Generally Accepted Accounting Principles and Cash
Chapter 2 exercises
1. The following is a list of accounts and identification letters A through J for Shannon Management Co.:
Use the form below to identify the type of account and its normal balance. The first item is filled in as an example.
2. Recording following transactions using T-accounts and prepare the journal entries for the transactions
a. Company A paid $2,500 cash to satisfy a previously recorded account payable.
b. Mr A, one owner of the company withdrew $ 100 to pay to company X for his personal use.
c. On December 3, the Matador Company paid $5,400 cash in salaries to office personnel.
d. On February 5, Textron Stores purchased a van that cost $35,000, but not paid to the supplier.
e. Company X bought $ 5000 inventories by cash.
3. Flora Accounting Services completed these transactions in February:
a. Purchased office supplies on account, $300.
b. Completed work for a client on credit, $500.
c. Paid cash for the office supplies purchased in (a).
d. Completed work for a client and received $800 cash.
e. Received $500 cash for the work described in (b).
f. Received $1,000 from a client for accounting services to be performed in March.
Prepare journal entries to record the above transactions.
4. Josephine's Bakery had the following assets and liabilities at the beginning and end of the current year:
a. If Josephine made no investments in the business and withdrew no assets during the year, what was the amount of net income earned by Josephine's Bakery?
b. If Josephine invested an additional $12,000 in the business during the year, but withdrew no assets during the year, what was the amount of net income earned by Josephine's Bakery?
5. Maria Sanchez began business as Sanchez Law Firm on November 1. Record the following November transactions by making entries directly to the T-accounts provided.
a) Sanchez invested $15,000 cash and a law library valued at $6,000.
b) Purchased $7,500 of office
1. The following is a list of accounts and identification letters A through J for Shannon Management Co.:
Use the form below to identify the type of account and its normal balance. The first item is filled in as an example.
2. Recording following transactions using T-accounts and prepare the journal entries for the transactions
a. Company A paid $2,500 cash to satisfy a previously recorded account payable.
b. Mr A, one owner of the company withdrew $ 100 to pay to company X for his personal use.
c. On December 3, the Matador Company paid $5,400 cash in salaries to office personnel.
d. On February 5, Textron Stores purchased a van that cost $35,000, but not paid to the supplier.
e. Company X bought $ 5000 inventories by cash.
3. Flora Accounting Services completed these transactions in February:
a. Purchased office supplies on account, $300.
b. Completed work for a client on credit, $500.
c. Paid cash for the office supplies purchased in (a).
d. Completed work for a client and received $800 cash.
e. Received $500 cash for the work described in (b).
f. Received $1,000 from a client for accounting services to be performed in March.
Prepare journal entries to record the above transactions.
4. Josephine's Bakery had the following assets and liabilities at the beginning and end of the current year:
a. If Josephine made no investments in the business and withdrew no assets during the year, what was the amount of net income earned by Josephine's Bakery?
b. If Josephine invested an additional $12,000 in the business during the year, but withdrew no assets during the year, what was the amount of net income earned by Josephine's Bakery?
5. Maria Sanchez began business as Sanchez Law Firm on November 1. Record the following November transactions by making entries directly to the T-accounts provided.
a) Sanchez invested $15,000 cash and a law library valued at $6,000.
b) Purchased $7,500 of office