Exercise 3-11A (30 minutes)
a.
Dec. 1 Supplies Expense…………………………..…….….…….. 2,000
Cash………………………………………………………… 2,000
Purchased supplies.
b.
Received fees for work to be done.
e.
Dec. 31 Supplies……………………………………………..….….…… 1,840
Supplies Expense…………………………………….. 1,840
Adjust expenses for unused supplies.
f.
Exercise 3-12A (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.
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 3-12A –concluded
c. Under the first method (and using entries from a)
Under the second method (and using entries from b)
Unearned Fees = $8,500
PROBLEM SET A
Problem 3-1A (10 minutes)
1. E 5. C 9. D
Problem 3-2A (35 minutes)
Part 1
Adjustment (a)
Adjustment (b)
31 Insurance Expense…………………………………... 7,120
Prepaid Insurance……………………………... 7,120
To record annual insurance coverage cost.
Policy Cost per Month
Months Active
in 2015 2015 Cost
A $600 ($14,400/24 mo.) 3 $ 1,800
B 360 ($12,960/36 mo.) 12 4,320
Problem 3-2A −concluded
Adjustment (d)
Adjustment (e)
Adjustment (f)
31 Unearned Rent……………….….….…….….….…. 5,600
Rent Earned……………….….….…….….….. 5,600
To record the amount of rent earned for
November and December (2 x $2,800).
Part 2
Cash Payment for (c)
Jan. 6 Salaries Payable…..……………………………….. 3,920
Salaries Expense*……………………….….….….. 5,880
Cash……………………………………………..… 9,800
To record payment of accrued and
current salaries. *(3 days x $1,960)
Cash Payment for (e)
Problem 3-3A (90 minutes)
Parts 1 and 2
Cash Equipment
Adj. Bal. 7,500 Adj. Bal. 28,200
Teaching Supplies Accounts Payable
Unadj. Bal. 8,000 Bal. 26,000
(b) 5,200
Adj. Bal. 2,800 Salaries Payable
Unadj. Bal. 0
Adj. Bal. 9,600 Unearned Training Fees
Unadj. Bal. 12,500
Prepaid Rent (e) 5,000
Unadj. Bal. 3,000 Adj. Bal. 7,500
(h) 3,000
Adj. Bal. 0 T. Wells, Capital
Professional Library
Unadj. Bal. 10,000
(d) 7,200
Adj. Bal. 17,200
Problem 3-3A (Continued)
Unadj. Bal. 40,000 Unadj.
Bal. 0
(e) 5,000 (b) 5,200
Adj. Bal. 45,000 Adj. Bal. 5,200
Depreciation Expense—
Equipment Utilities Expense
Unadj. Bal. 0Bal. 6,400
(c) 13,200
Adj. Bal. 13,200
Salaries Expense
(a) 2,400
Adj. Bal. 2,400
Problem 3-3A (Continued)
Part 2
Adjustment (a)
Adjustment (d)
31 Depreciation Expense—Profess. Library………….…...7,200
Accumul. Depreciation—Profess. Library................ 7,200
To record professional library depreciation.
Adjustment (e)
31 Unearned Training Fees………………………………………..5,000
Training Fees Earned………………………….….…….… 5,000
To record 2 months’ training fees earned
that were collected in advance.
Adjustment (f)
Adjustment (h)
31 Rent Expense……………………………………………………....3,000
Prepaid Rent……………………………..….….…….….….. 3,000
To record expiration of prepaid rent.
Problem 3-3A (Continued)
Part 3
WELLS TECHNICAL INSTITUTE
Adjusted Trial Balance
December 31, 2015
Debit Credit
Professional library…………………..…….….…….….…. 35,000
Accumulated depreciation—Professional library.... $ 17,200
Equipment………………………………….….…….….……... 80,000
Accumulated depreciation—Equipment………….… 28,200
Accounts payable……………………………….…….….…. 26,000
Depreciation expense—Professional library........ 7,200
Depreciation expense—Equipment..….……........... 13,200
Salaries expense ………………………………………..…... 50,400
Insurance expense……………..….…….….…….….……. 2,400
Rent expense…………………………………………………… 36,000
Problem 3-3A (Continued)
Part 4
WELLS TECHNICAL INSTITUTE
Income Statement
For Year Ended December 31, 2015
Revenues
Tuition fees earned…………………………………..…. $131,400
Training fees earned………….…….….…….….……. 45 ,000
Total revenues……………………..…….….….…….…. $176,400
Expenses
Teaching supplies expense……………………….… 5,200
Advertising expense……………..….…….….…….… 6,000
Utilities expense…………………………..….….……... 6 ,400
WELLS TECHNICAL INSTITUTE
Statement of Owner’s Equity
For Year Ended December 31, 2015
T. Wells, Capital, December 31, 2014……………..….…….…... $ 90,000
Plus: Net income…………………………….….…….….…….….…… 49,600
139,600