Chapter 2 Review of the Accounting Process Problem 2–2

Problem 2–2 Requirement 2 2013 Jan. 1 Cash ..................................................... Sales revenue ................................... Debit 3,500 Jan. 1 Cost of goods sold ............................... Inventory .......................................... 2,000 Jan. 2 Equipment ............................................ Accounts payable ............................. 5,500 Jan. 4 Advertising expense ............................. Accounts payable ............................. 150 Jan. 8 Accounts receivable ............................. Sales revenue ................................... 5,000 Jan. 8 Cost of goods sold ............................... Inventory .......................................... 2,800 Jan. 10 Inventory .............................................. Accounts payable ............................. 9,500 Jan. 13 Equipment ............................................ Cash ................................................. 800 Jan. 16 Accounts payable ................................. Cash ................................................. 5,500 Jan. 18 Cash ..................................................... Accounts receivable ......................... 4,000 Jan. 20 Rent expense ........................................ Cash .................................................. 800 Jan. 30 Wage expense ...................................... Cash ................................................. 3,000 Jan. 31 Retained earnings ................................. Cash ................................................. 1,000 Credit 3,500 2,000 5,500 150 5,000 2,800 9,500 800 5,500 4,000 800 3,000 1,000 2– Solutions Manual, Vol.1, Chapter 2 47 Problem 2–2 (continued) Requirements 1 and 3 BALANCE SHEET ACCOUNTS Cash Accounts receivable ___________________________ ___________________________ 1/1 Bal. 1/1 1/18 1/31 Bal. 5,000 3,500 4,000 1/1 Bal. 800 5,500 1/13 1/16 800 3,000 1,000 _______________ 1/20 1/30 1/31 1,400 1/31 Bal. 5,000 9,500 2,000 2,800 _______________ 1/1 Bal. 1/2 1/8 1/13 1/31 Bal. Accumulated depreciation ___________________________ 3,500 1/16 _______________ 3,500 10,000 2–48 11,000 5,500 800 ______________ 17,300 3,000 5,500 1/1 Bal. 1/2 150 9,500 ______________ 1/4 1/10 5,500 12,650 1/31 Bal. Retained earnings ___________________________ 1/1 Bal. 1/31 10,000 3,000 1/31 Bal. _______________ 1/18 Accounts payable ___________________________ 1/1 Bal. Common stock ___________________________ 4,000 Equipment ___________________________ 1/1 9,700 2,000 5,000 ______________ 1/31 Bal. Inventory ___________________________ 1/1 Bal. 1/10 1/8 1,000 6,500 1/1 Bal. ______________ 1/31 Bal. 5,500 1/31 Bal. Problem 2–2 (continued) INCOME STATEMENT ACCOUNTS Sales revenue ____________________________ 0 3,500 5,000 _______________ 1/1 Bal. 1/1 1/8 1/1 Bal. 1/1 1/8 0 2,000 2,800 ______________ 8,500 1/31 Bal. 1/31 Bal. 4,800 Rent expense ____________________________ 1/1 Bal. 1/20 1/31 Bal. Cost of goods sold ____________________________ 0 800 _______________ 800 Wage expense ____________________________ 1/1 Bal. 1/30 0 3,000 ______________ 1/31 Bal. 3,000 Advertising expense ____________________________ 1/1 Bal. 1/4 1/31 Bal. 0 150 _______________ 150 2– Solutions Manual, Vol.1, Chapter 2 49 Problem 2–2 (concluded) Requirement 4 Account Title Cash Accounts receivable Inventory Equipment Accumulated depreciation Accounts payable Common stock Retained earnings Sales revenue Cost of goods sold Wage expense Rent expense Advertising expense Totals 2–50 Debits 1,400 3,000 9,700 17,300 4,800 3,000 800 150 40,150 Credits 3,500 12,650 10,000 5,500 8,500 ______ 40,150