Download Report

Name: _______________
Chapter 4 Assignment
/35
1. Listed below are the transactions for East End Electric Repairs, owned by
Victor Kovacs. Examine these transactions and complete your analysis on the
transaction analysis sheet provided. Write the debit portion of each
transaction before the credit portion. (7 marks)
1) Bought a used delivery truck for $6 000 from Ardell Motors, terms $2 000
cash and the balance to be paid later.
2) Bought equipment for the office for $5 000 from Office Specialty, payment to
be made within 30 days.
3) Paid $300 cash to Prince-Vincent Ltd. for monthly payment on the loan.
4) Received a cheque from W. Thomson, a customer, for $180.
5) Performed a service for Brian Reynolds for $300, payment to be made in 30
days.
6) Twenty-five dollars worth of supplies was stolen by vandals.
7) Kovacs invested an additional $5 000 cash in his business.
2. Study the error situations listed and indicate whether they would or would not
cause the trial balance to be out of balance. If you decide that the trial balance
would be out of balance, state by how much. (5 marks)
3. For each of the transactions, indicate whether the account or item in
parentheses is an asset, a liability, or capital, and whether the account is
debited or credited. (5 marks)
4. T. Barkley, an accountant, is in business with the following assets and
liabilities: (18 marks)
Assets
Bank
$1 500
A/R—R. Burke
A/R—E. Chapple
A/R—O.
Patterson
Supplies
Equipment
Automobile
300
250
Liabilities
A/P—Familiar
Finance
A/P—Proctor’s Ltd.
A/P—A. Rose &
Son
$1 621
250
100
78
200
3 956
7 000
1. Set up the financial position of T. Barkley in T-accounts.
2. In the T-accounts provided, record the accounting entries for the transactions listed
below:
a.
b.
c.
d.
e.
f.
g.
h.
i.
Received $78 cash from O. Patterson in payment of her debt to the business.
Paid $100 cash to A. Rose & Son.
The owner withdrew $300 cash from the business for his personal use.
An accounting service was performed for R. Burke at a price of $500. Mr.
Burke agreed to pay for the service at a later date.
The office air conditioner, included in the Equipment figure, broke down and
had to be repaired at
a cost of $50. Cash was paid for the repair.
An accounting service was performed for E. Chapple for $200 cash.
Bought supplies valued at $45. Paid cash.
An accounting service was performed for L. Bell for $1 200. L. Bell promised
to pay within
30 days.
T. Barkley bought a computer from Computerland for $2 450. He gave a $900
deposit and is to pay the balance at the end of the month.
3. Calculate and record the balances in the accounts.
4. Take off a trial balance dated November 30, 20—, to see if the ledger is in balance.
Chapter 4 Answers
Question 1
No
.
Account Names
Asset,
Increase (+)
Debit
Liability, or
or Decrease
(DR) or
Owner’s
(-)
Credit
Equity
1)
2)
3)
4)
5)
6)
7)
(CR)
Amount
Question 2
Will it be out of
balance? (Y/N)
Error Situation
Amount- out of
balance
1.
A payment for equipment was recorded as a
debit of $395 to Equipment and a credit of
$359 to Bank.
$
2.
Cash received from a customer was recorded
as a debit of $180 to Bank and a credit of $180
to Accounts Payable.
$
3.
A credit of $300 to the Capital account was
recorded twice.
$
4.
A payment of $495 to a creditor was recorded
as a debit to Accounts Payable of $495 and
a credit to Bank of $49.
$
5.
An amount of $50 was debited to Supplies, but
it should have been debited to Equipment.
$
Question 3
For each of the following transactions, indicate whether the account or item in parentheses is an
asset, a liability, or capital, and whether the account is debited or credited.
Asset, Liability &
Capital
1
Increase in (Accounts Payable).
2
A broken (coffee maker) that
cannot be repaired is thrown out
(Owner) invests $2 000 more
cash in the business.
Obtain a (loan) of $5 000 from the
bank.
(Owner) withdraws $450 from the
business for personal use.
3
4
5
Debit or Credit
Question 4
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
Accounts
Debits
Credits