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ACC 205 Week 1 Assignment Student Guidance Report
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Exercises 2.
Basic computations. The following selected balances were extracted
from the accounting records of Rossi Enterprises on December 31, 20X3:
a. Determine Rossi's total assets as of December 31.
b. Determine the company's total liabilities as of December 31.
c. Compute 20X3 net income or loss.
5. Accounting equation; analysis of owner's equity. Sportscar
Repair revealed the following financial data on January 1 and December
31 of the current year.
Assets Liabilities
January 1 $45,000 $20,000
December 31 49,000 31,000
a. Compute the change in owner's equity during the year by using
the accounting equation.

b. Assume that there were no owner investments or withdrawals
during the year. What is the probable cause of the change in owner's
equity from part (a)?
c. Assume that there were no owner investments during the year. If
the owner withdrew $17,000, determine and compute the company's net
income or net loss. Be sure to label your answer.
d. If owner investments and withdrawals amounted to $13,000 and
$2,000, respectively, determine whether the company operated
profitably during the year. Show appropriate calculations.
8. Financial statement relationships. The following information
appeared on the financial statements of the Altoona Repair Company:
1. By picturing the content of and the interrelationships among the
financial statements, determine the following:
a. Total revenues for the year
b. Total owner investments
c. Total assets
Problems 3.
Statement preparation. The following information is taken from the
accounting records of Grimball Cardiology at the close of business on
December 31, 20X1.
Accounts Payable $14,700 Surgery Revenue $175,000
Surgical Expenses 80,000 Cash 60,000
Surgical Equipment 37,000 Office Equipment 118,000

2. All equipment was acquired just prior to year-end. Conversations
with the practice's bookkeeper revealed the following data:
Rose Grimball, capital (January 1, 20X1) $300,000
19X1 owner investments 2,000
19X1 owner withdrawals 22,000
3. Instructions
a. Prepare the income statement for Grimball Cardiology in good
form.
b. Prepare a statement of owner's equity in good form.
c. Prepare Grimball's balance sheet in good form.
5.Financial statement preparation. On October 1, 20X6, Susan
Thompson opened Thompson Decorating Services, a sole proprietorship.
Susan began operations with $50,000 cash, 60% of which was acquired
via an owner investment. The remaining amount was obtained from a
bank loan. A review of the accounting records for October revealed the
following:
• Asset purchases: Van, $16,000; office equipment, $4,000; and
decorator (household) furnishings, $17,000. These amounts were paid in
cash except for $2,100 that is still owed for the furnishings acquisition.
Instructions
d. Prepare an income statement for the month ending October 31,
20X6.
e. Prepare a statement of owner's equity for the month ending
October 31, 20X6.

f. Prepare a balance sheet as of October 31, 20X6.
Chapter 2 Exercise 3
3. Basic journal entries. The following April transactions pertain to
the Jennifer Royall Company:
4/1: Received cash of $15,000 and land valued at $10,000 from Jennifer
Royall as an investment in the business.
4/5: Provided $1,200 of services to Jason Ratchford, a client.
4/5: Ratchford agreed to pay $800 in 15 days and the remaining amount
in May.
4/9: Paid $250 in salaries to an employee.
4/24: Borrowed $7,500 from Best Bank by securing a 6-month loan.
Prepare journal entries (and explanations) to record the preceding
transactions and events.
Chapter 2 Exercise 4
4. Trial balance preparation. Brighton Company began operation
on March 1 of the current year. The following account balances were
extracted from the general ledger on March 31; all accounts have normal
balances.
Accounts Payable $ 12,000 Interest Expense $ 300
Fees Earned 18,900
a. Determine the cost of the company's land by preparing a trial
balance.

b. Determine the firm's net income for the period ending March 31.
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ACC 205 Week 1 Chapter 1,2 Quiz and Video Quiz
1. In accounting the concept of materiality refers to
________________.
Question 2. 2. Typically accounting transactions are recorded and
reported at _______________.
Question 3. 3. The accounting equation is
____________________________.
Question 4. 4. An accountant should be able to work in the profession in
the ___________________.
Question 5. 5. In accounting, a debit means
________________________.
Question 6. 6. All of the following accounts are decreased with a credit
except______________________.

Question 7. 7. A T-account is ________________________.
Question 8. 8. In accounting the General Journal is
___________________________.
Question 9. 9. In accounting a chart of accounts refers to
_______________________.
Question 10. 10. If the Trial Balance is in balance at the end of the
accounting period this insures that________. (Points : 1)
Part 2
Question 1. 1. The accounting equation will appear on every published
financial statement.
Question 2. 2. Accounting has its own language.
Question 3. 3. Assets identify what a firm owes.
Question 4. 4. Liabilities identify what a firm owns.
Question 5. 5. All accounting must be done using an Excel spreadsheet.
1. A balance sheet reveals the assets, liabilities and equity of a particular
business over a designated period of time.
Question 2. 2. An Income Statement reveals a firms assets, liabilities and
equity at a particular moment in time.
Question 3. 3. The Statement of Retained Earnings builds a bridge
between the retained earnings that existed at the beginning and the end
of the accounting period.
Question 4. 4. A Cash Flow Statement is identical to the firm’s bank
account and is used to reconcile the checking account each month.

