978-0077633059 Chapter 3 Solution Manual Part 9

subject Type Homework Help
subject Pages 9
subject Words 1176
subject Authors John Wild, Ken Shaw

Unlock document.

This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
page-pf1
Problem 3-6B (Continued)
Common Stock Acct. No. 307
Date Explanation PR Debit Credit Balance
Retained Earnings Acct. No. 318
Date Explanation PR Debit Credit Balance
July 31 Closing 2,725 2,725
31 Closing 2,000 725
Dividends Acct. No. 319
Date Explanation PR Debit Credit Balance
July 31 2,000 2,000
31 Closing 2,000 0
Storage Fees Earned Acct.No. 401
Date Explanation PR Debit Credit Balance
Depreciation Expense—Buildings Acct. No. 606
Date Explanation PR Debit Credit Balance
July 31 Adjusting 1,500 1,500
31 Closing 1,500 0
Salaries Expense Acct. No. 622
Insurance Expense Acct. No. 637
Date Explanation PR Debit Credit Balance
July 31 Adjusting 400 400
31 Closing 400 0
Rent Expense Acct. No. 640
Date Explanation PR Debit Credit Balance
page-pf2
Problem 3-6B (Concluded)
Office Supplies Expense Acct. No. 650
Date Explanation PR Debit Credit Balance
Repairs Expense Acct. No. 684
Date Explanation PR Debit Credit Balance
July 29 950 950
31 Closing 950 0
Telephone Expense Acct. No. 688
Date Explanation PR Debit Credit Balance
July 30 400 400
31 Closing 400 0
Income Summary Acct. No. 901
Date Explanation PR Debit Credit Balance
page-pf3
Problem 3-7B (15 minutes)
1. Z 6. F 11. A 16. E
2. A 7. D 12. E 17. Z
page-pf4
Problem 3-8B (75 minutes)
Part 1
ANARA CO.
Income Statement
For Year Ended December 31, 2015
Revenues
Professional fees earned................................... $59,600
Rent earned......................................................... 4,500
Dividends earned............................................... 1,000
Interest earned.................................................... 1,320
Total revenues.................................................... $66,420
Expenses
Depreciation expense—Building...................... 2,000
Depreciation expense—Equipment.................. 1,000
Wages expense................................................... 18,500
Telephone expense............................................ 521
Utilities expense................................................. 1,920
Total expenses.................................................... 37,530
Net income............................................................ $28,890
ANARA CO.
Statement of Retained Earnings
For Year Ended December 31, 2015
Retained earnings, December 31, 2014.............. $ 62,800
Add: Net income.................................................. 28,890
91,690
page-pf5
Problem 3-8B (Continued)
ANARA CO.
Balance Sheet
December 31, 2015
Assets
Current assets
Cash..................................................................... $ 7,400
Short-term investments..................................... 11,200
Supplies.............................................................. 4,600
Prepaid insurance.............................................. 1,000
Total current assets........................................... $ 24,200
Plant assets
Total plant assets............................................... 140,500
Total assets........................................................... $164,700
Liabilities
Current liabilities
Accounts payable............................................... $ 3,500
Interest payable.................................................. 1,750
Rent payable....................................................... 400
Wages payable.................................................... 1,280
Property taxes payable...................................... 3,330
page-pf6
Problem 3-8B (Continued)
Part 2
Closing entries (all dated December 31, 2015)
Instructor note: Entries are shown without an account reference column because no posting is required.
(1) Professional Fees Earned............................ 59,600
Rent Earned................................................... 4,500
Dividends Earned......................................... 1,000
Interest Earned.............................................. 1,320
Income Summary.................................. 66,420
To close the revenue accounts.
(2) Income Summary.......................................... 37,530
Repairs Expense................................... 679
Telephone Expense............................... 521
Utilities Expense.................................... 1,920
To close the expense accounts.
(3) Income Summary.......................................... 28,890
Retained Earnings................................. 28,890
To close the Income Summary account.
Part 3
a. Return on assets = $28,890/[($160,000 + $164,700)/2] = 17.8% (or 0.178)
b. Debt ratio = $51,010/$164,700 = 0.31
page-pf7
SERIAL PROBLEM – SP 3
Serial Problem, Business Solutions (180 minutes) — Part 1
<Note: The general ledger is displayed at the end of Part 8>
Journal entries
Dec. 2 Advertising Expense..................................655 1,025
Cash.....................................................101 1,025
Paid share of mall advertising costs.
10 Wages Expense..........................................623 750
Cash.....................................................101 750
Paid employee for part-time work.
14 Cash.............................................................101 1,500
Unearned Computer Services Revenue...236 1,500
Received advance on work to be performed.
28 Cash.............................................................101 3,000
Accounts Receivable..........................106 3,000
Collected accounts receivable.
29 Mileage Expense........................................676 192
page-pf8
Cash.....................................................101 192
Reimbursed Rey for mileage.
31 Dividends....................................................319 1,500
page-pf9
Serial Problem, SP 3 (Continued)
Part 2
Adjusting entries
Dec. 31 Computer Supplies Expense .........................652 3,065
Computer Supplies .................................126 3,065
Adjustment for supplies used (supplies
balance less cost of supplies available).
31 Wages Expense ..............................................623 500
Wages Payable ........................................210 500
Adjustment for accrued wages.
31 Depreciation Expense–Computer Equip.......613 1,250
Accumulated Depreciation—
31 Depreciation Expense—Office Equip............612 400
Accumulated Depreciation—
31 Rent Expense ..................................................640 2,475
page-pfa
Serial Problem, SP 3 (Continued)
Part 3
BUSINESS SOLUTIONS
Adjusted Trial Balance
December 31, 2015
Debit Credit
Cash ............................................................................ $ 48,372
Accounts receivable .................................................. 5,668
Computer supplies .................................................... 580
Prepaid insurance ..................................................... 1,665
Prepaid rent ................................................................ 825
Office equipment ....................................................... 8,000
Accumulated depreciation—Office equipment....... $ 400
Computer equipment ................................................ 20,000
Computer services revenue ..................................... 31,284
Depreciation expense—Office equipment .............. 400
Depreciation expense—Computer equipment........ 1,250
Wages expense .......................................................... 3,875
Insurance expense .................................................... 555
Rent expense ............................................................. 2,475
Computer supplies expense .................................... 3,065
Advertising expense.................................................. 2,753

Trusted by Thousands of
Students

Here are what students say about us.

Copyright ©2022 All rights reserved. | CoursePaper is not sponsored or endorsed by any college or university.