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Exercise For Chapter 2

Dr JJ, a family doctor, had various account balances as of April 1, 20X0 and completed several transactions throughout the month. During April, Dr JJ paid rent and expenses, purchased equipment and supplies on account and with cash, received cash from patients, recorded fees charged to patients and paid salaries. At the end of April, the balances of all accounts need to be determined.

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77 views

Exercise For Chapter 2

Dr JJ, a family doctor, had various account balances as of April 1, 20X0 and completed several transactions throughout the month. During April, Dr JJ paid rent and expenses, purchased equipment and supplies on account and with cash, received cash from patients, recorded fees charged to patients and paid salaries. At the end of April, the balances of all accounts need to be determined.

Uploaded by

Dĩm Mi
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Exercise for chapter 2

Exercise 1
Dr JJ has been practicing as a family doctor for three years. Dr JJ’s account balances as of April 1 20X0
(all normal balances) are listed as follows:

Account Balance ($)


Cash 4,123
Account Receivable 6,725
Supplies 290
Prepaid Insurance 465
PPE 19,745
Account Payable 765
Capital 30,583
During April,20X0, Dr JJ completed the following transactions:
April 1. Paid office rent for April, $800
3. Purchased equipment on account, $2,100
5. Received cash from patients who owe the business, $3,150
8. Purchased supplies on account, $245
12. Paid cash to equipment payable, $1,250
17. Paid cash for renewal of a six-month property insurance policy, $370
24. Paid cash for laboratory tests, $545
27. Paid cash for personal and family expenses, $1,250
30. Recorded the cash received in payment of services performed to patients during April, $1,720
30. Paid salaries of receptionist and nurses, $1,725
30. Paid various utility expenses, $360
30. Recorded fees charged to patients on account for services performed in April, $5,145
30. Paid miscellaneous expenses, $132
Requirements:

i. Journalise the transactions during April 20X0


ii. Determine the balances of accounts at the end of April 20X0

Exercise 2
Lolita S., an architect, opened an office on March 1 of the current year. During the month, she completed
the following transactions connected with her practice:
Opening balnace:
- Cash: $10,000
- Capital: $6,000
- AP: $4,000

a. Transferred cash from a personal bank account to an account to be used for the business, $15,000
b. Paid March rent for office and workroom, $2,000
c. Purchased used car for $11,500, paying $2,500 cash and took a bank loan for the remainder
d. Purchased office and computer equipment on account, $5,500
e. Paid cash for supplies, $750
f. Paid cash for annual insurance policies, $1,050
g. Paid cash for miscellaneous expenses, $75
h. Paid cash to creditors, $2,950
i. Paid instalment due on the bank loan, $400
j. Received invoice for printing service, due in April, $525
k. Recorded fee earned on plans delivered, payment to be received in April, $4,150
l. Paid salaries of assistant, $1,200
m. Paid petrol and repairs on car for March, $150

Requirement:
Journalise the transactions during the month.
Post T-account
Make TB
Exercise 3
On June 5 of the current year, Adam established an interior decorating business, AA Designs. During the
remainder of the month, Adam completed the following transactions related to the business:
June 5. Adam transferred cash from a personal bank account to an account to be used for the business,
$18,000
6. Paid rent for period of June 6 to end of the month, $2,000
7. Purchased office equipment on account, $10,500
8. Purchased a used truck for $18,000, paying $10,000 cash and taking a bank loan for the
remainder
10. Purchased supplies for cash $1,315
12. Received cash for job completed, $7,300
20. Paid annual premium on property insurance, $1,200
23. Recorded jobs completed on account and sent invoices to customers, $4,950
24. Received an invoice for truck expenses, to be paid in July, $450
29. Paid utilities expense, $750
29. Paid miscellaneous expense, $210
30. Received cash from customers who owe, $2,200
30. Paid salaries of employees, $3,000
30. Paid creditor a portion of the amount owed for equipment purchased on June 7, $1,800
30. Withdrew cash for personal use, $3,500
Requirement: Journalise the transactions during the month.
Exercise 4
JJ company’s account balances as of May 1 20X0 (all normal balances) are listed as follows:

Account Balance ($)


Cash 10,000
Account Receivable 1,000
Supplies 2,900
Prepaid Insurance 4,650
PPE 19,500
Account Payable 7,650
Capital 30,400
During May,20X0, Dr JJ completed the following transactions:
April 1. Paid car rent for May, $400
3. Purchased goods on account, $2,100
5. Received cash from customers $1,000
8. Purchased supplies on account, $2450
9. One of the goods purchased on May 3 was defective. It was returned with the permission of the
supplier, who agreed to reduce the account for the amount of the item, $300
12. Paid cash to account payable, $1,250
17. Paid cash for renewal of a six-month property insurance policy, $3200
24. Paid cash for interest expense, $55
30. Recorded the cash received in payment of services performed to customer during May, $4,000
30. Paid salaries, $1,000
30. Paid various utility expenses, $260
30. Paid miscellaneous expenses, $132
Requirements:

i. Journalise the transactions during May 20X0


ii. Determine the balances of accounts at the end of May 20X0

Exercise 5
DK company has Opening balnace in March:
- Cash: $10,000
- Capital: $6,000
- AP: $4,000
a. Transferred cash from a personal bank account to an account to be used for the business, $25,000
b. Paid March rent for office, $1,000
c. Purchased car for $11,500, paying $2,500 cash and took a bank loan for the remainder
d. Purchased equipment on account, $5,000
e. Paid cash for supplies, $650
f. Paid cash for annual insurance policies, $1,000
g. Received cash from, $3,100
h. Paid cash for miscellaneous expenses, $75
i. Paid cash to creditors, $2,500
j. Paid instalment due on the bank loan, $500
k. Received invoice for printing service, due in April, $525
l. Recorded revenue which payment to be received in April, $4,500
m. Paid salaries of assistant, $1,200
n. Paid petrol and repairs on car for March, $250

Requirement: Journalise the transactions during the month.


Exercise 6
In the beginning of June, Adam’s company has following transactions:
June 5. Adam transferred cash from a personal bank account to an account to be used for the business,
$15,000
6. Paid office rent for period of June, $1,000
7. Purchased office equipment by cash, $10,000
8. Purchased a new truck for $18,000, paying $12,000 cash and taking a bank loan for the
remainder
10. Purchased supplies on account $1,300
12. Received cash from clients, $7,300
20. Paid annual premium on property insurance, $2,400
23. Recorded jobs completed on account and sent invoices to customers, $5,000
24. Received an invoice for truck expenses, to be paid in August, $400
29. Paid utilities expense, $700
29. Paid miscellaneous expense, $200
30. Received cash from customers, $2,200
30. Paid salaries of employees, $3,000
30. Paid creditor a portion of the amount owed for equipment purchased on June 7, $1,800
30. Withdrew cash for personal use, $3,500
Requirement: Journalise the transactions during the month.

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