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 accounts appear in an adjusted trial balance of San Jose Consulting. Indicate whether each account would be reported in the (a) current asset; (b) property, plant, and equipment; (c) current liability; (d) long-term liability; or (e) owner's equity section of the December 31, 2015, balance sheet of San Jose Consulting.

1. Building
2. Salaries Payable
3. Nata Foust, Capital
4. Supplies
5. Notes Payable (due in five years)
6. Taxes Payable
7. Prepaid Rent
8. Unearned Service Fees

The amounts of the assets and liabilities of Wilderness Travel Service at April 30, 2016, the end of the year, and its revenue and expenses for the year follow. The capital of Harper Borg, owner, was $\$ 180,000$ at May 1, 2015, the beginning of the year, and the owner withdrew $\$ 40,000$ during the year.

$$\begin{array}{lrlr}\text { Accounts payable } & \$ 25,000 & \text { Supplies } & \$ 9,000 \\ \text { Accounts receivable } & 210,000 & \text { Supplies expense } & 12,000 \\ \text { Cash } & 146,000 & \text { Taxes expense } & 10,000 \\ \text { Fees earned } & 875,000 & \text { Utilities expense } & 38,000 \\ \text { Miscellaneous expense } & 15,000 & \text { Wages expense } & 525,000 \\ \text { Rent expense } & 75,000 & & \end{array}$$

Instructions

1. Prepare an income statement for the year ended April 30, 2016.
2. Prepare a statement of owner's equity for the year ended April 30, 2016.
3. Prepare a balance sheet as of April 30, 2016.
4. What item appears on both the income statement and statement of owner's equity?

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 in exchange for capital stock. b. Purchased supplies on account,$4,000. c. Paid creditors on account, $2,300. d. Received cash from fees earned on insurancecommissions,$13,800. e. Paid rent on office and equipment for the month, $5,000. f. Paid automobile expenses for 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. Paid dividends,$3,900. Instructions

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

$$\begin{array}{ccc} \textbf{Assets}&\textbf{= Liabilities +}&&&&&&&&&&&&&&&&&&&&&&&&&&&\textbf{Stockholders' Equity}\\ \hline \end{array}$$

$$\begin{array}{ccccccccc} &&\text{Accounts}&&&&\text{Accounts}&&\text{Capital}&&&&\text{Fees}&&\text{Rent}&&\text{Salaries}&&\text{Supplies}&&\text{Auto}&&\text{Misc}\\ \text{Cash}&+&\text{Receivable}&+&\text{Supplies}&=&\text{Payable}&=&\text{Stock}&-&\text{Dividends}&+&\text{Earned}&-&\text{Expense}&&\text{Expense}&-&\text{Expense}&-&\text{Expense}&-&\text{Expense} \end{array}$$

2. Briefly explain why the issuance of capitalstock and revenues increased stockholders’ equity, while dividends and expenses decreased stockholders’ equity.
3. Determine the net income for March.
4. How much did March’s transactions increase or decrease retained earnings?

The financial statements at the end of Wolverine Realty’s first month of operations are as follows:

$$\begin{array}{c} &\textbf{Wolverine Realty}\\ &\textbf{Income Statement}\\ &\textbf{For the Month Ended April 30, 2014}\\ \hline \end{array}$$

$$\begin{array}{lrr} \text{Fees earned}&&\$(a)\\ \text{Expenses:}&&\\ \quad\text{ Wages expense}&\$300,000&\\ \quad\text{Rent expense}&100,000&\\ \quad\text{Supplies expense}&(b)&\\ \quad\text{Utilities expense}&20,000&\\ \quad\text{Miscellaneous expense}&\underline{25,000}&\\ \quad\quad\text{Total expenses}&&\underline{475,000}\\ \quad\text{Net income}&&\underline{\underline{\$275,000}}\\ \end{array}$$

$$\begin{array}{c} &\textbf{Wolverine Realty}\\ &\textbf{Retained Earnings Statement}\\ &\textbf{For the Month Ended April 30, 2014}\\ \hline \end{array}$$

