Amy Austin established an insurance agency on March 1 of the current year and completed the following transactions during March:

a. Opened a business bank account with a deposit of $\$ 50,000$ from personal funds.
b. Purchased supplies on account, $\$ 4,000$.
c. Paid creditors on account, $\$ 2,300$.
d. Received cash from fees earned on insurance commissions, $\$ 13,800$.
e. Paid rent on office and equipment for the month, $\$ 5,000$.
f. Paid automobile expenses for the month, $\$ 1,150$, and miscellaneous expenses, $\$ 300$.
g. Paid office salaries, $\$ 2,500$.
h. Determined that the cost of supplies on hand was $\$ 2,700$; therefore, the cost of supplies used was $\$ 1,300$.
i. Billed insurance companies for sales commissions earned, $\$ 12,500$.
j. Withdrew cash for personal use, $\$ 3,900$.

Instructions

1. Indicate the effect of each transaction and the balances after each transaction, using the following tabular headings:

$$\begin{array}{c} \begin{array}{ccc} \begin{array}{ccccc} && \text{Assets}\\ \hline && \text{Accounts}\\ \text{Cash} & + & \text{Receivable} & + & \text{Supplies} \end{array} & \begin{array}{c} =\\ \\ = \end{array} & \begin{array}{ccccccccccccccccc} \text{Liabilities} & + &&&&&&& \text{Owner’s Equity}\\ \hline \text {Accounts} && \text {Amy Austin,} && \text {Amy Austin,} && \text {Fees} && \text {Rent } && \text { Salaries} && \text {Supplies } && \text { Auto } && \text { Misc. } \\ \text { Payable } & + & \text { Capital } & - & \text { Drawing } & + & \text { Earned} & - & \text {Expense} & - & \text {Expense} & - & \text {Expense} & - & \text {Expense} & - & \text {Expense } \\ \end{array} \end{array} \end{array}$$

2. Briefly explain why the owner's investment and revenues increased owner's equity, while withdrawals and expenses decreased owner's equity.
3. Determine the net income for March.
4. How much did March's transactions increase or decrease Amy Austin's capital?

Progressive Insurance asked customers who had been involved in auto accidents how far they were from home when the accident happened. The data are summarized in the table.

$$\begin{array}{l|c} \text {Miles from Home } & \text { \% of Accidents } \\ \hline \text {Less than } 1 & 23 \\ 1 \text { to } 5 & 29 \\ 6 \text { to } 10 & 17 \\ 11 \text { to } 15 & 8 \\ 16 \text { to } 20 & 6 \\ \text { Over } 20 & 17 \end{array}$$

Create an appropriate graph of these data.

Ken Jones, an architect, opened an office on April 1, 2016. During the month, he completed the following transactions connected with his professional practice: a. Transferred cash from a personal bank account to an account to be used for the business, $\$ 18,000$. b. Purchased used automobile for $\$ 19,500$, paying $\$ 2,500$ cash and giving a note payable for the remainder. c. Paid April rent for office and workroom, $3,150, d. Paid cash for supplies,$\$1,450$. e. Purchased office and computer equipment on account, $\$ 6,500$. f. Paid cash for annual insurance policies on automobile and equipment, $\$ 2,400$. g. Received cash from a client for plans delivered, $\$ 12,000$. h. Paid cash to creditors on account, $\$ 1,800$. i. Paid cash for miscellaneous expenses, $\$ 375$. j. Received invoice for blueprint service, due in May, $\$ 2,500$. k. Recorded fees earned on plans delivered, payment to be received in May, $\$ 15,650$.

1. Paid salary of assistant, $\$ 2,800$. m. Paid cash for miscellaneous expenses, $\$ 200$. n. Paid installment due on note payable, $\$ 300$. o. Paid gas, oil, and repairs on automobile for April, $\$ 550$. Instructions
2. Record these transactions directly in the following $\mathrm{T}$ accounts, without journalizing: Cash; Accounts Receivable; Supplies; Prepaid Insurance; Automobiles; Equipment; Notes Payable; Accounts Payable; Ken Jones, Capital; Professional Fees; Rent Expense; Salary Expense; Blueprint Expense; Automobile Expense; Miscellaneous Expense. To the left of each amount entered in the accounts, place the appropriate letter to identify the transaction.
3. Determine account balances of the $T$ accounts. Accounts containing a single entry only (such as Prepaid Insurance) do not need a balance.
4. Prepare an unadjusted trial balance for Ken Jones, Architect, as of April 30, 2016.
5. Determine the net income or net loss for April.

The following revenue and expense account balances were taken from the ledger of Wholistic Health Services Co. after the accounts had been adjusted on February 28, 2019, the end of the fiscal year:

$$\begin{array}{lrlr}\text { Depreciation Expense } & \$ 7,500 & \text { Service Revenue } & \$ 448,400 \\ \text { Insurance Expense } & 3,000 & \text { Supplies Expense } & 2,750 \\ \text { Miscellaneous Expense } & 8,150 & \text { Utilities Expense } & 33,900 \\ \text { Rent Expense } & 54,000 & \text { Wages Expense } & 360,000\end{array}$$

Prepare an income statement.

