Financial Accounting: An Integrated Statements Approach, 2nd Edition

Malta Co. is a travel agency. The nine transactions recorded by Malta during February 2006, its

first month of operations, are indicated in the following T accounts:

188 Chapter 4 Accounting Information Systems

CASH

(1) 40,000 (2) 1,800

(7) 9,500 (3) 9,000

(4) 3,050

(6) 7,500

(8) 5,000

EQUIPMENT

(3) 24,000

DIVIDENDS

(8) 5,000

SUPPLIES

(2) 1,800 (9) 1,050

CAPITAL STOCK

(1) 40,000

OPERATING EXPENSES

(4) 3,050

(9) 1,050

ACCOUNTS RECEIVABLE

(5) 12,000 (7) 9,500

ACCOUNTS PAYABLE

(6) 7,500 (3) 15,000

SERVICE REVENUE

(5) 12,000

Indicate for each debit and each credit: (a) whether an asset, liability, stockholders’ equity, div-

idends, revenue, or expense account was affected and (b) whether the account was increased (+)

or decreased (–). Present your answers in the following form, with transaction (1) given as an

example:

Account Debited Account Credited

Transaction Type Effect Type Effect

(1) asset  stockholders’ equity 

Based upon the T accounts in Exercise 4–8, prepare the nine journal entries from which the post-

ings were made.

Based upon the data presented in Exercise 4–8, prepare a trial balance, listing the accounts in

their proper order.

The following accounts (in millions) were adapted from the financial statements of Apple

Computer, Inc., for the year ending September 25, 2004:

Accounts Payable $2,680 Other Assets $ 651

Accounts Receivable 1,005 Other Income (net) 57

Capital Stock 2,406 Other Liabilities 294

Cash 2,969 Other Operating Expenses 23

Cost of Sales 6,020 Property, Plant, and Equipment 707

Goodwill and Other Intangible Assets 122 Research and Development Expenses 489

Income Tax Expense 107 Retained Earnings, September 27, 2003 2,394

Inventories 101 Sales 8,279

Investments 2,495 Selling, General, and Administrative

Expenses 1,421

Exercise 4-8

Identifying transactions

Goals3, 4

Exercise 4-9

Journal entries

Goals3, 4

Exercise 4-10

Trial balance

Goals3, 4

Exercise 4-11

Classification of accounts,

normal balances

Goals3, 4