Question 5. 5. GAAP is the organization that makes the rules for
accounting that all firms follow.
1. Journal entries must be prepared before financial statements can be
created for a firm.
Question 2. 2. T-accounts are part of the published financial reporting
package of statements each month.
Question 3. 3. An Income Statement will explain the value of current
assets a firm has acquired.
Question 4. 4. Liabilities will be listed on a firm’s balance sheet.
Question 5. 5. Dividends are part of current assets for a firm since they
will be paid with cash.
Question 1. 1. In accounting a debit indicates an increase in an account.
Question 2. 2. In accounting a credit increases a liability account.
Question 3. 3. In accounting a credit increases an asset account.
Question 4. 4. In accounting there are no debits or credits entered in the
equity accounts.
Question 5. 5. A trial balance is a listing of all accounts and their
balances at a given moment in time.
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ACC 205 Week 1 DQ 1 Accounting Equation (New)

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As you have learned in this week’s readings the Accounting Equation is
+ Owners’ Equity. Is the accounting equation true in all
instances? Provide sample transactions from your own experiences to
demonstrate the validity of the Accounting Equation.
Guided Response:
Review several of your peers’ postings and identify some core
components that you feel should be included in every
transaction. Respond to at least two of your peers and provide
recommendations to extend their thinking. Challenge your peers by
asking a question that may cause them to reevaluate or add components
to their transactions.
*************************************
ACC 205 Week 1 DQ 2 Accounts (New)
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What does the term “account” mean? What are the different
classifications of accounts? How do the rules for Debits and Credits
impact accounts? Please provide an example of how debits and credits
impact accounts.
Guided Response:
Analyze several of your peers’ postings. Let at least two of your peers
know if this knowledge could be used in their everyday lives. Is so,
how? If not, why not?
*************************************
ACC 205 Week 1 Journal Balance Sheet Journal (New)
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The Balance Sheet is a financial snap shot of a company at a particular
point in time. The Balance Sheet lists the assets, liabilities, and equity
of the company. Reflect on your personal financial situation, can you
apply the concepts of the Balance Sheet? What did you learn from this
reflection?
Carefully review the Grading Rubric for the criteria that will be used to
evaluate your journal entry.

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ACC 205 Week 2 Assignment Student Guidance Report
Exercise 4
4. Accounting for prepaid expenses and unearned revenues. Hawaii-Blue
began business on January 1 of the current year and offers deep-sea
fishing trips to tourists. Tourists pay $125 in advance for an all-day
outing off the coast of Maui. The company collected monies during
January for 210 outings, with 30 of the tourists not planning to take their
trips until early February.
Hawaii-Blue rents its fishing boat from Pacific Yacht Supply. An
agreement was signed at the beginning of the year, and $72,000 was
paid for the rights to use the boat for 2 full years.
1. Prepare journal entries to record (1) the collection of monies from
tourists and (2) the revenue generated during January.
2. Calculate Hawaii-Blue's total obligation to tourists at the end of
January. On what financial statement and in which section would this
amount appear?

3. Prepare journal entries to record (1) the payment to Pacific Yacht
Supply and (2) the subsequent adjustment on January 31.
4. On what financial statement would Hawaii-Blue's January boat rental
cost appear?
Exercise 8
8. Closing entries. Gomez Company had the following adjusted
trial balance on December Prepare the closing entries that Gomez would
record on December 31.
Problem 3
Adjusting entries. You have been retained to examine the records of
Kathy's Day Care Center as of December 31, 20X3, the close of the
current reporting period. In the course of your examination, you discover
the following:
1. On January 1, 20X3, the Supplies account had a balance of
$2,350. During the year, $5,520 worth of supplies was purchased, and a
balance of $1,620 remained unused on December 31.
2. Unrecorded interest owed to the centertotaled $275 as of
December 31.
3. All clients pay tuition in advance, and their payments are
credited to the Unearned Tuition Revenue account. The account was
credited for $75,500 on August 31. With the exception of $15,500,
which represented prepayments for 10 months' tuition from several well-
to-do families, all amounts were for the current semester ending on
December 31.
4. Depreciation on the school's van was $3,000 for the year.

