E5-15 Financial AccountingE5-15Journalizing purchase transactions

E5-15 Financial AccountingE5-15Journalizing purchase
transactions - perpetual systemsLO 2 [10-15 minutes]Students
please fill-in areas that are shadedStudent NameCourse
NameStudent ID:Date:On June 30, 2019, Hayes Jewelers
purchased inventory of $5,800 on account fromSlater Diamonds,
a jewelry importer. Terms were 3/15, net 45. The same day
Hayespaid freight charges of $400. Upon receiving the goods,
Hayes checked the order andfound $800 of unsuitable
merchandise, which was returned to Slater on July 4. Then,on
July 14, Hayes paid the invoice.Requirements1.Journalize all
necessary transactions for Hayes Jewelers. Explanations arenot
required.Test Your KnowledgeE5-15Req.
1JournalDATEACCOUNTS AND
EXPLANATIONSPOST.REF.DEBITCREDITJune 3030July 414
&LGood student&RApril 23
Print Test Your Knowledge
E5-18Financial AccountingE5-18Journalizing sales transactions
- perpetual systemsLO 3 [10-15 minutes]Students please fill-in
areas that are shadedStudent NameCourse NameStudent
ID:Date:Refer to the facts presented in Exercise 5-15.Exercise
5-15 presented here for your convenience.On June 30, 2019,
Hayes Jewelers purchased inventory of $5,800 on account
fromSlater Diamonds, a jewelry importer. Terms were 3/15, net
45. The same day Hayespaid freight charges of $400. Upon
receiving the goods, Hayes checked the order andfound $800 of
unsuitable merchandise, which was returned to Slater on July 4.
Then,on July 14, Hayes paid the
invoice.Requirements1.Journalize the transactions of the seller,
Slater Diamonds. Slater’s cost of goodssold was 45% of the
sales price. Explanations are not required.Test Your
KnowledgeE5-18Req. 1JournalDATEACCOUNTS AND
EXPLANATIONSPOST.REF.DEBITCREDITJune 3030Jul 4414

P5-27AFinancial AccountingP5-27AJournalizing purchase and
sales transactions - perpetual inventoryLO 2, 3 [20-25
minutes]Students please fill-in areas that are shadedStudent
NameCourse NameStudent ID:Date:Consider the following
transactions that occurred in September 2019 for
Aqumarines.Sep 3Purchased inventory on terms 1/15, n/eom,
$5,000.4Purchased inventory for cash of $1,700.6Returned $500
of inventory from September 4 purchase.8Sold goods on terms
of 2/15, n/35 of $6,000 that cost $2,640.10Paid for goods
purchased September 3.12Received goods from September 8
sale of $400 that cost $160.23Received payment from
September 8 customer.25Sold goods to Smithsons for $1,100
that cost $400. Terms of n/30were offered. As a courtesy to
Smithsons, $75 of freight was added tothe invoice for whi ch
cash was paid directly to UPS by Aquamarines.29Received
payment from Smithsons.Requirements1.Journalize September
transactions for Aquamarines, Inc. No explanationsare
required.Test Your KnowledgeP5-27AReq.
EXPLANATIONSDEBITCREDITSep 3468810121223252529
P5-32AFinancial AccountingP5-32APreparing a multi-step
income statement and a classified balance sheetLO 5 [30-40
NameCourse NameStudent ID:Date:Link Back to Chapter 4
(Classified Balance Sheet). The accounts of TaylorElectronics
Company are listed along with their balances before closing for
themonth ended March 31, 2019.Interest revenue$
200Accounts payable$ 16,700Inventory45,100Accounts
receivable33,600Note payable, long–term46,000Accumulated
depreciation37,700Salary payable2,700Taylor, capital, Feb 28,
201954,100Sales discounts2,900Taylor, drawing20,000Sales
returns and allowances7,500Cash8,000Sales
revenue297,000Cost of goods sold162,300Selling
expense38,200Equipment129,100Supplies6,000General

