Solutions manual for Intermediate Accounting (volume 1) 13th Canadian edition

CHAPTER 0 Accounting Cycle Review SOLUTIONS TO BRIEF EXERCISES BRIEF EXERCISE 0.1 Assets Liabilities Shareholders’ Equity (a) (b) (c) + + – + NE NE NE + – LO 1 BT: C Difficulty: Easy TOT: 2 min. AACSB: None AICPA FC: Reporting BRIEF EXERCISE 0.2 Assets = Liabilities + Shareholders’ Equity Cash + Accounts Receivable + Supplies = Accounts Payable + Bonds Payable+ Common Shares + Retained Earnings (1) +$60,000 +$60,000 (2) –9,000 –$9,000 Paid div. (3) +13,000 –$13,000 (4) +$3,100 +$3,100 LO 1 BT: AP Difficulty: Medium TOT: 5 min. AACSB: Analytic AICPA FC: Reporting Copyright © 2022 John Wiley & Sons Canada, Ltd.. Kieso et al., Intermediate Accounting, 13Ce, Solutions Manual 0-2 BRIEF EXERCISE 0.3 Assets = Liabilities + Shareholders’ Equity Cash + Inventory +Equipment = Accounts Payable + Common Shares + Retained Earnings (1) -$286,176 +$286,176 (2) +137,590 +$137,590 Issued shares (3) +$68,480 +$68,480 LO 1 BT: AP Difficulty: Medium TOT: 3 min. AACSB: Analytic AICPA FC: Reporting BRIEF EXERCISE 0.4 Debit Effect Credit Effect Normal Balance (a) (b) (c) (d) (e) (f) Accounts Payable Advertising Expense Service Revenue Accounts Receivable Retained Earnings Dividends Decrease Increase Decrease Increase Decrease Increase Increase Decrease Increase Decrease Increase Decrease Credit Debit Credit Debit Credit Debit LO 2 BT: K Difficulty: Medium TOT: 4 min. AACSB: None AICPA FC: Reporting Copyright © 2022 John Wiley & Sons Canada, Ltd.. Kieso et al., Intermediate Accounting, 13Ce, Solutions Manual 0-3 BRIEF EXERCISE 0.5 Account Debited Account Credited June 1 2 3 12 Cash Equipment Rent Expense Accounts Receivable Common Shares Accounts Payable Cash 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 Shares ....................................................... 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; the shareholders’ equity account Common Shares is increased. Debits increase assets: debit Cash $10,000. Credits increase shareholders’ equity: credit Common Shares $10,000. 4 The asset Prepaid Insurance is increased; the asset Cash is decreased. Debits increase assets: debit Prepaid Insurance $1,500. Credits decrease assets: credit Cash $1,500. Copyright © 2022 John Wiley & Sons Canada, Ltd.. Kieso et al., Intermediate Accounting, 13Ce, Solutions Manual 0-4 BE 0.7 (Continued) 16 The asset Cash is increased; the revenue Service Revenue is increased. Debits increase assets: debit Cash $900. Credits increase revenues: credit Service Revenue $900. 27 The expense Salaries and Wages Expense is increased; the asset Cash is decreased. Debits increase expenses: debit Salaries and Wages 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 Shares........................................................ 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 Copyright © 2022 John Wiley & Sons Canada, Ltd.. Kieso et al., Intermediate Accounting, 13Ce, Solutions Manual 0-5 BRIEF EXERCISE 0.9 Cash Service Revenue 5/12 1,600 5/15 2,000 5/5 3,800 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, 20X2 Debit Credit Cash........................................................................................... Accounts receivable................................................................. Equipment ................................................................................. Accounts payable ..................................................................... Common shares........................................................................ Dividends................................................................................... Service revenue ........................................................................ Salaries and wages expense ................................................... Rent expense ............................................................................ $ 5,400 3,000 13,000 1,200 4,000 1,000 $27,600 $ 1,000 18,000 8,600 $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 Copyright © 2022 John Wiley & Sons Canada, Ltd.. Kieso et al., Intermediate Accounting, 13Ce, Solutions Manual 0-6 BRIEF EXERCISE 0.11 BIRELLIE COMPANY Trial Balance December 31, 20X2 Debit Credit Cash........................................................................................... Prepaid insurance..................................................................... Accounts payable ..................................................................... Unearned revenue .................................................................... Common shares........................................................................ Retained earnings..................................................................... Dividends................................................................................... Service revenue ........................................................................ Salaries and wages expense ................................................... Rent expense ............................................................................ $20,800 3,500 5,000 14,600 2,600 $46,500 $ 2,500 1,800 10,000 6,600 25,600 $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) (b) (c) (d) (e) (f) $–100 0 0 +800 –2,500 0 $0 –20 +1,300 0 0 –600 LO 5 BT: C Difficulty: Medium TOT: 4 min. AACSB: None AICPA FC: Reporting Copyright © 2022 John Wiley & Sons Canada, Ltd.. Kieso et al., Intermediate Accounting, 13Ce, Solutions Manual 0-7 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 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 Item (1) Type of Adjustment (2) 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 Copyright © 2022 John Wiley & Sons Canada, Ltd.. Kieso et al., Intermediate Accounting, 13Ce, Solutions Manual 0-8 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 Depreciation Expense Accumulated Depreciation— 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 Copyright © 2022 John Wiley & Sons Canada, Ltd.. Kieso et al., Intermediate Accounting, 13Ce, Solutions Manual 0-9 BRIEF EXERCISE 0.18 July 1 Cash .............................................................................. 12,400 Unearned Revenue.............................................. 12,400 Dec. 31 Unearned Revenue....................................................... 3,100 Service Revenue ($12,400 X 6/24) ...................... 3,100 Unearned Revenue Service Revenue 12/31 3,100 7/1 12,400 12/31 3,100 12/31 Bal. 9,300 LO 5 BT: AP Difficulty: Medium TOT: 5 min. AACSB: Analytic AICPA FC: Reporting BRIEF EXERCISE 0.19 (a) Dec. 31 Interest Expense.................................................. 300 Interest Payable.......................................... 300 (b) 31 Accounts Receivable .......................................... 1,700 Service Revenue......................................... 1,700 (c) 31 Salaries and Wages Expense ............................. 780 Salaries and Wages Payable ..................... 780 LO 5 BT: AP Difficulty: Medium TOT: 5 min. AACSB: Analytic AICPA FC: Reporting Copyright © 2022 John Wiley & Sons Canada, Ltd.. Kieso et al., Intermediate Accounting, 13Ce, Solutions Manual 0-10 BRIEF EXERCISE 0.20 LEVIN CORPORATION Income Statement For the Year Ended December 31, 20X2 Revenues Service revenue .................................................................. $32,000 Expenses Salaries and wages expense.............................................. $14,000 Rent expense....................................................................... 3,900 Insurance expense.............................................................. 1,800 Supplies expense................................................................ 1,500 Depreciation expense......................................................... 1,000 Total expenses............................................................................. 22,200 Net income.................................................................................... $ 9,800 [Revenues – Expenses = Net income or (loss)] LO 7 BT: AP Difficulty: Medium TOT: 5 min. AACSB: Analytic AICPA FC: Reporting BRIEF EXERCISE 0.21 LEVIN CORPORATION Statement of Retained Earnings For the Year Ended December 31, 20X2 Retained earnings, January 1 ........................................................................... $17,200 Add: Net income / (Loss)................................................................................. 10,400 27,600 Less: Dividends ................................................................................................ 6,000 Retained earnings, December 31...................................................................... $21,600 (Beginning retained earnings ± Changes to retained earnings = Ending retained earnings) LO 7 BT: AP Difficulty: Medium TOT: 5 min. AACSB: Analytic AICPA FC: Reporting Copyright © 2022 John Wiley & Sons Canada, Ltd.. Kieso et al., Intermediate Accounting, 13Ce, Solutions Manual 0-11 BRIEF EXERCISE 0.22 Account (a) (b) (c) (d) (e) (f) (g) Accumulated Depreciation Depreciation Expense Retained Earnings (beginning) Dividends Service Revenue Supplies Accounts Payable Balance Sheet Income Statement Statement of Retained Earnings Statement of Retained Earnings Income Statement Balance Sheet Balance Sheet LO 7 BT: K Difficulty: Easy TOT: 3 min. AACSB: None AICPA FC: Reporting BRIEF EXERCISE 0.23 (a) Closing Entries July 31 Service Revenue.................................................. 