Week 2 Individual Exercise Sheet
August 17, 2011
E1-1 Urlacher Company performs the following accounting tasks during the year.
___I___Analyzing and interpreting information.
___R___Classifying economic events.
___C___Explaining uses, meaning, and limitations of data.
___R___Keeping a systematic chronological diary of events.
___R___Measuring events in dollars and cents.
___C___Preparing accounting reports.
___C___Reporting information in a standard format.
___I___Selecting economic activities relevant to the company.
___C___Summarizing economic events.
Accounting is “an information system that identifies, records, and communicates the economic
events of an organization to interested users.”
Categorize the accounting tasks performed by Urlacher as relating to either the identification
(I), recording (R), or communication (C) aspects of accounting.
E1-5 Meredith Cleaners has the following balance sheet items.
Accounts payable Accounts receivable
Cash Notes payable
Cleaning equipment Salaries payable
Cleaning supplies Common stock
Classify each item as an asset, liability, or stockholders’ equity.
Assets Liability Stockholders’ Equity
Cash Accounts Payable Common Stock
Accounts receivable Notes Payable
Cleaning Equipment/Supplies Salaries payable
E1-12 The following information relates to Linda Stanley Co. for the year 2008.
Retained earnings, January 1, 2008 $ 48,000 Advertising expense $ 1,800
Dividends during 2008 6,000 Rent expense 10,400
Service revenue 62,500 Utilities expense 3,100
Salaries expense 30,000
After analyzing the data, prepare an income statement and a retained earnings statement for the