Exercise 3-1

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Ryan Duckworth

Financial Accounting

Module 3 Homework

Mar 6, 2013

Exercise 3-1 Types of Events

External Event Transaction (E)

Internal Event Transaction (I)

Not Recorded (NR)

1. E 5. I

2. E 6. NR

3. NR 7. E

4. E 8. I

Exercise 3-3 The Effect of Transactions on the Accounting Equation

Increases (I)

Decreases (D)

No Effect (NE)

Assets = Liabilities + Stockholders' Equity

1. NE NE NE

2. I NE I

3. I NE I

4. D D NE

5. NE NE NE

6. I I NE

7. D NE D

8. D NE D

9. I NE I

Problem 3-2 Transaction Analysis and Financial Statements

1. Just Rolling Along Inc. Transactions for the month of May 2012:

Assets = Liabilities + Stockholders’ Equity

Accounts Accounts Capital Retained

Date Cash Receivable Equipment Supplies Payable Stock Earnings

5/1 $ 18,000 $18,000

5/1 $ 3,000 $ 3,000

Bal. $ 18,000 $ 3,000 $ 3,000 $ 18,000

5/5 –15 $ –15

Bal. $ 17,985 $ 3,000 $ 3,000 $ 18,000 $ (15)

5/9 –4,400 4,400

Bal. $ 13,585 $ 7,400 $ 3,000 $ 18,000 $ (15)

5/10 $ 100 100

Bal. $ 13,585 $ 7,400 $ 100 $ 3,100 $ 18,000 $ (15)

5/15 –125 –125

Bal. $ 13,460 $ 7,400 $ 100 $ 3,100 $ 18,000 $ (140)

5/17 1,800 1,800

Bal. $ 15,260 $ 7,400 $ 100 $ 3,100 $ 18,000 $ 1,660

5/24 $ 1,200 1,200

Bal. $ 15,260 $ 1,200 $ 7,400 $ 100 $ 3,100 $ 18,000 $ 2,860

5/29 600 –600

Bal. $ 15,860 $ 600 $ 7,400 $ 100 $ 3,100 $ 18,000 $ 2,860

5/30 3,000 3,000

Bal. $ 18,860 $ 600 $ 7,400 $ 100 $ 3,100 $ 18,000 $ 5,860

5/30 –160 –160

Bal. $ 18,700 $ 600 $ 7,400 $ 100 $ 3,100 $ 18,000 $ 5,700

5/31 –3,000 –3,000

Bal. $ 15,700 $ 600 $ 7,400 $ 100 $ 100 $ 18,000 $ 5,700

TOTAL ASSETS: $23,800 TOTAL LIABILITIES AND

STOCKHOLDERS’ EQUITY: $23,800

PROBLEM 3-2 (Concluded)

2. JUST ROLLING ALONG INC.

INCOME STATEMENT...