Velcor Industries has over 70 expense accounts in its chart of accounts. Each month, the computerized accounting system generates a list of the accounts which includes the year-to-date account balance and the annual amount budgeted for the year.

The managers of the business want to receive a monthly report showing how effectively the business is controlling its expenses. For example, if the company expected to spend $12,000 on insurance for the entire year, it should only have spent$5,000 through May.

OPEN THE SPREADSHEET TLA CH04

1. Follow the directions on the Instructions tab.

Post the separate amounts (on each line of the journal) that need to be posted individually. Heather Hasley owns a service business, which uses the following accounts. Assets 110 Cash 120 Accounts Receivable—Ken Garlie 130 Supplies 140 Prepaid Insurance Liabilities 210 Accounts Payable—Bodden Company Owner’s Equity 310 Heather Hasley, Capital 320 Heather Hasley, Drawing Revenue 410 Sales Expenses 510 Advertising Expense

On April 30 of the current year, Naples Electric Repair has the following general ledger accounts and balances. The business uses a monthly fiscal period. A work sheet is given in the Working Papers.

$$\begin{matrix} \text{Account Titles} & \text{Account Balances}\\ \text{} & \text{Debit} & \text{Credit}\\ \text{Cash} & \text{\$ 5,658.00} & \text{}\\ \text{Petty Cash} & \text{300.00} & \text{}\\ \text{Accounts Receivable-Barbara Bye} & \text{3,022.00} & \text{}\\ \text{Supplies} & \text{1,710.00} & \text{}\\ \text{Prepaid Insurance} & \text{2,200.00} & \text{}\\ \text{Accounts Payable- Seaside Supplies} & \text{} & \text{\$ 1,000.00}\\ \text{Kaelynn Guerero, Capital} & \text{} & \text{9,004.00}\\ \text{Kaelynn Guerero, Drawing} & \text{880.00} & \text{}\\ \text{Income Summary} & \text{} & \text{}\\ \text{Sales} & \text{} & \text{6,800.00}\\ \text{Advertising Expense} & \text{900.00} & \text{}\\ \text{Cash Short and Over} & \text{4.00} & \text{}\\ \text{Insurance Expense} & \text{} & \text{}\\ \text{Miscellaneous Expense} & \text{380.00} & \text{}\\ \text{Rent Expense} & \text{750.00} & \text{}\\ \text{Supplies Expense} & \text{} & \text{}\\ \text{Utilities Expense} & \text{1,000. 00}\\ \end{matrix}$$

Prepare the heading and trial balance on a work sheet. Total and rule the Trial Balance columns.

On August 29 of the current year, Bright and White Laundry received a bank statement dated August 28. The following information is obtained from the bank statement and from the records of the business.

$$\begin{matrix} \text{Bank statement balance} & \text{\$ 2,712.00} & \text{Outstanding checks:} & \text{}\\ \text{Bank service charge} & \text{20.00} & \text{No. 306} & \text{\$ 140.00}\\ \text{Outstanding deposit,} & \text{} & \text{No. 308} & \text{70.00}\\ \text{August 28} & \text{300.00} & \text{Checkbook balance on} & \text{}\\ \text{} & \text{} & \text{Check Stub No.309} & \text{2,822.00}\\ \end{matrix}$$

Prepare a bank statement reconciliation. Use August 29 of the current year as the date.

Journalize the following transactions completed during May of the current year. Use page 1 of the journal given in the Working Papers. Source documents are abbreviated as follows: check stub, C; memorandum, M; receipt, R; sales invoice, S; calculator tape, T. May 1. Received cash from owner as an investment, $15,000.00. R1.

1. Paid cash for rent,$1,800.00. C1.
2. Paid cash for electric bill, $105.00. C2.
3. Paid cash for supplies,$450.00. C3.
4. Paid cash for insurance, $1,200.00. C4.
5. Bought supplies on account from Dunn Supplies,$900.00. M1.
6. Paid cash to establish a petty cash fund, $250.00. C5.
7. Received cash from sales,$475.00. T12.
8. Paid cash for repairs, $250.00. C6.
9. Paid cash for miscellaneous expense,$40.00. C7.
10. Received cash from sales, $235.00. T13.
11. Sold services on account to Midwest College,$225.00. S1.
12. Paid cash for advertising, $300.00. C8.
13. Paid cash to owner for personal use,$200.00. C9.
14. Paid cash on account to Dunn Supplies, $500.00. C10.
15. Received cash from sales,$305.00. T15.
16. Sold services on account to Matterhorn University, $425.00. S2.
17. Paid cash for miscellaneous expense,$95.00. C11.
18. Received cash on account from Midwest College, $125.00. R2.
19. Received cash from sales,$480.00. T19.
20. Paid cash for repairs, $160.00. C12.
21. Bought supplies on account from Greenway Supplies,$120.00. M2.

On March 31 of the current year, Fresh Flowers received a bank statement dated March 30. Prepare a bank statement reconciliation. Use March 31 of the current year as the date. The following information is obtained from the March 30 bank statement and from the records of the business.

$$\begin{matrix} \text{Bank statement balance} & \text{\$ 3,658.00}\\ \text{Bank service charge} & \text{30.00}\\ \text{Outstanding deposit, March 31} & \text{700.00}\\ \text{Outstanding checks, Nos. 24 and 225} & \text{}\\ \text{Checkbook balance on Check Stub No.226} & \text{3,603.00}\\ \end{matrix}$$

Prepare a petty cash report for November 30 of the current year using the following information: Amount in fund, $\$200.00$. Petty cash slips supported payment of $\$24.00$ for Postage Expense and $\$20.00$ for Miscellaneous Expense. Actual amount of cash in the petty cash box is $\$154.00$.

