(Solution Manual) Intermediate Accounting

Kieso,Weygandt,Terry, 18

Business

Solution Manual

18th Edition

• $15.00 $50.00

---

Description

Solution Manual for Intermediate Accounting, The downloadable file consists of 2024 pages, and the total size of the file is 14.57 MB. Purchase now only for highly discounted price.

Author(s): Kieso, Weygandt, Terry

---

---

Study Note Preview

Solutions Manual for Intermediate Accounting, 18e Donald Kieso, Jerry Weygandt, Terry Warfield (All Chapters) CHAPTER 0 Accounting Cycle Review SOLUTIONS TO BRIEF EXERCISES BRIEF EXERCISE 0 -1 Assets Liabilities Stockholders’ Equity (a) (b) (c) + + – + NE NE NE + – LO 1 BT: C Difficulty: Easy TOT: 2 min. AACSB: None AICPA FC: Reporting BRIEF EXERCISE 0 -2 Assets = Liabilities + Stockholders’ Equity Cash + Accounts Receivable + Supplies = Accounts Payable + Bonds Payable + Common Stock + Retained 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 BRIEF EXERCISE 0 -3 Assets = Liabilities + Stockholders’ Equity Cash + Inventory + Equipment = Accounts Payable + Common Stock + Retaine d Earnings (1) -$286,176 +$286,176 (2) +137,590 +$137,590 Issued stock (3) +$68,480 +$68,480 LO 1 BT: AP Difficulty: Medium TOT: 3 min. AACSB: Analytic AICPA FC: Reporting BRIEF EXERCISE 0 -4 Debit Effect Credit Effect Normal Balance (a) (b) (c) (d) (e) (f) Accounts Payable Advertising Expense Service Revenue Accounts Receivable Retained Earnings Dividends Decrease Increase Decrease Increase Decrease Increase Increase Decrease Increase Decrease Increase Decrease Credit Debit Credit Debit Credit Debit LO 2 BT: K Difficulty : Medium TOT: 4 min. AACSB: None AICPA FC: Reporting BRIEF EXERCISE 0 -5 Account Debited Account Credited June 1 2 3 12 Cash Equipment Rent Expense Accounts Receivable Common Stock Accounts Payable Cash 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 Stock ................................ ................................ .. 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; the stockholders’ equity account Common Stock is increased. Debits increase assets: debit Cash $10,000. Credits increase stockholders’ equity: credit Common Stock $10,000. 4 The asset Prepaid Insurance is increased; the asset Cash is decreased. Debits increase assets: debit Prepaid Insurance $1,500. Credits decrease assets: credit Cash $1,500. 16 The asset Cash is increased; the revenue Service Revenue is increased. Debits increase assets: debit Cash $900. Credits increase revenues: credit Service Revenue $900. 27 The expense Salaries and Wages Expense is increased ; the asset Cash is decreased. Debits increase expenses: debit Salaries and Wages 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 Stock ................................ .......................... 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 BRIEF EXERCISE 0-9 Cash Service Revenue 5/12 1,600 5/15 2,000 5/5 3,800 5/15 2,000 Accounts Receivable 5/5 3,800 5/12 1,600 LO 3 BT: AP Difficulty: Medium TOT: 4 min. AACSB: Analytic AICPA FC: Reporting BRIEF EXERCISE 0 -10 PEETE COMPANY Trial Balance June 30, 2017 Debit Credit Cash ................................ ................................ ........................... Accounts Receivable ................................ ................................ Equipment ................................ ................................ ................. Accounts Payable ................................ ................................ ..... Common Stock ................................ ................................ ......... Dividends ................................ ................................ ................... Service Revenue ................................ ................................ ....... Salaries and Wages Expense ................................ .................. Rent Expense ................................ ................................ ............ $ 5,400 3,000 13,000 1,200 4,000 1,000 $27,600 $ 1,000 18,000 8,600 $27,600 (Total of debit account balances = Total of credit account balances) LO 4 BT: AP Difficulty: Medium TOT: 6 min. AACSB: Analytic AICPA FC: Reporting BRIEF EXERCISE 0 -11 BIRELLIE COMPANY Trial Balance December 31, 2017 Debit Credit Cash ................................ ................................ ........................... Prepaid Insurance ................................ ................................ ..... Accounts Payable ................................ ................................ ..... Unearned Service Revenue ................................ ...................... Common Stock ................................ ................................ ......... Retained Earnings ................................ ................................ .... Dividends ................................ ................................ ................... Service Revenue ................................ ................................ ....... Salaries and Wages Expense ................................ .................. Rent Expense ................................ ................................ ............ $20,800 3,500 5,000 14,600 2,600 $46,500 $ 2,500 1,800 10,000 6,600 25,600 $46,500 (Assets, expenses, and dividends have debit balances) LO 4 BT: AN Difficulty: Medium TOT: 6 min. AACSB: Analytic AICPA FC: Reporting BRIEF EXERCISE 0 -12 Cash Net Income (a) (b) (c) (d) (e) (f) $–100 0 0 +800 –2,500 0 $0 –20 +1,300 0 0 –600 LO 5 BT: C Difficulty: Medium TOT: 4 min. AACSB: None AICPA FC: Reporting BRIEF EXERCISE 0 -13 (a) Prepaid Insurance —to recognize insurance expired during the period. (b) Depreciation Expense —to allocate the cost of an asset to expense during the current period. (c) Unearned Service Revenue —to account for unearned revenue for which services were provided during the period. (d) Interest Payable —to recognize interest accrued but unpaid on notes payable during the current period. LO 5 BT: C Diffi culty: Medium TOT: 4 min. AACSB: None AICPA FC: Reporting BRIEF EXERCISE 0 -14 Item (1) Type of Adjustment (2) Accounts Before Adjustment (a) Prepaid Expenses Assets Overstated Expenses Understated (b) Accrued Revenues Assets Understated Revenues Understated (c) Accrued Expenses Expenses Understated Liabilities Understated (d) Unearned Revenues Liabilities Overstated Revenues Understated LO 5 BT : AN Difficulty: Hard TOT: 6 min. AACSB: Analytic AICPA FC: Reporting BRIEF EXERCISE 0 -15 Dec. 31 Supplies Expense ................................ ......................... 7,700 Supplies ................................ ............................... 7,700 Supplies Supplies Expense 8,800 12/31 7,700 12/31 7,700 12/31 Bal. 1,100 LO 5 BT : AP Difficulty: Medium TOT: 5 min. AACSB: Analytic AICPA FC: Reporting BRIEF EXERCISE 0 -16 Dec. 31 Depreciation Expense ................................ .................. 2,750 Accumulated Depreciation — Equipment ................................ ........................ 2,750 Depreciation Expense Accumulated Depreciation — Equipment 12/31 2,750 12/31 2,750 Balance Sheet: Equipment ................................ ................................ ................ $22,000 Less: Accumulated depreciation —equipment ..................... 2,750 $19,250 LO 5 BT: AP Difficulty: Medium TOT: 6 min. AACSB: Analytic AICPA FC: Reporting BRIEF EXERCISE 0 -17 July 1 Prepaid Insurance ................................ ........................ 12,400 Cash ................................ ................................ ...... 12,400 Dec. 31 Insurance Expense ($12,400 X 6/24) ........................... 3,100 Prepaid Insurance ................................ ............... 3,100 Prepaid Insurance Insurance Expense 7/1 12,400 12/31 3,100 12/31 3,100 12/31 Bal. 9,300 LO 5 BT : AP Difficulty: Medium TOT: 5 min. AACSB: Analytic AICPA FC: Reporting BRIEF EXERCISE 0 -18 July 1 Cash ................................ ................................ .............. 12,400 Unearned Service Revenue ................................ 12,400 Dec. 31 Unearned Service Revenue ................................ ......... 3,100 Service Revenue ($12,400 X 6/24) ...................... 3,100 Unearned Service Revenue Service Revenue 12/31 3,100 7/1 12,400 12/31 3,100 12/31 Bal. 9,300 LO 5 BT: AP Difficulty: Medium TOT: 5 min. AACSB: Analytic AICPA FC: Reporting BRIEF EXERCISE 0 -19 (a) Dec. 31 Interest Expense ................................ .................. 300 Inter est Payable ................................ .......... 300 (b) 31 Accounts Receivable ................................ .......... 1,700 Service Revenue ................................ ......... 1,700 (c) 31 Salaries and Wages Expense ............................. 780 Salaries and Wages Payable ..................... 780 LO 5 BT : AP Difficulty: Medium TOT: 5 min. AACSB: Analytic AICPA FC: Reporting BRIEF EXERCISE 0 -20 Account (1) Type of Adjustment (2) Related Account (a) Accounts Receivable Accrued Revenues Service Revenue (b) Prepaid Insurance Prepaid Expenses Insurance Expense (c) Equipment Not required Not required (d) Accum. Depreciation — Equipment Prepaid Expenses Depreciation Expense (e) Notes Payable Not required Not r equired (f) Interest Payable Accrued Expenses Interest Expense (g) Unearned Service Revenue Unearned Revenues Service Revenue LO 6 BT: AN Difficulty: Hard TOT: 6 min. AACSB: Analytic AICPA FC: Reporting BRIEF EXERCISE 0 -21 LEVIN CORPORATION Income Statement For the Year Ended December 31, 2017 Revenues Service revenue ................................ ................................ .. $32,000 Expenses Salaries and wages expense ................................ .............. $14,000 Rent expense ................................ ................................ ....... 3,900 Insurance expense ................................ .............................. 1,800 Supplies expense ................................ ................................ 1,500 Depreciation expense ................................ ......................... 1,000 Total expenses ................................ ................................ ............. 22,200 Net income ................................ ................................ ................... $ 9,800 [Revenues – Expenses = Net income or (loss)] LO 7 BT: AP Difficulty: Medium TOT: 5 min. AACSB: Analytic AICPA FC: Reporting BRIEF EXERCISE 0 -22 LEVIN CORPORATION Retained Earnings Statement For the Year Ended December 31, 2017 Retained earnings, January 1 ................................ ................................ ........... $17,200 Add: Net income / (Loss) ................................ ................................ ................. 10,400 27,600 Less: Dividends ................................ ................................ ................................ 6,000 Retained earnings, December 31 ................................ ................................ ...... $21,600 (Beginning retained earnings ± Changes to retained earnings = Ending retained earnings) LO 7 BT: AP Difficulty: Medium TOT: 5 min. AACSB: Analytic AICPA FC: Reporting BRIEF EXERCISE 0-23 Account (a) (b) (c) (d) (e) (f) (g) Accumulated Depreciation Depreciation Expense Retained Earnings (beginning) Dividends Service Revenue Supplies Accounts Payable Balance Sheet Income Statement Retained Earnings Statement Retained Earnings Statement Income Statement Balance Sheet Balance Sheet LO 7 BT: K Difficulty: Easy TOT: 3 min. AACSB: None AICPA FC: Reporting BRIEF EXERCISE 0 -24 (a) Closing Entries July 31 Service Revenue ................................ .................. 16,000 Income Summary ................................ ........ 16,000 (To close revenue account) Income Summary ................................ ................ 11,900 Salaries and Wages Expense ..................... 8,400 Maintenance and Repairs Expense ................................ ........................ 2,500 Income Tax Expense ................................ ... 1,000 (To close expense accounts) Income Summary ................................ ................ 4,100 Retained Earnings ................................ ....... 4,100 (To close net income to retained earnings) Retained Earnings ................................ ............... 1,300 Dividends ................................ ..................... 1,300 (To c lose dividends to retained earnings) (Income statement accounts are closed to the Income Summary account) (b) Retained Earnings 1,300 7/1 Bal. 20,000 4,100 7/31 Bal. 22,800 LO 8 BT: AP Difficulty: Medium TOT: 8 min. AACSB: Analytic AICPA FC: Reporting BRIEF EXERCISE 0 -25 The accounts that will appear in the post -closing trial balance are: Accumulated Depreciation Retained Earnings (ending) Supplies Accounts Payable LO 9 BT: K Difficulty: Easy TOT: 2 min. AACSB: None AICPA FC: Reporting SOLUTIONS TO DO IT! REVIEW EXERCISES DO IT! 0-1 Assets = Liabilities + Stockholders’ Equity Cash + Accounts Receivable = Accounts Payable + Common Stock + Retained Earnings Revenues – Expenses – Dividends (1) +$20,000 +$20,000 (2) +$20,000 –20,000 (3) +$1,800 –$1,800 (4) –3,000 –$3,000 LO 1 BT : AP Difficulty: Medium TOT: 3 min. AACSB: Analytic AICPA FC: Reporting DO IT! 0-2 Boyd would likely need the following accounts in which to record the trans actions necessary to ready his photography studio for opening day: Cash (debit balance) Equipment (debit balance) Supplies (debit balance) Accounts Payable (credit balance) Notes Payable (credit balance) Common Stock (credit balance) LO 2 BT: C Difficulty: Easy TOT: 2 min. AACSB: None AICPA FC: Reporting DO IT! 0-3 Each transaction that is recorded is entered in the general journal. The three activities would be recorded as follows: 1. Cash ................................ ................................ ....................... 8,000 Common Stock ................................ .............................. 