A partial chart of accounts for Kits & Pups Grooming follows. $$ \begin{matrix} \text{General Ledger} & \text{ }\\ \hline \text{101 Cash in Bank} & \text{301 Abe Shultz, Capital}\\ \text{105 Accts. Rec.—J. Alvarez} & \text{305 Abe Shultz, Withdrawals}\\ \text{120 Grooming Supplies} & \text{401 Boarding Revenue}\\ \text{130 Office Furniture} & \text{405 Grooming Revenue}\\ \text{140 Grooming Equipment} & \text{525 Salaries Expense}\\ \text{205 Accts. Pay.—Dogs & Cats Inc.} & \text{ }\\ \end{matrix} $$ 1. In your working papers, open an account in the general ledger for each of these accounts. 2. Record the March transactions on page 1 of the general journal. 3. Post each journal entry to the appropriate ledger account. 4. Prove the ledger by preparing a trial balance. $$ \begin{array}{rl} \text{Date} & \text{Transactions}\\ \hline \text{Mar 1} & \text{Abe Shultz invested $\$ 5,000$ in the business, Memorandum 51.}\\ \text{3} & \text{Abe Shultz transferred a desk and chairs valued at $\$ 1,200$ to the business, Memorandum 52.}\\ \text{5} & \text{Issued Check 551 for $\$ 300$ for grooming supplies.}\\ \text{7} & \text{Bought grooming equipment on account for $\$ 1,800$ from Dogs & Cats Inc., Invoice DC201.}\\ \text{9} & \text{Groomed Juan Alvarez's show dogs on account, $\$ 400,$ Sales Invoice 350.}\\ \text{12} & \text{Paid Dogs & Cats Inc. $\$ 900$ on account, Check 552.}\\ \text{15} & \text{Issued Check 553 for $\$ 500$ to pay the office secretary's salary.}\\ \text{18} & \text{Abe Shultz withdrew $\$ 1,000$ cash from the business, Check 554.}\\ \text{20} & \text{Deposited $\$ 1,400$ received from clients for boarding their pets, Receipts 477-480.}\\ \text{24} & \text{Wrote Check 555 for $\$ 900$ to Dogs & Cats Inc. to apply on account.}\\ \text{26} & \text{Received a check for $\$ 400$ from Juan Alvarez on account, Receipt 481.}\\ \end{array} $$

Abe Shultz owns and operates a pet grooming business called Kits & Pups Grooming. The following accounts are used to journalize transactions. $$ \begin{matrix} \text{General Ledger} & \text{ }\\ \hline \text{101 Cash in Bank} & \text{207 Accts. Pay.—Pet Gourmet}\\ \text{105 Accts. Rec.—Juan Alvarez} & \text{301 Abe Shultz, Capital}\\ \text{110 Accts. Rec.—N. Carlsbad} & \text{305 Abe Shultz, Withdrawals}\\ \text{115 Accts. Rec.—Martha Giles} & \text{310 Income Summary}\\ \text{125 Office Equipment} & \text{401 Boarding Revenue}\\ \text{130 Office Furniture} & \text{405 Grooming Revenue}\\ \text{135 Computer Equipment} & \text{501 Advertising Expense}\\ \text{140 Grooming Equipment} & \text{505 Equipment Repair Expense}\\ \text{145 Kennel Equipment} & \text{510 Maintenance Expense}\\ \text{201 Accts. Pay.—Able Store} & \text{520 Rent Expense}\\ \text{Equipment} & \text{525 Salaries Expense}\\ \text{205 Accts. Pay.—Dogs &} & \text{530 Utilities Expense}\\ \text{Cats Inc.} & \text{ }\\ \end{matrix} $$ Record the following transactions on page 7 of the general journal in your working papers. $$ \begin{array}{rl} \text{Date} & \text{Transactions}\\ \hline \text{Jan. 1} & \text{Received $\$ 125$ for boarding a client's dog for one week, Receipt 300.}\\ \text{3} & \text{Abe Shultz contributed to the business a computer valued at $\$ 2,500,$ Memorandum 33. }\\ \text{5} & \text{Billed a client, Juan Alvarez, $\$ 80$ for grooming his pets, Sales Invoice 212. }\\ \text{9} & \text{Wrote Check 411 to Allegheny Power Co. for $\$ 150$ in payment for the month's electricity bill.}\\ \text{11} & \text{Abe Shultz withdrew $\$ 700$ for personal use, Check 412.}\\ \text{14} & \text{Purchased kennel equipment for $\$ 2,600$ from Dogs $\&$ Cats Inc., on account, Invoice DC92.}\\ \text{16} & \text{Paid the part-time receptionist's salary of $\$ 400$ by issuing Check 413.}\\ \text{18} & \text{Abe Shultz took from the business for his personal use a ten-key adding machine valued at $\$ 65,$ Memorandum 34.}\\ \text{23} & \text{Juan Alvarez sent a check for $\$ 80$ in full payment of his account, Receipt 301.}\\ \text{28} & \text{Purchased on credit $\$ 250$ in grooming equipment from the Pet Gourmet, Invoice PG333.}\\ \text{31} & \text{Issued Check 414 for $\$ 1,300$ as an installment payment for the amount owed to Dogs & Cats Inc. }\\ \end{array} $$

The chart of accounts for Outback Guide Service follows.

$$\begin{array}{ll} \mathbf{\text{General Ledger }} & \text{ }\\ \text{101 Cash in Bank} & \text{301 Juanita Ortega, Capital}\\ \text{115 Accts. Rec. - Podaski} & \text{302 Juanita Ortega, Withdrawals}\\ \text{Systems Inc.} & \text{401 Guide Service Revenue}\\ \text{140 Computer Equipment} & \text{501 Advertising Expense}\\ \text{145 Hiking Equipment} & \text{ }\\ \text{150 Rafting Equipment} & \text{ }\\ \text{205 Accts. Pay. - Peak Equipment Inc.} & \text{ }\\ \text{207 Accts. Pay. - Premier Processors} & \text{ }\\ \end{array}$$

