ACCT 2101
Principles of Accounting
Augusta University
Spring 2020
Dr. Lizzie Turner
Test 1
Name:_____________________________
Total Assets
Total Liabilities
Retained Earnings
Common. Stock
Dividends
Revenues
Expenses
January 1, 2017
$427,000
57,000
?
115,000
January 1, 2018
$452,000
67,500
?
115,000
(35,000)
311,000
?
What is the amount in Retained Earnings on January 1, 2017? (5 points)
What is the amount in Retained Earnings on January 1, 2018? (5 points)
What is the amount of Expenses during the year? (5 points)
Did the company report Net Income or Net Loss? Amount? (5 points)
Use the accounting equation to solve for unknown amounts. Show all your work.
Make the journal entries for the following: (20 points)
a. Richard started a business and contributed $10,000 and a building valued at $50,000 in
exchange for common stock.
b. Earned $12,000 for service revenue. $6000 was received and the rest has not been paid.
c. Purchased equipment for $6,000, $1000 down payment and the rest on account.
d. Paid $600 for office supplies.
e. Employees earned $1600 in wages each week. They are usually paid on Monday. But the
week is from Friday to Thursday (the business is only open 5 days a week (M-F) and
wages are the same each day). The year ends on Thursday. Be careful: when was the last
time they were paid and how much in wages have they earned since then? You are
making the journal entry to accrue all the wages since the last time they were paid.
f. Cash dividends of $700 were paid to stockholders.
g. Received a bill for $250 for the monthly utilities. The bill has not yet been paid.
DR
a.
b.
c.
d.
e.
f.
g
CR
Isaiah’s Automotive Services: Adjustment data at 12/31:
a. On December 9, Isaiah’s Automotive Services was contracted to preform services for a
client, receiving $10,000 in advance. The services are maintenance contract on a fleet.
Record this. By 12/31, Isaiah had performed $2,000 on the maintenance contract. Record
this Adjustment.
b. Isaiah prepaid six months of rent on November 1 (Assume the Prepaid Rent balance as
shown on the unadjusted trial balance represents the 6 months of rent prepaid on
November 1). Make the adjusting entry.
c. Isaiah purchased $600 in supplies on Dec. 10.
d. Depreciation for the equipment was recorded. Assume the equipment has a residual value
of $1,000 and Isaiah plans on using it 5 years. They have owned it 6 months of this year.
Use straight-line.
e. Isaiah received a bill for online advertising, $550. The Company will not pay for it until
January.
f. On 12/31, Isaiah had $800 in supplies. Don’t forget the purchases in part c.
1. Journalize the transactions and adjusting entries.
2. Prepare the Adjusted Trial Balance.
Isaiah’s Automotive Services
Unadjusted Trail Balance
December 31, 2018
Account
DR.
Cash
6,100
Accounts receivable
17,100
Prepaid Rent
12,400
Office Supplies Inventory
1,600
Equipment
20,000
CR.
Accumulated Depreciation-Equipment
Accounts Payable
4,700
Salaries Payable
1,600
Unearned Revenue
Common Stock
38,000
Retained Earnings
25,600
Dividends
8,000
Service Revenue
25,000
Salaries Expense
20,000
Rent Expense
8000
Depreciation Expense
Advertising Expense
1,700
Supplies Expense
Total
94,900
DR.
a.
b.
c.
d.
e.
f.
CR
Isaiah’s Automotive Service
Adjusted Trail Balance
December 31, 2018
Account
Cash
Accounts receivable
Prepaid Rent
Office Supplies Inventory
Equipment
Accumulated Depreciation-Equipment
Accounts Payable
Salaries Payable
Unearned Revenue
Common Stock
Retained Earnings
Dividends
Service Revenue
Salaries Expense
Rent Expense
Depreciation Expense
Advertising Expense
Supplies Expense
Total
DR.
CR.
Multiple Choice (20 points)_______________________________________________________
Accounting Equation (20 points)___________________________________________________
Journal Entries (20 points)________________________________________________________
Adjusting Journal Entries (20 points)________________________________________________
Adjusted Trial Balance (20 points)_______________________________________________
Total_________________________________________________________________________

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