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Record business events in general ledger accounts organized under an accounting equation.

The complete collection of a company’s accounts is called the general ledgerComplete set of accounts used in accounting systems.. The general ledger account information for RCS’s 2004 accounting period is shown in Exhibit 1.3. The revenue, expense, and dividend account data appear in the retained earnings column. These account titles are shown immediately to the right of the dollar amounts listed in the retained earnings column. To help you review RCS’s general ledger, the business events that the company experienced during 2004 are summarized below.

1. RCS issued common stock, acquiring $120,000 cash from its owners.
2. RCS borrowed $400,000 cash.
3. RCS paid $500,000 cash to purchase land.
4. RCS received $85,000 cash from earning revenue.
5. RCS paid $50,000 cash for expenses.
6. RCS paid dividends of $4,000 cash to the owners.
7. The land that RCS paid $500,000 to purchase had an appraised market value of $525,000 on December 31, 2004.

Exhibit 1.3	General Ledger Accounts Organized Under the Accounting Equation
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As indicated earlier, accounting information is normally presented to external users in four general-purpose financial statements. The information in the ledger accounts is used to prepare these financial statements. The data in the above ledger accounts are color coded to help you understand the source of information in the financial statements. The numbers in green are used in the statement of cash flows. The numbers in red are used to prepare the balance sheetStatement that lists the assets of a business and the corresponding claims (liabilities and equity) on those assets.. Finally, the numbers in blue are used to prepare the income statement. The numbers reported in the statement of changes in stockholders’ equity have not been color coded because they appear in more than one statement. The next section explains how the information in the accounts is presented in financial statements.

Exercises  1-8A, 1-9A, 1-10A, 1-12A, 1-13A, 1-10B, 1-12B, 1-13B

Problems  1-30A, 1-31A, 1-30B, 1-31B