16,000 Income Summary ........................................ 16,000 (To close revenue account) Income Summary ................................................ 11,900 Salaries and Wages Expense ..................... 8,400 Repairs and Maintenance Expense............ 2,500 Income Tax Expense................................... 1,000 (To close expense accounts) Income Summary ................................................ 4,100 Retained Earnings....................................... 4,100 (To close net income to retained earnings) Retained Earnings............................................... 1,300 Dividends ..................................................... 1,300 (To close dividends to retained .earnings) (Income statement accounts are closed to the Income Summary account) (b) Retained Earnings 1,300 7/1 Bal. 20,000 4,100 7/31 Bal. 22,800 LO 8 BT: AP Difficulty: Medium TOT: 8 min. AACSB: Analytic AICPA FC: Reporting Copyright © 2022 John Wiley & Sons Canada, Ltd.. Kieso et al., Intermediate Accounting, 13Ce, Solutions Manual 0-12 BRIEF EXERCISE 0.24 The accounts that will appear in the post-closing trial balance are: Accumulated Depreciation Retained Earnings (ending) Supplies Accounts Payable LO 9 BT: K Difficulty: Easy TOT: 2 min. AACSB: None AICPA FC: Reporting Copyright © 2022 John Wiley & Sons Canada, Ltd.. Kieso et al., Intermediate Accounting, 13Ce, Solutions Manual 0-13 SOLUTIONS TO DO IT! REVIEW EXERCISES DO IT! 0.1 Assets = Liabilities + Shareholders’ Equity Cash + Accounts Receivable = Accounts Payable + Common Shares + Retained Earnings Revenues – Expenses – Dividends (1) +$20,000 +$20,000 (2) +$20,000 –20,000 (3) +$1,800 –$1,800 (4) –3,000 –$3,000 LO 1 BT: AP Difficulty: Medium TOT: 3 min. AACSB: Analytic AICPA FC: Reporting DO IT! 0.2 Boyd would likely need the following accounts in which to record the transactions necessary to ready his photography studio for opening day: Cash (debit balance) Equipment (debit balance) Supplies (debit balance) Accounts Payable (credit balance) Notes Payable (credit balance) Common Shares (credit balance) LO 2 BT: C Difficulty: Easy TOT: 2 min. AACSB: None AICPA FC: Reporting DO IT! 0.3 Each transaction that is recorded is entered in the general journal. The three activities would be recorded as follows: 1. Cash ....................................................................................... 8,000 Common Shares............................................................ 8,000 2. Supplies ............................................................................... 950 Accounts Payable ......................................................... 550 Cash ............................................................................... 400 3. No entry because no transaction has occurred. LO 2 BT: AP Difficulty: Medium TOT: 4 min. AACSB: Analytic AICPA FC: Reporting Copyright © 2022 John Wiley & Sons Canada, Ltd.. Kieso et al., Intermediate Accounting, 13Ce, Solutions Manual 0-14 DO IT! 0.4 Cash 4/1 1,900 4/3 3,400 4/16 500 4/20 300 4/30 4,500 LO 3 BT: AP Difficulty: Easy TOT: 3 min. AACSB: Analytic AICPA FC: Reporting DO IT! 0.5 CHILLIN’ COMPANY Trial Balance December 31, 20X2 Debit Credit Cash........................................................................................... $ 6,000 Accounts receivable ................................................................. 8,000 Supplies..................................................................................... 5,000 Equipment ................................................................................. 76,000 Notes payable............................................................................ $ 20,000 Accounts payable ..................................................................... 9,000 Salaries and wages payable..................................................... 3,000 Common shares........................................................................ 25,000 Dividends................................................................................... 8,000 Service revenue ........................................................................ 86,000 Rent expense............................................................................. 2,000 Salaries and wages expense.................................................... 