Question 1

Bernie Buttermilk formed a corporation to provide concrete construction work. His jobs typically involve building parking lots, drives, and foundations. Bernie provided the following information about transactions occurring during the first month of operation. Evaluate the transactions and prepare journal entries for this activity.

Jan. 2, 2015 - Bernie Buttermilk invested $10,000 cash in the capital stock of the newly formed corporation.

Jan. 4, 2015 - Purchased equipment on account for $7,500.

Jan. 12, 2015 - Proceeds received from customers for services provided in the amount of $40,000.

Jan. 15, 2015 - Received a bill for construction supplies used in the amount of $2,000.

Jan. 18, 2015 - Provided $3,200 of services on account.

Jan. 20, 2015 - Paid employees $2,300 for wages earned.

Jan. 22, 2015 - Collected 60% of the amount due for the work provided on January 18.

Jan. 23, 2015 - Paid 40% of the amount due on the equipment purchased on January 4.

Jan. 25, 2015 - Purchased (and immediately used) construction supplies for cash in the amount of $600.

Jan. 31, 2015 - The company paid Bernie Buttermilk a $1,500 dividend.

Question 2

Determine whether each of the following items is an:

Asset Liability Revenue Expense Owners Equity Other

Cash Dividend to shareholdersLandAccounts PayableCapital StockNotes PayableAccounts ReceivableSalariesRentCost of Utilities usedCustomer order not yet filledValue of completed services provided to customersObligation to pay for utilities consumed

Question 3

Review the following list of accounts, and indicate the debit/credit rules for the account, as well as the accounts normal balance. The first one is done as an example.

Increased with a: Decreased with a: Normal Balance:

(a) Cash Debit Credit Debit

(b) Capital Stock

(c) Accounts Payable

(d) Revenues

(e) Rent Expense

(f) Equipment

(g) Dividends

(h) Utilities Expense

(i)Accounts Receivable

(j) Loan Payable