ACCT 211 Connect Homework Chapter 2 Exercises Liberty University Solution

Question 1

Following are the transactions of a new company called Pose-for-Pics.

Aug.

1 Madison Harris, the owner, invested $11,000 cash and $47,300 of photography equipment in the company in exchange for common stock.

2 The company paid $3,600 cash for an insurance policy covering the next 24 months.

5 The company purchased office supplies for $2,090 cash.

20 The company received $2,750 cash in photography fees earned.

31 The company paid $866 cash for August utilities.

Prepare general journal entries for the above transactions.

Question 2

The transactions of Spade Company appear below.

a.

Kacy Spade, owner, invested $19,500 cash in the company in exchange for common stock.

b.

The company purchased office supplies for $566 cash.

c.

The company purchased $10,784 of office equipment on credit.

d.

The company received $2,301 cash as fees for services provided to a customer.

e.

The company paid $10,784 cash to settle the payable for the office equipment purchased in transaction c.

f.

The company billed a customer $4,134 as fees for services provided.

g.

The company paid $535 cash for the monthly rent.

h.

The company collected $1,736 cash as partial payment for the account receivable created in transaction f.

i.

The company paid $900 cash in dividends to the owner (sole shareholder).

Question 3

A corporation had the following assets and liabilities at the beginning and end of this year.

a.

Owner made no investments in the business, and no dividends were paid during the year.

b.

Owner made no investments in the business, but dividends were $850 cash per month.

c.

No dividends were paid during the year, but the owner did invest an additional $45,000 cash in exchange for common stock.

d.

Dividends were $850 cash per month, and the owner invested an additional $35,000 cash in exchange for common stock.

Determine the net income earned or net loss incurred by the business during the year for each of the above separate cases: (Decreases in equity should be indicated with a minus sign.)

Question 4

Carmen Camry operates a consulting firm called Help Today, which began operations on August 1. On August 31, the company’s records show the following accounts and amounts for the month of August.

Use the above information to prepare an August income statement for the business.

Question 5

Use the above information to prepare an August statement of retained earnings for Help Today. (Hint: Net income for August is $10,410.)

Question 6

Use the above information to prepare an August 31 balance sheet for Help Today. (Hint: The ending retained earnings account balance as of August 31 is $4,390.)

Question 7

Compute the missing amount for each of the following separate companies a through d. (Losses and amounts to be deducted should be indicated with a minus sign.)