ResourceCh. 2 & 3 ofFinancial Accounting

CompleteBrief Exercises BE 2-1 & BE3-10.

CompleteExercises E2-1, E2-2, E3-13 (part (a) only) & E3-17.

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BE2-1 The following are the major balance sheet classifications:

Classify accounts on balance sheet.

(LO 1), K

Current assets (CA)	Current liabilities (CL)
Long-term investments (LTI)	Long-term liabilities (LTL)
Property, plant, and equipment (PPE)	Common stock (CS)
Intangible assets (IA)	Retained earnings (RE)

Match each of the following accounts to its proper balance sheet classification.

_____ Accounts payable

_____ Accounts receivable

_____ Accumulated depreciation

_____ Buildings

_____ Cash

_____ Goodwill

_____ Income taxes payable

_____ Investment in long-term bonds

_____ Land

_____ Inventory

_____ Patent

_____ Supplies

BE3-10

Selected transactions for Perez Company are presented below in journal form (without explanations). Post the transactions to T-accounts.

Post journal entries to T-accounts.

(LO 7), AP

Date	Account Title	Debit	Credit
May 5	Accounts Receivable	3,800
	Service Revenue		3,800
12	Cash	1,600
	Accounts Receivable		1,600
15	Cash	2,000
	Service Revenue		2,000

E2-1 The following are the major balance sheet classifications.

Classify accounts on balance sheet.

(LO 1), AP

Current assets (CA)

Long-term investments (LTI)

Property, plant, and equipment (PPE)

Intangible assets (IA)

Current liabilities (CL)

Long-term liabilities (LTL)

Stockholders equity (SE)

Instructions

Classify each of the following financial statement items taken from Mordica Corporations balance sheet.

____ Accounts payable

____ Accounts receivable

____ Accumulated depreciationequipment

____ Buildings

____ Cash

____ Interest payable

____ Goodwill

____ Income taxes payable

____ Inventory

____ Stock investments (to be sold in 7 months)

____ Land (in use)

____ Mortgage payable

____ Supplies

____ Equipment

____ Prepaid rent

E2-2 The major balance sheet classifications are listed in E2-1.

Classify financial statement items by balance sheet classification.

(LO 1), AP

Instructions

Classify each of the following financial statement items based upon the major balance sheet classifications listed in E2-1.

____ Prepaid advertising

____ Equipment

____ Trademarks

____ Salaries and wages payable

____ Income taxes payable

____ Retained earnings

____ Accounts receivable

____ Land (held for future use)

____ Patents

____ Bonds payable

____ Common stock

____ Accumulated depreciationequipment

____ Unearned sales revenue

____ Inventory

E3-13

Selected transactions from the journal of Eberle Inc. during its first month of operations are presented here.

Post journal entries and prepare a trial balance.

(LO 7, 8), AP

Date	Account Titles	Debit	Credit
Aug.	1	Cash	8,000
		Common Stock		8,000
	10	Cash	1,700
		Service Revenue		1,700
	12	Equipment	6,200
		Cash		1,200
		Notes Payable		5,000
	25	Accounts Receivable	3,400
		Service Revenue		3,400
	31	Cash	600
		Accounts Receivable		600

Instructions

(a)Post the transactions to T-accounts.

E3-17

The following accounts, in alphabetical order, were selected from recent financial statements of Krispy Kreme Doughnuts, Inc.

Identify normal account balance and corresponding financial statement.

(LO 3), K

Accounts Payable	Interest income
Accounts receivable	Inventories
Common Stock	Prepaid expenses
Depreciation expense	Property and equipment
Interest expense	Revenues

Instructions

For each account, indicate (a) whether the normal balance is a debit or a credit, and (b) the financial statementbalance sheet or income statementwhere the account should be presented.

BE2-1 Please put the answer to the left of the accounts below. Your answers will be one of the following abbreviations: CA (Current Assets), LTI (Long-term Investments), PPE (Property, Plant, and Equipment), IA (Intangible Assets), CL (Current Liabilities), LTL (Long-term liabilities), CS (Common Stock), RE (Retained Earnings). 1 2 3 4 5 6 7 8 9 10 11 12 Accounts Payable Accounts Receivable Accumulated Depreciation Buildings Cash Goodwill Income taxes payable Investment in long-term bonds Land Inventory Patent Supplies E2-1 Please put the answer to the left of the accounts below. Your answers will be one of the following abbreviations: CA (Current Assets), LTI (Long-term Investments), PPE (Property, Plant, and Equipment), IA (Intangible Assets), CL (Current Liabilities), LTL (Long-term liabilities), SE (Stockholders' Equity). 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Accounts Payable Accounts Receivable Accumulated Depreciation - equipment Buildings Cash Interest payable Goodwill Income taxes payable Inventory Stock investments (to be sold in 7 months) Land (in use) Mortgage payable Supplies Equipment Prepaid Rent E2-2 Please put the answer to the left of the accounts below. Your answers will be one of the following abbreviations: CA (Current Assets), LTI (Long-term Investments), PPE (Property, Plant, and Equipment), IA (Intangible Assets), CL (Current Liabilities), LTL (Long-term liabilities), SE (Stockholders' Equity). 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Prepaid Advertising Equipment Trademarks Salaries and wages payable Income taxes payable Retained earnings Accounts receivable Land (held for future use) Patents Bonds payable Common Stock Accumulated depreciation - equipment Unearned sales revenue Equipment BE3-10 Put the number in the correct T-ledger on the correct date as either a debit (left column) or a credit (right column). Accounts Receivable 5/5 5/12 4/30 4/30 Service Revenue 5/5 5/15 Cash 5/12 5/15 E3-13, part a Put the number in the correct T-ledger on the correct date as either a debit (left column) or a credit (right column). Cash 8/1 8/10 8/12 8/31 Common Stock 8/1 Equipment 8/12 Service Revenue 8/10 8/25 Notes Payable 8/12 Accounts Receivable 8/25 8/31 E3-17 Type the normal balance of each account below as well as the financial statement to which the account belongs. Account Normal Balance? Financial Statement? 1 Accounts Payable - Debit or Credit? Balance Sheet or Income Statement? 2 Accounts Receivable- Debit or Credit? Balance Sheet or Income Statement? 3 Common Stock- Debit or Credit? Balance Sheet or Income Statement? 4 Depreciation Expense - Debit or Credit? Balance Sheet or Income Statement? 5 Interest Expense- Debit or Credit? Balance Sheet or Income Statement? 6 Interest Income- Debit or Credit? Balance Sheet or Income Statement? 7 Inventories- Debit or Credit? Balance Sheet or Income Statement? 8 Prepaid Expenses- Debit or Credit? Balance Sheet or Income Statement? 9 Property and Equipment- Debit or Credit? Balance Sheet or Income Statement? Debit or Credit? Balance Sheet or Income Statement? 10 Revenues