Quiz 1 Al's Cleaning Services (160 points)

Albert Gerald has been operating Al's Cleaning Services for 5 years.  At December 31 of last year, the accounting records post closing trial balance reflected the following:

Assets	Amount	Liabilities & Equity	Amount
Cash	$ 45,000	Accounts Payable	$ 23,000
Marketable Securities	15,000	Notes Payable (Short-Term)	50,000
Accounts Receivable	20,000	Long Term Notes Payable	90,000
Equipment	100,000	Common Stock	40,000
Factory	210,000	Additional Paid in Capital	10,000
Intangibles	23,000	Retained Earnings	200,000
Total Assets	$413,000	Total Liabilities & Equity	$413,000

 

During the current year, the company had the following summarized activities:

1. Purchased furniture for $20,000 cash.

Debit to cash and credit to furniture

Debit to furniture and credit to cash

Debit to furniture and credit to accounts payable

No entry needed

 

1. Purchase supplies on account for $7,000.

Debit to supplies and credit to cash

Debit to supplies and credit to accounts payable

Debit to accounts payable and credit to supplies

Debit to accounts payable and credit to supplies expense

 

1. Purchased equipment that cost a total of $55,000; paid $5,000 cash and signed a one-year note for the balance.

Debit equipment and cash and credit long term note payable 

Debit equipment and credit cash and long term note payable

Debit equipment and cash and credit short term note payable 

Debit equipment and credit cash and short term note payable

 

1. Hired a new president at the end of the year. The contract was for $95,000 per year plus options to purchase company stock at a set price based on company performance.

Debit salary expense and credit cash

Debit salary expense and credit salary payable

Debit salary expense and credit half to cash and half to salary payable

No transaction needed

 

1. Issued additional shares of common stock for $20,000 cash and $80,000 in machinery.

Debit to cash and credit to common stock 

Debit to cash and credit to common stock and machinery

Debit to common stock and credit to cash and machinery

Debit to cash and machinery and a credit to common stock 

 

1. Purchased a new vehicle for $60,000 by putting down $10,000 cash and obtained a five year note payable from a local bank.

Debit to vehicle and credit to short term note payable

Debit to vehicle and credit to long term note payable

Debit to vehicle and credit to cash and long term note payable 

Debit to vehicle and credit to cash and short term not payable

 

1. Purchased Land for $15,000 cash.

Debit to cash and credit to land

Debit to land and credit to accounts payable 

Debit to land and credit to cash

No entry needed

 

1. Performed Services for customers and received $82,500 cash.

Debit to service revenue and credit to cash

Debit to accounts receivable and credit to service revenue

Debit to cash and credit to service revenue

Debit to cash and credit to accounts receivable 

 

1. Built an addition to the factory for a total cost of $90,000; paid $5,000 in cash and signed a three-year note for the balance.

Debit factory and credit short term note payable 

Debit factory and credit long term note payable

Debit factory and credit cash and short term note payable 

Debit factory and credit cash and long term note payable

 

1. Performed services for a customers on account for $52,500.

Debit cash and credit service revenues

Debit cash and credit accounts receivables

Debit accounts receivables and credit sales revenues

Debit service revenues and credit accounts receivables 

 

1. Paid $16,000 on account payable.

Debit cash and credit accounts payable

Debit accounts payable and credit cash 

Debit cash and credit account receivable 

 

Debit accounts receivable and credit cash 

 

1. Received $40,000 from customers on account.

Debit accounts receivable and credit sales revenues

Debit sales revenues and credit accounts receivables 

Debit cash and credit accounts receivables 

Debit accounts receivables and credit cash

 

1. Paid expenses: Rent-$14,500, Advertising-$4,000 and Salaries-$28,000

Debit cash and credit rent expense, advertising expense, salaries exp.

Debit rent expense, advertising expense, salaries exp., and credit cash

Debit rent exp., advertising exp., salaries exp. and credit accounts payable

Debit accounts payable and credit rent exp., advertising exp., salaries exp.

 

1. Paid dividends $10,500.

Debit cash and credit dividends

Debit dividends and credit dividends payable

Debit dividends and credit cash 

Debit dividends payable and credit cash 

 

 

 

 

 

 

 

Hints

1. Watch my Quiz How to Video!

2. Follow the accounting cycle 

3. Use the existing accounts and open new accounts when needed. See chapter 2 for accounts!   

4. When doing ratios-show the ratio formula, show the numbers you are using, then make sure you compute 2-4 ratios and provide an analysis for each ratio. 

 

 Required

 

1. Generate a Balance Sheet as of December 31, of the current year. List ALL Accounts.