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Week One Exercise Assignment
Basic Accounting Equations
(You must refer to Chapter 2, Section 2.2, Page 48 to see normal balance and how debit or credit will impact each account. Please read my Hints in parenthesis and mostly underlined for each section of the problem/assignment)
1. Basic concepts. Jean's Marine Supply specializes in the sale of boating equipment and accessories. Identify the items that follow as an asset (A), liability (L), revenue (R), or expense (E) from the firm's viewpoint. (Pages 24, 33-34) a. The inventory of boating supplies owned by the company. b. Monthly rental charges paid for store space. c. A loan owed to Citizens Bank. d. New computer equipment purchased to handle daily record keeping. e. Daily sales made to customers. f. Amounts due from customers. g. Land owned by the company to be used as a future store site. h. Weekly salaries paid to salespeople.
2. Basic computations. The following selected balances were extracted from the accounting records of Rossi Enterprises on December 31, 20X3:
(Hint: Assets: Cash, A/R, Bldg, Land (add these together), Liabilities: A/P, L/P (add these together), Revenue: Fee, Expenses: I/E, A/E, T/E, U/E, W/E (add all expenses and deduct the total from revenue, the result would be your net income).
Accounts Payable $3,200 Interest Expense $2,500
Accounts Receivable 14,800 Land 18,000
Auto Expense 1,900 Loan Payable 40,000
Building 30,000 Tax Expense 3,300
Cash 7,400 Utilities Expense 4,100
Fee Revenue 56,900 Wage Expense 37,500
a. Determine Rossi’s total assets as of December 31.
b. Determine the company’s total liabilities as of December 31.
c. Compute 20X3 net income or loss.
3. Balance sheet preparation. The following data relate to Preston Company as of December 31, 19XX:
Hint:
Assets:
Cash
A/R
Land
Building
Total Assets:
Liabilities:
Accounts Payable
Loan Payable
Total
Basic Accounting Equations
(You must refer to Chapter 2, Section 2.2, Page 48 to see normal balance and how debit or credit will impact each account. Please read my Hints in parenthesis and mostly underlined for each section of the problem/assignment)
1. Basic concepts. Jean's Marine Supply specializes in the sale of boating equipment and accessories. Identify the items that follow as an asset (A), liability (L), revenue (R), or expense (E) from the firm's viewpoint. (Pages 24, 33-34) a. The inventory of boating supplies owned by the company. b. Monthly rental charges paid for store space. c. A loan owed to Citizens Bank. d. New computer equipment purchased to handle daily record keeping. e. Daily sales made to customers. f. Amounts due from customers. g. Land owned by the company to be used as a future store site. h. Weekly salaries paid to salespeople.
2. Basic computations. The following selected balances were extracted from the accounting records of Rossi Enterprises on December 31, 20X3:
(Hint: Assets: Cash, A/R, Bldg, Land (add these together), Liabilities: A/P, L/P (add these together), Revenue: Fee, Expenses: I/E, A/E, T/E, U/E, W/E (add all expenses and deduct the total from revenue, the result would be your net income).
Accounts Payable $3,200 Interest Expense $2,500
Accounts Receivable 14,800 Land 18,000
Auto Expense 1,900 Loan Payable 40,000
Building 30,000 Tax Expense 3,300
Cash 7,400 Utilities Expense 4,100
Fee Revenue 56,900 Wage Expense 37,500
a. Determine Rossi’s total assets as of December 31.
b. Determine the company’s total liabilities as of December 31.
c. Compute 20X3 net income or loss.
3. Balance sheet preparation. The following data relate to Preston Company as of December 31, 19XX:
Hint:
Assets:
Cash
A/R
Land
Building
Total Assets:
Liabilities:
Accounts Payable
Loan Payable
Total