ACCOUNTING CYCLE - EXTRA PRACTICE
CHAPTER 2
Problem 1
Kat's Cat Klinic had the following balance sheet as of December 31, 2020:
The following economic events occurred during 2021:
Performed services for $174,000, all on account.
Paid $157,000 for salaries that were due. (THINK!)
Collected $116,000 from customers on account.
Received $34,000 for services to be performed.
Paid $7,800 due for utilities. (THINK!)
Performed services totaling $212,000 of which $68,000 was received in cash.
Purchased $39,000 worth of supplies and paid cash.
Paid $5,000 for interest due on note. (THINK!)
Wrote off uncollectible bad debt of $14,300. (See notes, 2030 text or page 349.)
Paid $147,000 for salaries.
Collected $186,000 on account.
Paid $18,000 on account.
Issued 60,000 shares of $1 par value common stock and received $280,000. (See note 2030 text or page 1058.)
Performed services totaling $284,200 of which $79,000 was received in cash.
Declared and paid a cash dividend of $72,000. (Use a dividend account. See notes.)
ACCT 3010-SPRING2024
Problem 1
CHAPTER 2
Assets: Cash Liabilities and Stockholders' Equity $195,000 Accounts Payable $23,000 Accounts Receivable $70,000 Less Allowance Salaries Payable $11,400 $4,500 $65,500 Utilities Payable $2,100 Prepaid Insurance Supplies $31,000 Interest Payable $3,800 Building $29,000 Deferred Revenue $13,500 $510,000 Notes Payable $57,000 Accum Depr - Build ($185,000) $325,000 Common Stock $225,000 Equipment $385,000 APIC $403,000 Accum Depr - Equip ($110,000) $275,000 Retained Earnings $181,700 $920,500 $920,500
4. Paid $7,800 due for utilities. (THINK!)
10. Paid $147,000 for salaries.
11. Collected $186,000 on account.
12. Paid $18,000 on account.
