PROBLEM 3.3A

Analyzing and Journalizing Transactions

Weida Surveying, Inc., provides land surveying services. During September, its transactions included the following.

Sept. 1	Paid rent for the month of September, $4,400.
Sept. 3	Billed Fine Line Homes $5,620 for surveying services. The entire amount is due on or before September 28. (Weida uses an account entitled Surveying Revenue when billing clients.)
Sept. 9	Provided surveying services to Sunset Ridge Developments for $2,830. The entire amount was collected on this date.
Sept. 14	Placed a newspaper advertisement in the Daily Item to be published in the September 20 issue. The cost of the advertisement was $165. Payment is due in 30 days.
Sept. 25	Received a check for $5,620 from Fine Line Homes for the amount billed on September 3.
Sept. 26	Provided surveying services to Thompson Excavating Company for $1,890. Weida collected $400 cash, with the balance due in 30 days.
Sept. 29	Sent a check to the Daily Item in full payment of the liability incurred on September 14.
Sept. 30	Declared and paid a $7,600 cash dividend to the companys stockholders.

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Instructions

1. Analyze the effects that each of these transactions will have on the following six components of the companys financial statements for the month of September. Organize your answer in tabular form, using the column headings shown. Use I for increase, D for decrease, and NE for no effect. The September 1 transaction is provided for you.

2. Prepare a journal entry (including explanation) for each of these transactions.

3. Three of Septembers transactions involve cash payments, yet only one of these transactions is recorded as an expense. Describe three situations in which a cash payment would not involve recognition of an expense.

LO3-1, LO3-2, LO3-3, LO3-4, LO3-5, LO3-6, LO3-7, LO3-8, LO3-9, LO3-10

PROBLEM 3.4A

The Accounting Cycle: Journalizing, Posting, and Preparing a Trial Balance

In June, current year, Wendy Winger organized a corporation to provide aerial photography services. The company, called Aerial Views, began operations immediately. Transactions during the month of June were as follows.

June 1	The corporation issued 60,000 shares of capital stock to Wendy Winger in exchange for $60,000 cash.
June 2	Purchased a plane from Utility Aircraft for $220,000. Made a $40,000 cash down payment and issued a note payable for the remaining balance.
June 4	Paid Woodrow Airport $2,500 to rent office and hangar space for the month.
June 15	Billed customers $8,320 for aerial photographs taken during the first half of June.
June 15	Paid $5,880 in salaries earned by employees during the first half of June.
June 18	Paid Hannigans Hangar $1,890 for maintenance and repair services on the company plane.
June 25	Collected $4,910 of the amounts billed to customers on June 15.
June 30	Billed customers $16,450 for aerial photographs taken during the second half of the month.
June 30	Paid $6,000 in salaries earned by employees during the second half of the month.
June 30	Received a $2,510 bill from Peatree Petroleum for aircraft fuel purchased in June. The entire amount is due July 10.
June 30	Declared a $2,000 dividend payable on July 15.

The account titles used by Aerial Views are:

Cash	Retained Earnings
Accounts Receivable	Dividends
Aircraft	Aerial Photography Revenue
Notes Payable	Maintenance Expense
Accounts Payable	Fuel Expense
Dividends Payable	Salaries Expense
Capital Stock	Rent Expense

Instructions

1. Analyze the effects that each of these transactions will have on the following six components of the companys financial statements for the month of June. Organize your answer in tabular form, using the column headings shown. Use I for increase, D for decrease, and NE for no effect. The June 1 transaction is provided for you.

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2. Prepare journal entries (including explanations) for each transaction.

3. Post each transaction to the appropriate ledger accounts (use a running balance format as illustrated in Exhibit 34).

4. Prepare a trial balance dated June 30, current year.

5. Using figures from the trial balance prepared in part d, compute total assets, total liabilities, and owners equity. Are these the figures that the company will report in its June 30 balance sheet? Explain your answer briefly.