38,000 $143,000 $143,000 (Liabilities, Common shares, and Revenues have credit balances) LO 4 BT: AP Difficulty: Medium TOT: 8 min. AACSB: Analytic AICPA FC: Reporting Copyright © 2022 John Wiley & Sons Canada, Ltd.. Kieso et al., Intermediate Accounting, 13Ce, Solutions Manual 0-15 DO IT! 0.6 1. c. 2. e. 3. h. 4. c. LO 5 BT: C Difficulty: Easy TOT: 3 min. AACSB: None AICPA FC: Reporting DO IT! 0.7 1. Insurance Expense ....................................................................... 300 Prepaid Insurance ................................................................. 300 (To record insurance expired) 2. Supplies Expense ......................................................................... 1,600 Supplies ................................................................................. 1,600 (To record supplies used) 3. Depreciation Expense................................................................... 200 Accumulated Depreciation—Equipment ............................ 200 (To record monthly depreciation) 4. Unearned Revenue ....................................................................... 4,000 Service Revenue.................................................................... 4,000 (To record revenue for services provided) LO 5 BT: AP Difficulty: Medium TOT: 6 min. AACSB: Analytic AICPA FC: Reporting DO IT! 0.8 1. Salaries and Wages Expense....................................................... 1,100 Salaries and Wages Payable ................................................ 1,100 (To record accrued salaries) 2. Interest Expense ($20,000 X .09 X 1/12) ...................................... 150 Interest Payable..................................................................... 150 (To record accrued interest) 3. Accounts Receivable ................................................................... 1,600 Service Revenue.................................................................... 1,600 (To record revenue for service provided) LO 5 BT: AP Difficulty: Medium TOT: 6 min. AACSB: Analytic AICPA FC: Reporting Copyright © 2022 John Wiley & Sons Canada, Ltd.. Kieso et al., Intermediate Accounting, 13Ce, Solutions Manual 0-16 DO IT! 0.9a Income statement: Service Revenue, Utilities Expense Balance sheet: Accounts Receivable, Accumulated Depreciation, Notes Payable, Common Shares. LO 7 BT: C Difficulty: Easy TOT: 3 min. AACSB: None AICPA FC: Reporting DO IT! 0.10a Dec. 31 Service Revenue..................................................................... 108,000 Income Summary............................................................ 108,000 (To close revenue to income summary) Dec. 31 Income Summary.................................................................... 72,000 Salaries and Wages Expense ........................................ 40,000 Rent Expense.................................................................. 18,000 Utilities Expense............................................................. 8,000 Supplies Expense........................................................... 6,000 (To close expenses to income summary) Dec. 31 Income Summary.................................................................... 36,000 Retained Earnings.......................................................... 36,000 (To close net income to retained earnings) Dec. 31 Retained Earnings.................................................................. 22,000 Dividends ........................................................................ 22,000 (To close dividends to retained earnings) LO 8 BT: AP Difficulty: Medium TOT: 6 min. AACSB: Analytic AICPA FC: Reporting Copyright © 2022 John Wiley & Sons Canada, Ltd.. Kieso et al., Intermediate Accounting, 13Ce, Solutions Manual 0-17 SOLUTIONS TO EXERCISES EXERCISE 0.1 1. Increase in assets and increase in shareholders’ equity. 2. Decrease in assets and decrease in shareholders’ equity. 3. Increase in assets and increase in shareholders’ equity. 4. Increase in assets and increase in shareholders’ equity. 5. Decrease in assets and decrease in shareholders’ equity. 6. Increase in liabilities and decrease in shareholders’ equity. 7. Increase in assets and decrease in assets. 8. Increase in assets and decrease in assets. 