5. On August 1, the center began to pay rent in 6-month
installments of $21,000. Kathy wrote a check to the owner of the
building and recorded the check in Prepaid Rent, a new account.
6. Two salaried employees earn $400 each for a 5-day week. The
employees are paid every Friday, and December 31 falls on a Thursday.
7. Kathy's Day Care paid insurance premiums as follows, each time
debiting Prepaid Insurance:
Date Paid Policy No. Length of Policy Amount
Feb. 1, 20X2 1033MCM19 1 year $540
Jan. 1, 20X3 7952789HP 1 year 912
Aug. 1, 20X3 XQ943675ST 2 years 840
Instructions
The center's accounts were last adjusted on December 31, 20X2. Prepare
the adjusting entries necessary under the accrual basis of accounting.
Chapter 4 Exercises
3. Bank reconciliation and entries. The following information was
taken from the accounting records of Palmetto Company for the month
of January:
1. January bank reconciliation.
2. Prepare any necessary journal entries for Palmetto.
Exercise 6

6. Allowance method: estimation and balance sheet disclosure. The
following preadjusted information for the Maverick Company is
available on December 31:
Accounts receivable $107,000
Allowance for uncollectible accounts 5,400 (credit balance)
Credit sales 250,000
1. Prepare the journal entries necessary to record Maverick's
uncollectible accounts expense under each of the following assumptions:
(1) Uncollectible accounts are estimated to be 5% of Credit Sales.
(2) Uncollectible accounts are estimated to be 14% of Accounts
Receivable.
2. How would Maverick's Accounts Receivable appear on the
December 31 balance sheet under assumption (1) of part (a)?
3. How would Maverick's Accounts Receivable appear on the
December 31 balance sheet under assumption (2) of part (a)?
Problem 4
3. Allowance method: analysis of receivables. At a January 20X2
meeting, the president of Sonic Sound directed the sales staff "to move
some product this year." The president noted that the credit evaluation
department was being disbanded because it had restricted the company's
growth. Credit decisions would now be made by the sales staff.
By the end of the year, Sonic had generated significant gains in sales,
and the president was very pleased. The following data were provided
by the accounting department:
The $12,444,000 receivables balance was aged as follows:

Assume that no accounts were written off during 20X2.
Instructions
1. Estimate the amount of Uncollectible Accounts as of December
31, 20X2.
2. What is the company's Uncollectible Accounts expense for 20X2?
3. Compute the net realizable value of Accounts Receivable at the
end of 20X1 and 20X2.
4. Compute the net realizable value at the end of 20X1 and 20X2 as
a percentage of respective year-end receivables balances. Analyze your
findings and comment on the president's decision to close the credit
evaluation department.
*************************************

1. The accrual basis of accounting
means_______________________.
Question 2. 2. Under accrual basis accounting revenue is not recognized
until _________________.
Question 3. 3. The matching principle states
______________________________.
Question 4. 4. Adjusting entries apply to
___________________________.
Question 5. 5. Depreciation is
_________________________________________.
Question 6. 6. Which one of the following is not one of the seven steps
in the accounting cycle?
Question 7. 7. All of the following would be included as cash or cash
equivalents except ____________.
Question 8. 8. Which of the following is not considered a control feature
for cash receipts?
Question 9. 9. Which of the following is not considered a control feature
for cash disbursements?
Question 10. 10. When looking at a firm’s balance sheet if the accounts
receivable account is followed by an account that reads “less Allowance
for Uncollectible Accounts” a reader can assume_______.
Part 2
Question 1. 1. Cash received from a customer in advance of an order
being shipped is considered revenue by the firm.

Question 2. 2. If no cash is received then revenue cannot be recognized
based on the matching principle.
Question 3. 3. The cash account will never have an adjusting entry when
closing the books.
Question 4. 4. Expenses must be paid for before they can be
recognized.
Question 5. 5. The accounting cycle for a firm is considered to be one
year.
1. The Historical Cost Principle divides the economic life of a business
into artificial time periods.
Question 2. 2. An accounting time period that is one year long is called
the fiscal year.
Question 3. 3. Under accrual accounting revenue should be recognized
when cash is received.
Question 4. 4. The matching principle means expenses should be
recognized in the same accounting period as the revenue they helped
produce.
Question 5. 5. Adjusting journal entries are only necessary for revenues
that are unrecognized at the end of the accounting period.
. Postage stamps would be considered a cash equivalent.
Question 2. 2. A note receivable due in 16 months would be considered
a cash equivalent. Question 3. 3. A good cash control is to take cash
register receipts and hide them in the back room until later in the week
when a bank deposit can be made.
Question 4. 4. An accounts receivable is an amount due from a
customer.

Question 5. 5. A note receivable and an account receivable are the same
thing, just with a different name.
1. Cash control refers to insuring everyone has access to the petty cash
drawer so they can make change when needed.
Question 2. 2. A bank reconciliation by someone external to the cash
process is considered an internal control.
Question 3. 3. Petty cash is the primary account for a firm to pay bills
out of.
Question 4. 4. The Direct Write-off method of bad debt recognition is
not recognized by GAAP as acceptable.
Question 5. 5. The Allowance Method of recognizing bad debt expense
is not recognized as GAAP acceptable.
*************************************
ACC 205 Week 2 DQ 1 Accounting Cycle (New)
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