Scribd
Upload
55 views2 pages

Only For Students Who Have Problem With Absences

Here are the T accounts and unadjusted trial balance with net income for Cantwell Architects for July 2016: Cash a. $25,000 g. $11,150 h. $300 i. $3,500 j. $550 m. $2,200 n. $815 b. $2,750 e. $1,600 f. $2,400 Balance: $26,635 Accounts Receivable l. $17,300 Balance: $17,300 Supplies e. $1,600 Balance: $1,600 Prepaid Insurance f. $2,400 Automobiles

Uploaded by

usman akbar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
55 views2 pages

Only For Students Who Have Problem With Absences

Here are the T accounts and unadjusted trial balance with net income for Cantwell Architects for July 2016: Cash a. $25,000 g. $11,150 h. $300 i. $3,500 j. $550 m. $2,200 n. $815 b. $2,750 e. $1,600 f. $2,400 Balance: $26,635 Accounts Receivable l. $17,300 Balance: $17,300 Supplies e. $1,600 Balance: $1,600 Prepaid Insurance f. $2,400 Automobiles

Uploaded by

usman akbar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 2

Only for students who have problem with absences

Exercise 1*

We-Sell Realty, organized August 1, 2019, is owned and operated by Omar Farah. How
many errors can you find in the following statements for We-Sell Realty, prepared after
its first month of operations?

We-Sell Realty
Income Statement
August 31, 2019
Sales commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $140,000
Expenses:
Office salaries expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $87,000
Rent expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,000
Automobile expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,500
Miscellaneous expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,200
Supplies expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,150
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115,850
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 25,000

Omar Farah
Retained Earnings Statement
August 31, 2019
Retained earnings, August 1, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0
Less dividends during August . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000
$(10,000)
Additional issuance of capital stock on August 1, 2014 . . . . . . . . . . . . . . . . . . . .  15,000
$ 5,000
Net income for August . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000
Retained earnings, August 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $30,000

Balance Sheet
For the Month Ended August 31, 2014

Assets Liabilities
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,900 Accounts receivable . . . . . . . . . . . $38,600
Accounts payable . . . . . . . . . . . . . . . . . 22,350 Supplies . . . . . . . . . . . . . . . . . . . . . ...4,000
Stockholders’ Equity
Retained earnings . . .. . . . . . . . . . .. 30,000
Total assets . . . . . . . . . . . . . . . . . . . . . . . $31,250 Total liabilities and stockholders’eq$72,600
Exercise 2**

Lynn Cantwell, an architect, organized Cantwell Architects on July 1, 2016. During the
month, Cantwell Architects completed the following transactions:
a. Issued capital stock to Lynn Cantwell in exchange for $25,000.
b. Paid July rent for office and workroom, $2,750.
c. Purchased used automobile for $30,000, paying $4,000 cash and giving a note payable
for the remainder.
d. Purchased office and computer equipment on account, $9,000.
e. Paid cash for supplies, $1,600.
f. Paid cash for annual insurance policies, $2,400.
g. Received cash from client for plans delivered, $11,150.
h. Paid cash for miscellaneous expenses, $300.
i. Paid cash to creditors on account, $3,500.
j. Paid installment due on note payable, $550.
k. Received invoice for blueprint service, due in August, $1,500.
l. Recorded fee earned on plans delivered, payment to be received in August, $17,300.
m. Paid salary of assistant, $2,200.
n. Paid gas, oil, and repairs on automobile for July, $815.

Instructions:

1. Record the above transactions directly in the following T accounts, without journalizing:
Cash, Accounts Receivable, Supplies, Prepaid Insurance, Automobiles, Equipment, Notes
Payable, Accounts Payable, Capital Stock, Professional Fees, Rent Expense, Salary Expense,
Blueprint Expense, Automobile Expense, Miscellaneous Expense. To the left of the amount
entered in the accounts, place the appropriate letter to identify the transaction.
2. Determine account balances of the T accounts. Accounts containing a single entry only
(such as Prepaid Insurance) do not need a balance.
3. Prepare an unadjusted trial balance for Cantwell Architects, as of July 31, 2016.
4. Determine the net income or net loss for July.

You might also like