Kevin Xie (SID #22871778) Brooks Homework #2: P3-2, P3-4 (Req 1-3) P3-2.

Recording Journal Entries a. Issued 2,000 shares of stock to investors for cash at $20 per share. Debit 40,000 Credit 40,000

UGBA 102A 9/17/13

Account Cash (+A) Contributed Capital (+SE)

b. Borrowed $60,000 from the bank to provide additional funding to begin operations; the note is due in two years. Account Cash (+A) Notes Payable (+L) c. Debit 60,000 Credit 60,000

Paid $1,500 for the current months rent of a warehouse and another $1,500 for next months rent. Debit 1,500 1,500 1,500 Credit 1,500

Account Rent Expense (+E, -SE) Cash (-A) Pre-Paid Expense (+A) Cash (-A)

d. Paid $2,400 for a one-year fire insurance policy on the warehouse (recorded as a prepaid expense). Account Prepaid Expense (+A) Cash (-A) Debit 2,400 Credit 2,400

e. Purchased furniture and fixtures for the warehouse for $15,000, paying $3,000 cash and the rest on account. The amount is due within 30 days. Account Equipment (+A) Cash(-A) Accounts Payable (+L) f. Debit 15,000 Credit 3,000 12,000

Purchased for $2,800 cash The University of Florida, UCLA, Texas A&M, and Michigan State University baseball caps as inventory to sell online. Debit 2,800 Credit 2,800

Account Inventory (+A) Cash (-A)

Kevin Xie (SID #22871778) Brooks g. Placed advertisements on Google for a total of $350 cash. Account Advertising Expense (+E, -SE) Cash (-A) Debit 350 Credit 350

UGBA 102A 9/17/13

h. Sold caps totaling $1,700, half of which was charged on account. The cost of the caps sold was $900. Account Cash (+A) Accounts Receivable (+A) Revenue (+R, +SE) Cost of Sales (+E, -SE) Inventory (-A) i. Debit 850 850 900 900 Credit

1700

Made full payment for the furniture and fixtures purchased on account in ( e ). Debit 12,000 Credit 12,000

Account Accounts Payable (-L) Cash (-A) j.

Received $210 from a customer on account. Debit 210 Credit 210

Account Cash (+A) Accounts Receivable (-A)

Kevin Xie (SID #22871778) Brooks P3-4 (1-3). Analyzing the Effects of Transactions Using T-Accounts, Preparing Financial
Statements, and Evaluating the Total Asset Turnover Ratio as a Manager

UGBA 102A 9/17/13

1. T-Accounts Cash Beg. Bal 0 (a) 27600 (e) 11000 (h) 2675 (k) 155 (m) 2400 (b) 5640 (d) 1430 (f) 11000 (g) 500 (i) 550 (j) 1500 (l) 130 Accounts Receivable Beg. Bal 0 (h) 325 (i) 155 End Bal 170

End. Bal 23080 Supplies Beg. Bal 0 (d) 1430 End Bal. 1430 Beg. Bal 0 (c) 5500 End Bal. 3100 Prepaid Expenses Beg. Bal 0 (b) 5640 End. Bal 5640 Furniture and Fixtures Beg. Bal 0 (f) 8250 End Bal 8250 Notes Payable Beg. Bal 0 (e) 11000 End Bal 11000 Sales Revenue Beg. Bal 0 (h) 3000 (m) 2400 End Bal. 5400 Beg. Bal 0 (f) 2750 End. Bal 2750 Accounts Payable (i) 550 Beg. Bal 0 (c) 5500 End Bal. 4950 Contributed Capital Beg. Bal 0 (a) 27,600 End Bal. 27600 Cost of Goods Sold (Expense) Beg. Bal 0 (h) 1200 (m) 1200 End Bal. 2400 Equipment Inventory (h) 1200 (m) 1200

Kevin Xie (SID #22871778) Brooks

UGBA 102A 9/17/13

Advertising Expense Beg. Bal 0 (g) 500 End Bal. 500 Repair Expense Beg. Bal 0 (l) 130 End Bal. 130

Wage Expense Beg. Bal 0 (j) 1500 End Bal. 1500

2. Summarized Income Statement: Bris Sweets Income Statement Month of February 28, 2011 Revenue Total sales revenue Total Revenue Expenses Cost of Goods Sold Expense Advertising Expense Wage Expense Repair Expense Total Expenses Pretax Income Net Income 3. Statement of Retained Earnings Gaslight Company Statement of Retained Earnings Year of December 31, 2011 Retained earnings, January 1, 2011 Net Income for 2011 Dividends for 2011 Retained earnings, December 31, 2011 $5,400 $5,400 $2,400 $500 $1,500 $130 $4,530 $870 $870

$0 $870 $0 $870

Kevin Xie (SID #22871778) Brooks 4. Balance Sheet Gaslight Company Balance Sheet December 31, 2011 Assets Cash Accounts Receivable Supplies Inventory Prepaid Expenses Equipment Owned Furniture and Fixtures Total Assets Liabilities Accounts Payable Notes Payable Total Liabilities Shareholders Equity Contributed Capital Retained Earnings Total Shareholders Equity Total Liability & Shareholders Equity

UGBA 102A 9/17/13

$23,080 $170 $1,430 $3,100 $5,640 $2,750 $8,250 $44,420 $4,950 $11,000 $15,950 $27,600 $870 $28,470 $44,420