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Problem-1
During 2017, Blossom Company entered into the following transactions.
| 1. | Purchased equipment for $323,340 cash. | |
| 2. | Issued common stock to investors for $139,300 cash. | |
| 3. | Purchased inventory of $71,720 on account. |
Using the following tabular analysis, show the effect of each transaction on the accounting equation. For Retained Earnings, use separate columns for Revenues, Expenses, and Dividends if necessary.
Problem-2
Presented below are three economic events. In each column, indicate whether the event increased, decreased, or had no effect on assets, liabilities, and stockholders’ equity.
| (a) | Purchased supplies on account. |
| (b) | Received cash for performing a service. |
| (c) | Expenses paid in cash. |
Problem-3
For each of the following accounts, indicate the effect of a debit or a credit on the account and the normal balance.
| (a) | Accounts Payable. |
| (b) | Advertising Expense. |
| (c) | Service Revenue. |
| (d) | Accounts Receivable. |
| (e) | Retained Earnings. |
| (f) | Dividends. |
Problem-4
Transactions for Jayne Company for the month of June are presented below.
| June 1 | Issues common stock to investors in exchange for $5,000 cash. | |
| 2 | Buys equipment on account for $1,100. | |
| 3 | Pays $740 to landlord for June rent. | |
| 12 | Bills Wil Wheaton $700 for welding work done. |
Identify the accounts to be debited and credited for each transaction.
Problem-5
Transactions for Sheridan Company for the month of June are presented below.
| June 1 | Issues common stock to investors in exchange for $4,010 cash. | |
| 2 | Buys equipment on account for $1,670. | |
| 3 | Pays $710 to landlord for June rent. | |
| 12 | Bills Wil Wheaton $830 for welding work done. |
Journalize the transactions.
Problem-6
Cheyenne Corp. has the following transactions during August of the current year.
| Aug. 1 | Issues shares of common stock to investors in exchange for $13,900. | |
| Aug. 4 | Pays insurance in advance for 3 months, $2,200. | |
| Aug. 16 | Receives $800 from clients for services rendered. | |
| Aug. 27 | Pays the secretary $670 salary. |
Indicate the basic analysis and the debit–credit analysis.
Problem-7
Grouper Corp. has the following transactions during August of the current year.
| Aug. 1 | Issues shares of common stock to investors in exchange for $10,010. | |
| 4 | Pays insurance in advance for 3 months, $1,200. | |
| 16 | Receives $880 from clients for services rendered. | |
| 27 | Pays the secretary $600 salary. |
Journalize the transactions.
Problem-8
From the ledger balances below, prepare a trial balance for Crane Company at June 30, 2017. All account balances are normal.
| Accounts Payable | $ 1,350 | Service Revenue | $8,910 |
| Cash | 5,750 | Accounts Receivable | 2,660 |
| Common Stock | 18,000 | Salaries and Wages Expense | 3,570 |
| Dividends | 1,630 | Rent Expense | 1,340 |
| Equipment | 13,310 |
Problem-9
Selected transactions for Front Room, an interior decorator corporation, in its first month of business, are as follows.
| 1. | Issued stock to investors for $14,800 in cash. | |
| 2. | Purchased used car for $10,400 cash for use in business. | |
| 3. | Purchased supplies on account for $200. | |
| 4. | Billed customers $4,250 for services performed. | |
| 5. | Paid $200 cash for advertising start of the business. | |
| 6. | Received $1,480 cash from customers billed in transaction (4). | |
| 7. | Paid creditor $230 cash on account. | |
| 8. | Paid dividends of $310 cash to stockholders. |
Problem-10
Selected transactions for Riverbed Corp during its first month in business are presented below.
| Sept. 1 | Issued common stock in exchange for $19,200 cash received from investors. | |
| 5 | Purchased equipment for $9,470, paying $3,650 in cash and the balance on account. | |
| 8 | Performed services on account for $18,000. | |
| 14 | Paid salaries of $1,200. | |
| 25 | Paid $2,910 cash on balance owed for equipment. | |
| 30 | Paid $760 cash dividend. |