Question

Obj. 2 BE 2-1 Rules of debit and credit and normal balances State for each account whether it is likely to have (a) debit entries only, (b) credit entries only or (c) both debit and credit entries. Also, indicate its normal balance. 1. Accounts Payable 2. Cash 3. Dividends 4. Miscellaneous Expense 5. Insurance Expense 6. Fees Earned BE 2-2 Journal entry for asset purchase Prepare a journal entry for the purchase of office supplies on November 2 for $1,600, paying $500 cash and the remainder on account. Obj. 2 BE 2-3 Journal entry for fees earned Prepare a journal entry on August 13 for cash received for services rendered, $9,000. Obj. 3 BE 2-4 Journal entry for dividends Prepare a journal entry on June 30 for dividends of $11,500. Obj. 3 BE 2-5 Missing amount from an account On August 1, the supplies account balance was $1,025. During August, supplies of $3,110 were purchased, and $1,324 of supplies were on hand as of August 31. Determine supplies expense Obj. 3

Answer 1

	Req 2-1
	Accounts Name			Entries			Normal balance
1	Accounts payable			both debit and credit entries			Credit balance
2	Cash			both debit and credit entries			Debit balance
3	Dividend			Debit entries			Debit balance
4	Miscellaneous expenses			Debit entries			Debit balance
5	Insurance expenses			Debit entries			Debit balance
6	Fees earned			Credit entries			Credit balance
	Note:
	Accounts payable has credit entries for purchases made on credit and debit entries for cash payment, returns, etc
	Note:
	Cash accounts has debit entries for all types of receipts and credit entries for payments made.
	Req 2-2
	Journal entry:
	Date	Accounts title and explanations				Debit $	Credit $
	2-Nov	office supplies Account				1600
		Cash account					500
		Accounts payable					1100
		(for supplies purchased on c redit and cash both)
	Req 2-3
	Journal entry:
	Date	Accounts title and explanations				Debit $	Credit $
	13-Aug	Cash account				9000
		Service revenue					9000
		(for services performed and cash received)
	Req 2-4
	Journal entry:
	Date	Accounts title and explanations				Debit $	Credit $
	30-Jun	Dividend account				11500
		Cash account					11500
		(for dividend paid)
	Req 2-5
	Supplies expenses for August
	Beginning Supplies inventory on Aug 01				1025
	Add: Purchases during Aug				3110
	Total supplies				4135
	Less: Ending Supplies inventory on Aug 31				1324
	Supplies expenses for August				2811