8,000 2. Supplies ................................ ................................ ............... 950 Accounts Payable ................................ ......................... 550 Cash ................................ ................................ ............... 400 3. No entry because no transaction has occu rred. LO 2 BT: AP Difficulty: Medium TOT: 4 min. AACSB: Analytic AICPA FC: Reporting DO IT! 0-4 Cash 4/1 1,900 4/3 3,400 4/16 500 4/20 300 4/30 4,500 LO 3 BT: AP Difficulty: Easy TOT: 3 min. AACSB: Analytic AICPA FC: Reporting DO IT! 0-5 CHILLIN’ COMPANY Trial Balance December 31, 2017 Debit Credit Cash ................................ ................................ ........................... $ 6,000 Accounts Receivable ................................ ................................ 8,000 Supplies ................................ ................................ ..................... 5,000 Equipment ................................ ................................ ................. 76,000 Notes Payable ................................ ................................ ........... $ 20,000 Accounts Payable ................................ ................................ ..... 9,000 Salaries and Wages Payable ................................ .................... 3,000 Common Stock ................................ ................................ .......... 25,000 Dividends ................................ ................................ ................... 8,000 Service Revenue ................................ ................................ ....... 86,000 Rent Expense ................................ ................................ ............ 2,000 Salaries and Wages Expense ................................ ................... 38,000 $143,000 $143,000 (Liabilities, Common stock, and Revenues have credit balances) LO 4 BT: AP Difficulty: Medium TOT: 8 min. AACSB: Analytic AICPA FC: Reporting DO IT! 0-6 1. (d) 2. (e) 3. (h) 4. (c) LO 5 BT: C Difficulty: Easy TOT: 3 min. AACSB: None AICPA FC: Reporting DO IT! 0-7 1. Insurance Expense ................................ ................................ ....... 300 Prepaid Insurance ................................ ................................ . 300 (To record insurance expired) 2. Supplies Expense ................................ ................................ ......... 1,600 Supplies ................................ ................................ ................. 1,600 (To record supplies used) 3. Depreciation Expense ................................ ................................ .. 200 Accumulated Depreciation —Equip ment ............................ 200 (To record monthly depreciation) 4. Unearned Service Revenue ................................ .......................... 4,000 Service Revenue ................................ ................................ .... 4,000 (To record revenue for services provided) LO 5 BT: AP Difficulty: Medium TOT: 6 min. AACSB: Analytic AICPA FC: Reporting DO IT! 0-8 1. Salaries and Wages Expense ................................ ....................... 1,100 Salaries and Wages Payable ................................ ................ 1,100 (To record accrued salaries) 2. Interest Expense ($20,000 X .09 X 1/12) ................................ ...... 150 Interest Payable ................................ ................................ ..... 150 (To record accrued interest) 3. Accounts Receivable ................................ ................................ ... 1,600 Service Revenue ................................ ................................ .... 1,600 (To record revenue for service provided) LO 5 BT: AP Difficulty: Medium TOT: 6 min. AACSB: Analytic AICPA FC: Reporting DO IT! 0-9a Income statement: Service Revenue, Utilities Expense Balance sheet: Accounts Receivable, Accumulated Depreciation, Notes Payable, Common Stock. LO 7 BT: C Difficulty: Easy TOT: 3 min. AACSB: None AICPA FC: Reporting DO IT! 0-10a Dec. 31 Service R evenue ................................ ................................ ..... 108,000 Income Summary ................................ ........................... 108,000 (To close revenue to income summary) Dec. 31 Income Summary ................................ ................................ .... 72,000 Salaries and Wages Expense ................................ ........ 40,000 Rent Expense ................................ ................................ .. 18,000 Utilities Expense ................................ ............................. 8,000 Supplies Expense ................................ ........................... 6,000 (To close expens es to income summary) Dec. 31 Income Summary ................................ ................................ .... 36,000 Retained Earnings ................................ .......................... 36,000 (To close net income to retained earnings) Dec. 31 Retained Earnings ................................ ................................ .. 22,000 Dividends ................................ ................................ ........ 22,000 (To close dividends to retained earnings) LO 8 BT: AP Difficulty: Medium TOT: 6 min. AACSB: Analytic AICPA FC: Reporting SOLUTIONS TO EXERCISES EXERCISE 0-1 1. Increase in assets and increase in stockholders’ equity. 2. Decrease in assets and decrease in stockholders’ equity. 3. Increase in asse ts and increase in stockholders’ equity. 4. Increase in assets and increase in stockholders’ equity. 5. Decrease in assets and decrease in stockholders’ equity. 6. Increase in liabilities and decrease in stockholders’ equity. 7. Increase in assets and decrease in assets. 8. Increase in assets and decrease in assets. 9. Increase in assets and increase in liabilities. LO 1 BT: C Difficulty: Medium TOT: 5 min. AACSB: None AICPA FC: Reporting EXERCISE 0-2 Assets = Liabilities + Stockholders’ Equity Cash + Accounts Receivable + Equipment = Accounts Payable + Common Stock + Retained Earnings Revenues – Expenses (1) +$40,000 +$40,000 Issued Stock (2) +$30,000 +$30,000 (3) –4,000 –$4,000 Rent Expense (4) +$19,000 +$19,000 Service Revenue (5) +5,000 +5,000 Service Revenue (6) –8,000 –8,000 Utilities Expense (7) –30,000 –30,000 (8) +1,300 –1,300 Advertising Expense (9) +12,000 –12,000 $15,000 + $7,000 + $30,000 = $ 1,300 + $40,000 + $24,000 – $13,300 $52,000 $52,000 LO 1 BT : AP Difficulty: Medium TOT: 8 min. AACSB: Analytic AICPA FC: Reporting Exercise 0 -3 LO 1 BT: AP Difficulty: M edium TOT: 10 min. AACSB: Analytic AICPA FC: Reporting Assets = Liabilities + Stockholders’ Equity Cash + Accounts Receivable + Supplies + Equipment = Accounts Payable + Bonds Payable + Common Stock + Retained Earnings Revenues – Expenses – Dividends (1) +$100,000 +$100,000 Issued Stock (2) +45,000 +$45,000 (3) –60,000 +$60,000 (4) +16,000 +$16,000 Service Revenue (5) +$4,700 +$4,700 (6) –5,200 –$5,200 Rent Expense (7) +$10,000 +10,000 Service Revenue (8) –28,000 –28,000 Salaries and Wages Expense (9) –11,000 –$11,000 Dividends $ 56,800 + $10,000 + $4,700 + $60,000 $4,700 + $45,000 + $100,000 + +$26,000 – $33,200 – $11,000 $131,500 $131,500 SM .., Solutions Manual (For Instructor Use Only) 3-21EXERCISE 0-4 (Essay) 1. Stockholders invested $20,000 cash in the business. 2. Purchased equipment for $5,000, paying $1,000 in cash and the balance of $4,000 on account. 3. Paid $750 cash for supplies. 4. Earned $9,500 in revenue, receiving $4,100 cash and $5,400 on account. 5. Paid $1,500 cash on accounts payable. 6. Paid $2,000 cash dividends to stockholders. 7. Paid $800 cash for rent. 8. Collected $450 cash from customers on account. 9. Paid salaries of $3,000. 10. Incurred $300 of utilities expense on account. EXERCISE 0 -4 (b) Issued common stock ................................ ................................ ............. $20,000 Service revenue ................................ ................................ ....................... 9,500 Dividends ................................ ................................ ................................ .. (2,000 ) Rent expense ................................ ................................ ............................ (800) Salaries and wages expense ................................ ................................ ... (3,000) Utilities expense ................................ ................................ ....................... (300) Increase in stockholders’ equity ................................ ............................ $23,400 [Revenues – Expenses = Net income or (loss)] (Changes in stockholders’ equity = Additional investment – dividends ± Net income or Loss) (c) Service revenue ................................ ................................ ....................... $9,500 Rent expense ................................ ................................ ............................ (800) Salaries and wages expense ................................ ................................ ... (3,000 ) Utilities expense ................................ ................................ ....................... (300) Net income ................................ ................................ ................................ $ 5,400 LO 1 BT: AP Difficulty: Medium TOT. 12 min. AACSB: Analytic AICPA FC: Reporting EXERCISE 0-5 Account (a) Normal Balance Debit or Credit (b) Balance Sheet or Income Statement SM .., Solutions Manual (For Instructor Use Only) 3-22Accounts payable Credit Balance sheet Accounts receivable Debit Balance sheet Common stock Credit Balance sheet Depreciation expense Debit Income statement Interest expense Debit Income statement Interest income Credit Income statement Inventories Debit Balance sheet Prepaid expenses Debit Balance sheet Property and equipment Debit Balance sheet Revenues Credit Income statement LO 2 BT : K Difficulty: Easy TOT: 5 min. AACSB: None AICPA FC: Reporting (a) Account Debited Account Credited Trans - action (a) Basic Type (b) Specific Account (c) Effect (d) Normal Balance (a) Basic Type (b) Specific Account (c) Effect (d) Normal Balance 1. Asset Cash Increase Debit Stockholders’ Equity Common Stock Increase Credit 2. Asset Equipment Increase Debit Asset Cash Decrease Debit 3. Asset Supplies Increase Debit Liability Accounts Payable Increase Credit 4. Asset Accounts Receivable Increase Debit Stockholders’ Equity Service Revenue Increase Credit 5. Stockholders’ Equity Advertising Expense Increase Debit Asset Cash Decrease Debit 6. Asset Cash Increase Debit Asset Accounts Receivable Decrease Debit 7. Liability Accounts Payable Decrease Credit Asset Cash Decrease Debit 8. Stockholders’ Equity Dividends Increase Debit Asset Cash Decrease Debit SM .., Solutions Manual (For Instructor Use Only) 3-24EXERCISE 0-6 (Continued) (b) General Journal Trans. Account Titles Debit Credit 1. Cash Common Stock ................................ ......................15,000 15,000 2. Equipment ................................ ................................ ....... Cash ................................ ................................ ........ 10,000 10,000 3. Supplies ................................ ................................ .......... Accounts Payable ................................ .................. 300 300 4. Accounts Receivable ................................ ..................... Service Revenue ................................ .................... 3,700 3,700 5. Advertising Expense ................................ ...................... Cash ................................ ................................ ........ 200 200 6. Cash Accounts Receivable ................................ ............1,100 1,100 7. Accounts Payable ................................ ........................... Cash ................................ ................................ ........ 300 300 8. Dividends ................................ ................................ ........ Cash ................................ ................................ ........ 400 400 LO 2 BT: AP Difficulty: Medium TOT: 15 AACSB: Analytic AICPA FC: Reporting EXERCISE 0-7 Oct. 1 Debits increase assets: debit Cash $30,000. Credits increase stockholders’ equity: credit Common Stock $30,000. 2 No accounting transaction. 3 Debits increase assets: debit Equipment $3,800. Credits increase liabilities: credit Accounts Payable $3,800. SM .., Solutions Manual (For Instructor Use Only) 3-25EXERCISE 0-7 (Continued) Oct. 6 Debits increase assets: debit Accounts Receivable $10,800. Credits increase revenues: credit Service Revenue $10,800. 10 Debits increase assets: debit Cash $140. Credits increase revenues: credit Service Revenue $140. 27 Debits decrease liabilities: debit Accounts Payable $700. Credits decrease assets: credit Cash $700. 30 Debits increase expenses: debit Salaries and Wages Expense $3,000. Credits decrease assets: credit Cash $3,000. LO 2 BT: C Difficulty: Medium TOT: 10 min. AACSB: None AICPA FC: Reporting EXERCISE 0-8 General Journal Date Account Titles Debit Credit Oct. 1 Cash Common Stock ................................ .....................30,000 30,000 2 No entry. 3 Equipment ................................ ................................ ..... Accounts Payable ................................ ................ 3,800 3,800 6 Accounts Receivable ................................ .................... Service Revenue ................................ .................. 10,800 10,800 10 Cash Service Revenue ................................ .................. 140 140 27 Accounts Payable ................................ ......................... Cash ................................ ................................ ...... 700 700 30 Salaries and Wages Expense ................................ ....... Cash ................................ ................................ ...... 3,000 3,000 LO 2 BT: AP Difficulty: Medium TOT: 5 min. AACSB: Analytic AICPA FC: Reporting