$$\begin{array}{lr} \text{Retained earnings, April 1, 2014}&&\$\quad(c)\\ \text{Net income for April}&\underline{\$\quad{(d)}}\\ \text{Less dividends}&\underline{155,000}\\ \text{Increase in retained earnings}&&\underline{(e)}\\ \text{Retained earning, April 30, 2014}&&\underline{\underline{\$\quad(f)}}\\ \end{array}$$

$$\begin{array}{c} &\textbf{ Wolverine Realty}\\ &\textbf{Balance Sheet}\\ &\textbf{April 30, 2014}\\ \hline \end{array}$$

$$\begin{array}{lcrlcr} &\textbf{Assets}&&&\textbf{Liabilities}\\ \text{Cash}&&\$462,500&\text{Accounts payable}&&\$100,000\\ \text{Supplies}&&12,500&&\textbf{Stockholders' Equity}\\ \text{Land}&&\underline{150,000}&\text{Capital stock}&&\$375,000\\ \text{Total assets}&&\$\quad{(g)}&\text{Retained earnings}&&(h)\\ &&&\text{Total stockholders' equity}&&\underline{(i)}\\ &&&\text{Total liabilities and stockholders' equity}&&\underline{\$\quad(j)}\\ \hline\hline \end{array}$$

$$\begin{array}{c} &\textbf{ Wolverine Realty}\\ &\textbf{Statement of Cash Flows}\\ &\textbf{For the Month Ended April 30, 2014}\\ \hline \end{array}$$

$$\begin{array}{lrr} \text{Cash flows from operating activities:}&&\\ \quad\text{Cash received from customers}&\$(k)&\\ \quad\text{Deduct cash payments for expenses and payments to creditos}&\underline{(387,500)})&\\ \quad\text{Net cash flows from from operating activities}&&\$(l)\\ \text{Cash flows used for investing activities:}&&\\ \quad\text{Cash payments for acquisition activities}&&(m)\\ \text{Cash flows from financing activities:}&&\\ \text{Cash received from issuing capital stock}&\$\quad(n)&\\ \quad\text{Deduct cash dividendss}&\underline{(o)}&\\ \quad\text{Net cash flows from financing activites}&&\underline{(p)}\\ \quad\text{Net increase (decrease) in cash and April 30, 2014, cash balance}&&\\ \end{array}$$

Instructions By analyzing the interrelationships among the four financial statements, determine the proper amounts for (a) through (q).

The financial statements at the end of Wolverine Realty’s first month of operations are as follows:

$$\begin{array}{lrr} \text{Fees earned}&& \$ A\\ \text{Expenses:}\\ \text{Wages expense}& \$300,000\\ \text{Rent expense}& 100,000\\ \text{Supplies expense}& B\\ \text{Utilities expense}& 20,000\\ \text{Miscellaneous expense}& 25,000\\ \text{Total expenses}&& 475,000\\ \text{Net income}& &\$275,000 \end{array}$$

By analyzing the interrelationships among the four financial statements, determine the proper amounts for A through Q.

D’Lite Dry Cleaners is owned and operated by Joel Palk. A building and equipment are currentl being rented, pending expansion to new facilities. The actual work of dry cleaning is done by another company at wholesale rates. The assets, liabilities, and common stock of the business on July 1, 2018, are as follows: Cash, $45,000; Accounts Receivable,$93,000; Supplies, $7,000; Land,$75,000; Accounts Payable, $40,000; Common Stock,$60,000. Business transactions during July are summarized as follows:

A. Joel Palk invested additional cash in exchange for common stock with a deposit of $35,000 in the business bank account. B. Paid$50,000 for the purchase of land adjacent to land currently owned by D’Lite Dry Cleaners as a future building site. C. Received cash from customers for dry cleaning revenue, $32,125. D. Paid rent for the month,$6,000. E. Purchased supplies on account, $2,500. F. Paid creditors on account,$22,800. G. Charged customers for dry cleaning revenue on account, $84,750. H. Received monthly invoice for dry cleaning expense for July (to be paid on August 10),$29,500. I. Paid the following: wages expense, $7,500; truck expense,$2,500; utilities expense, $1,300; miscellaneous expense,$2,700. J. Received cash from customers on account, $88,000. K. Determined that the cost of supplies on hand was$5,900; therefore, the cost of supplies used during the month was $3,600. L. Paid dividends,$12,000.

