Accounting, Week 2

* Individual Assignment: Ch. 1, 2, & 7 Textbook Exercises

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* Chapter 1:

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* Exercise E1-1

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Urlacher Company performs the following accounting tasks during the year.

__I____Analyzing and interpreting information.

__I____Classifying economic events.

___C__Explaining uses, meaning, and limitations of data.

___R___Keeping a systematic chronological diary of events.

__R____Measuring events in dollars and cents.

__R____Preparing accounting reports.

__c___Reporting information in a standard format.

__I__ _Selecting economic activities relevant to the company.

___C___Summarizing economic events.

Accounting is “an information system that identifies, records, and communicates the economic events of an organization to interested users.”

Instructions:

Categorize the accounting tasks performed by Urlacher as relating to the identification (I), recording (R), or communication (C) aspects of accounting.

* Exercise E1-5

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Meredith Cleaners has the following balance sheet items.

Accounts payable Liability Accounts receivable Asset

Cash Asset Notes payable Liability

Cleaning equipment Asset Salaries payable Liability

Cleaning supplies Asset Common stock Stockholders’ Equity

Instructions

Classify each item as an asset, liability, or stockholders’ equity.

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* Exercise E1-12

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The following information relates to Linda Stanley Co. for the year 2008.

Retained earnings, January 1, 2008 $ 48,000

Advertising expense $ 1,800

Dividends during 2008 6,000

Rent expense 10,400

Service revenue 62,500

Utilities expense 3,100

Salaries expense 30,000

Instructions

After analyzing the data, prepare an income statement and a retained earnings statement for the year ending December 31, 2008.

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* Linda Stanley Co.

* Income Statement

* For the Year Ended December 31, 2008

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