ࡱ> M bjbj== *WWlnnnnnnn<<<< <|WB(?(?(?(?(?(?(?(?1W3W3W3W3W3W3W$X [LWWn(?(?(?(?(?WW`Bnn(?(?lW`B`B`B(?.n(?n(?1W`B(?1W`B6`BBEnnF(?? + z8<V? FFtW0WF`[`B`[F`BX@nnnnCHAPTER 3 Questions 1. A note payable is a written document that specifies a definite amount owed to an entity at a specified date (dates), and usually demands interest. A note payable can be short-term and long-term. An account payable also references an amount owed to an entity, but the amount can be increased by the debtor(s) by making additional purchases. Moreover, an account payable is not usually a single document but may represent the result of several oral, implied, or sometimes written promises to pay the creditor. An account payable is usually short-term. 2. a. Common asset accounts: cash, notes receivable, prepaid expenses, office supplies, store supplies, equipment, building, and land. b. Common liability accounts: accounts payable, notes payable, and unearned revenue, wages payable, and taxes payable. c. Common equity accounts: owners capital and owners withdrawals. Quick Study 3-1 a. Credit f. Debit b. Debit g. Credit c. Debit h. Credit d. Credit i. Debit e. Credit j. Credit Quick Study 3-4 a. BS f. BS b. IS g. BS c. BS h. BS d. BS i. IS e. IS j. SCOE Quick Study 3-6 Jan. 13 Cash 70,000 Equipment 30,000 Bella Woods, Capital 100,000 Investment by owner. Jan. 21 Office Supplies 280 Accounts Payable 280 Purchased office supplies on credit. Jan. 29 Cash 7,800 Landscaping Services Revenue 7,800 Received cash for landscaping services. Exercise 3-4 Type ofIncreaseDecreaseNormal AccountAccount(Dr. or Cr.)(Dr. or Cr.)Balancea.Unearned revenueliabilitycreditdebitcreditb.Accounts payableliabilitycreditdebitcreditc.Postage expenseexpensedebitcreditdebitd.Prepaid insuranceassetdebitcreditdebite.Landassetdebitcreditdebitf.P. Maben, Capitalequitycreditdebitcreditg.Accounts receivableassetdebitcreditdebith.P. Maben, Withdrawalsequitydebitcreditdebiti.Cashassetdebitcreditdebitj.Equipmentassetdebitcreditdebitk.Fees earnedrevenuecreditdebitcreditl.Wages expenseexpensedebitcreditdebit Problem 3-1A Part 1 April 1 Cash 101 80,000 Office Equipment 163 26,000 Roberto Ricci, Capital 301 106,000 Owner invested cash and equipment. 1 Prepaid Rent 131 9,000 Cash 101 9,000 Prepaid three months rent. 2 Office Equipment 163 8,000 Office Supplies 124 3,600 Accounts Payable 201 11,600 Purchased equip. & supplies on credit. 6 Cash 101 4,000 Services Revenue 403 4,000 Received cash for services. 9 Accounts Receivable 106 6,000 Services Revenue 403 6,000 Billed client for completed work. 10 Accounts Payable 201 11,600 Cash 101 11,600 Paid balance due on account. 19 Prepaid Insurance 128 2,400 Cash 101 2,400 Paid premium for insurance. 22 Cash 101 4,400 Accounts Receivable 106 4,400 Collected part of amount owed by client. 25 Accounts Receivable 106 2,890 Services Revenue 403 2,890 Billed client for completed work. 30 Roberto Ricci, Withdrawals 302 5,500 Cash 101 5,500 Owner withdrew cash. 30 Office Supplies 124 600 Accounts Payable 201 600 Purchased supplies on account. 30 Utilities Expense 690 435 Cash 101 435 Paid monthly utility bill. Problem 3-1A (Continued) Part 2 CashAcct. No. 101DateExplanationPR Debit CreditBalanceApril1G180,00080,0001G19,00071,0006G14,00075,00010G111,60063,40019G12,40061,00022G14,40065,40030G15,50059,90030G143559,465 Accounts ReceivableAcct. No. 106DateExplanationPR Debit CreditBalanceApril9G16,0006,00022G14,4001,60025G12,8904,490 Office SuppliesAcct. No. 124DateExplanationPR Debit CreditBalanceApril2G13,6003,60030G16004,200 Prepaid InsuranceAcct. No. 128DateExplanationPR Debit CreditBalanceApril19G12,4002,400 Prepaid RentAcct. No. 131DateExplanationPR Debit CreditBalanceApril1G19,000 9,000 Office EquipmentAcct. No. 163DateExplanationPR Debit CreditBalanceApril1G126,00026,0002G18,00034,000 Problem 3-1A (Continued) Accounts PayableAcct. No. 201DateExplanationPR Debit CreditBalanceApril2G111,60011,60010G111,600030G1600600 Roberto Ricci, CapitalAcct. No. 301DateExplanationPR Debit CreditBalanceApril 1G1106,000106,000 Roberto Ricci, WithdrawalsAcct. No. 302DateExplanationPR Debit CreditBalanceApril30G15,5005,500 Services RevenueAcct. No. 403DateExplanationPR Debit CreditBalanceApril 6G14,0004,0009G16,00010,00025G12,89012,890 Utilities ExpenseAcct. No. 690DateExplanationPR Debit CreditBalanceApril 30G1435435 Problem 3-1A (Continued) Part 3 FINANCIAL CONSULTANTS Trial Balance April 30 Debit Credit Cash $ 59,465 Accounts receivable 4,490 Office supplies 4,200 Prepaid insurance 2,400 Prepaid rent 9,000 Office equipment 34,000 Accounts payable $ 600 Roberto Ricci, Capital 106,000 Roberto Ricci, Withdrawals 5,500 Services revenue 12,890 Utilities expense 435 _______ Total $119,490 $119,490   ,3 : x   ) ` v S b i Yxz7<@Fq}ιأؙؙؙ؏؏5>*CJOJQJ5>*CJOJQJ 5OJQJ5CJOJQJ5CJOJQJ5CJOJQJOJQJ56OJQJ56CJOJQJ5CJOJQJ5OJQJ\^J 56CJ5CJ5>*OJQJ\^J5  >@#0>L[]mn  n : ; Q x $$Ifa$$Ifd v4(#  *T4(#  *T4(#  *4(#  ?99$If$$IfP4ֈ L#@  <4 Pa $$Ifa$    ?6 d$If$$IfP4ֈ L#@  <4 Pa $$Ifa$ ) 3 : @ G H K \ f T$$IfP4ֈ L#@ 4 Pa $d$Ifa$ d$If$If f m s z { ~ cZZZ d$If$$IfP4ֈ L#@ 4 Pa $d$Ifa$ offfZZZoff $d$Ifa$ d$If$$IfP4ֈ L#@ 4 Pa    $ Z$$IfP4ֈ L#@ 4 Pa $d$Ifa$ d$If $ + , / C I O V \ ] ` cZZZcZ d$If$$IfP4ֈ L#@ 4 Pa $d$Ifa$ ` v } T$$IfP4ֈ L#@ 4 Pa $d$Ifa$ d$If$If cZZZ d$If$$IfP4ֈ L#@ 4 Pa $d$Ifa$    offfZZZoff $d$Ifa$ d$If$$IfP4ֈ L#@ 4 Pa   % , 2 3 4 5 6 7 8 ZXXXXX$$IfP4ֈ L#@ 4 Pa $d$Ifa$ d$If 8 9 : ; < = > ? 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