Assignment 1 - Financial Accounting - January 21

Financial Accounting BMBA 140 Assignment #1
Name (first and last name):
PART I — Short Answer Exercise (5 points or 1 mark each question)
At the beginning of the year, Plug-In Company had total assets of $117,000 and total liabilities of
$95,000.
Instructions: Answer the following questions viewing each situation as being independent of the
others.
1. If total assets increased $12,000 during the year, and total liabilities decreased $14,000,
what is the amount of owner's equity at the end of the year?
Owner’s Equity = 48,000
2. During the year, total liabilities increased $34,000 and owner's equity decreased $13,000.
What is the amount of total assets at the end of the year?
Total Assets = 138,000
3. If total assets decreased $6,132 and owner's equity increased $19,197 during the year,
what is the amount of total liabilities at the end of the year?
Total Liabilities = 69,671
4. What amount would the Plug-In Company need to increase its liabilities by if their
ownership group withdrew $10,000 cash from their equity account?
Total Liabilities = It should increase its liability by “Zero” since it has no effect in
its liability. Hence, the total amount of liabilities remains to be “95,000”.
5. If total liabilities decreased $16,000 and owner's equity decreased $29,000 during the
year, what is the amount of total assets at the end of the year?
Total Assets = 72,000
1
PART II — JOURNAL ENTRIES (15 points)
The following ledger accounts are used by Hanson and Sons Company in their ledger.
Instructions: Indicate the appropriate entries for the month of September by placing the
appropriate account number(s) in the debit and credit columns provided. Item 0 is provided as an
example. Write "n/a" if no entry is appropriate.
1000 Cash 2000 Salaries Payable 4000 Service Revenue

1010 Accounts Receivable 2010 Accounts Payable 5000 Equipment Expense
1020 Supplies 2020 Unearned Service Revenue 5010 Advertising Expense
1030 Prepaid Salaries 2030 Notes Payable 5020 Supplies Expense
1040 Prepaid Advertising 3000 T. Hanson, Capital 5030 Rent Expense
1050 Equipment 3010 T. Hanson, Drawings 5040 Salaries Expense
Entry Date Entry Information Account(s Account(s)

No. ) Debited Credited
0. Sept. 1 T. Hanson invested $45,000 in the business. 1000 3000
1. Sept. 3 Supplies were purchased on account at a cost of 1020 2010
$1,755 from The Supply Co. These supplies will
be used during July.
2. Sept. 3 Paid $425 cash to Facebook for advertisements 5010 1000
run this past week.
3. Sept. 5 Received $10,000 from customers for services to 1000 2020
be rendered early in July.
4. Sept. 6 Received $3,333 cash from customers to 1000 1010
extinguish their outstanding balance.
5. Sept. 8 Purchased equipment for $4,000; a three-month, 1050 2030
5% note payable was signed for this amount.
6. Sept. 9 Hansen agreed to hire C. Kimler as an assistant. N/A N/A
They will be paid at the rate of $4,000 monthly,
receiving $2,000 on the 15th and 30th of each
month. They will begin work September 16.
7. Sept. 15 C. Kimler has their first day. N/A N/A
8. Sept. 17 Hanson withdrew $1,900 for personal use. 3010 1000
9. Sept. 19 Paid a supplier $2,250 cash on account. 2010 1000
10. Sept. 21 T. Hanson invests $5,000 in supplies in the 1020 3000
business.
11. Sept. 22 Paid $425 cash to Facebook for advertisements to 1040 1000
run the first week of October.
12. Sept. 22 Paid $3,125 in cash to Carson Company for 5030 1000
September rent.
13. Sept. 28 Received $4,989 from customers for services 1000 4000
rendered during the week.
14. Sept. 29 Billed customers $6,000 for services rendered but 1010 4000
not collected during September.
15. Sept. 30 C. Kimler was paid $2,000 cash for their salary 5040 1000
2
PART III — JOURNAL ENTRIES (30 points)
Answers to Part II:
Instructions: Record the appropriate entries for the month of September by completing the
following table. Item 0 is provided as an example. Write "n/a" if no entry is appropriate.
Entry Date Account Debit or

Number Account Name Credit Amount
#
Sept. 1 1000 Cash DR $45,000
0
3000 T. Hansen, Capital CR $45,000
Sept. 3 1020 Supplies DR 1,755
1
2010 Accounts Payable CR 1,755
Sept. 3 5010 Advertising Expense DR 425
2
1000 Cash CR 425
Sept. 5 1000 Cash DR 10,000
3 2020 Unearned Service CR
10,000
Revenue
Sept. 6 1000 Cash DR 3,333
4 1010 Accounts CR
3,333
Receivable
Sept. 8 1050 Equipment DR 4,000
5
2030 Notes Payable CR 4,000
Sept. 9 N/A
6
Sept. 15 N/A
7
Sept. 17 3010 T. Hanson, Drawings DR 1,900
8
1000 Cash CR 1,900
Sept. 19 2010 Accounts Payable DR 2,250
9
1000 Cash CR 2,250
Sept. 21 1020 Supplies DR 5,000
10
3000 T. Hanson, Capital CR 5,000
Sept. 22 1040 Prepaid Advertising DR 425
11
1000 Cash CR 425
Sept. 22 5030 Rent Expense DR 3,125
12
1000 Cash CR 3,125
Sept. 28 1000 Cash DR 4,989
13
4000 Service Revenue CR 4,989
Sept. 29 1010 Accounts Receivable DR 6,000
14
4000 Service Revenue CR 6,000
Sept. 30 5040 Salaries Expense DR 2,000
15
1000 Cash CR 2,000

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Financial Accounting BMBA 140 Assignment #1

Name (first and last name):

PART I — Short Answer Exercise (5 points or 1 mark each question)

Owner’s Equity = 48,000

Total Assets = 138,000

Total Liabilities = 69,671

Total Assets = 72,000

1000 Cash 2000 Salaries Payable 4000 Service Revenue

Entry Date Entry Information Account(s Account(s)

Entry Date Account Debit or

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