The following accounts and balances were drawn from the records of Shearer Company at December 31, 2016:

$$\begin{array}{lrlr} \text{Cash}&\$22,100 & \text{Accounts receivable} & \$21,000\\ \text{Land}&\text{43,000} & \text{Cash flow from operating act.} & \text{8,600}\\ \text{Insurance expense}&\text{2,500} & \text{Beginning retained earnings} & \text{47,200}\\ \text{Dividends}&\text{5,000} & \text{Beginning common stock} & \text{5,500}\\ \text{Prepaid insurance}&\text{3,500} & \text{Service revenue} & \text{86,000}\\ \text{Accounts payable}&\text{15,000} & \text{Cash flow from financing act.} & \text{9,000}\\ \text{Supplies}&\text{2,100} & \text{Ending common stock} & \text{14,500}\\ \text{Supplies expense}&\text{1,000} & \text{Cash flow from investing act.} & \text{(6,000)}\\ \text{Rent expense}&\text{3,500} & \text{Other operating expenses} & \text{59,000}\\ \end{array}$$

Required

Use the accounts and balances from Shearer Company to construct an income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows (show only totals for each activity on the statement of cash flows).

The following account balances were taken from the adjusted trial balance for Shanghai Messenger Service, a delivery service firm, for the current fiscal year ended September 30, 2014:

$$\begin{array}{lrlr} \text { Depreciation Expense } & \$ 7,250 & \text { Rent Expense } & \$ 36,000 \\ \text { Fees Earned } & 440,000 & \text { Salaries Expense } & 265,150 \\ \text { Insurance Expense } & 1,200 & \text { Supplies Expense } & 2,200 \\ \text { Miscellaneous Expense } & 7,100 & \text { Utilities Expense } & 28,500 \end{array}$$

Prepare an income statement.

The following account balances were taken from the adjusted trial balance for Laser Messenger Service, a delivery service firm, for the fiscal year ended April 30, 2016:

$$\begin{array}{lrlr}\text { Depreciation Expense } & \$ 8,650 & \text { Rent Expense } & \$ 60,000 \\ \text { Fees Earned } & 674,000 & \text { Salaries Expense } & 336,900 \\ \text { Insurance Expense } & 1,500 & \text { Supplies Expense } & 4,100 \\ \text { Miscellaneous Expense } & 3,650 & \text { Utilities Expense } & 41,200\end{array}$$

Prepare an income statement.

Assuming the following Adjusted Trial Balance, recreate the Post-Closing Trial Balance that would result after all closing journal entries were made and posted:

$$\begin{array}{c} \textbf{Adjusted Trial Balance} \end{array}$$

$$\begin{array}{lcc} &\textbf{Debit}&\textbf{Credit}\\[5pt] \text{Cash}&\text{\$\hspace{1pt}17,900}\\ \text{Accounts Receivable}&\text{\hspace{10pt}9,900}\\ \text{Supplies}&\text{\hspace{10pt}1,600}\\ \text{Prepaid Insurance}&\text{\hspace{10pt}2,500}\\ \text{Salaries Payable}&&\text{\$\hspace{5pt}8,600}\\ \text{Common Stock}&&\text{\hspace{5pt}10,000}\\ \text{Retained Earnings}&&\text{\hspace{10pt}2,800}\\ \text{Dividends}&\text{\hspace{10pt}4,000}\\ \text{Service Fee Revenue}&&\text{\hspace{5pt}37,050}\\ \text{Salaries Expense}&\text{\hspace{5pt}16,900}\\ \text{Supplies Expense}&\text{\hspace{10pt}4,200}\\ \text{Insurance Expense}&\underline{\text{\hspace{10pt}1,450}}&\underline{\text{\hspace{34pt}}}\\ &\underline{\underline{\text{\$\hspace{1pt}58,450}}}&\underline{\underline{\text{\$\hspace{1pt}58,450}}}\\ \end{array}$$