expenses16,700Unearned sales revenue13,800Interest
payable1,200Requirements1.Prepare Taylor Electronics’ multi -
step income statement.2.Prepare Taylor Electronics’ statement
of owner's equity.3.Prepare Taylor Electronics’ classified
balance sheet in report form.Test Your KnowledgeP5-32AReq.
1Taylor Electronics CompanyIncome StatementMonth Ended
March 31, 2019Net incomeReq. 2Taylor Electronics
CompanyStatement of Owner's EquityMonth Ended March 31,
2019Taylor, capital, Feb 28, 2019Taylor, capital, March 31,
2019Req. 3Taylor Electronics CompanyBalance SheetMarch 31,
2019ASSETSTotal assetsLIABILITIESOWNER'S EQUITYTotal
liabilities and owner's equity
S5-8Financial AccountingS5-8Preparing a merchandiser’s
income statement, statement of retained earnings and balance
sheetLO 5 [30-40 minutes]Students please fill-in areas that are
shadedStudent NameCourse NameStudent ID:Date:Carolina
Communications reported the following figures from its
adjusted trial balancefor its first year of business:Cash$
3,800Cost of Goods Sold$ 18,000Selling
Expenses1,000Equipment, net10,200Accounts
Payable4,100Accrued Liabilities1,700Common Stock4,230Sales
Revenue40,000Notes Payable, long-term700Accounts
Receivable2,700Merchandise Inventory500Interest
Expense30Administrative Expenses2,500Sales
Discounts4,800Sales Returns and
Allowances7,200Requirements1.Prepare Carolina
Communications’ multi-step income statement for the year
ended July 31, 2019.2.Prepare Carolina Communications’
statement of owner's equity.3.Prepare Carolina
Communications’ classified balance sheet in report form.Test
Your KnowledgeP5-32AReq. 1CAROLINA
COMMUNICATIONSIncome StatementMonth Ended July 31,
2019Net incomeReq. 2CAROLINA
COMMUNICATIONSStatement of Owner's EquityMonth Ended

July 31, 2019Carolina, capital, July 31, 2019Req. 3CAROLINA
COMMUNICATIONSBalance SheetJuly 31, 2019ASSETSTotal
assetsLIABILITIESOWNER'S EQUITYTotal liabilities and
owner's equity
S5-19Financial AccountingS5-19Preparing a merchandiser’s
income statement, statement of retained earnings and balance
sheetLO 5 [30-40 minutes]Students please fill-in areas that are
shadedStudent NameCourse NameStudent ID:Date:Journalize
the following sales transactions for Antique Mall. Explanations
are not required.Jan. 4Sold $12,200 of antiques on account,
credit terms are 3/15, n/30. Cost ofgoods is $6,400.8Received a
$400 sales return on damaged goods from the customer. Cost
ofgoods damaged is $210.13Antique Mall receives payment
from the customer on the amount due fromJan. 4, less the return
and discount.20Sold $4,800 of antiques on account, credit terms
are 1/10, n/45, FOBdestination. Cost of goods is
$1,200.20Antique Mall paid $100 on freight out.25Antique Mall
negotiated a $300 allowance on the goods sold on Jan.
20.29Receives payment from the customer on the amount due
from Jan. 20, less theallowance and
discount.Requirements1.Journalize all necessary
transactions.Test Your KnowledgeS5-19Req.
EXPLANATIONSPOST.REF.DEBITCREDITJan. 4Jan. 8Jan.
13Jan. 20Jan. 20Jan. 25Jan. 29
E4-15Financial AccountingE4-15Journalizing adjusting and
closing entriesLO 3 [15-25 minutes]Students please fill-in areas
that are shadedStudent NameCourse NameStudent ID:Date:Use
your answer from E4-13. [E4-13 is repeated here for your
convenience.]TELEGRAPHIC LINKTrial BalanceNovember 30,
2019Trial BalanceAccount TitleDebitCreditCash$

