Accounting problems - P3-1A, P3-7A and P3-3A

P3-1A Analyze transactions and compute net income

On April 1, DeDonder Travel Agency Inc. was established. These transactions were completed

during the month.

1. Stockholders invested $30,000 cash in the company in exchange for common stock.

2. Paid $900 cash for April office rent.

3. Purchased office equipment for $3,400 cash.

4. Purchased $200 of advertising in the Chicago Tribune, on account.

5. Paid $500 cash for office supplies.

6. Performed services worth $12,000. Cash of $3,000 is received from customers, and the

balance of $9,000 is billed to customers on account.

7. Paid $400 cash dividends.

8. Paid Chicago Tribune amount due in transaction (4)

9. Paid employees' salaries $1,800.

10. Received $9,000 in cash from customers billed previously in transaction (6).

Instructions

(a) Prepare a tabular analysis of the transactions using these column headings: Cash,

Accounts Receivable, Supplies, Equipment, Accounts Payable, Common Stock, and

Retained Earnings (with separate columns for Revenues, Expenses, and Dividends).

Include margin explanations for any changes in Retained Earnings.

(b) From an analysis of the Retained Earnings columns, compute the net income or net loss

for April.

NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" .

P3-3A Analyze transactions and prepare an income statement, retained earnings statement, and balance sheet

Cindy Braun created a corporation providing legal services, Cindy Braun Inc., on July 1, 2014. On July 31, the balance sheet

showed Cash $4,000; Accounts Receivable $2,500; Supplies $500; Equipment $5,000; Accounts Payable $4,200; Common

Stock $6,200; and Retained Earnings $1,600. During August, the following transactions occurred.

Aug 1 Collected $1,100 of accounts receivable due from customers.

4 Paid $2,700 cash for accounts payable due.

9 Performed services worth $5,400 of which $3,600 is collected in cash and the balance is due in September.

15 Purchased additional office equipment for $4,000, paying $700 in cash and the balance on account.

19 Paid salaries $1,400, rent for August $700, and advertising expenses $350.

23 Paid a cash dividend of $700.

26 Borrowed $5,000 from Standard Federal Bank; the money was borrowed on a 4-month note payable.

31 Incurred utility expenses for the month on account $380.

Instructions

(a) Prepare a tabular analysis of the August transactions beginning with July 31 balances. The column headings

should be Cash + Accounts Receivable + Supplies + Equipment = Notes Payable + Accounts Payable + Common

Stock + Retained Earnings + Revenue - Expenses - Dividends. Include margin explanations for any changes in

Retained Earnings.

(b) Prepare an income statement for August, a retained earnings statement for August, and a classified balance

sheet at August 31.

NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" .

P3-7A Prepare a correct trial balance

This trial balance of Swisher Co. does not balance.

SWISHER CO.

Trial Balance

June 30, 2014

Debit Credit

Cash 3090

Accounts Receivable 3190

Supplies 800

Equipment 3000

Accounts Payable 3686

Unearned Service Revenue 1200

Common Stock 9000

Dividends 800

Service Revenue 3480

Salaries and Wages Expense 3600

Utilities Expense 910

13500 19256

Each of the listed accounts has a normal balance per the general ledger. An examination

of the ledger and journal reveals the following errors:

1. Cash received from a customer on account was debited for $780, and Accounts Receivable

was credited for the same amount. The actual collection was for $870.

2. The purchase of a printer on account for $340 was recorded as a debit to Supplies for $340

and a credit to Accounts Payable for $340.

3. Services were performed on account for a client for $900. Accounts Receivable was debited

for $90 and Service Revenue was credited for $900.

4. A debit posting to Salaries and Wages Expense of $700 was omitted.

5. A payment on account for $206 was credited to Cash for $206 and credited to Accounts

Payable for $260.

6. Payment of a $600 cash dividend to Swisher's stockholders was debited to Salaries and

Wages Expense for $600 and credited to Cash for $600.

Instructions

Prepare the correct trial balance. (Hint: All accounts have normal balances.)

NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" .