,
,(1) -$286,176 +$286,176
(2) +137,590 +$137,590 Issued
stock
(3) +$68,480 +$68,480
LO 1 BT: AP Difficulty: Medium TOT: 3 min. AACSB: Analytic AICPA FC: Reporting
BRIEF EXERCISE 0-4
Debit Credit Normal
Effect Effect Balance
(a) Accounts Payable Decrease Increase Credit
(b) Advertising Expense Increase Decrease Debit
(c) Service Revenue Decrease Increase Credit
(d) Accounts Receivable Increase Decrease Debit
(e) Retained Earnings Decrease Increase Credit
(f) Dividends Increase Decrease Debit
LO 2 BT: K Difficulty: Medium TOT: 4 min. AACSB: None AICPA FC: Reporting
BRIEF EXERCISE 0-5
Account Debited Account Credited
June 1 Cash Common Stock
2 Equipment Accounts Payable
3 Rent Expense Cash
12 Accounts Receivable Service Revenue
LO 2 BT: C Difficulty: Medium TOT: 3 min. AACSB: None AICPA FC: Reporting
BRIEF EXERCISE 0-6
June 1 Cash ................................................................................... 5,000
Common Stock .................................................................. 5,000
2 Equipment .......................................................................... 1,100
Accounts Payable.............................................................. 1,100
, 3 Rent Expense ..................................................................... 740
Cash ........................................................................... 740
12 Accounts Receivable ........................................................ 700
Service Revenue ....................................................... 700
LO 2 BT: AP Difficulty: Medium TOT: 4 min. AACSB: Analytic AICPA FC: Reporting
BRIEF EXERCISE 0-7
(a) Basic Analysis (b) Debit-Credit Analysis
Aug. 1 The asset Cash is increased; Debits increase assets:
the stockholders’ equity debit Cash $10,000. Credits
account Common Stock is increase stockholders’ equity:
increased. credit Common Stock $10,000.
4 The asset Prepaid Insurance Debits increase assets:
is increased; the asset Cash debit Prepaid Insurance $1,500.
is decreased. Credits decrease assets:
credit Cash $1,500.
16 The asset Cash is increased; Debits increase assets:
the revenue Service Revenue debit Cash $900.
is increased. Credits increase revenues:
credit Service Revenue $900.
27 The expense Salaries and Debits increase expenses:
Wages Expense is increased; debit Salaries and Wages
the asset Cash is decreased. Expense $620.
Credits decrease assets:
credit Cash $620.
LO 2 BT: C Difficulty: Medium TOT: 8 min. AACSB: None AICPA FC: Reporting
BRIEF EXERCISE 0-8
Aug. 1 Cash .................................................................................... 10,000
Common Stock .......................................................... 10,000
4 Prepaid Insurance .............................................................. 1,500
Cash ........................................................................... 1,500
, 16 Cash .................................................................................... 900
Service Revenue........................................................ 900
27 Salaries and Wages Expense ............................................ 620
Cash ........................................................................... 620
LO 2 BT: AP Difficulty: Medium TOT: 5 min. AACSB: Analytic AICPA FC: Reporting
,BRIEF EXERCISE 0-9
Cash Service Revenue
5/12 1,600 5/5 3,800
5/15 2,000 5/15 2,000
Accounts Receivable
5/5 3,800 5/12 1,600
LO 3 BT: AP Difficulty: Medium TOT: 4 min. AACSB: Analytic AICPA FC: Reporting
BRIEF EXERCISE 0-10
PEETE COMPANY
Trial Balance
June 30, 2017
Debit Credit
Cash ........................................................................................... $ 5,400
Accounts Receivable ................................................................ 3,000
Equipment ................................................................................. 13,000
Accounts Payable ..................................................................... $ 1,000
Common Stock ......................................................................... 18,000
Dividends................................................................................... 1,200
Service Revenue ....................................................................... 8,600
Salaries and Wages Expense .................................................. 4,000
Rent Expense ............................................................................ 1,000
$27,600 $27,600
(Total of debit account balances = Total of credit account balances)
LO 4 BT: AP Difficulty: Medium TOT: 6 min. AACSB: Analytic AICPA FC: Reporting
,BRIEF EXERCISE 0-11
BIRELLIE COMPANY
Trial Balance
December 31, 2017
Debit Credit
Cash ........................................................................................... $20,800
Prepaid Insurance ..................................................................... 3,500
Accounts Payable ..................................................................... $ 2,500
Unearned Service Revenue...................................................... 1,800
Common Stock ......................................................................... 10,000
Retained Earnings .................................................................... 6,600
Dividends................................................................................... 5,000
Service Revenue ....................................................................... 25,600
Salaries and Wages Expense .................................................. 14,600
Rent Expense ............................................................................ 2,600
$46,500 $46,500
(Assets, expenses, and dividends have debit balances)
LO 4 BT: AN Difficulty: Medium TOT: 6 min. AACSB: Analytic AICPA FC: Reporting
BRIEF EXERCISE 0-12
Cash Net Income
(a) $–100 $0
(b) 0 –20
(c) 0 +1,300
(d) +800 0
(e) –2,500 0
(f) 0 –600
LO 5 BT: C Difficulty: Medium TOT: 4 min. AACSB: None AICPA FC: Reporting
BRIEF EXERCISE 0-13
(a) Prepaid Insurance—to recognize insurance expired during the period.
