Accounting 115

Assignment 3

Summer 2006

Capturing Economic Events

Print Name ______Student Number ______

(1)

Given the following list of accounts and their amounts for Shari's Co. in alphabetical order, prepare a trial balance for December 31, 2006 as it should be presented on the next page.

Accounts Payable / 25,000
Accounts Receivable / 15,000
Advertising expense / 2,000
Building / 90,000
Capital stock / 70,500
Cash / 32,500
Dividends / 8,000
Land / 130,000
Notes Payable / 75,000
Revenue / 155,000
Retained Earnings / ?
Supplies / 3,500
Utilities expense / 4,500
Wage expense / 66,250
Wages Payable / 15,250

(1 cont.)

Shari’s Company

Trial Balance
December 31, 2006
Account / Debit / Credit
Cash
Accounts Receivable
Supplies
Land
Building
Notes Payable
Accounts Payable
Wages Payable
Capital Stock
Retained Earnings
Dividends
Revenue
Advertising Expense
Utility Expense
Wages Expense
Total

(2)

A list of accounts for Magic Company is given below, followed by a series of transactions. Indicate the accounts that would be debited and credited in recording each transaction by placing the appropriate number (or numbers) in the space provided.

1 / Cash / 5 / Office Equipment
2 / Accounts Receivable / 6 / Notes Payable
3 / Land / 7 / Accounts Payable
4 / Building / 8 / Capital Stock
9 / Retained Earnings
Transaction / Account(s)
Debited / Account(s)
Credited
Example: Purchased office equipment, paying part cash, with the balance due on account / 5 / 1, 7
A. Purchased land and a building, paying part cash
and issuing a note payable for the balance of the
purchase price
B. Sold a piece of the company’s office equipment at
cost; received part of the proceeds in cash, with
the balance due in 30 days
C. Collected an account receivable
D. Borrowed money from a bank and signed a note
payable due in one year
E. Paid an account payable
F. Issued capital stock in exchange for cash