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Finance and Accounting

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Case Study 1 (Part A)

P2-69B
(Learning Objectives 4, 5, 6: Analyze the impact of business transactions on accounts; record (journalize and post) transactions in the books; construct and use a trial balance) During the first month of operations, Johnson Plumbing, Inc., completed the following transactions: Mar 2 | Johnson received $35,000 cash and issued common stock to the stockholders. | 3 | Purchased supplies, $200, and equipment, $3,200, on account. | 4 | Performed services for a client and received cash, $1,400. | 7 | Paid cash to acquire land, $24,000. | 11 | Performed services for a customer and billed the customer, $800. Johnson expects to collect within one month. | 16 | Paid for the equipment purchased March 3 on account. | 17 | Paid the telephone bill, $150. | 18 | Received partial payment from customer on account, $400. | 22 | Paid the water and electricity bills, $170. | 29 | Received $1,500 cash for repairing the pipes of a customer. | 31 | Paid employee salary, $1,800. | 31 | Declared and paid dividends of $2,100. |
▸Requirements
* 1. Record each transaction in the journal. Key each transaction by date. Explanations are not required. * 2. Post the transactions to the T-accounts, using transaction dates as posting references. * 3. Prepare the trial balance of Johnson Plumbing, Inc., at March 31 of the current year. * 4. The manager asks you how much in total resources the business has to work with, how much it owes, and whether March was profitable (and by how much).

Case Study 1 (Part B)
P3-77B
(Learning Objectives 3, 4: Adjust the accounts; construct the financial statements) Consider the unadjusted trial balance of Princess, Inc., at August 31, 2012, and the related month-end adjustment data.

Adjustment data at August 31, 2012, include the following: * a. Accrued advertising revenue at

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