Question ACC 205 Week 1 DQ 1 Accounting Equation. As you have learned in this w

29 Jun Question ACC 205 Week 1 DQ 1 Accounting Equation. As you have learned in this w

Question
ACC 205 Week 1

DQ 1

Accounting Equation. As you have learned in this week’s readings, the Accounting

Equation is Assets = Liabilities + Owners’ Equity. Is the accounting equation true in all instances? Provide

sample transactions from your own experiences to demonstrate the validity of the Accounting Equation.

Guided Response:

Review several of your peers’ posts and identify some core components that you feel should be included in every

transaction. Respond to at least two of your peers and provide recommendations to extend their thinking.

Challenge your peers by asking a question that may cause them to reevaluate or add components to their transactions.

DQ 2

Accounts. What does the term account mean? What are the different classifications of

accounts? How do the rules for debits and credits impact accounts? Please provide an example of how debits and credits impact accounts.

Guided Response:

Analyze several of your peers’ posts. Let at least two of your peers know if this knowledge could be used in their everyday lives. Is so, how? If not, why not?

Assignment

Basic Accounting Equations. Please complete each of the exercises below in a word document. Save the

document, and submit it in the appropriate week using the Assignment Submission button.

1. Recognition of normal balances. The following items appeared in the accounting records of Triguero’s, a

retail music store that also sponsors concerts. Classify each of the items as an asset, liability; revenue; or

expense from the company’s viewpoint. Also indicate the normal account balance of each item.

a. Amounts paid to a mall for rent.

b. Amounts to be paid in 10 days to suppliers.

c. A new fax machine purchased for office use.

d. Land held as an investment.

e. Amounts due from customers.

f. Daily sales of merchandise sold.

g. Promotional costs to publicize a concert.

h. A long-term loan owed to Citizens Bank.

i. The albums, tapes, and CDs held for sale to customers.

2. Basic journal entries. The following transactions pertain to the Jennifer Royall Company:

May 1 Jennifer Royall invested cash of $25,000 and land valued at

$15,000 into the business.

5 Provided $1,000 of services to Jason Ratchford, a client, on account.

9 Paid $1,250 of salaries to an employee.

14 Acquired a new computer for $4,200, on account.

20 Collected $800 from Jason Ratchford for services provided on May 5.

24 Borrowed $2,500 from BestBanc by securing a six-month loan.

Prepare journal entries (and explanations) to record the preceding transactions and events.

3. Balance sheet preparation.

The following data relate to Preston Company as of December 31, 20XX:

Building $40,000 Accounts receivable $24,000

Cash 21,000 Loan payable 30,000

J. Preston, capital 65,000 Land 21,000

Accounts payable ?

Prepare a balance sheet as of December 31, 20XX.(See Exhibit 1.1 and 1.4)

4. Basic transaction processing. On November 1 of the current year, Richard Simmons established a sole proprietorship. The following transactions occurred during the month:

1: Simmons invested $32,000 into the business for $32,000 in common stock.

2: Paid $5,000 to acquire a used minivan.

3: Purchased $1,800 of office furniture on account.

4: Performed $2,100 of consulting services on account.

5: Paid $300 of repair expenses.

6: Received $800 from clients who were previously billed in item 4.

7: Paid $500 on account to the supplier of office furniture in item 3.

8: Received a $150 electric bill, to be paid next month.

9: Simmons withdrew $800 from the business.

10: Received $250 in cash from clients for consulting services rendered. 13

Instructions

a. Arrange the following asset, liability, and owner’s equity elements of the accounting equation: Cash,

Accounts Receivable, Office Furniture, Van, Accounts Payable, Common Stock/Dividends, and

Revenues/Expenses. (See Exhibit 1.5)

b. Record each transaction on a separate line. After all transactions have been recorded, compute the balance in each of the preceding items.

c. Answer the following questions for Parker.

(1) How much does the company owe to its creditors at month-end? On which financial statement(s) would this information be found?

(2) Did the company have a “good” month from an accounting viewpoint? Briefly explain.

5. Transaction analysis and statement preparation. The transactions that follow relate to Burton Enterprises

for March 20X1, the company’s first month of activity.

3/1: Joanne Burton, the owner invested $20,000 cash into the business.

3/4: Performed $2,400 of services on account.

3/7: Acquired a small parcel of land by paying $6,000 cash.

3/12: Received $500 from a client, who was billed previously on March 4.

3/15: Paid $200 to the Journal Herald for advertising expense.

3/18: Acquired $9,000 of equipment from Park Central Outfitters by paying $7,000 down and agreeing to remit the balance owed within the next 2 weeks, (Accounts Payable).

3/22: Received $300 cash from clients for services.

3/24: Paid $1,500 on account to Park Central Outfitters in partial settlement of the balance due from the

transaction on March 18.

3/28: Rented a car from United Car Rental for use on March 28. Total charges amounted to $125, with

United billing Burton for the amount due.