1. ASHFORD ACC 205 Week 1 Basic Accounting
Equations
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Due by Day 7. Basic Accounting Equations. Please complete each of the
exercises below in a word document. Save the document, and submit it in the
appropriate week using the Assignment Submission button.
1. Basic concepts. Jean's Marine Supply specializes in the sale of boating
equipment and acces-sories. Identify the items that follow as an asset (A), liability
(L), revenue (R), or expense (E) from the firm's viewpoint.
a. The inventory of boating supplies owned by the company.
b. Monthly rental charges paid for store space.
c. A loan owed to Citizens Bank.
d. New computer equipment purchased to handle daily record keeping.
e. Daily sales made to customers.
f. Amounts due from customers.
g. Land owned by the company to be used as a future store site.
h. Weekly salaries paid to salespeople.
2. Analysis of transactions.
Set up the following headings across a piece of paper:
+ Owner's Equity
By using "+" and "-," indicate the effect of each of the following transactions on
total assets, liabilities, and owner's equity:
a. Processed a $5,000 cash withdrawal for the owner.
b. Recorded the receipt of May's utility bill, to be paid in June.
c. Provided services to customers on account.
d. Paid the current month's advertising charges.

2. e. Purchased a $27,000 delivery truck by paying $5,000 down and securing a
loan for the remaining balance.
f. Received $11,000 cash from the owner as an investment in the business.
g. Returned a new computer and printer purchased earlier in the month on
account. The bill had not as yet been paid.
h. Paid the utility bill recorded previously in (b).
3. Balance sheet preparation.
The following data relate to Preston Company as of December 31, 19XX:
Building $44,000 Accounts receivable $24,000
Cash 17,000 Loan payable 30,000
J. Preston, capital 65,000 Land 21,000
Accounts payable ?
Prepare a balance sheet in good form as of December 31, 19XX.
4. Statement preparation
The following information is taken from the accounting records of Grimball
Cardiology at the close of business on December 31, 19X1: Accounts payable
$ 14,700
Surgery revenue
$175,000
Surgical expenses
80,000
Cash
60,000
Surgical equipment
37,000
Office Equipment

3. 118,000
Salaries expense
30,000
Rent expense
15,000
Accounts receivable
135,000
Loan payable
10,300
Utilities expense
5,000
19X1 owner withdrawals 22,000
Instructions
a. Prepare the income statement for Grimball Cardiology in good form.
b. Prepare a statement of owner's equity in good form.
c. Prepare Grimball's balance sheet in good form.
5. Recognition of normal balances
The following items appeared in the accounting records of Triguero's, a retail
music store that also sponsors concerts. Classify each of the items as an asset,
liability; revenue; or expense from the company's viewpoint. Also indicate the
normal account balance of each item.
a. The albums, tapes, and CDs held for sale to customers.
b. A long-term loan owed to Citizens Bank.
c. Promotional costs to publicize a concert.
d. Daily receipts for merchandise sold,
e. Amounts due from customers,

4. f. Land held as an investment,
g. A new fax machine purchased for office use.
h. Amounts to be paid in 10 days to suppliers,
i. Amounts paid to a mall for rent.
6. Basic journal entries
The following transactions pertain to the Jennifer Royall Company: Apr. 1
Received cash of $15,000 and land valued at $10,000 from
Jennifer Royall as an investment in the business.
5
Provided $1,200 of services to Jason Ratchford, a client.
Ratchford agreed to pay $800 in 15 days and the remaining amount in May.
9
Paid $250 of salaries to an employee.
14
Acquired a new computer for $3,200; Royall will pay the dealer in May.
20
Collected $800 from Jason Ratchford for services provided on April 5.
24
Borrowed $7,500 from BestBanc by securing a six-month loan.
Salariesexpense
2,300
Advertisingexpense
700