1. For each of the following (1) identify the type of account as an asset, liability, equity, revenue, or expense, (2) identify the normal balance of the account, and (3) select debit (Dr.) or credit (Cr.) to identify th
...
1. For each of the following (1) identify the type of account as an asset, liability, equity, revenue, or expense, (2) identify the normal balance of the account, and (3) select debit (Dr.) or credit (Cr.) to identify the kind of entry that would increase the account balance.
Account Type of Account Normal Balance Increase (Dr. or Cr.)
a. Land Asset Debit Debit
b. Cash Asset Debit Debit
c. Legal Expense Expense Debit Debit
d. Prepaid Insurance Asset Debit Debit
e. Accounts Receivable Asset Debit Debit
f. Dividends Equity Debit Debit
g. License Fee Revenue Revenue Credit Credit
h. Unearned Revenue Liability Credit Credit
i. Fees Earned Revenue Credit Credit
j Equipment Asset Debit Debit
k Notes Payable Liability Credit Credit
l. Common Stock Equity Credit Credit
2. The transactions of Spade Company appear below.
a. Kacy Spade, owner, invested $100,750 cash in the company in exchange for common stock.
b. The company purchased office supplies for $1,250 cash.
c. The company purchased $10,050 of office equipment on credit.
d. The company received $15,500 cash as fees for services provided to a customer.
e. The company paid $10,050 cash to settle the payable for the office equipment purchased in transaction c.
f. The company billed a customer $2,700 as fees for services provided.
g. The company paid $1,225 cash for the monthly rent.
h. The company collected $1,125 cash as partial payment for the account receivable created in transaction f.
i. The company paid $10,000 cash in dividends to the owner (sole shareholder).
Required:
1. Prepare general journal entries to record the transactions above for Spade Company by using the following accounts: Cash; Accounts Receivable; Office Supplies; Office Equipment; Accounts Payable; Common Stock; Dividends; Fees Earned; and Rent Expense. Use the letters beside each transaction to identify entries.
2. Post the above journal entries to T-accounts, which serves as the general ledger for this assignment. Determine the ending balance of each T-account.
Cash
a. 100,750 b. 1,250
d. 15,500 e. 10,050
h. 1,125 g. 1,225
i. 10,000
Balance 94,850
Accounts Receivable
f. 2,700 h. 1,125
Balance 1,575
Office Equipment
c. 10,050
Balance 10,050
Office Supplies
b. 1,250
Balance 1,250
Accounts Payable
e. 10,050 c. 10,050
Balance
Common Stock
a. 100,750
Balance 100
Dividends
i. 10,000
Balance 10,000
Fees Earned
d. 15,500
f. 2,700
Balance 18,200
Rent Expense
g. 1,225
Balance 1,225
3. The transactions of Spade Company appear below.
a. Kacy Spade, owner, invested $100,750 cash in the company in exchange for common stock.
b. The company purchased office supplies for $1,250 cash.
c. The company purchased $10,050 of office equipment on credit.
d. The company received $15,500 cash as fees for services provided to a customer.
e. The company paid $10,050 cash to settle the payable for the office equipment purchased in transaction c.
f. The company billed a customer $2,700 as fees for services provided.
g. The company paid $1,225 cash for the monthly rent.
h. The company collected $1,125 cash as partial payment for the account receivable created in transaction f.
i. The company paid $10,000 cash in dividends to the owner (sole shareholder).
Check Cash ending balance, $94,850.
Prepare the Trial Balance.
SPADE COMPANY
Trial Balance
May 31, 2016
Debit Credit
Cash $94,850
Accounts receivable 1,575
Office supplies 1,250
Office equipment 10,050
Accounts payable
Common stock 100,750
Dividends 10,000
Fees earned 18,200
Rent expense 1,225
Totals $118,950 $118,950
Explanation:
Cash
a. 100,750 b. 1,250
d. 15,500 e. 10,050
h. 1,125 g. 1,225
i. 10,000
Balance 94,850
Accounts Receivable
f. 2,700 b. 1,125
Balance 1,575
Office Supplies
a. 1,250
Balance 1,250
Office Equipment
c. 10,050
Balance 10,050
Accounts Payable
e. 10,050 c. 10,050
Balance 0
Common Stock
a. 100,750
Balance 100,750
Dividends
i. 10,000
Balance 10,000
Fees Earned
d. 15,500
f. 2,700
Balance 18,200
Rent Expense
g. 1,225
Balance 1,225
4. Following are the transactions for Valdez Services.
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