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 item as an asset, liability, revenue, or expense from the company’s viewpoint. Also indicate the normal account balance of each item.

Exercises CHAPTER 2
    1. 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 item 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 f. Land held as an investment g. A new fax machine purchased for of!ce use h. Amounts to be paid in 10 days to suppliers i. Amounts paid to a mall for rent 2. General journal and general ledger content. St. James Services uses a general journal and general ledger to process transactions. Assume that the volume of transactions has grown in recent months and that all posting procedures have already been performed. A manager has requested that you provide the following data: a. The total amounts that clients owe the !rm as of May 31 b. The accounts that were increased or decreased by a particular transaction on a speci!c date c. The total cash received during May d. The reason for a cash disbursement on May 14 e. A dated listing of all decreases to the Accounts Payable account during the month Evaluate the data requests of the manager independently and determine whether the requests can be answered most ef!ciently by a review of the company’s general journal or the general ledger. 3. Basic journal entries. The following April transactions pertain to the Jennifer Royall Company: 4/1: Received cash of $15,000 and land valued at $10,000 from Jennifer Royall as an investment in the business. 4/5: Provided $1,200 of services to Jason Ratchford, a client. 4/5: Ratchford agreed to pay $800 in 15 days and the remaining amount in May. 4/9: Paid $250 in salaries to an employee. 4/19: Acquired a new computer for $3,200; Royall will pay the dealer in May. 4/20: Collected $800 from Jason Ratchford for services provided on April 5. 4/24: Borrowed $7,500 from Best Bank by securing a 6-month loan Problems CHAPTER 2 Prepare journal entries (and explanations) to record the preceding transactions and events. 4. Trial balance preparation. Brighton Company began operation on March 1 of the current year. The following account balances were extracted from the general ledger on March 31; all accounts have normal balances. Accounts Payable $ 12,000 Interest Expense $ 300 Accounts Receivable 8,800 Land ? Advertising Expense 5,700 Loan Payable 26,000 Bob Brighton, Capital 30,000 Salaries Expense 11,100 Cash 22,500 Utilities Expense 700 Fees Earned 18,900 a. Determine the cost of the company’s land by preparing a trial balance. b. Determine the !rm’s net income for the period ending March 31. 5. Trial balance errors. You are reviewing the month-end trial balance for Schirmer Enterprises and discover various errors [parts (a)2(f)]. Identify the effect of the errors on the trial balance by using the following codes. Where appropriate, indicate the amount of the error. 1—Debits will exceed credits by $___________. 2—Credits will exceed debits by $___________. 3—Debits will be equal to credits. a. Failed to record $1,000 of service revenue charged to customers at month-end. b. Incorrectly understated the balance in the Cash account by $2,500. c. Recorded the collection of $400 on account as a debit to Cash and a debit to Accounts Receivable. d. Recorded the $5,000 balance of Equipment in the credit column of the trial balance. e. Recorded payment of the month’s $700 utility bill as a $700 debit to Utilities Expense and a $70 credit to Cash. f. Recorded a $3,000 payment on account as a debit to Repairs Expense and a credit to Cash.     1. Transaction analysis and trial balance preparation. The T-accounts that follow were taken from the books of Miller Data Processing on December 31 of the current year. Letters in the accounts reference speci!c transactions of the !rm. Cash (a) 35,000 (d) 3,000 (b) 10,000 (h) 1,500 (f) 8,000 (j) 800 (i) 400

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