

Account Receivable Account No. 106

Date Explanation Debit Credit Balance

9 9,200 9,200
 22 4,300 4,900
25 3,590 8,490

Office supplies Account No. 124

Date Explanation Debit Credit Balance

3 1,400 1,400
30 1,700 3,100

Prepaid insurance Account No. 128

Date Explanation Debit Credit Balance

19 7,500 7,500

Prepaid rent Account No. 131

Date Explanation Debit Credit Balance

2 8,000 8,000

Office equipment Account No. 163

Date Explanation Debit Credit Balance

1 30,000 30,000
3 3,300 33,300

Account payable Account No. 201

Date Explanation Debit Credit Balance

3 4,700 4,700
12 4,700 -
30 1,700 1,700

Capital Account No. 301

Date Explanation Debit Credit Balance

1 210,000 210,000

Withdrawal Account No. 302

 Date Explanation Debit Credit Balance
29 4,900 - 4,900

Revenue Account No. 403

Date Explanation Debit Credit Balance

6 6,000 6,000
9 9,200 15,200
25 3,590 18,790

Utility expenses Account No. 690

Date Explanation Debit Credit Balance

31 500 - 500

VENTURE CONSULTANTS
Trial Balance
March 31
Debit Credit
Cash 164,700
Account receivable 8,490
Office supplies 3,100
Prepaid insurance 7,500
Prepaid rent 8,000
Office equipment 33,300
Account payable 1,700
Capital 210,000
Withdrawal 4,900
Revenue 18,790
Expense 500
Total 230,490 230,490

Problem 2-4A
The accounting records of Faviana Shipping show the following assets and liabilities
as of December 31, 2008 and 2009
Deccember 31 2008 2009
Cash 47,867 8,154
AR 25,983 20,370
Office supplies 4,098 3,002
Office equipment 125,816 134,018
Trucks 49,236 58,236
Building - 164,124
Land - 40,956
AP 68,310 33,879
Note payable - 85,080

Late in December 2009, the business purchased a small office building and land for
$205,080. It paid $120,000 cash toward the purchase and an $85,080 note payable
was signed for the balance. Ms. Faviana had to invest $34,000 cash in the business
to enable it to pay the $120,000 cash. The owner withdraws $2,400 cash per month
for personal use

Withdrawal 28,800
Capital 34,000

Faviana Shipping
Balance Sheet
December 31, 2008

Assets
Cash 47,867
AR 25,983
Office supplies 4,098
Office equipment 125,816
Trucks 49,236
Building -
Land -
Total assets 253,000
Liabilities
AP 68,310
Note payable -
Total liabilities 68,310
Owner's Capital
Equity 184,690
Total liabilities and equity 253,000

Faviana Shipping
 Balance Sheet
December 31, 2009

Assets
Cash 8,154
AR 20,370
Office supplies 3,002
Office equipment 134,018
Trucks 58,236
Building 164,124
Land 40,956
Total assets 428,860
Liabilities
AP 33,879
Note payable 85,080
Total liabilities 118,959
Owner's Capital
Equity 309,901
Total liabilities and equity 428,860

We have: Equity - beg. 184,690

+ NI 120,011
- Withdrawal 28,800
+ Investment 34,000
Equity - end. 309,901

b.
Debt ratio 2009 = Total debt/ Total assets 27.74%

Additional problem 1
On January 1 of the current year, John's Company reported owner's
capital totaling $132,000. During the current year, total revenues were
$120,000 while total expenses were $101,000. Also, during the
current year John withdrew $30,000 from the company. No other
changes in equity occurred during the year. If, on December 31 of the
current year, total assets are $173,000, the change in owner's capital
during the year was?

Owner's capital - beg. 132,000

Revenue 120,000
Expenses 101,000
Withdrawal 30,000
Changes in owner's capital during the year: (11,000)
(equity decreased by 11,000)
 Office supplies Photography equipment
(1) 61,275

Prepaid insurance Photography revenue

(20) 3,250