20 Minutes, Easy
Dec. 31 13
,
600
Salaries Pa
y
able 13
,
600
31 3
,
200
Guest Fee Revenue 3
,
200
,
(
(
Unex
p
ired Insurance 900
(
)
Accounts Receivable
To record
g
uest fees owed b
y
the Geor
g
ia State
To record income taxes accrued in December.
To record December insurance ex
p
ense
(
7
)
(
$10,800 x 1/12
)
.
SOLUTIONS TO PROBLEMS SET B
a.
(Adjusting Entries)
(1)
(
2
)
To record accrued salaries at December 31.
PROBLEM 4.1B
GEORGIA GUN CLUB
20__
Salaries Ex
p
ense
(
$120,000 ÷ 8
y
ears x 1/12
)
.
(
)
(
5
)
To record December de
p
reciation ex
p
ense
Police.
Education.
,
(
)
b. 1.
2.
8.
c.
Accruing unpaid expenses.
Accruing uncollected revenue.
PROBLEM 4.1B
GEORGIA GUN CLUB (concluded)
The clubhouse was built in 1956 and has been fully depreciated for financial accounting
asset’s fair market value. