Complete the followingExercise from Chapter Two and Problemfrom Chapter three.

Exercise - Chapter 2

Explain what a transaction is; analyze the impact of business transactions on accounts; record [journalize and post] transactions in the books; construct and use a trial balance)You are a Certified Public Accountant "Student's name, Certified Public Accountant", and operate as a professional corporation (P.C.). Your business completed these transactions during the first part of August 2016:

Aug.1The P.C. received $20,000 cash from you, and issued you common stock.

2Paid monthly office rent, $800

3Purchased a computer on account for $2,500, with the computer expected to remain in service for five years.

4Purchased office furniture for cash, $5,000, with the furniture projected to last for five years.

5Purchased supplies on account, $800.

9Performed tax service for a client on account, $1,500.

15Received and paid utility expenses, $350.

20Preformed consulting services and received cash for the full amount of $1,800.

LOUSING EXCEL:

1.Journalize the transaction.Explanations are not required.

2.Post to the T-accounts.Key all items by date and determine the ending balance in each account.Denote an account balance on August 20, 2016, as Bal.

3. Prepare trial balance at August 20, 2016.

Problem - Chapter 3

(Learning Objective 1: Explain how accrual accounting differs from cash-basis accounting)Hough Consulting had the following selected transactions in July:

July1Prepaid insurance for July through September, $4,200.

2Purchased office furniture for cash, $5,000.

3Performed consulting services for a client on account, $3,500.

5Paid advertising expense, $500.

10Performed consulting services and received cash, $1,500.

20Purchased a computer on account, $2,500.

25Collected for July 3 service.

26Paid account payable from July 20.

29Paid salary expense, $1,800.

31Adjusted for July insurance expense (see July 1).

31Earned revenue of $1,000 that was collected in advance back in June.

31Recorded July depreciation on fixed assets, $125.

LOUSING EXCEL:

1.Show how each transaction would be handled (in terms of recognizing revenues and expenses) using the cash basis and the accrual basis.

2.Compute July income (loss) before tax under each accounting method

3. Indicate which measure of net income or net loss is preferable. Use the transactions on July 3 and July 25 to explain.

Clickthe Assignment Files tab to submit.

Materials

• Chapter 2 Exercise Instructions
• Chapter 3 Problem Instructions
• Chapter 2 Exercise Template
• Chapter 3 Problem Template