1. In your working papers, open an account in the general ledger for each account in the chart of accounts. 2. Record the following transactions on page 1 of the general journal. 3. Post each journal entry to the appropriate accounts in the ledger. 4. Prove the ledger by preparing a trial balance.

$$\begin{array}{rl} \text{Date} & \text{Transactions}\\ \text{Mar. 1} & \text{Invested \$20,000 in cash and transferred rafting equipment }\\ \text{ } & \text{valued at \$5,000 to the business, Memorandum 35.}\\ \text{3} & \text{Purchased \$600 in hiking equipment on account from Peak}\\ \text{ } & \text{Equipment Inc., Invoice 101.}\\ \text{5} & \text{Bought a \$2,800 computer from Premier Processors and agreed}\\ \text{ } & \text{to pay for it within 60 days, Invoice 616.}\\ \text{7} & \text{Deposited \$700 cash received from clients, Receipts 310–315.}\\ \text{9} & \text{Paid \$400 to the Daily Courier for an ad, Check 652.}\\ \text{12} & \text{Sent a bill for \$900 to Podaski Systems Inc. for conducting a}\\ \text{ } & \text{group rafting trip for them, Sales Invoice 352.}\\ \text{15} & \text{Juanita Ortega wrote a check for \$800 for personal use, Check 653.}\\ \text{18} & \text{Paid Premier Processors \$1,400 to apply on account, Check 654.}\\ \text{22} & \text{Received \$900 from Podaski Systems Inc. in full payment for}\\ \text{ } & \text{the amount owed, Receipt 316.}\\ \text{27} & \text{Bought a \$500 television ad with LIVE TV, Check 655.}\\ \text{28} & \text{Paid Peak Equipment Inc. \$600 by writing Check 656. }\\ \end{array}$$

Calculate the total change in accounts payable.

The ledger accounts for Hot Suds Car Wash are shown in your working papers. Prepare a trial balance as of March 31 of the current year.

After graduating from college, Abe Shultz decided to start a pet grooming service called Kits & Pups Grooming. Use a form similar to the one that follows. For each of the following transactions: 1. Identify the accounts affected, using the account names on the form. 2. Determine the amount of the increase or decrease for each account. 3. Write the amount of the increase (+) or decrease (-) in the space under each account affected. 4. On the following line, write the new balance for each account. 5. Transaction 1 is completed as an example. $$ \begin{matrix} \text{ } & \text{ } & \text{Assets} & \text{ } & \text{ } & \text{$=$} & \text{Liabilities} & \text{$+$} & \text{Owner’s Equity}\\ \hline \text{Trans.} & \text{Cash in} & \text{Accts.} & \text{Office} & \text{Grooming} & \text{$=$} & \text{Accounts} & \text{$+$} & \text{Abe Shultz,}\\ \text{ } & \text{Bank} & \text{Rec.} & \text{Equip.} & \text{Equip.} & \text{ } & \text{Payable} & \text{ } & \text{Capital}\\ \text{1} & \text{$+\$ 10,000$} & \text{ } & \text{ } & \text{ } & \text{ } & \text{ } & \text{ } & \text{$+\$ 10,000$}\\ \end{matrix} $$ $$ \begin{array}{rl} \text{Date} & \text{Transactions}\\ \text{Jan. 2} & \text{1. Abe Shultz began the business by depositing $\$10,000$ in a checking account at the Shoreline National Bank in the name of the business, Kits & Pups Grooming.}\\ \text{3} & \text{2. Bought grooming equipment for cash, $\$1,000$.}\\ \text{8} & \text{3. Issued a check for $\$900$ for the monthly rent.}\\ \text{9} & \text{4.Bought $\$6,000$ worth of new office equipment on account for use in the business.}\\ \text{15} & \text{5. Received $\$700$ cash for services performed for customers during the first week of business. }\\ \text{21} & \text{6. Issued a $\$2,000$ check to the creditor as partial payment for the office equipment purchased on account.}\\ \text{29} & \text{7. Performed grooming services and agreed to be paid for them later, $\$500$.}\\ \end{array} $$

An auditor reviewed the accounting records of Showbiz Video. The auditor wrote a list of transactions, outlined below, describing the errors discovered in the March records. The general journal for March and a portion of the general ledger are included in your working papers. 1. Record correcting entries on general journal page 22. Use March 31 as the date and Memorandum 50 as the source document for all correcting entries. 2. Some errors will not require correcting entries but will require a general ledger correction. Make the appropriate general ledger corrections. 3. Post all correcting entries to the general ledger accounts.

$$\begin{array}{ll} \text{Date} & \text{Transactions}\\ \text{Mar. 3} & \text{The \$125 purchase was for office supplies.}\\ \text{7} & \text{A \$200 payment to a creditor, Broad Street Office Supply, was}\\ \text{ } & \text{not posted to the account.}\\ \text{13} & \text{Greg Failla withdrew \$1,200 from the business for personal use.}\\ \text{17} & \text{Cash totaling \$2,000 was received for video rentals.}\\ \text{19} & \text{A \$75 receipt from Shannon Flannery was posted as \$57.}\\ \text{27} & \text{Greg Failla invested an additional \$3,000 in the business.}\\ \text{29} & \text{The revenue of \$1,000 was for video rentals.}\\ \end{array}$$

Compute the amount that Greg Failla, Capital was overstated or understated before the correcting entries were posted.