Problem 4-1A (Continued)
Part 7—continued
Ledger as of April 30
Cash Acct. No. 101
Date Explanation PR Debit Credit Balance
April 1 30,000 30,000
2 1,800 28,200
3 1,000 27,200
Accounts Receivable Acct. No. 106
Date Explanation PR Debit Credit Balance
Office Supplies Acct. No. 124
Date Explanation PR Debit Credit Balance
Prepaid Insurance Acct. No. 128
Date Explanation PR Debit Credit Balance
Computer Equipment Acct. No. 167
Date Explanation PR Debit Credit Balance
Accumulated Depreciation–Computer Equipment Acct. No. 168
Date Explanation PR Debit Credit Balance
Salaries Payable Acct. No. 209
Date Explanation PR Debit Credit Balance
April 30 Adjusting 420 420
4-1
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Problem 4-1A (Continued)
J. Nozomi, Capital Acct. No. 301
Date Explanation PR Debit Credit Balance
April 1 50,000 50,000
J. Nozomi, Withdrawals Acct. No. 302
Date Explanation PR Debit Credit Balance
Commissions Earned Acct. No. 405
Date Explanation PR Debit Credit Balance
Depreciation Expense–Computer Equipment Acct. No. 612
Date Explanation PR Debit Credit Balance
Salaries Expense Acct. No. 622
Date Explanation PR Debit Credit Balance
April 14 1,600 1,600
Insurance Expense Acct. No. 637
Date Explanation PR Debit Credit Balance
Rent Expense Acct. No. 640
Date Explanation PR Debit Credit Balance
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Office Supplies Expense Acct. No. 650
Date Explanation PR Debit Credit Balance
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Problem 4-1A (Concluded)
Repairs Expense Acct. No. 684
Date Explanation PR Debit Credit Balance
Telephone Expense Acct. No. 688
Date Explanation PR Debit Credit Balance
Income Summary Acct. No. 901
Date Explanation PR Debit Credit Balance
4-4
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Problem 4-2A (90 minutes) Part 1
ACE CONSTRUCTION CO.
Work Sheet
For Year Ended June 30, 2015
Unadjusted
Trial Balance Adjustments
Adjusted
Trial Balance
Income
Statement
Balance
Sheet
No. Account Title Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr.
101 Cash……………………………………
18,500 18,500 18,500
126 Supplies……………………..……….
9,900 (a) 6,600 3,300 3,300
128 Prepaid insurance….……………..
7,200 (b
)
3,800 3,400 3,400
167 Equipment……………………………
132,000 132,000 132,000
168 Accumulated depreciation—
Equipment…..…………................ 26,250 (c) 8,400 34,650 34,650
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Problem 4-2A (Continued)
Part 2 Adjusting entries (all dated June 30, 2015)
Instructor note: Entries are shown without an account reference column because no posting is required.
(a) Supplies Expense…..………..………..……............ 6,600
Supplies………………………………..………..…. 6,600
To record consumption of supplies.
(b) Insurance Expense..…..………..………................ 3,800
Prepaid Insurance..……..…........................ 3,800
To record expiration of insurance.
4-7
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Education.
Problem 4-2A (Continued)
Closing entries (all dated June 30, 2015)
Instructor note: Entries are shown without an account reference column because no posting is required.
(1) Construction Fees Earned.......................... 132,100
Income Summary…………………………... 132,100
To close the revenue account.
(2) Income Summary………..…………..…….......... 101,210
Depreciation Expense–Equipment...... 8,400
(3) Income Summary………..…………..…….......... 30,890
4-8
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Problem 4-2A (Continued)
Part 3
ACE CONSTRUCTION CO.
Income Statement
For Year Ended June 30, 2015
Construction fees earned..………..…………..…... $132,100
Expenses
Depreciation expense—Equipment............... $ 8,400
Wages expense…………………………………….…. 48,660
ACE CONSTRUCTION CO.
Statement of Owner’s Equity
For Year Ended June 30, 2015
V. Ace, Capital, June 30, 2014.......................... $ 53,660
4-9
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Problem 4-2A (Continued)
ACE CONSTRUCTION CO.
Balance Sheet
June 30, 2015
Assets
Current assets
Cash……………………………………….……..………..…. $ 18,500
Liabilities
Current liabilities
Accounts payable.………..…………..………............. $ 7,450
Interest payable…………..………..…….................... 250
4-10
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Problem 4-2A (Concluded)
Part 4
(a) This error enters the wrong amount in the correct accounts. The
ending balance of the Supplies account should be $3,300, but the
The adjusted trial balance columns in the work sheet will be equal,
This error is not likely to be detected as a result of completing the
(b) This error inserts a credit in the adjusted trial balance when a debit
should have been inserted. As a result, the trial balance will not
Problem 4-3A (15 minutes)
1. B 6. C 11. E 16. C
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