4,000Accounts receivable3,200Prepaid rent1,900Supplies
expense3,000Equipment34,800Accumulated
depreciation1,600Accounts payable5,400Salary payableThomas,
capital35,700Thomas, drawing2,100Service
revenueDepreciation expense8,600Salary expense1,700Rent
expenseUtilities expense600Supplies expenseTotal51,300$
51,300Use this information for your adjusting
entries:Additional information at November 30, 2019:a.Accrued
service revenue, $600.d.Prepaid rent expired,
$500.b.Depreciation, $300.e.Supplies used, $100.c.Accrued
salary expense, $800.Requirements1.Journalize Telegraphic
Link’s adjusting and closing entries at November 30, 2019.Test
Your KnowledgeE4-15Req.
1JournalDATEPOST.REF.DEBITCREDITAdjusting EntriesNov.
3030303030
&LGood student&RApril 22, 2011
E4-18Financial AccountingE4-18Preparing closing entries from
a partial worksheetLO 3 [15-25 minutes]Students please fill-in
ID:Date:The adjusted trial balance from the January worksheet
of Silver Sign Company follows:SILVER SIGN
COMPANYPartial WorksheetMonth Ended January 31,
2019Adjusted Trial BalanceAccountDebitCreditCash$
14,300Supplies2,400Prepaid
rent1,400Equipment45,000Accumulated depreciation$
6,100Accounts payable4,500Salary payable300Unearned service
revenue4,500Note payable, long-term5,300Silver,
capital32,600Silver, drawing800Service revenue16,800Salary
expense3,600Rent expense1,400Depreciation
expense400Supplies expense200Utilities expense600Total$
70,100$ 70,100Requirements1.Journalize Silver’s closing
entries at January 31.2.How much net income or net loss did
Silver earn for January? How can you tell?Test Your
KnowledgeE4-18Req.
1JournalDATEPOST.REF.DEBITCREDITCl osing EntriesJan.

31313131Req. 2
P4-28AFinancial AccountingP4-28AJournalizing adjusting and
closing entriesLO 3 [45-60 minutes]Students please fill-in areas
that are shadedStudent NameCourse NameStudent ID:Date:The
unadjusted trial balance and adjustment data of Elias Real
Estate AppraisalCompany at June 30, 2019, follow:ELIAS
REAL ESTATE APPRAISAL COMPANYUnadjusted Trial
BalanceJune 30, 2019Trial BalanceAccount
TitleDebitCreditCash$ 4,900Accounts
receivable4,000Supplies3,000Prepaid
insurance2,200Building74,400Accumulated depreciation$
18,800Land13,600Accounts payable19,500Interest
payable8,800Salary payable1,300Elias, capital30,800Elias,
drawing27,900Service revenue97,900Salary
expense32,400Depreciation expense- 0Insurance
expense4,200Utilities expense4,000Supplies
expense6,500Total$ 177,100$ 177,100Adjustment data at
June 30, 2019:a.Prepaid insurance expired, $300.b.Accrued
service revenue, $1,300.c.Accrued salary expense,
$900.d.Depreciation for the year, $8,500.e.Supplies used during
the year, $600.Requirements1.Open T-accounts for Elias,
capital and all the accounts that follow on thetrial balance.
Insert their unadjusted balances. Also open a T-account for
Incomesummary, which has a zero balance.2.Journalize the
adjusting entries and post to the accounts that you opened.
Showthe balance of each revenue account and each expense
account.3.Journalize the closing entries and post to the accounts
that you opened. Drawdouble underlines under each account
balance that you close to zero.4.Compute the ending balance of
Elias, capital.Test Your KnowledgeP4-28AReq. 1Open T-
accounts shown below adjusting entriesReq
EXPLANATIONSPOST.REF.DEBITCREDITJuneAdjusting
Entriesa. 30b. 30c. 30d. 30e. 30Req. 1 and

