Principles of Accounting BBUS - Practice exercise

PRACTICE EXERCISE Question 1 OnSeptember 1, City Plaza Agency was founded to promote local tourism. The following transactions were completed during the month. 1. The owner invested a total of $15,000 cash to start the business. 2. The business had to pay in cash $600 for September office rent. 3. An equipment was purchased for $3,000 cash. 4. The advertising cost on Brisbane Times was incurred on account for $700. 5. City Plaza Agency also acquired some office supplies worth of $900 in cash 6. In organizing some local tours, $10,000 of revenue was earned, of which only $3,000 in cash was received from customers, and the balance of $7,000 is billed to customers on account. 7. The owner withdrew $600 cash for personal use. 8. $500 as part of the amount due in transaction (4) was paid to Brisbane Times 9. The Agency paid salaries its employees an amount of $2,500. 10. Received $4,000 in cash from customers who have previously been billed in transaction (6) Instructions (a) Prepare a tabular analysis of the transactions using the following column headings: Cash, Accounts Receivable, Supplies, Equipment, Accounts Payable, Owner's Capital, Owner's Drawings, Revenues, and Expenses. (b) Prepare the income statement, owner’s equity statement and balance sheet for City Plaza Agency for the month of September. Question 2 Paws and Hoofs Clinic engaged in the following events during May 2022: May 1 2 Jim Wright, the owner, invested $20,000 in cash to form Paws and Hoofs Clinic. Made an agreement to provide $6,000 in services over the next year to Quarter Horse Stables. 39 Paid $600 in advance for two months’ rent of an office. 12 Purchased medical supplies for $400 in cash. 15 Purchased $4,000 of equipment on credit; made a 25 percent down payment. 18 Delivered a calf for a fee of $350 on credit. 27 Made a payment of $500 on the equipment purchased on May 12. Paid a utility bill of $140. Instructions (a) Prepare journal entries torecord the business activities during May. (b) Prepare a trial balance forthe month of May. Question 3 The Trial Balance of Reliable Answering Service company is as below: RELIABLE ANSWERING SERVICE Trial Balance December 31, 2022 Cash $ 2,160 Accounts Receivable 1,250 Office Supplies Prepaid Insurance Office 180 Equipment Accumulated Depreciation – 240 Equipment Accounts Payable Unearned 3,400 Revenue T.Ramos, Capital T.Ramos, Withdrawals Answering Service Revenue Salaries Expense Rent Expense Total $ 600 700 460 4,870 400 2,900 1,500 400 $ 9,530 . $ 9,530 The following information is also available for the company on December 31, 2022: 1. Insurance that expired during December amounted to $40. 2. Office supplies on hand on December 31 totaled $75. 3. Depreciation for December totaled $100. 4. Accrued wages on December 31 totaled $120. 5. Revenues earned for services performed in December but not billed by the end of the month totaled $300. 6. Revenues received in advance of services still to be performed totaled $300 at the end of the year. Instructions (a) Prepare adjusting entries. (b) Prepare an adjusted trialbalance. ACC201 – Principles of Accounting Question 4 From the following ABC TOYS adjusted trial balance, prepare financial statements, as follows: ABC TOYS Adjusted Trial Balance December 31, 2022 Cash Office Supplies Prepaid Rent Equipment Accumulated Depreciation – Equipment Account Payable Salaries Payable Unearned Revenue Notes Payable (long-term) ABC, Capital ABC, Withdrawals Service Revenue Salaries Expense Rent Expense Depreciation Expense – Equipment Supplies Expense Utilities Expense Total $ 15,400 1,500 1,400 60,000 $ 7,000 3,800 100 4,200 4,300 48,800 800 17,300 3,700 1,400 400 300 600 $ 85,500 . $85,500 Instructions Using the information above, prepare the closing entries and prepare the post-closing trial balance for ABC TOYS. Downloaded by H??NG ?INH TR?N QUÊ (huongdinh.31241021717@st.ueh.edu.vn)