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Problem 4-6AA (Concluded)
Part 4
Instructor note: Entries are shown without an account reference column because no posting is required.
2016
Jan. 4 Salaries Expense........................................ 1,500
15 Interest Expense......................................... 2,250
31 Cash............................................................ 19,300
Member Fees Earned........................... 19,300
4-1
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
PROBLEM SET B
Problem 4-1B (90 minutes)
INSTRUCTOR NOTE: Ledger accounts are shown after Part 7 as they would appear after
all entries are posted.
Part 2
Transactions for July
July 1 Cash.............................................................101 30,000
Buildings......................................................173 150,000
L. Plume, Capital..................................301 180,000
Owner invested in the business.
4-2
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
Problem 4-1B (Continued)
Part 3
SAFE STORAGE CO.
Unadjusted Trial Balance
July 31, 2015
No. Account Title Debit Credit
101 Cash.................................................................... $ 22,850
106 Accounts receivable.......................................... 0
124 Office supplies................................................... 2,400
4-3
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
Problem 4-1B (Continued)
Part 4
Adjusting entries
July 31 Insurance Expense..........................................637 400
Prepaid Insurance...................................128 400
31 Office Supplies Expense.................................650 875
31 Depreciation Expense—Buildings..................606 1,500
31 Salaries Expense.............................................622 100
31 Accounts Receivable.......................................106 1,150
4-4
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
Problem 4-1B (Continued)
Part 4
SAFE STORAGE CO.
Adjusted Trial Balance
July 31, 2015
No. Account Title Debit Credit
101 Cash.................................................................... $ 22,850
106 Accounts receivable.......................................... 1,150
124 Office supplies................................................... 1,525
4-5
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
Problem 4-1B (Continued)
Part 5
SAFE STORAGE CO.
Income Statement
For Month Ended July 31, 2015
Storage fees earned.................................. $10,950
Expenses
Depreciation expense–Buildings........... $1,500
Salaries expense..................................... 2,100
SAFE STORAGE CO.
Statement of Owner’s Equity
For Month Ended July 31, 2015
L. Plume, Capital, July 1, 2015.................. $ 0
Add: Owner’s investment....................... $180,000
4-6
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Education.
Problem 4-1B (Continued)
Part 5
SAFE STORAGE CO.
Balance Sheet
July 31, 2015
Assets
Cash........................................................... $ 22,850
Accounts receivable................................. 1,150
Liabilities
Equity
4-7
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Education.
Problem 4-1B (Continued)
Part 6
Closing entries
July 31 Storage Fees Earned.................................401 10,950
Income Summary.................................901 10,950
To close the revenue account.
31 Income Summary......................................901 8,225
Depreciation Exp—Buildings...............606 1,500
31 Income Summary......................................901 2,725
31 L. Plume, Capital.......................................301 2,000
Part 7
SAFE STORAGE CO.
Post-Closing Trial Balance
July 31, 2015
Debit Credit
Cash........................................................... $ 22,850
Accounts receivable................................. 1,150
4-8
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
4-9
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
Problem 4-1B (Continued)
Ledger as of July 31
Cash Acct. No. 101
Date Explanation PR Debit Credit Balance
July 1 30,000 30,000
2 2,000 28,000
5 2,400 25,600
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
Buildings Acct. No. 173
Date Explanation PR Debit Credit Balance
Accumulated Depreciation—Buildings Acct. No. 174
Date Explanation PR Debit Credit Balance
4-10
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
Salaries Payable Acct. No. 209
Date Explanation PR Debit Credit Balance
4-11
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Education.
Problem 4-1B (Continued)
L. Plume, Capital Acct. No. 301
Date Explanation PR Debit Credit Balance
L. Plume, Withdrawals Acct. No. 302
Date Explanation PR Debit Credit Balance
Storage Fees Earned Acct.No. 401
Date Explanation PR Debit Credit Balance
Depreciation Expense—Buildings Acct. No. 606
Date Explanation PR Debit Credit Balance
Salaries Expense Acct. No. 622
Date Explanation PR Debit Credit Balance
July 14 1,000 1,000
Insurance Expense Acct. No. 637
Date Explanation PR Debit Credit Balance
Rent Expense Acct. No. 640
Date Explanation PR Debit Credit Balance
4-12
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
4-13
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