2Accounts receivableBal.SuppliesBal.Prepaid
insuranceBal.Accumulated depreciationBal.Salary
payableBal.Elias, capitalBal.Elias, drawingBal.Service
revenueBal.Salary expenseBal.Depreciation
expenseBal.Insurance expenseBal.Utilities expenseBal.Supplies
expenseBal.Req. 3JournalDATEACCOUNTS AND
EXPLANATIONSPOST.REF.DEBITCREDITJuneClosing
Entries3030303030Req. 3Closing entriesElias, capitalBal.Elias,
drawingIncome summaryClo.Clo.Clo.Bal.Service
revenueClo.Bal.Salary expenseBal.Clo.Depreciation
expenseBal.Clo.Insurance expenseBal.Clo.Utilities
expenseBal.Clo.Supplies expenseBal.Clo.Req. 4
&LGood Student&RApril 22
P4-29AFinancial AccountingP4-29APreparing a classified
balance sheet in report form, and using the current and debt
ratios to evaluate a companyLO 5, 6 [30-40 minutes]Students
please fill-in areas that are shadedStudent NameCourse
NameStudent ID:Date:Selected accounts of Blume Irrigation
System at December 31, 2019, follow:Insurance expense$
900Accounts payable$ 24,700Note payable, long-
term2,800Accounts receivable43,100Other
assets2,200Accumulated depreciation—
building24,000Building55,800Blume, capital, December 31,
201852,000Prepaid insurance4,000Accumulated depreciation—
equipment7,900Salary expense16,300Cash11,000Salary
payable3,900Interest payable400Service revenue74,800Blume,
drawing2,000Supplies3,300Equipment23,000Unearned service
revenue1,600Depreciation
expense30,500Requirements1.Prepare the company’s classified
balance sheet in report form at December 31, 2019.2.Compute
the company’s current ratio and debt ratio at December 31,
2019. AtDecember 31, 2018, the current ratio was 1.81 and the
debt ratio was 0.34.Did the company’s ability to pay debts
improve or deteriorate, or did it remainthe same during
2019?Test Your KnowledgeP4-29AReq. 1Blume Irrigation

SystemsBalance SheetDecember 31, 2019ASSETSCurrent
assets:CashTotal current assets$ - 0Plant assets:Equipment-
0Building- 0Total assets$ - 0LIABILITIESCurrent
liabilities:Accounts payableTotal current liabilities- 0Total
liabilities- 0OWNER'S EQUITYTotal owner's equity- 0Total
liabilities and owner's equity$ - 0Req. 2Current Ratio
Analysis20192018Current Ratio =Total current assetsTotal
current liabilitiesAnalysis:During 2019, Blume Irrigation
System's ability to pay current liabilities improved.Debt Ratio
Analysis20192018Debt Ratio =Total liabilitiesTotal
assetsAnalysis:
E9-20Financial AccountingE9-20Partial year depreciation and
sale of an assetLO 2, 3 [10-15 minutes]Students please fill-in
ID:Date:On January 2, 2018, Repeat Clothing Consignments
purchased showroom fixturesfor $11,000 cash, expecting the
fixtures to remain in service for five years. Repeathas
depreciated the fixtures on a double-declining-balance basis,
with zero residualvalue. On October 31, 2019, Repeat sold the
fixtures for $6,200 cash.Requirements1.Record both
depreciation for 2019 and sale of the fixtures on October 31,
2019.Test Your KnowledgeE9-20Req.
EXPLANATIONSDEBITCREDIT2019Depreciation for 10
months:Oct 31Sale of fixtures:Oct 31Gain on sale of
fixtures1,800Calculate 2018 depreciation:You can also use DDB
function in excel:DDB =for 2018DDB =for 10 mo.
2019Calculate 2019 depreciationGain is computed as
follows:Sale price of old fixturesBook value of old
fixtures:CostLess: Accm depreciationGain on
sale………………………………………………….
&LJennie&RApril 23
E9-24Financial AccountingE9-24Acquisition of patent,

