FinancialAccounting-OP_YioY6nY-44

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PB12. 3.5 Prepare journal entries to record the following transactions that occurred in March:
A. on first day of the month, purchased building for cash, $75,000
B. on fourth day of month, purchased inventory, on account, $6,875
C. on eleventh day of month, billed customer for services provided, $8,390
D. on nineteenth day of month, paid current month utility bill, $2,000
E. on last day of month, paid suppliers for previous purchases, $2,850
PB13. 3.5 Post the following November transactions to T-accounts for Accounts Payable, Inventory, and
Cash, indicating the ending balance. Assume no beginning balances in Accounts Payable and Inventory, and a
beginning Cash balance of $21,220.
A. purchased merchandise inventory on account, $9,900
B. paid vendors for part of inventory purchased earlier in month, $6,500
C. purchased merchandise inventory for cash, $4,750
PB14. 3.5 Post the following July transactions to T-accounts for Accounts Receivable, Sales Revenue, and
Cash, indicating the ending balance. Assume no beginning balances in these accounts.
A. sold products to customers for cash, $7,500
B. sold products to customers on account, $12,650
C. collected cash from customer accounts, $9,500
PB15. 3.6 Prepare an unadjusted trial balance, in correct format, from the following alphabetized account
information. Assume all accounts have normal balances.
PB16. 3.6 Prepare an unadjusted trial balance, in correct format, from the following alphabetized account
information. Assume all accounts have normal balances.
206 Chapter 3 Analyzing and Recording Transactions
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PB17. 3.6 Prepare an unadjusted trial balance, in correct format, from the following alphabetized account
information. Assume all accounts have normal balances.
PB18. 3.6 Prepare an unadjusted trial balance, in correct format, from the following alphabetized account
information. Assume all accounts have normal balances.
Thought Provokers
TP1. 3.1 Is it possible to be too conservative? Explain your answer.
TP2. 3.1 Why is it important to learn all of this terminology when accounting is a quantitative subject?
TP3. 3.2 Assume that you are the controller of a business that provides legal services to clients. Suppose
that the company has had a tough year, so the revenues have been lagging behind, based on previous years’
standards. What would you do if your boss (the chief executive officer [CEO] of the company) asked to
reclassify a transaction to report loan proceeds of $150,000 as if the cash came from service fee revenue from
clients instead. Would following the CEO’s advice impact the company’s accounting equation? How would
reclassifying this one transaction change the outcome of the balance sheet, the income statement, and the
statement of retained earnings? Would making this reclassification change the perception that users of the
financial statements would have of the company’s current year success and future year potential?
Write a memo, detailing your willingness (or not) to embrace this suggestion, giving reasons behind your
decision. Remember to exercise diplomacy, even if you must dissent from the opinion of a supervisor. Note
that the challenge of the assignment is to keep your integrity intact, while also keeping your job, if possible.
Chapter 3 Analyzing and Recording Transactions 207
TP4. 3.2 Visit the website of the US Securities and Exchange Commission (SEC) (https://www.sec.gov/
edgar/searchedgar/companysearch.html). Search for the latest Form 10-K for a company you would like to
analyze. Submit a short memo that
A. Includes the name and ticker symbol of the company you have chosen.
B. Reviews the company’s end-of-period Balance Sheet to determine the following:
i. total assets
ii. total liabilities
iii. total equity
C. Presents the company’s accounting equation at the end of the period, from the information you
collected in (A), (B), and (C):
i. provide the web link to the company’s Form 10-K to allow accurate verification of your answers
TP5. 3.3 Is the order in which we place information in the journal and ledger important?
TP6. 3.4 Visit the website of the SEC (https://www.sec.gov/edgar/searchedgar/companysearch.html).
Search for the latest Form 10-K for a company you would like to analyze. Submit a short memo that
A. Includes the name and ticker symbol of the company you have chosen
B. Reviews the company’s comparative Balance Sheet to gather the following information:
i. Compare beginning and ending Assets totals, noting amount of change for the most recent
period
ii. Compare beginning and ending Liabilities totals, noting amount of change for the most recent
period
iii. Compare beginning and ending Equity totals, noting amount of change for the most recent
period
C. State the changes identified in (A), (B), and (C) in accounting equation format. If the “change” equation
does not balance, explain why not. Hint: Double-check your calculations, and if the accounting
equation change still does not balance, search for notes in the company’s files about prior period
adjustments, which will often explain why balances may differ.
i. Provide the web link to the company’s Form 10-K to allow accurate verification of your answers.
TP7. 3.5 Visit the website of the US Securities and Exchange Commission (SEC) (https://www.sec.gov/
edgar/searchedgar/companysearch.html). Search for the latest Form 10-K for a company you would like to.
When you are choosing, make sure the company sells a product (has inventory on the Balance Sheet, and Cost
of Goods Sold on the Income Statement). Submit a short memo:
A. Include the name and ticker symbol of the company you have chosen.
B. Follow the financial statement progression from the Income Statement to the Retained Earnings
Statement to the Balance Sheet. Find the net income amount from the Income Statement and identify
where it appears on the Statement of Retained Earnings (or the Statement of Stockholders’ Equity).
C. On the statement found for instruction (A), find the ending retained earnings balance, and identify
where it appears on the Balance Sheet for year-end.
D. Provide the web link to the company’s Form 10-K to allow accurate verification of your answers.
208 Chapter 3 Analyzing and Recording Transactions
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TP8. 3.6 Analyze Trusty Company’s trial balance and the additional information provided to determine the
following:
A. what is causing the trial balance to be out of balance
B. any other errors that require corrections that are identified during your analysis
C. the effect (if any) that correcting the errors will have on the accounting equation
A review of transactions revealed the following facts:
• A service fee of $18,000 was earned (but not yet collected) by the end of the period but was accidentally
not recorded as revenue at that time.
• A transposition error occurred when transferring the account balances from the ledger to the trial
balance. Salaries expense should have been listed on the trial balance as $64,500 but was inadvertently
recorded as $46,500.
• Two machines that cost $9,000 each were purchased on account but were not recorded in company
accounting records.
Chapter 3 Analyzing and Recording Transactions 209
210 Chapter 3 Analyzing and Recording Transactions
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
	Chapter 3. Analyzing and Recording Transactions
	Thought Provokers