On July 1, 2019, Pat Glenn established Half Moon Realty. Pat completed the following transactions during the month of July:

a. Opened a business bank account with a deposit of $\$ 25,000$ from personal funds.
b. Purchased office supplies on account, $\$ 1,850$.
c. Paid creditor on account, $\$ 1,200$.
d. Earned sales commissions, receiving cash, $\$ 41,500$.
e. Paid rent on office and equipment for the month, $\$ 3,600$.
f. Withdrew cash for personal use, $\$ 4,000$.
g. Paid automobile expenses (including rental charge) for the month, $\$3,050$, and miscellaneous expenses, $\$1,600$.
h. Paid office salaries, $\$ 5,000$.
i. Determined that the cost of supplies on hand was $\$ 950$; therefore, the cost of supplies used was $\$ 900$.

Instructions

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

$$\begin{array}{c} \begin{array}{ccc} \begin{array}{ccc} & \text{Assets}\\ \hline \\ \\ \text{Cash} & + & \text{Supplies} \end{array} & \begin{array}{c} =\\ \\ = \end{array} & \begin{array}{ccccccccccccccccccccc} \text{Liabilities} & + &&&&&&& \text{Owner’s Equity}\\ \hline && \text{Pat} && \text{Pat}\\ \text {Accounts} && \text {Glenn,} && \text {Glenn,} && \text {Sales} && \text { Salaries } && \text { Rent } && \text { Auto } && \text { Supplies } && \text { Misc. } \\ \text { Payable } & + & \text { Capital } & - & \text { Drawing } & + & \text { Commission} & - & \text {Expense} & - & \text {Expense} & - & \text {Expense} & - & \text {Expense} & - & \text {Expense } \\ \end{array} \end{array} \end{array}$$

2. Prepare an income statement for July, a statement of owner's equity for July, and a balance sheet as of July 31.

Seth Feye established Reliance Financial Services on July 1, 2014. Reliance Financial Services offers financial planning advice to its clients. The effect of each transaction and the balances after each transaction for July are shown below.

$$\begin{array}{ccc} &&&&\textbf{Assets}&&&&&&&&&&&&&&&\textbf{= Liabilities +}&&&&&&&&&&&&&&&&&&&&&&&&&&&\textbf{Stockholders' Equity}\\ \hline \end{array}$$

$$\begin{array}{lccccccccc} &&&\text{Accounts}&&&&\text{Accounts}&&\text{Capital}&&&&\text{Fees}&&\text{Salaries}&&\text{Rent}&&\text{Auto}&&\text{Supplies}&&\text{Misc}\\ &\text{Cash}&+&\text{Receivable}&+&\text{Supplies}&=&\text{Payable}&+&\text{Stock}&-&\text{Dividends}&+&\text{Earned}&-&\text{Expense}&-&\text{Expense}&-&\text{Expense}&-&\text{Expense}&-&\text{Expense}\\ \text{a.}&+50,000&&&&&&&&+50,000\\ \text{b.}&&&&&\underline{+7,000 }&&\underline{+7,000 }\\ \text{Bal.}&50,000&&&&7,000&&7,000&&50,000\\ \text{c.}&\underline{-3,600}&&&&&&\underline{-3,600}\\ \text{Bal.}&46,000&&&&7,000&&3,400&&50,000\\ \text{d.}&\underline{+110,000}&&&&&&&&&&&&\underline{+110,000}\\ \text{Bal.}&156,400&&&&7,000&&3,400&&50,000&&&&\\ \text{e.}&\underline{-33,000}&&&&&&&&&&&&&&&&\underline{-33,000}\\ \text{Bal.}&123,400&&&&7,000&&3,400&&50,000&&&&110,00&&&&-33,000\\ \text{f.}&\underline{-20,800}&&&&&&&&&&&&&&&&&&\underline{16,000}\\ \text{Bal.}&102,600&&&&7,000&&3,400&&50,000&&&&110,000&&&&33,000&&16,000\\ \text{g.}&\underline{-55,000}&&&&&&&&&&&&&&\underline{55,000}\\ \text{Bal.}&47,600&&&&7,000&&3,400&&50,000&&&&110,000&&55,000&&33,000&&16,000&&&&4,800\\ \text{h.}&&&&&\underline{-4,500}&&&&&&&&&&&&&&&&\underline{-4,500}\\ \text{Bal.}&47,600&&&&2,500&&3,400&&50,000&&&&110,000&&55,000&&33,000&&16,000&&-4,500&&4,800\\ \text{i.}&&&\underline{-34,500}&&&&&&&&&&\underline{-34,500}\\ \text{Bal.}&47,600&&34,500&&2,500&&3,400&&50,000&&&&144,500&&-55,000&&-33,000&&-16,000&&-4,500&&-4,800\\ \text{j.}&\underline{15,000}&&&&&&&&&&\underline{15,000}\\ \text{Bal.}&32,600&&34,500&&2,500&&3,400&&50,000&&15,000&&144,500&&55,000&&33,000&&16,000&&4,500&&4,800\\ \hline\hline \end{array}$$

