Revenues Liabilities 400 – Service Revenue 200 – Accounts Payable 210 – Unearned Revenue Expenses 500 – Utilities Expense 510 – Advertising Expense E2-12 Requirement 1 Requirement 2 Requirement 3 Account Name Type of Account Increase with Debit/Credit Normal Balance Debit/Credit a. Interest Revenue E CR CR b. Accounts Payable L CR CR c. Common Stock E CR CR d. Office Supplies A DR DR e. Advertising Expense E DR DR f. Unearned Revenue L CR CR g. Prepaid Rent A DR DR h. Utilities Expense E DR DR i. Dividends E DR DR j. Service Revenue E CR CR
E2-13 Assets = Liabilities + Equity Contributed Capital + Retained Earnings Assets = Liabilities + Common Stock – (d) Dividends + Revenues – Expenses (e) Incr. Decr. Decr. (f) Incr. (g) Decr. (h) Incr. (i) Incr. (j) Decr. (k) Decr. (l) Incr. Incr. (m) Decr. Debit (n) Credit (o) Debit Credit (p) Debit Credit (q) Debit Credit Debit Credit (r) Debit Credit Assets Equity Liabilities Dividends Incr. Incr. Decr. Incr. Incr. Decr. Decr. Incr. Credit Debit Debit Debit Trial
FURNITURE Account No. 141 Date Item Post Ref. Debit Credit Balance Credit Apr. 3 J1 2,000 2,000 BUILDING Account No. 151 Date Item Post Ref. Debit Credit Balance Debit Credit Apr. 7 J1 120,000 120,000 LAND Account No. 161 Date Item Post Ref. Debit Credit Balance Debit Credit Apr. 7 J1 30,000 30,000 ACCOUNTS PAYABLE Account No. 201 Date Item Post Ref. Debit Credit Balance Debit Credit Apr. 3 J1 2,500 2,500 Apr. 16 J1 500 2,000 UTILITIES PAYABLE Account No. 211 Date Item Post Ref. Credit Balance Debit Credit Apr. 25 J1 300 300 PAYABLE Account No. 221 Date Item Post Ref. Debit Credit Balance Debit Credit Apr. 7 J1 100,000 100,000 COMMON STOCK Account No. 301 Date Item Post Ref. Credit Balance Debit Credit Apr. 1 J1 62,000 62,000
P2-38B, cont. DIVIDENDS Account No. 311 Date Item Post Ref. Debit Credit Balance Debit Credit Apr. 30 J1 2,700 2,700 SERVICE REVENUE Account No. 411 Date Item Post Ref. Debit Credit Balance Debit Credit Apr. 4 J1 1,900 1,900 Apr. 11 J1 1,100 3,000 Apr. 18 J1 1,700 4,700 Apr. 19 J1 700 5,400 SALARIES EXPENSE Account No. 511 Date Item Post Ref. Debit Credit Balance Debit Credit Apr. 15 J1 920 920 Apr. 29 J1 920 1,840 RENT EXPENSE Account No. 521 Date Item Post Ref. Debit Credit Balance Debit Credit Apr. 30 J1 730 730 UTILITIES EXPENSE Account No. 531 Date Item Post Ref. Debit Credit Balance Debit Credit Apr. 25 J1 300 300 P2-38B, cont. Requirement 4 VINCE PEREZ, ATTORNEY Trial Balance April 30, 2015
Retained Earnings, December 1, 2014 $ 0 Net income for the month 1,800 1,800 Dividends (1,400) Retained Earnings, December 31, 2014 $ 400 Requirement 7 CONSULTING Balance December 31, 2014 Assets Liabilities Cash $ 16,400 Accounts Payable $ 4,700 Accounts Receivable 1,200 Unearned Revenue 1,400 Office Supplies 900 Liabilities $ 6,100 Equipment 1,800 Furniture 4,200 Stockholders’ Equity Common Stock 18,000 Retained Earnings 400 Total Stockholders’ Equity 18,400 Total Assets $ 24,500 Total Liabilities and Stockholders’ Equity $ 24,500 Requirement 8 Debt ratio = Total liabilities / Total assets = $6,100 / $24,500 = 0.25* = 25% * rounded Practice Set P2-44 Requirement 1 Date Accounts and Explanation Posting Ref. Debit Credit Nov. 1 Cash 35,000 Truck 8,000 Common 43,000