The following accounts appeared in recent financial statements of Delta Air Lines:

Identify each account as either a balance sheet account or an income statement account. For each balance sheet account, identify it as an asset, a liability, or owner’s equity. For each income statement account, identify it as a revenue or an expense.

Oak Interiors is owned and operated by Fred Biggs, an interior decorator. In the ledger of Oak Interiors, the first digit of the account number indicates its major account classification (1—assets, 2—liabilities, 3—owner’s equity, 4—revenues, 5—expenses). The second digit of the account number indicates the specific account within each of the preceding major account classifications.

Match each account number with its most likely account in the list that follows. The account numbers are 11, 12, 13, 21, 31, 32, 41, 51, 52, and 53.

Outdoor Leadership School is a newly organized business that teaches people how to inspire and influence others. The list of accounts to be opened in the general ledger is as follows:

List the accounts in the order in which they should appear in the ledger of Outdoor Leadership School and assign account numbers. Each account number is to have two digits: the first digit is to indicate the major classification (1 for assets, for example), and the second digit is to identify the specific account within each major classification (11 for Cash, for example).

The following table summarizes the rules of debit and credit. For each of the items (a) through (l), indicate whether the proper answer is a debit or a credit.

During the month, Midwest Labs Co. has a substantial number of transactions affecting each of the following accounts. State for each account whether it is likely to have (a) debit entries only, (b) credit entries only, or (c) both debit and credit entries.

1. Accounts Payable

2. Accounts Receivable

3. Cash

4. Fees Earned

5. Insurance Expense

6. Jerri Holt, Drawing

7. Utilities Expense

Identify each of the following accounts of Dispatch Services Co. as asset, liability, owner’s equity, revenue, or expense and state in each case whether the normal balance is a debit or a credit:

1. Accounts Payable

2. Accounts Receivable

3. Ashley Griffin, Capital

4. Ashley Griffin, Drawing

5. Cash

6. Fees Earned

7. Office Equipment

8. Rent Expense

9. Supplies

10. Wages Expense

Simmons Consulting Co. has the following accounts in its ledger: Cash; Accounts Receivable; Supplies; Office Equipment; Accounts Payable; Michael Short, Capital; Michael Short, Drawing; Fees Earned; Rent Expense; Advertising Expense; Utilities Expense; Miscellaneous Expense.

Journalize the following selected transactions for October 20Y3 in a two-column journal. Journal entry explanations may be omitted.

On September 18, 20Y4, Carbon Company purchased $8,710 of supplies on account. In Carbon Company’s chart of accounts, the supplies account is No. 15, and the accounts payable account is No. 21. https://homeworkcrew.com/

1. Journalize the September 18, 20Y4, transaction on Page 87 of Carbon Company’s two-column journal. Include an explanation of the entry.

2. Prepare a four-column account for Supplies. Enter a debit balance of $2,960 as of September 1, 20Y4. Place a check mark (✓) in the Posting Reference column.

3. Prepare a four-column account for Accounts Payable. Enter a credit balance of $38,400 as of September 1, 20Y4. Place a check mark (✓) in the Posting Reference column.

4. Post the September 18, 20Y4, transaction to the accounts.

5.  Do the rules of debit and credit apply to all companies?

The following selected transactions were completed during August of the current year:

1. Billed customers for fees earned, $73,900.

2. Purchased supplies on account, $1,960.

3. Received cash from customers on account, $62,770.

4. Paid creditors on account, $820.

1. Journalize these transactions in a two-column journal, using the appropriate number to identify the transactions. Journal entry explanations may be omitted.

2. Post the entries prepared in (a) to the following T accounts: Cash, Supplies, Accounts Receivable, Accounts Payable, Fees Earned. To the left of each amount posted in the accounts, place the appropriate number to identify the transactions.

3.  Assume that the unadjusted trial balance on August 31 shows a credit balance for Accounts Receivable. Does this credit balance mean that an error has occurred?

During the month, Warwick Co. received $515,000 in cash and paid out $375,000 in cash.

1.  Do the data indicate that Warwick Co. had net income of $140,000 during the month? Explain.

2. If the balance of the cash account is $200,000 at the end of the month, what was the cash balance at the beginning of the month?

As of January 1, Terrace Waters, Capital had a credit balance of $500,000. During the year, withdrawals totaled $10,000, and the business incurred a net loss of $320,000.

1. Compute the balance of Terrace Waters, Capital as of the end of the year.

2.  Assuming that there have been no recording errors, will the balance sheet prepared at December 31 balance? Explain.

Emerald Tours Co. is a travel agency. The nine transactions recorded by Emerald Tours during May 20Y5, its first month of operations, are indicated in the following T accounts:

Indicate for each debit and each credit (a) whether an asset, liability, owner’s equity, drawing, revenue, or expense account was affected and (b) whether the account was increased (+) or decreased (–). Present your answers in the following form, with transaction (1) given as an example:

Based upon the T accounts in Exercise 2-13, prepare the nine journal entries from which the postings were made. Journal entry explanations may be omitted.