9. Increase in assets and increase in liabilities. LO 1 BT: C Difficulty: Medium TOT: 5 min. AACSB: None AICPA FC: Reporting EXERCISE 0.2 Assets = Liabilities + Shareholders’ Equity Cash + Accounts Receivable + Equipment = Accounts Payable + Common Shares + Retained Earnings Revenues – Expenses (1) +$40,000 +$40,000 Issued Shares (2) +$30,000 +$30,000 (3) –4,000 –$4,000 Rent Expense (4) +$19,000 +$19,000 Service Revenue (5) +5,000 +5,000 Service Revenue (6) –8,000 –8,000 Utilities Expense (7) –30,000 –30,000 (8) +1,300 –1,300 Advertising Expense (9) +12,000 –12,000 $15,000 + $7,000 + $30,000 = $ 1,300 + $40,000 + $24,000 – $13,300 $52,000 $52,000 LO 1 BT: AP Difficulty: Medium TOT: 8 min. AACSB: Analytic AICPA FC: Reporting Exercise 0.3 LO 1 BT: AP Difficulty: Medium TOT: 10 min. AACSB: Analytic AICPA FC: Reporting Assets = Liabilities + Shareholders’ Equity Cash + Accounts Receivable + Supplies + Equipment = Accounts Payable + Bonds Payable + Common Shares + Retained Earnings Revenues – Expenses – Dividends (1) +$100,000 +$100,000 Issued Shares (2) +45,000 +$45,000 (3) –60,000 +$60,000 (4) +16,000 +$16,000 Service Revenue (5) +$4,700 +$4,700 (6) –5,200 –$5,200 Rent Expense (7) +$10,000 +10,000 Service Revenue (8) –28,000 –28,000 Salaries and Wages Expense (9) –11,000 –$11,000 Dividends $ 56,800 + $10,000 + $4,700 + $60,000 $4,700 + $45,000 + $100,000 + +$26,000 – $33,200 – $11,000 $131,500 $131,500 Copyright © 2022 John Wiley & Sons Canada, Ltd.. Kieso et al., Intermediate Accounting, 13Ce, Solutions Manual 0-19 EXERCISE 0.4 (Essay) 1. Shareholders invested $20,000 cash in the business. 2. Purchased equipment for $5,000, paying $1,000 in cash and the balance of $4,000 on account. 3. Paid $750 cash for supplies. 4. Earned $9,500 in revenue, receiving $4,100 cash and $5,400 on account. 5. Paid $1,500 cash on accounts payable. 6. Paid $2,000 cash dividends to shareholders. 7. Paid $800 cash for rent. 8. Collected $450 cash from customers on account. 9. Paid salaries of $3,000. 10. Incurred $300 of utilities expense on account. EXERCISE 0.4 b. Issued common shares ........................................................................... $20,000 Service revenue ....................................................................................... 9,500 Dividends.................................................................................................. (2,000) Rent expense............................................................................................ (800) Salaries and wages expense................................................................... (3,000) Utilities expense....................................................................................... (300) Increase in shareholders’ equity ............................................................ $23,400 [Revenues – Expenses = Net income or (loss)] (Changes in shareholders’ equity = Additional investment – dividends ± Net income or Loss) c. Service revenue ....................................................................................... $9,500 Rent expense............................................................................................ (800) Salaries and wages expense................................................................... (3,000) Utilities expense....................................................................................... (300) Net income................................................................................................ $ 5,400 LO 1 BT: AP Difficulty: Medium TOT. 12 min. AACSB: Analytic AICPA FC: Reporting Copyright © 2022 John Wiley & Sons Canada, Ltd.. Kieso et al., Intermediate Accounting, 13Ce, Solutions Manual 0-20 EXERCISE 0.5 Account a. Normal Balance Debit or Credit b. Balance Sheet or Income Statement Accounts payable Credit Balance sheet Accounts receivable Debit Balance sheet Common shares Credit Balance sheet Depreciation expense Debit Income statement Interest expense Debit Income statement Interest income Credit Income statement Inventories Debit Balance sheet Prepaid expenses Debit Balance sheet Property and equipment Debit Balance sheet Revenues Credit Income statement LO 2 BT: K Difficulty: Easy TOT: 5 min. AACSB: None AICPA FC: Reporting a. Account Debited Account Credited Trans - action a. Basic Type b. Specific Account c. Effect c. Normal Balance a. Basic Type b. Specific Account c. Effect c. Normal Balance 1. Asset Cash Increase Debit Shareholders’ Equity Common Share s Increase Credit 2. Asset Equipment Increase Debit Asset Cash Decrease Debit 3. Asset Supplies Increase Debit Liability Accounts Payable Increase Credit 4. Asset Accounts Receivable Increase Debit Shareholders’ Equity Service Revenue Increase Credit 5. Shareholders’ Equity Advertising Expense Increase Debit Asset Cash Decrease Debit 6. Asset Cash Increase Debit Asset Accounts Receivable Decrease Debit 7. Liability Accounts Payable Decrease Credit Asset Cash Decrease Debit 8. Shareholders’ Equity Dividends Increase Debit Asset Cash Decrease Debit 3-18 Copyright © 2016 John Wiley & Sons, Inc. Kimmel, Financial Accounting, 8/e, Solutions Manual (For Instructor Use Only) EXERCISE 0-06 Copyright © 2022 John Wiley & Sons Canada, Ltd.. Kieso et al., Intermediate Accounting, 13Ce, Solutions Manual 0-22 EXERCISE 0.6 (Continued) b. General Journal Trans. Account Titles Debit Credit 1. Cash .............................................................................. Common Shares .................................................. 