Write the answers to this problem in the Working Papers. Enter the following transactions on page 15 of a journal. Transactions: Aug. 18. Received notice from the bank of a dishonored check from Christine Iverson, $\$126.00$, plus $\$25. 00$ fee; total, $\$151. 00$. Memorandum No.312. 20. Paid cash on account to Schwartz Enterprises, $\$270. 00$, using EFT Memorandum No.313.21. Purchased supplies, $\$62.00$, using a debit card. Memorandum No.314.

1. For each of the following situations, prepare the appropriate endorsement. a. Write a blank endorsement. b. Write a special endorsement to transfer a check to Kim Lumas. c. Write a restrictive endorsement to deposit a check in the account of Wash N' Dry. 2. Record the balance brought forward on Check Stub No.410, $\$4,125.15$. 3. Record a deposit of $\$1,976.60$ made on August 31 of the current year on Check Stub No.410. 4. Prepare check stubs and write the following checks. Use August 31 of the current year as the date. a. Check No.410 to Central Supplies for supp lies, $\$649.50$. b. Check No.411 to Evening Tribune for advertising, $\$297.00$. c. Check No.412 to Barbaye Sam for rent, $\$600. 00$.

For each of these situations, prepare the appropriate endorsement. a. Write a special endorsement to transfer a check to Kevin Deters. b. Write a restrictive endorsement to deposit a check in the account of Milltown Hair Care.

Linda Liu owns a tutoring service called Homework Helper. On October 30, Homework Helper's accounting equation indicated the following account balances. Use the form in your Working Papers to complete this problem.

$$\begin{matrix} \text{Trans. } & \text{} & \text{Assets =} & \text{} & \text{Liabilities +} & \text{} & \text{Owner 's Equity}\\ \text{No.} & \text{Cash +} & \text{Accts. Rec.- 4Kids Daycare +} & \text{Supplies +} & \text{Prepaid Insurance =} & \text{Accts. Pay.- Ashl ey Tech Services +} & \text{Linda Liu, Capital}\\ \text{}{\begin{array}{c}{\text { Beg. Bal. }} \\ {\text { 1 }}\end{array}} & \text{7,542 } & \text{1,265} & \text{1,100 } & \text{600} & \text{3145} & \text{7362}\\ \end{matrix}$$

1. For each transaction, complete the following: a. Analyze the transaction to determine which accounts in the accounting equation are affected. b. Write the amount in the appropriate columns, using a plus sign(+) if the account increases or a minus sign( - ) if the account decreases. c. For transactions that change owner's equity, write in parentheses a description of the transaction to the right of the amount. d. Calculate the new balance for each account in the accounting equation. e. Before going on to the next transaction, determine that the accounting equation is still in balance. 2. Answer the following questions. a. Why can the owner of a business withdraw assets from that business for personal use? b. Why would the owner withdraw assets other than cash? Transactions: 1. Took $\$300.00$ of supplies for personal use. 2. Had computer repaired at Ashley Tech Services and agreed to pay Ashley Tech Services at a later date, $\$225.00$. 3. Linda Liu sold her personal book collection for $\$750.00$ cash. 4. Paid Ashley Tech Services, $\$125.00$.

Brian Ford owns a service business called Ford Lawn and Garden. Ford Lawn and Garden's general ledger accounts are given in the Working Papers. Transactions: Feb. 1. Received cash from owner as an investment, $\$11,000.00$. R1. 3. Paid cash for supplies, $\$800.00$. C1. 5. Received cash from sales, $\$1,800.00$. T5. 6. Sold services on account to Clara Walthers, $\$560.00$. S1. 9. Paid cash for rent, $\$1,200.00$. C2. 11. Paid cash for miscellaneous expense, $\$100.00$. C3. 13. Bought supp lies on account from Corner Supplies, $\$480.00$. M1. 13. Received cash from sales, $\$860.00$. T13. 16. Paid cash for advertising, $\$286.00$. C4 18. Paid cash on account to Corner Supplies, $\$280.00$. C5. 20. Paid cash for electric bill, $\$460.00$. C6.20. Received cash on account from Clara Walthers, $\$300.00$. R2.25. Paid cash for supplies, $\$300.00$. C7.27. Paid cash for supplies, $\$160.00$. CB.27. Received cash from sales, $\$4,200.00$. T27.28. Paid cash to owner for personal use, $\$1,000.00$. C9.28. Received cash from sales, $\$220.00$. T28. Prove cash. The balance on the next unused check stub is $\$13,794.00$.

Kajal Chauhan owns a service business called Deters Duplicating, which uses the following accounts.

$$\begin{matrix} \text{Accounts Receivable-J. Chin} & \text{Postage Expense}\\ \text{Accounts Receivable-A. Karn} & \text{Charitable Expense}\\ \text{Accounts Payable-River Company} & \text{Rent Expense}\\ \text{Accounts Payable-Sharma Supply} & \text{Insurance Expense}\\ \text{Kajal Chauhan, Capital} & \text{Supplies}\\ \text{Kajal Chauhan, Drawing} & \text{Sales}\\ \text{Prepaid Insurance} & \text{Cash}\\ \text{Advertising Expense}\\ \end{matrix}$$

1. Prepare a chart of accounts similar to the one described in this chapter. Arrange any accounts receivable, accounts payable, or expense accounts in alphabetical order. Use 3-digit account numbers and number the accounts within a division by 10s. 2. Two new accounts, Delivery Expense and Telephone Expense, are to be added to the chart of accounts prepared in Part 1. Assign account numbers to the two new accounts. 3. Using the forms in the Working Papers, open the Prepaid Insurance and the Postage Expense accounts.

Fill in the blanks. The equation

$$(x - h)^2 + (y-k)^2=r^2$$

is the standard form of the equation of a ________ with center ________ and radius ________.