(b) Depreciation Expense—to allocate the cost of an asset to expense during the
current period.
,(c) Unearned Service Revenue—to account for unearned revenue for which services
were provided during the period.
(d) Interest Payable—to recognize interest accrued but unpaid on notes payable
during the current period.
LO 5 BT: C Difficulty: Medium TOT: 4 min. AACSB: None AICPA FC: Reporting
,BRIEF EXERCISE 0-14
(1) (2)
Item Type of Adjustment Accounts Before Adjustment
(a) Prepaid Expenses Assets Overstated
Expenses Understated
(b) Accrued Revenues Assets Understated
Revenues Understated
(c) Accrued Expenses Expenses Understated
Liabilities Understated
(d) Unearned Revenues Liabilities Overstated
Revenues Understated
LO 5 BT: AN Difficulty: Hard TOT: 6 min. AACSB: Analytic AICPA FC: Reporting
BRIEF EXERCISE 0-15
Dec. 31 Supplies Expense ......................................................... 7,700
Supplies ............................................................... 7,700
Supplies Supplies Expense
8,800 12/31 7,700 12/31 7,700
12/31 Bal. 1,100
LO 5 BT: AP Difficulty: Medium TOT: 5 min. AACSB: Analytic AICPA FC: Reporting
, BRIEF EXERCISE 0-16
Dec. 31 Depreciation Expense .................................................. 2,750
Accumulated Depreciation—
Equipment ........................................................ 2,750
Accumulated Depreciation—
Depreciation Expense Equipment
12/31 2,750 12/31 2,750
Balance Sheet:
Equipment ................................................................................ $22,000
Less: Accumulated depreciation—equipment ..................... 2,750 $19,250
LO 5 BT: AP Difficulty: Medium TOT: 6 min. AACSB: Analytic AICPA FC: Reporting
BRIEF EXERCISE 0-17
July 1 Prepaid Insurance ........................................................ 12,400
Cash...................................................................... 12,400
Dec. 31 Insurance Expense ($12,400 X 6/24) ........................... 3,100
Prepaid Insurance ............................................... 3,100
Prepaid Insurance Insurance Expense
7/1 12,400 12/31 3,100 12/31 3,100
12/31 Bal. 9,300
LO 5 BT: AP Difficulty: Medium TOT: 5 min. AACSB: Analytic AICPA FC: Reporting
,(1) -$286,176 +$286,176
(2) +137,590 +$137,590 Issued
stock
(3) +$68,480 +$68,480
LO 1 BT: AP Difficulty: Medium TOT: 3 min. AACSB: Analytic AICPA FC: Reporting
BRIEF EXERCISE 0-4
Debit Credit Normal
Effect Effect Balance
(a) Accounts Payable Decrease Increase Credit
(b) Advertising Expense Increase Decrease Debit
(c) Service Revenue Decrease Increase Credit
(d) Accounts Receivable Increase Decrease Debit
(e) Retained Earnings Decrease Increase Credit
(f) Dividends Increase Decrease Debit
LO 2 BT: K Difficulty: Medium TOT: 4 min. AACSB: None AICPA FC: Reporting
BRIEF EXERCISE 0-5
Account Debited Account Credited
June 1 Cash Common Stock
2 Equipment Accounts Payable
3 Rent Expense Cash
12 Accounts Receivable Service Revenue
LO 2 BT: C Difficulty: Medium TOT: 3 min. AACSB: None AICPA FC: Reporting
BRIEF EXERCISE 0-6
June 1 Cash ................................................................................... 5,000
Common Stock .................................................................. 5,000
2 Equipment .......................................................................... 1,100
Accounts Payable.............................................................. 1,100
, 3 Rent Expense ..................................................................... 740
Cash ........................................................................... 740
12 Accounts Receivable ........................................................ 700
Service Revenue ....................................................... 700
LO 2 BT: AP Difficulty: Medium TOT: 4 min. AACSB: Analytic AICPA FC: Reporting
BRIEF EXERCISE 0-7
(a) Basic Analysis (b) Debit-Credit Analysis
Aug. 1 The asset Cash is increased; Debits increase assets:
the stockholders’ equity debit Cash $10,000. Credits
account Common Stock is increase stockholders’ equity:
increased. credit Common Stock $10,000.
4 The asset Prepaid Insurance Debits increase assets:
is increased; the asset Cash debit Prepaid Insurance $1,500.
is decreased. Credits decrease assets:
credit Cash $1,500.
16 The asset Cash is increased; Debits increase assets:
the revenue Service Revenue debit Cash $900.
is increased. Credits increase revenues:
credit Service Revenue $900.
27 The expense Salaries and Debits increase expenses:
Wages Expense is increased; debit Salaries and Wages
the asset Cash is decreased. Expense $620.
Credits decrease assets:
credit Cash $620.