15,000 15,000 2. Equipment..................................................................... Cash...................................................................... 10,000 10,000 3. Supplies ........................................................................ Accounts Payable................................................ 300 300 4. Accounts Receivable ................................................... Service Revenue.................................................. 3,700 3,700 5. Advertising Expense.................................................... Cash...................................................................... 200 200 6. Cash .............................................................................. Accounts Receivable .......................................... 1,100 1,100 7. Accounts Payable......................................................... Cash...................................................................... 300 300 8. Dividends ...................................................................... Cash...................................................................... 400 400 LO 2 BT: AP Difficulty: Medium TOT: 15 AACSB: Analytic AICPA FC: Reporting EXERCISE 0.7 Oct. 1 Debits increase assets: debit Cash $30,000. Credits increase shareholders’ equity: credit Common Shares $30,000. 2 No accounting transaction. 3 Debits increase assets: debit Equipment $3,800. Credits increase liabilities: credit Accounts Payable $3,800. Copyright © 2022 John Wiley & Sons Canada, Ltd.. Kieso et al., Intermediate Accounting, 13Ce, Solutions Manual 0-23 EXERCISE 0.7 (Continued) Oct. 6 Debits increase assets: debit Accounts Receivable $10,800. Credits increase revenues: credit Service Revenue $10,800. 10 Debits increase assets: debit Cash $140. Credits increase revenues: credit Service Revenue $140. 27 Debits decrease liabilities: debit Accounts Payable $700. Credits decrease assets: credit Cash $700. 30 Debits increase expenses: debit Salaries and Wages Expense $3,000. Credits decrease assets: credit Cash $3,000. LO 2 BT: C Difficulty: Medium TOT: 10 min. AACSB: None AICPA FC: Reporting EXERCISE 0.8 General Journal Date Account Titles Debit Credit Oct. 1 Cash............................................................................. Common Shares................................................. 30,000 30,000 2 No entry. 3 Equipment ................................................................... Accounts Payable .............................................. 3,800 3,800 6 Accounts Receivable.................................................. Service Revenue ................................................ 10,800 10,800 10 Cash............................................................................. Service Revenue ................................................ 140 140 27 Accounts Payable ....................................................... Cash .................................................................... 700 700 30 Salaries and Wages Expense..................................... Cash .................................................................... 3,000 3,000 LO 2 BT: AP Difficulty: Medium TOT: 5 min. AACSB: Analytic AICPA FC: Reporting Copyright © 2022 John Wiley & Sons Canada, Ltd.. Kieso et al., Intermediate Accounting, 13Ce, Solutions Manual 0-24 EXERCISE 0.9 General Journal Date Account Titles Debit Credit May 4 Accounts Payable ....................................................... Cash .................................................................... 700 700 7 Accounts Receivable.................................................. Service Revenue ................................................ 6,800 6,800 8 Supplies....................................................................... Accounts Payable .............................................. 850 850 9 Equipment ................................................................... Cash .................................................................... 1,000 1,000 17 Salaries and Wages Expense..................................... Cash .................................................................... 530 530 22 Repairs and Maintenance Expense ........................... Accounts Payable .............................................. 900 900 29 Prepaid Insurance....................................................... Cash .................................................................... 