amortization, and change in useful lifeLO 5 [10-15
NameCourse NameStudent ID:Date:Miracle Printers (MP)
manufactures printers. Assume that MP recently paid
$600,000for a patent on a new laser printer. Although it gives
legal protection for 20 years, thepatent is expected to provide a
competitive advantage for only eight
years.Requirements1.Assuming the straight-line method of
amortization, make journal entries torecord (a) the purchase of
the patent and (b) amortization for year 1.2.After using the
patent for four years, MP learns at an industry trade show
thatanother company is designing a more efficient printer. On
the basis of this newinformation, MP decides, starting with year
5, to amortize the remaining cost ofthe patent over two
remaining years, giving the patent a total useful life of sixyears.
Record amortization for year 5.Test Your KnowledgeE9-24Req.
EXPLANATIONSDEBITCREDITReq. 1Purchase of
patent(a)(b)Amortization for one year:Req. 2Amortization for
year 5:Calculate book valueOrginal cost$600,000Accm
Depreciation:Year 1Year 2Year 3Year 4- 0Book value at beg of
Yr 5600,000New estimated useful life remainingNew annual
amortization
&LJennie&RApril 23
P9-29AFinancial AccountingP9-29ALump sum asset purchases,
partial year depreciation, and impairmentsLO 2,3 [20-25
NameCourse NameStudent ID:Date:Gretta Chung Associates
surveys American eating habits. The company’s accountsinclude
Land, Buildings, Office equipment, and Communication
equipment, with aseparate accumulated depreciation account for
each asset. During 2018 and 2019,Gretta Chung completed the
following transactions:2018Jan 1Traded in old office equipment
with book value of $40,000 (cost of $132,000and accumulated
depreciation of $92,000) for new equipment. Chung alsopaid
$80,000 in cash. Fair value of the new equipment is

$119,000.Apr 1Acquired land and communication equipment in
a group purchase. Totalcost was $270,000 paid in cash. An
independent appraisal valued the landat $212,625 and the
communication equipment at $70,875.Sep 1Sold a building that
cost $555,000 (accumulated depreciation of $255,000through
December 31 of the preceding year). Chung received
$370,000cash from the sale of the building. Depreciation is
computed on astraight-line basis. The building has a 40-year
useful life and a residualvalue of $75,000.Dec 31Recorded
depreciation as follows:→Communication equipment is
depreciated by the straight-line method over afive-year life with
zero residual value.→Office equipment is depreciated using the
double-declining-balance method overfive years with $2,000
residual value.2019Jan 1The company identified that the
communication equipment suffered significantdecline in value.
The fair value of the communication equipment wasdetermined
to be $55,000.Requirements1.Record the transactions in the
journal of Gretta Chung Associates.Test Your KnowledgeP9-
29AReq. 1JournalDATEACCOUNTS AND
EXPLANATIONSDEBITCREDIT2018Jan. 1Office equipment
(new)Apr. 1Sept. 1Sept. 1Dec. 31Dec. 312019Jan. 1
&LJennie&RApril 23
P9-30AFinancial AccountingP9-30ANatural resource
accountingLO 4 [15-20 minutes]Students please fill-in areas
that are shadedStudent NameCourse NameStudent
ID:Date:McCabe Oil Company has an account titled Oil and gas
properties. McCabe paid$6,200,000 for oil reserves holding an
estimated 500,000 barrels of oil. Assume thecompany paid
$510,000 for additional geological tests of the property and
$490,000to prepare for drilling. During the first year, McCabe
removed 90,000 barrels of oil,which it sold on account for $39
per barrel. Operating expenses totaled $850,000, allpaid in
cash.Requirements1.Record all of McCabe’s transactions,
including depletion for the first year.Test Your KnowledgeP9-
30AReq. 1JournalDATEACCOUNTS AND
EXPLANATIONSDEBITCREDIT

&LJennie&RApril 23
EX2-17Financial AccountingE2-17 Describing transactions,
posting to T-accounts, and preparing a trial balanceLO 2,3,4,5
[20-30 minutes]Students please fill-in areas that are shaded
Student Name Course Name Student ID:
Date:The journal of Ward Technology
Solution
s,includes the following entries forMay, 2018:May 1The
business received cash of $75,000 and and gave capital to the
owner.2Purchased supplies of $500 on account.4Paid $53,000
cash for a building.6Performed service for customers and
received cash, $2,600.9Paid $400 on accounts
payable.17Performed service for customers on account,
$2,500.23Received $1,900 cash on account from a
customer.31Paid the following expenses: salary, $1,100; rent,
$900.Requirements1.Describe each transaction. For example,
the May 4 transaction description couldbe “Paid cash for
building.”2.Open T-accounts.3.Post to the accounts. Write dates
and journal references in the accounts. Compute the balance of
each account after posting.4.Prepare the trial balance of Ward
Technology

E5-15 Financial AccountingE5-15Journalizing purchase transactions

E5-15 Financial AccountingE5-15Journalizing purchase transactions

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