CHAPTER 0
Accounting Cycle Review
SOLUTIONS TO BRIEF EXERCISES
BRIEF EXERCISE 0.1
Assets Liabilities Shareholders’ Equity
(a) + + NE
(b) + NE +
(c) – NE –
LO 1 BT: C Difficulty: Easy TOT: 2 min. AACSB: None AICPA FC: Reporting
BRIEF EXERCISE 0.2
Assets = Liabilities + Shareholders’ Equity
Accounts Accounts Bonds Common Retained
Cash + Receivable + Supplies = Payable + Payable + Shares + 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 0-1
, BRIEF EXERCISE 0.3
Assets = Liabilities + Shareholders’
Equity
Accounts Common Retained
Cash + Inventory + Equipment = Payable + Shares + 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 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
Copyright © 2022 John Wiley & Sons Canada, Ltd.. Kieso et al., Intermediate Accounting, 13Ce, Solutions Manual 0-2
, BRIEF EXERCISE 0.5
Account Debited Account Credited
June 1 Cash Common Shares
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 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; Debits increase assets:
the shareholders’ equity debit Cash $10,000. Credits
account Common Shares is increase shareholders’ equity:
increased. credit Common Shares $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.
Copyright © 2022 John Wiley & Sons Canada, Ltd.. Kieso et al., Intermediate Accounting, 13Ce, Solutions Manual 0-3
, BE 0.7
(Continued)
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 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 0-4
Accounting Cycle Review
SOLUTIONS TO BRIEF EXERCISES
BRIEF EXERCISE 0.1
Assets Liabilities Shareholders’ Equity
(a) + + NE
(b) + NE +
(c) – NE –
LO 1 BT: C Difficulty: Easy TOT: 2 min. AACSB: None AICPA FC: Reporting
BRIEF EXERCISE 0.2
Assets = Liabilities + Shareholders’ Equity
Accounts Accounts Bonds Common Retained
Cash + Receivable + Supplies = Payable + Payable + Shares + 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 0-1
, BRIEF EXERCISE 0.3
Assets = Liabilities + Shareholders’
Equity
Accounts Common Retained
Cash + Inventory + Equipment = Payable + Shares + 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 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
Copyright © 2022 John Wiley & Sons Canada, Ltd.. Kieso et al., Intermediate Accounting, 13Ce, Solutions Manual 0-2
, BRIEF EXERCISE 0.5
Account Debited Account Credited
June 1 Cash Common Shares
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 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; Debits increase assets:
the shareholders’ equity debit Cash $10,000. Credits
account Common Shares is increase shareholders’ equity:
increased. credit Common Shares $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.
Copyright © 2022 John Wiley & Sons Canada, Ltd.. Kieso et al., Intermediate Accounting, 13Ce, Solutions Manual 0-3
, BE 0.7
(Continued)
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 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 0-4
