Problem 3-3B (90 minutes)
Parts 1 and 2
Cash Accounts Payable
Bal. 60,000 Bal. 11,200
Accounts Receivable Salaries Payable
Prepaid Insurance C. Alonzo, Capital
Unadj. Bal. 19,000 Bal. 71,500
(a) 9,500
Adj. Bal. 0
Professional Library
Bal. 12,000
Accumulated Depreciation—
Professional Library
Accumulated Depreciation—
Equipment
Unadj. Bal. 20,000
(c) 5,000
Adj. Bal. 25,000
Problem 3-3B (Continued)
Parts 1 and 2
Tuition Fees Earned Advertising Expense
Unadj. Bal. 129,200 Bal. 19,000
(f) 5,750
Adj. Bal. 134,950
Training Fees Earned Utilities Expense
Unadj. Bal. 68,000 Bal. 13,400
(e) 28,600
Adj. Bal. 96,600
Depreciation Expense—
Equipment
Unadj. Bal. 0
(c) 5,000
Adj. Bal. 5,000
Unadj. Bal. 0
(a) 9,500
Adj. Bal. 9,500
Rent Expense
Unadj. Bal. 29,600
Adj. Bal. 50,000
Problem 3-3B (Continued)
Part 2
Adjustment (a)
Dec. 31 Insurance Expense………………………………………… 9,500
Prepaid Insurance……………………………….….. 9,500
To record the insurance expired.
Adjustment (b)
Adjustment (c)
31 Depreciation Expense—Equipment………………… 5,000
Accumulated Depreciation—Equipment..... 5,000
To record equipment depreciation.
Adjustment (d)
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)
Adjustment (h)
31 Rent Expense …………………………………………….…. 3,800
Prepaid Rent…………………………………….…….. 3,800
To record expiration of prepaid rent.
Problem 3-3B (Continued)
Part 3
ALONZO INSTITUTE
Adjusted Trial Balance
December 31, 2015
Debit Credit
Prepaid insurance………………………………………..……….. 9,500
Prepaid rent…………………………………………….…………… 0
Professional library…………………………………….…………. 12,000
Accumulated depreciation—Professional library…….…. $ 4,900
Equipment……………………………….………….………………. 40,000
C. Alonzo, Capital…………………………………………..……… 71,500
C. Alonzo, Withdrawals……………………….………….……… 20,000
Tuition fees earned……………………………………………..…. 134,950
Training fees earned………………………………………………. 96,600
Depreciation expense—Professional library……….…….. 2,400
Depreciation expense—Equipment..….……………….…... 5,000
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
Insurance expense……………….………….……………….. 9,500
Rent expense…………………………………………………….. 33,400
Teaching supplies expense……….…………….………… 50,000
Advertising expense………………………………………….. 19,000
Utilities expense……………………….……………….……… 13 ,400
ALONZO INSTITUTE
Statement of Owner’s Equity
For Year Ended December 31, 2015
C. Alonzo, Capital, December 31, 2014.............. $ 71,500
C. Alonzo, Capital, December 31, 2015.............. $105 ,700
Problem 3-3B (Concluded)
ALONZO INSTITUTE
Balance Sheet
December 31, 2015
Assets
Professional library…………………………………….………. $12,000
Accumulated depreciation—Professional library…..…… (4 ,900) 7,100
Equipment………………………………….…….………………… 40,000
Accumulated depreciation—Equipment……………..… (25 ,000) 15 ,000
Total assets……………………………….………….……………. $117 ,350
Liabilities
Problem 3-4B (45 minutes) — Part 1
Account
Unadjusted
Trial Balance Adjustments
Adjusted
Trial Balance
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
Z. Yan, Capital……..….…..…. 80,200 80,200
Z. Yan, Withdrawals…………. 20,000 20,000
Consulting fees earned...... 234,600
(a)
(h)
6,660
12,200 253,460
Rent expense…………………. 20,000 20,000
Office supplies expense…... (b) 23,000 23,000
Advertising expense........... 42,000
_______ (e) 6 ,000
______ 48,000
_______
Totals……………………………$475,800
$475,800
$80,610
$80,610
$516,610
$516,610
Adjustment Descriptions
(a) Earned but uncollected revenues.
(b) Cost of office supplies used.
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
Total expenses………………………………………….… 244 ,350
Net income…………………………………….….…………. $ 9 ,110
YAN CONSULTING COMPANY
Statement of Owner’s Equity
For Year Ended December 31, 2015
Z. Yan, Capital, December 31, 2014..……............ $ 80,200
Plus: Net income………………………………….………. 9 ,110
Problem 3-4B (Concluded)
Part 2
YAN CONSULTING COMPANY
Balance Sheet
December 31, 2015
Assets
Prepaid insurance…………………………….…….……………. 3,600
Office equipment…………………………………….……….…… $120,000
Accumulated depreciation—Office equipment.......... (30,000) 90,000
Total assets………………………………………………………….. $222,260
Liabilities
Long-term notes payable………………………………………. 75,000
Total liabilities………………………………………………………. 152,950
Equity
Z. Yan, Capital……………………………………………..……….. 69,310
Problem 3-5B (50 minutes)
Part 1
SPEEDY COURIER
Income Statement
For Year Ended December 31, 2015
Revenues
Delivery fees earned……..………….……………. $611,800
Interest earned……………………………………….. 34 ,000
Total revenues……………………………….………. $645,800
Interest expense……………………….……………. 15,000
Office supplies expense……………….………… 31,000
Advertising expense………..……………….……. 27,200
SPEEDY COURIER
Statement of Owner’s Equity
For Year Ended December 31, 2015
L. Horace, Capital, December 31, 2014......... $125,000
Plus : Net income………………..………….………. 86 ,000
Problem 3-5B (Concluded)
SPEEDY COURIER
Balance Sheet
December 31, 2015
Assets
Office supplies……………………………………………... 22,000
Trucks…………………………………………………..……… $ 134,000
Accumulated depreciation—Trucks…………….... (58,000) 76,000
Accounts payable…………………………………………. $134,000
Interest payable…………………………………….……… 20,000
Equity
L. Horace, Capital………………………………….……… 161,000
Total liabilities and equity…………………………..…. $663,000
Part 2