Suggested SolutionChapter 11. Effect on the accounting equation(1)(2)(3)(4)(5)(6)(a) Increase in one asset, decrease in another asset.(b) Increase in an asset, increase in a liability.(c) Increase in an asset, increase in capital.(d) Decrease in an asset, decrease in a liability.(e) Decrease in an asset, decrease in capital.2. TransactionsAssets+/-Liabilities+/-Owners equity+/-1+2+3-4+5+6-7-8+/-9-10-3. Describe each transaction based on the summary above.Transactions1Purchased land for cash, $6,000.2Investment for cash, $3,200.3Paid expense $1,200.4Purchased supplies on account, $800.5Paid owners personal use, $750.6Paid creditor, $1,5007Supplies used during the period, $630.4.AssetsLiabilitiesEquity Beginning275,00080,000195,000 Add. investment48,000 Add. Net income27,000 Less withdrawals-35,000Ending320,00085,000235,0005.(a)March 31, 20XXApril 30, 20XXAssets Cash 4,5005,400 Accounts receivable2,5604,100Supplies840450 Total assets7,9009,950Liabilities Accounts payable430690Equity Tina Pierce, Capital7,4709,260(b) net income = 9,260-7,470=1,790(c) net income = 1,790+2,500=4,290Chapter 21.a. To increase Notes Payable -CRb. To decrease Accounts Receivable-CRc. To increase Owner, Capital -CRd. To decrease Unearned Fees -DRe. To decrease Prepaid Insurance -CRf. To decrease Cash - CRg. To increase Utilities Expense -DRh. To increase Fees Earned -CRi. To increase Store Equipment -DRj. To increase Owner, Withdrawal -DR2.a.Cash1,800 Accounts payable1,800b.Revenue4,500 Accounts receivable 4,500c.Owners withdrawals1,500 Salaries Expense1,500d.Accounts Receivable750 Revenue 7503. Prepare adjusting journal entries at December 31, the end of the year.Advertising expense600 Prepaid advertising 600Insurance expense (2160/12*2)360 Prepaid insurance360Unearned revenue2,100 Service revenue2,100Consultant expense900 Prepaid consultant900Unearned revenue3,000 Service revenue3,0004. 1. $388,4002. $22,5203. $366,6004. $21,8005. 1.net loss for the year ended June 30, 2002: $60,0002.DR Jon Nissen, Capital 60,000 CR income summary 60,0003.post-closing balance in Jon Nissen, Capital at June 30, 2002: $54,000Chapter 31. Dundee Realty bank reconciliationOctober 31, 2009Reconciled balance $6,220Reconciled balance $6,2202. April 7Dr: Notes receivableA company5400Cr: Accounts receivableA company5400 12Dr: Cash5394.5Interest expense5.5Cr: Notes receivable5400June 6Dr: Accounts receivableA company5533Cr: Cash553318Dr: Cash5560.7Cr: Accounts receivableA company5533Interest revenue27.73. (a) As a whole: the ending inventory=685(b) applied separately to each product: the ending inventory=6254. The cost of goods available for sale=ending inventory + the cost of goods=80,000+200,000*500%=80,000+1,000,000=1,080,0005.(1) 24,000+60,000-90,000*0.8=12000(2) (60,000+24,000)/( 85,000+31,000)*( 85,000+31,000-90,000)=18828Chapter 41. (a) second-year depreciation = (114,000 5,700) / 5 = 21,660; (b) second-year depreciation = 8,600 * (114,000 5,700) / 36,100 = 25,800; (c) first-year depreciation = 114,000 * 40% = 45,600 second-year depreciation = (114,000 45,600) * 40% = 27,360; (d) second-year depreciation = (114,000 5,700) * 4/15 = 28,880.2. (a) weighted-average accumulated expenditures (2008) = 75,000 * 12/12 + 84,000 * 9/12 + 180,000 * 8/12 + 300,000 * 7/12 + 100,000 * 6/12 = 483,000 (b) interest capitalized during 2008 = 60,000 * 12% + ( 483,000 60,000) * 10% =49,5003. (1) depreciation expense = 30,000 (2) book value = 600,000 30,000 * 2=540,000 (3) depreciation expense = ( 600,000 30,000 * 8)/16 =22,500 (4) book value = 600,000 30,000 * 8 22,500 = 337,5004. Situation 1: Jan 1st, 2008 Investment in M 260,000 Cash 260,000 June 30 Cash 6000 Dividend revenue 6000Situation 2:January 1, 2008 Investment in S 81,000 Cash 81,000June 15 Cash 10,800 Investment in S 10,800December 31 Investment in S 25,500 Investment Revenue