The unadjusted trial balance for All Mopped Up Company, a cleaning service, is as follows:

$$\begin{array}{c} \textbf{ALL MOPPED UP COMPANY}\\ \textbf{Unadjusted Trial Balance}\\ \textbf{December 31, 2018} \end{array}$$

$$\begin{array}{lrr} {\textbf{Account Title}}&\textbf{Debit\hspace{6pt}}&\textbf{Credit\hspace{4pt}}\\ \text{Cash}&\text{\$\hspace{18pt}800}\\ \text{Office Supplies}&\text{2,000}\\ \text{Prepaid Insurance}&\text{600}\\ \text{Equipment}&\text{30,000}\\ \text{Accumulated Depreciation- Equipment}&&\text{\$\hspace{10pt}2,000}\\ \text{Accounts Payable}&&\text{2,400}\\ \text{Salaries Payable}\\ \text{Unearned Revenue}&&\text{700}\\ \text{Common Stock}&&\text{15,300}\\ \text{Dividends}&\text{5,000}\\ \text{Service Revenue}&&\text{25,000}\\ \text{Salaries Expense}&\text{7,000}\\ \text{Supplies Expense}\\ \text{Depreciation Expense- Equipment}\\ \text{Insurance Expense}&\text{\underline{\hspace{38pt}}}&\text{\underline{\hspace{38pt}}}\\ \text{Total}&\underline{\underline{\$\hspace{5pt}\text{45,400}}}&\underline{\underline{\$\hspace{5pt}\text{45,400}}}\\ \end{array}$$

During the 12 months ended December 31, 2018, All Mopped Up:

• a. used office supplies of $1,700.
• b. used prepaid insurance of$580.
• c . depreciated equipment, $500.
• d. accrued salaries expense of$310 that hasn't been paid yet.
• e. earned $400 of unearned revenue.

Requirements

1. Open a T-account for each account using the unadjusted balances.
2. Journalize the adjusting entries using the letter and December 31 date in the date column.
3. Post the adjustments to the T-accounts, entering each adjustment by letter. Show each account's adjusted balance.

From the following Company S adjusted trial balance, prepare the following:

B. Retained Earnings Statement

$$\begin{array}{c} \textbf{Adjusted Trial Balance} \end{array}$$

$$\begin{array}{lcc} &\textbf{Debit}&\textbf{Credit}\\[5pt] \text{Cash}&\text{\$\hspace{5pt}55,200}\\ \text{Accounts Receivable}&\text{\hspace{10pt}30,200}\\ \text{Prepaid Insurance}&\text{\hspace{15pt}6,000}\\ \text{Land}&\text{\hspace{10pt}30,000}\\ \text{Accounts Payable}&&\text{\$\hspace{5pt}14,300}\\ \text{Salaries Payable}&&\text{\hspace{15pt}6,100}\\ \text{Common Stock}&&\text{\hspace{10pt}26,000}\\ \text{Retained Earnings}&&\text{\hspace{10pt}38,900}\\ \text{Dividends}&\text{\hspace{10pt}16,500}\\ \text{Service Revenue}&&\text{\hspace{5pt}211,850}\\ \text{Insurance Expense}&\text{\hspace{10pt}24,000}\\ \text{Salaries Expense}&\text{\hspace{5pt}128,350}\\ \text{Miscellaneous Expense}&\underline{\text{\hspace{15pt}6,900}}&\underline{\text{\hspace{39pt}}}\\ &\underline{\underline{\text{\$\hspace{1pt}297,150}}}&\underline{\underline{\text{\$\hspace{1pt}297,150}}}\\ \end{array}$$

An insurance company checks police records on 582 accidents selected at random and notes that teenagers were at the wheel in 91 of them. a) Create a 98% confidence interval for the percentage of all auto accidents that involve teenage drivers. b) Explain what your interval means. c) Explain what "98% confidence" means. d) A politician urging tighter restrictions on drivers' licenses issued to teens says, "In one of every five auto accidents, a teenager is behind the wheel." Does your confidence interval support or contradict this statement? Explain.

Family Furniture Corporation incurred the following costs.

1. Wood used in the production of furniture.
2. Fuel used in delivery trucks.
3. Straight-line depreciation on factory building.
4. Screws used in the production of furniture.
5. Sales staff salaries.
6. Sales commissions.
7. Property taxes.
8. Insurance on buildings.
9. Hourly wages of furniture craftsmen.
10. Salaries of factory supervisors.
11. Utilities expense.
12. Telephone bill.

Instructions Identify the costs above as variable, fi xed, or mixed.

Use the table for the percent of coverage to determine the (a) amount of insurance on the home, (b) amount of coverage for the garage, (c) amount of coverage for loss of use, and (d) amount of coverage for personal property.

$$\begin{array}{|l|c|} \hline{\text { Coverage }} & \begin{array}{c} \text { Percent } \\ \text { Covered } \end{array} \\ \hline \text { Garage and other structures } & 10 \% \\ \hline \text { Loss of use } & 20 \% \\ \hline \text { Personal property } & 50 \% \\ \hline \end{array}$$

Replacement value: $538,500; coverage: 90%.

Tia has the following insurance coverages on her car:

Comprehensive physical damage

Bodily injury and property liability (100/200/25)

Collision ($250 deductible)

As a result of an accident in which she was negligent, the driver of the other car was awarded$9,800 for injuries and $2,100 in damages to his car. Tia 's auto was damaged at a cost of$820. Her medical bills were $135. How much did the insurer have to pay in claims as a result of the accident? What is the maximum the policy would pay for injuries to the other driver?