Instructions

1. Prepare an income statement for the month ended July 31, 2014.
2. Prepare a retained earnings statement for the month ended July 31, 2014.
3. Prepare a balance sheet as of July 31, 2014.
4. (Optional). Prepare a statement of cash flows for the month ending July 31, 2014.

The amounts of the assets and liabilities of Nordic Travel Agency at December 31, 2019, the end of the year, and its revenue and expenses for the year follow. The capital of Ian Eisele, owner, was $\$ 670,000$ on January 1, 2019, the beginning of the year. During the year, Ian withdrew $\$ 42,000$.

$$\begin{array}{lrlr} \text { Accounts payable } & \$\hspace{5pt}69,500 & \text { Rent expense } & \$\hspace{5pt}36,000 \\ \text { Accounts receivable } & 285,000 & \text { Supplies } & 5,500 \\ \text { Cash } & 190,500 & \text { Supplies expense } & 4,100 \\ \text { Fees earned } & 912,500 & \text { Utilities expense } & 28,500 \\ \text { Land } & 544,000 & \text { Wages expense } & 510,000 \\ \text { Miscellaneous expense } & 6,400 & & \end{array}$$

Instructions

1. Prepare an income statement for the year ended December 31, 2019.
2. Prepare a statement of owner's equity for the year ended December 31, 2019.
3. Prepare a balance sheet as of December 31, 2019.
4. What item appears on both the statement of owner's equity and the balance sheet?

On June 1 of the current year, Chad Wilson established a business to manage rental property. He completed the following transactions during June:

a. Opened a business bank account with a deposit of $\$ 30,000$ from personal funds.
b. Purchased office supplies on account, $\$ 1,800$.
c. Received cash from fees earned for managing rental property, $\$ 10,000$.
d. Paid rent on office and equipment for the month, $\$ 4,500$.
e. Paid creditors on account, $\$ 1,250$.
f. Billed customers for fees earned for managing rental property, $\$ 16,800$.
g. Paid automobile expenses (including rental charges) for the month, $\$ 750$, and miscellaneous expenses, $\$ 980$.
h. Paid office salaries, $\$ 4,000$.
i. Determined that the cost of supplies on hand was $\$ 680$; therefore, the cost of supplies used was $\$ 1,120$.
j. Withdrew cash for personal use, $\$ 7,500$.

Instructions

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

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

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 June.
4. How much did June's transactions increase or decrease Chad Wilson's capital?

How do nations gain by specializing in products for which they have a comparative advantage?

Describe the similarities and differences of a frequency table and a frequency distribution. Be sure to include which requires qualitative data and which requires quantitative data.

A set of data contains 53 observations. The lowest value is 42 and the largest is 129.The data are to be organized into a frequency distribution.a. How many classes would you suggest?b. What would you suggest as the lower limit of the first class?