Problem 3-3B (90 minutes)
Parts 1 and 2
Cash Accounts Payable
Bal. 60,000 Bal. 11,200
Accounts Receivable Salaries Payable
Teaching Supplies Unearned Training Fees
Prepaid Insurance Common Stock
Unadj. Bal. 19,000 Bal. 11,000
(a) 9,500
Adj. Bal. 9,500
Retained Earnings
Prepaid Rent Bal. 60,500
Dividends
Professional Library Bal. 20,000
Bal. 12,000
Accumulated Depreciation—
Professional Library
Equipment
Bal. 40,000
Accumulated Depreciation—
Equipment
Problem 3-3B (Continued)
Parts 1 and 2
Tuition Fees Earned Advertising Expense
Training Fees Earned Utilities Expense
Unadj. Bal. 68,000 Bal. 13,400
(e) 28,600
Adj. Bal. 96,600
Depreciation Expense—
Professional Library
Depreciation Expense—
Equipment
Salaries Expense
Unadj. Bal. 44,200
(g) 450
Adj. Bal. 44,650
Insurance Expense
Rent Expense
Unadj. Bal. 29,600
(h) 3,800
Adj. Bal. 33,400
Problem 3-3B (Continued)
Part 2
Adjustment (b)
31 Teaching Supplies Expense………..…….….…….…. 50,000
Teaching Supplies…………………………….…….. 50,000
To record the cost of supplies used
($70,000 – $20,000).
Adjustment (d)
31 Depreciation Expense—Professional Library.... 2,400
Accumulated Depreciation—Professional
Library………….…………………….…..…….……. 2,400
To record professional library depreciation.
Adjustment (e)
31 Unearned Training Fees…………………………….…... 28,600
Adjustment (f)
31 Accounts Receivable…………….……..…….…….…… 5,750
Tuition Fees Earned…………..……….….……..… 5,750
To record tuition earned ($2,300 x 2 1/2 mo).
Adjustment (g)
31 Salaries Expense…………….…………………….…….… 450
Salaries Payable…………………………………..…. 450
To accrue salaries expense (3 days x $150).
Adjustment (h)
31 Rent Expense …………..………………….………..……... 3,800
Problem 3-3B (Continued)
Part 3
ALONZO INSTITUTE
Adjusted Trial Balance
December 31, 2015
Debit Credit
Cash……………….…………………….…………….………………. $ 60,000
Accounts receivable…………………….……..…….…….……. 5,750
Teaching supplies…………………..…………………..…….….. 20,000
Prepaid insurance…………………………………………….…… 9,500
Prepaid rent………………..…………….….….….…….…….….. 0
Professional library……………….……………….………….….. 12,000
Training fees earned……………………………..……………….. 96,600
Depreciation expense—Professional library……………... 2,400
Depreciation expense—Equipment.….…….…….….…….. 5,000
Salaries expense……………………………..……………….…... 44,650
Insurance expense……………………………………………..…. 9,500
Rent expense…………………….…………………..…….…….… 33,400
Teaching supplies expense…………………………………….. 50,000
Advertising expense……………………………..…….…….….. 19,000
Utilities expense………………..……………………………….…. 13,400
_______
Totals…………………………………………….….….…….…….… $344,600
$344,600
Problem 3-3B (Continued)
Part 4
ALONZO INSTITUTE
Income Statement
For Year Ended December 31, 2015
Revenues
Tuition fees earned…………….……………..…….….…….. $134,950
Training fees earned…………………………..…….…….…. 96,600
Total revenues……………………………..………………..….. $231,550
Expenses
Depreciation expense—Professional library.......... 2,400
Depreciation expense—Equipment…..…….……....... 5,000
Salaries expense………………..……………….…………..… 44,650
ALONZO INSTITUTE
Statement of Retained Earnings
For Year Ended December 31, 2015
Retained earnings, December 31, 2014………….. $ 60,500
Plus: Net income……………..……….….……..…….…. 54,200
114,700
Problem 3-3B (Concluded)
ALONZO INSTITUTE
Balance Sheet
December 31, 2015
Assets
Cash………………………………….……………….….…….…….. $ 60,000
Accounts receivable……………….…………………….…….. 5,750
Teaching supplies…………….…………………………….…... 20,000
Prepaid insurance…………………..………………………..…. 9,500
Professional library…………….……………..…….…….…... $12,000
Equity
Common stock…………..…………………….………..….……. 11,000
Retained earnings…………………………….……………….… 94,700
Total liabilities and equity…………….……..…….…….….. $117,350
Problem 3-4B (45 minutes) — Part 1
Account
Unadjusted
Trial Balance Adjustments
Adjusted
Trial Balance
Cash……….……..…….……….$ 45,000 $ 45,000
Accounts receivable........... 60,000 (a) 6,660 66,660
Office supplies…….……….… 40,000 (b) 23,000 17,000
Prepaid insurance…………... 8,200 (c) 4,600 3,600
Office equipment.…............120,000 120,000
Accumulated depreciation—
Office equipment…….……..….
$ 20,000 (d) 10,000 $30,000
Dividends……….………..…… 20,000 20,000
Consulting fees earned...... 234,600
(a)
(h)
6,660
12,200 253,460
Depreciation expense—
Office equipment………….. (d) 10,000 10,000
Salaries expense………..……112,000 (g) 16,000 128,000
Interest expense….............. 8,600 (f) 2,150 10,750
Insurance expense…………. (c) 4,600 4,600
Problem 3-4B (continued)
Part 2
YAN CONSULTING COMPANY
Income Statement
For Year Ended December 31, 2015
Revenues
Consulting fees earned …………….………………… $253,460
Expenses
Depreciation expense—Office equipment....... $ 10,000
Salaries expense ……………….…………..…….……. 128,000
Interest expense ………………..…………..….….…… 10,750
YAN CONSULTING COMPANY
Statement of Retained Earnings
For Year Ended December 31, 2015
Retained earnings, December 31, 2014………….. $ 76,200
Plus: Net income……………..……….….……..…….…. 9,110
Problem 3-4B (Concluded)
Part 2
YAN CONSULTING COMPANY
Balance Sheet
December 31, 2015
Assets
Cash………………………………….…………….…………………... $ 45,000
Accounts receivable……………….….….….….…….…….…. 66,660
Office supplies……………………………………………………... 17,000
Prepaid insurance…………………..………….….….…….…… 3,600
Office equipment…………….……………….……..….…….….. $120,000
Accumulated depreciation—Office equipment.......... (30,000 ) 90,000
Total assets…………..…………………….………………..….….. $222,260
Liabilities
Equity
Common stock…………..……………….….….….…….….…… 4,000
Retained earnings………………………………..…….…….….. 65,310
Total liabilities and equity…………….……………………….. $222,260