1,200 1,200 LO 2 BT: AP Difficulty: Medium TOT: 8 min. AACSB: Analytic AICPA FC: Reporting Copyright © 2022 John Wiley & Sons Canada, Ltd.. Kieso et al., Intermediate Accounting, 13Ce, Solutions Manual 0-25 EXERCISE 0.10 General Journal Date Account Titles Debit Credit March 1 Rent Expense.............................................................. Cash.................................................................... 1,200 1,200 3 Accounts Receivable.................................................. Service Revenue ................................................ 140 140 5 Cash............................................................................. Service Revenue ................................................ 75 75 8 Equipment ................................................................... Cash.................................................................... Accounts Payable.............................................. 600 80 520 12 Cash............................................................................. Accounts Receivable......................................... 140 140 14 Salaries and Wages Expense .................................... Cash.................................................................... 525 525 22 Utilities Expense......................................................... Cash.................................................................... 72 72 24 Cash............................................................................. Notes Payable .................................................... 1,500 1,500 27 Repairs and Maintenance Expense........................... Cash.................................................................... 220 220 28 Accounts Payable....................................................... Cash.................................................................... 520 520 30 Prepaid Insurance....................................................... Cash.................................................................... 1,800 1,800 LO 2 BT: AP Difficulty: Medium TOT: 8 min. AACSB: Analytic AICPA FC: Reporting Copyright © 2022 John Wiley & Sons Canada, Ltd.. Kieso et al., Intermediate Accounting, 13Ce, Solutions Manual 0-26 EXERCISE 0.11 General Journal Trans. Account Titles Debit Credit 1. Cash .............................................................................. Common Shares .................................................. 24,000 24,000 2. Cash .............................................................................. Notes Payable...................................................... 7,000 7,000 3. Equipment..................................................................... Cash...................................................................... 11,000 11,000 4. Rent Expense................................................................ Cash...................................................................... 1,200 1,200 5. Supplies ........................................................................ Cash...................................................................... 1,450 1,450 6. Advertising Expense.................................................... Accounts Payable................................................ 600 600 7. Cash .............................................................................. Accounts Receivable ................................................... Service Revenue.................................................. 2,000 16,000 18,000 8. Dividends ...................................................................... Cash...................................................................... 400 400 9. Utilities Expense........................................................... Cash...................................................................... 2,000 2,000 10. Accounts Payable......................................................... Cash...................................................................... 600 600 11. Interest Expense........................................................... Cash...................................................................... 40 40 12. Salaries and Wages Expense ...................................... Cash...................................................................... 6,400 6,400 13. Cash .............................................................................. Accounts Receivable .......................................... 12,000 12,000 14. Income Tax Expense.................................................... Cash...................................................................... 1,500 1,500