Week One Exercise Solutions -Set a

2159 words 9 pages
Week One Exercise Solutions -Set A 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. | | | | | | Classification | Normal Balance | a. The albums, tapes, and CDs held for sale to customers. | A | Debit | b. A long-term loan owed to Citizens Bank. | | L | Credit | c. Promotional costs to publicize a concert. | | E | Debit | d. Daily sales of merchandise sold, | | | R | Credit | e. Amounts due from customers, | …show more content…
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 $700 from a client who was billed previously on March 4.
3/15 Paid $800 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 two weeks (A/P).
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 $75, with United billing Burton for the amount due.
3/31 Paid $900 for March wages
3/31 Processed a $600 cash withdrawal (dividend) from the business for Joanne Burton

| | | Assets | | = | Liabilities | + | Equity | | | | Accounts | | | | Accounts | | (+)Com Stock | (+) Rev | | Cash | Receivable | Land | Equipment | | Payable | | (-) Dividend | (-) Exp | 3/1 | $20,000 | | | | | | | $20,000 | | 3/4 | | $2,400 | | | | | | | $2,400 | 3/7 | ($6,000) | | $6,000 | | | | | | | 3/12 | $700 | ($700) | | | | | | | | 3/15 | ($800) | | | | | | | | ($800) | 3/18 | ($7,000) | | | $9,000 | | $2,000 | | | | 3/22 | $300 | | | | | | | | $300 | 3/24 | ($1,500) | | |

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