Question

CHAPTER Case A Case B Case C $ 120 260 3,170 $ 3.900 1.900 12.900 $ 59 46 791 $ 190 1.100 $ 2.350 16.150 $72 229 Cash Accounts receivable Equipment Accounts payable Capital withdrawals Revenue.. Wages expense Total 850 7.000 0 3,000 9,600 610 8,700 $34 400 $5.010 $4,290 10 $906 $28.100 $942 PROBLEMS Problem 2-1A Analyzing transactions and recording journal entries L03,5 Tobias Eaden started a sole proprietorship named Sky High Ads. A customer's message can be displayed on an airplane banner across the city. Sky High Ads had the following business activities during the month of November 2020: Nov 1 Invested $200,000 cash and aircraft equipment with a $50,000 fair value in a new sole proprietorship named Sky High Ads 3 Purchased land and a small office building. The land was worth $400,000, and the building was worth $100,000 The purchase price was paid with $125,000 cash and a long-term note payable for the balance 7 Eaden transferred title of his personal airplane to the business. The airplane had a value of $200,000 and was to be used exclusively in the business. 9 Purchased $5,000 of supplies on credit. Provided services to a customer for a marriage proposal and collected $16,000 on credit Paid $3,000 wages to a pilot Signed an advertising contract to commence in January. A deposit of $250 must be paid by December 15. Paid for half of the account payable from the November 9 transaction Purchased $20,000 of new aircraft equipment by paying $15.000 cash and trading in old aircraft equipment with a 30 Withdrew $3.200 cash from the business for personal use. Required for each transaction, (1) complete the analysis, (2) determine the journal entry analysis, and (3) record the journal entry. Use the template below. Nov 1 Analysis Journal entry analysis Journal Entry 13 17 21 23 27 Date Account Titles and Explanation Debit Credit Nov 3

please help me analyze this problem. thank you

From problem 2-1 to 2-5

Answer 1

Journal Entry in the books of Sky High ads

	Date	Account Title and Explanation		Debit($)	Credit($)
	Nov 1	Analysis Increase in Assets (Cash) by 200,000 Therefore, Debit it (All Increase in Assets). Increase in Asset (Aircraft) by 50,000, therefore, Debit it (All Increase in Assets.) Increase in Capital by 250,000 therefore, Credit it (All Increase in Liabilities and Capital.) Entry as Follows:- Cash A/c Dr. Aircraft Equipment A/c Dr. To Capital A/c (Being business started with cash and aircraft equipment)		200,000 50,000	250,000
	Nov 3	Analysis Increase in Assets (Land) By 400,0000 ==> Debit it ( All increase in Assets) Increase in Assets (Building) by 100,000 ==> Debit it (All increase in Assets) Decrease in Assets (Cash) by 125,000) ==> Credit it (All decrease in Assets) Increase in Liability (Loan) by 375,000 ==> Credit it ( All Increase in Liability) Entry Land a/c Dr. Building A/c Dr. To Cash A/c To Long term loan A/c ( Being land and building purchased for cash and long term loan)		400,000 100,000	125,000 375,000
	Nov 7	Analysis Increase in Asset (Airplane) by 200,000 ==> Debit it Increase in Capital (As it it brought from home)by 200000 ==> Credit it Airplane A/c Dr. To Capital A/c (Being Airplan brought into the business)		200,0000	200,000
	Nov 9	Analysis Increase in Asset ( Purchase of stock ) by 5000 ==> Debit it Increase in liability (Creditors) ==> Credit it Purchases A/c Dr. To Creditors A/c (Being Supplies bought for the busniess)		5000	5000
	Nov 13	Analysis Increase in Assets( Cash) ==> Debit it Increase in revenue ( Sales) ==> Credit it Entry Cash A/c Dr. To Sales A/c ( Being Cash received for services provided)		16000	16000
	Nov 17	Analysis Increase in Expenses ( Wages) ==> debit it Decrease in Asset (Cash) ==> Credit it Wages A/c Dr. To Cash A/c (Being Wages paid to pilot )		3000	3000
	NOv 21	No Entry		-	-
	Nov 23	Analysis Decrease in Liability ( amt paid to creditors) ==> Debit it decrease in Cash ( Asset) ==> Credit it Creditors A/c Dr. To Cash A/c (Being Payment made to creditors)		2500	2500
	Nov 27	Analysis Here, we is purchased new aircraft in cash and by exchanging the old aircraft . As the Book Value of old Aircraft is 50000 and it is exchanged for just 5000 therefore we wil record rest amt as loss on sale of aircraft INcrease in Asset ( Purchase of New Aircraft) ==> Debit it Loss on exchange of old aircraft there debit it as debit - All Expenses and losses Decrease in Cash ( Asset)- Credit it Decrease in Asset ( Old Aircraft ) - Credit it Entry as follows New Aircraft A/c Dr. Loss on exchange of aircraft A/c Dr. To Cash A/c To Old Aircraft A/c (Being New Aircraft purchase for Rs. 20000 and 15000 paid in cash and 5000 paid in exchange of old aircraft)		20000 45000	15,000 50,000
	Nov 30	Anaylsis Cash withdrawn from business is called drawings. Drawing is opposite of Capital Decrease in Capital ( Drawing) == Debit it Decrease in Assets( Cash ) == > Crebit it Drawing A/c Dr. To Cash A/c (Being Cash withdrawn from business for personal use)		3200	3200

Modern Rules of accounting (Classification of Accounts):

As per modern rules of accounting, transaction will be categorised into 6 heads or accounts and any increase or decrease in such account will either be debited or credited in the manner shown in the table given below:

Types of Account	Account to be debited	Account to be credited
Assets account	Increase	Decrease
Liabilities account	Decrease	Increase
Capital account	Decrease	Increase
Revenue account	Decrease	Increase
Expenditure account	Increase	Decrease
Withdrawal account	Increase	Decrease