LO 2 BT: C Difficulty: Medium TOT: 8 min. AACSB: None AICPA FC: Reporting
BRIEF EXERCISE 0-8
Aug. 1 Cash .................................................................................... 10,000
Common Stock .......................................................... 10,000
4 Prepaid Insurance .............................................................. 1,500
Cash ........................................................................... 1,500
, 16 Cash .................................................................................... 900
Service Revenue........................................................ 900
27 Salaries and Wages Expense ............................................ 620
Cash ........................................................................... 620
LO 2 BT: AP Difficulty: Medium TOT: 5 min. AACSB: Analytic AICPA FC: Reporting
,BRIEF EXERCISE 0-9
Cash Service Revenue
5/12 1,600 5/5 3,800
5/15 2,000 5/15 2,000
Accounts Receivable
5/5 3,800 5/12 1,600
LO 3 BT: AP Difficulty: Medium TOT: 4 min. AACSB: Analytic AICPA FC: Reporting
BRIEF EXERCISE 0-10
PEETE COMPANY
Trial Balance
June 30, 2017
Debit Credit
Cash ........................................................................................... $ 5,400
Accounts Receivable ................................................................ 3,000
Equipment ................................................................................. 13,000
Accounts Payable ..................................................................... $ 1,000
Common Stock ......................................................................... 18,000
Dividends................................................................................... 1,200
Service Revenue ....................................................................... 8,600
Salaries and Wages Expense .................................................. 4,000
Rent Expense ............................................................................ 1,000
$27,600 $27,600
(Total of debit account balances = Total of credit account balances)
LO 4 BT: AP Difficulty: Medium TOT: 6 min. AACSB: Analytic AICPA FC: Reporting
,BRIEF EXERCISE 0-11
BIRELLIE COMPANY
Trial Balance
December 31, 2017
Debit Credit
Cash ........................................................................................... $20,800
Prepaid Insurance ..................................................................... 3,500
Accounts Payable ..................................................................... $ 2,500
Unearned Service Revenue...................................................... 1,800
Common Stock ......................................................................... 10,000
Retained Earnings .................................................................... 6,600
Dividends................................................................................... 5,000
Service Revenue ....................................................................... 25,600
Salaries and Wages Expense .................................................. 14,600
Rent Expense ............................................................................ 2,600
$46,500 $46,500
(Assets, expenses, and dividends have debit balances)
LO 4 BT: AN Difficulty: Medium TOT: 6 min. AACSB: Analytic AICPA FC: Reporting
BRIEF EXERCISE 0-12
Cash Net Income
(a) $–100 $0
(b) 0 –20
(c) 0 +1,300
(d) +800 0
(e) –2,500 0
(f) 0 –600
LO 5 BT: C Difficulty: Medium TOT: 4 min. AACSB: None AICPA FC: Reporting
BRIEF EXERCISE 0-13
(a) Prepaid Insurance—to recognize insurance expired during the period.
(b) Depreciation Expense—to allocate the cost of an asset to expense during the
current period.
,(c) Unearned Service Revenue—to account for unearned revenue for which services
were provided during the period.
(d) Interest Payable—to recognize interest accrued but unpaid on notes payable
during the current period.
LO 5 BT: C Difficulty: Medium TOT: 4 min. AACSB: None AICPA FC: Reporting
,BRIEF EXERCISE 0-14
(1) (2)
Item Type of Adjustment Accounts Before Adjustment
(a) Prepaid Expenses Assets Overstated
Expenses Understated
(b) Accrued Revenues Assets Understated
Revenues Understated
(c) Accrued Expenses Expenses Understated
Liabilities Understated
(d) Unearned Revenues Liabilities Overstated
Revenues Understated
LO 5 BT: AN Difficulty: Hard TOT: 6 min. AACSB: Analytic AICPA FC: Reporting
BRIEF EXERCISE 0-15
Dec. 31 Supplies Expense ......................................................... 7,700
Supplies ............................................................... 7,700
Supplies Supplies Expense
8,800 12/31 7,700 12/31 7,700
12/31 Bal. 1,100
LO 5 BT: AP Difficulty: Medium TOT: 5 min. AACSB: Analytic AICPA FC: Reporting
, BRIEF EXERCISE 0-16
Dec. 31 Depreciation Expense .................................................. 2,750
Accumulated Depreciation—
Equipment ........................................................ 2,750
Accumulated Depreciation—
Depreciation Expense Equipment
12/31 2,750 12/31 2,750
Balance Sheet:
Equipment ................................................................................ $22,000
Less: Accumulated depreciation—equipment ..................... 2,750 $19,250
LO 5 BT: AP Difficulty: Medium TOT: 6 min. AACSB: Analytic AICPA FC: Reporting
BRIEF EXERCISE 0-17
July 1 Prepaid Insurance ........................................................ 12,400
Cash...................................................................... 12,400
Dec. 31 Insurance Expense ($12,400 X 6/24) ........................... 3,100
Prepaid Insurance ............................................... 3,100
Prepaid Insurance Insurance Expense
7/1 12,400 12/31 3,100 12/31 3,100
12/31 Bal. 9,300
LO 5 BT: AP Difficulty: Medium TOT: 5 min. AACSB: Analytic AICPA FC: Reporting