Based upon the data presented in Exercise 2-13, (a) prepare an unadjusted trial balance, listing the accounts in their proper order. (b) Based upon the unadjusted trial balance, determine the net income or net loss.

The accounts in the ledger of Hickory Furniture Company as of December 31, 20Y6, are listed in alphabetical order below. All accounts have normal balances. The balance of the cash account has been intentionally omitted.

Prepare an unadjusted trial balance, listing the accounts in their normal order and inserting the missing figure for cash.

Indicate which of the following errors, each considered individually, would cause the trial balance totals to be unequal:

1. A fee of $21,000 earned and due from a client was not debited to Accounts Receivable or credited to a revenue account, because the cash had not been received.

2. A receipt of $11,300 from an account receivable was journalized and posted as a debit of $11,300 to Cash and a credit of $11,300 to Fees Earned.

3. A payment of $4,950 to a creditor was posted as a debit of $4,950 to Accounts Payable and a debit of $4,950 to Cash.

4. A payment of $5,000 for equipment purchased was posted as a debit of $500 to Equipment and a credit of $500 to Cash.

5. Payment of a cash withdrawal of $19,000 was journalized and posted as a debit of $1,900 to Salary Expense and a credit of $19,000 to Cash.

Indicate which of the preceding errors would require a correcting entry.

The following preliminary unadjusted trial balance of Ranger Co., a sports ticket agency, does not balance:

When the ledger and other records are reviewed, you discover the following: (1) the debits and credits in the cash account total $77,600 and $62,100, respectively; (2) a billing of $9,000 to a customer on account was not posted to the accounts receivable account; (3) a payment of $4,500 made to a creditor on account was not posted to the accounts payable account; (4) the balance of the unearned rent account is $5,400; (5) the correct balance of the equipment account is $190,000; and (6) each account has a normal balance.

Prepare a corrected unadjusted trial balance.

The following errors occurred in posting from a two-column journal:

1. A credit of $6,000 to Accounts Payable was not posted.

2. An entry debiting Accounts Receivable and crediting Fees Earned for $5,300 was not posted.

3. A debit of $2,700 to Accounts Payable was posted as a credit.

4. A debit of $480 to Supplies was posted twice.

5. A debit of $3,600 to Cash was posted to Miscellaneous Expense.

6. A credit of $780 to Cash was posted as $870. https://homeworkcrew.com/

7. A debit of $12,620 to Wages Expense was posted as $12,260.

Considering each case individually (i.e., assuming that no other errors had occurred), indicate (a) by “yes” or “no” whether the trial balance would be out of balance; (b) if answer to (a) is “yes,” the amount by which the trial balance totals would differ; and (c) whether the Debit or Credit column of the trial balance would have the larger total. Answers should be presented in the following form, with error (1) given as an example:

Identify the errors in the following trial balance. All accounts have normal balances.

The following errors took place in journalizing and posting transactions:

1. Insurance of $18,000 paid for the current year was recorded as a debit to Insurance Expense and a credit to Prepaid Insurance.

2. A withdrawal of $10,000 by Brian Phillips, owner of the business, was recorded as a debit to Wages Expense and a credit to Cash.

Journalize the entries to correct the errors. Omit explanations.

The following errors took place in journalizing and posting transactions:

1. Cash of $8,800 received on account was recorded as a debit to Fees Earned and a credit to Cash.

2. A $1,760 purchase of supplies for cash was recorded as a debit to Supplies Expense and a credit to Accounts Payable.

Journalize the entries to correct the errors. Omit explanations.

The following data (in millions) were taken from the financial statements of Target Corporation:

1. For Target Corporation, determine the amount of change in millions and the percent of change (round to one decimal place) from the prior year to the recent year for:https://homeworkcrew.com/

   1. Revenue

   2. Operating expenses

   3. Operating income

   Answer

   Check Figure: 1. 3.6% decrease

2.  What conclusions can you draw from your analysis of the revenue and the total operating expenses?

The following data (in millions) were taken from the financial statements of Costco Wholesale Corporation:

1. For Costco, determine the amount of change in millions and the percent of change (round to one decimal place) from the prior year to the recent year for:

   1. Revenue

   2. Operating expenses

   3. Operating income

   Answer

   Check Figure: 2. 9.8% increase

2.  Comment on the results of your horizontal analysis in part (a).

3. Based upon Exercise 2-23, compare and comment on the operating results of Target and Costco for the recent year.