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Exercise 3-4 (30 minutes)
a. Unearned Fee Revenue..................................................... 5,000
Fee Revenue.................................................................. 5,000
To record earned portion of fee received in advance
($15,000 x 1/3).
b. Wages Expense................................................................. 8,000
Wages Payable.............................................................. 8,000
To record wages accrued but not yet paid.
g. Interest Expense.............................................................. 2,500
Interest Payable........................................................... 2,500
To record interest incurred but not yet paid.
Notes:
Prepaid Insurance†Office Supplies*
Exercise 3-5 (25 minutes)
Dec. 31 Accounts Receivable.............................................. 2,100
Fees Earned..................................................... 2,100
To record earned but unbilled fees (30% x $7,000).
31 Depreciation Expense—Office Furniture............... 1,850
Accumulated Depreciation—Office Furniture.... 1,850
To record depreciation on office furniture.
31 Salaries Expense.................................................... 2,250
Salaries Payable.............................................. 2,250
To record accrued salaries.
To record use of office supplies.
31 Utilities Expense...................................................... 90
Utilities Payable............................................... 90
To record incurred and unpaid utility costs.
forwarded, distributed, or posted on a website, in whole or part.
Financial and Managerial Accounting, 6th Edition
150
Exercise 3-6 (20 minutes)
adidas AG
Balance Sheet
December 31, 2013
(Euros in millions)
Assets
Noncurrent assets
Intangible assets.................................................... € 148
Tangible and other assets..................................... 304
Other noncurrent assets...................................... 3,476
Total noncurrent assets......................................... 3,928
Current assets
Equity
Total equity............................................................... € 2,489
Liabilities
Total noncurrent liabilities...................................... 3,411
Total current liabilities............................................. 794
Exercise 3-7 (20 minutes)
WILSON TRUCKING COMPANY
Income Statement
For Year Ended December 31, 2015
Trucking fees earned................................................ $130,000
Expenses
Depreciation expense—Trucks........................... $23,500
Salaries expense.................................................. 61,000
WILSON TRUCKING COMPANY
Statement of Retained Earnings
For Year Ended December 31, 2015
Retained earnings, December 31, 2014................... $155,000
Add: Net income...................................................... 25,500
Exercise 3-8 (10 minutes)
Dec. 31 Net Sales........................................................1,014,345
Income Summary.................................. 1,014,345
To close the revenue account.
31 Income Summary.......................................... 936,724
To close the expense accounts.
Exercise 3-9 (20 minutes)
WILSON TRUCKING COMPANY
Balance Sheet
December 31, 2015
Assets
Current assets
Cash................................................................ $ 8,000
Accounts receivable..................................... 17,500
Office supplies............................................... 3,000
Total current assets...................................... 28,500
Plant assets
Liabilities
Current liabilities
Accounts payable.......................................... $ 12,000
Interest payable............................................. 4,000
Total current liabilities.................................. 16,000
Long-term notes payable................................ 53,000
Total liabilities.................................................. 69,000
Equity
forwarded, distributed, or posted on a website, in whole or part.
Exercise 3-10 (10 minutes)
a. $ 4,361 / $ 44,500 = 9.8%
b. $ 97,706 / $ 398,800 = 24.5%
Exercise 3-11 (15 minutes)
Current
Assets
Current
Liabilities
Current
Ratio
Case 1 $ 79,040 / $ 32,000 = 2.47
Case 2 104,880 / 76,000 = 1.38
Exercise 3-12A (30 minutes)
a.
Dec. 1 Supplies Expense................................................... 2,000
Cash.................................................................. 2,000
Purchased supplies.
b.
Dec. 2 Insurance Expense................................................. 1,540
Cash.................................................................. 1,540
Paid insurance premiums.
c.
Dec. 15 Cash......................................................................... 13,000
Remodeling Fees Earned............................... 13,000
Received fees for work to be done.
d.
Dec. 28 Cash......................................................................... 3,700
Remodeling Fees Earned............................... 3,700
Received fees for work to be done.
e.
Exercise 3-13A (25 minutes)
a. Initial credit recorded in the Unearned Fees account
July 1 Cash....................................................................... 3,000
Unearned Fees.............................................. 3,000
Received fees for work to be done for Solana.
6 Cash....................................................................... 7,500
Unearned Fees.............................................. 7,500
Received fees for work to be done for Haru.
b. Initial credit recorded in the Fees Earned account
July 1 Cash....................................................................... 3,000
Fees Earned................................................... 3,000
Received fees for work to be done for Solana.
6 Cash....................................................................... 7,500
Fees Earned................................................... 7,500
Received fees for work to be done for Haru.
12 No entry required.
Exercise 3-13A –concluded
c. Under the first method (and using entries from a)
Unearned Fees = $3,000 + $7,500 - $3,000 + $8,500 - $7,500 = $8,500
Fees Earned = $3,000 + $7,500 = $10,500
Exercise 3-14B (25 minutes)
WESTCOTT COMPANY
December 31, 2015
Unadjusted
Trial Balance
Dr. Cr.
Adjustments
Dr. Cr.
Adjusted
Trial Balance
Dr. Cr.
Cash.................................................... 21 21
Accounts receivable.......................... 12 12
Supplies.............................................. 24 (d) 9 15
Prepaid insurance............................. 18 (e) 15 3
Equipment.......................................... 39 39
Salaries expense............................... 18 (b) 6 24
Insurance expense............................ (e) 15 15
Supplies expense.............................. (d) 9 9
Utilities expense................................ 12 ___ __ __ 12 ___
Totals..................................................150 150 45 45 159 159
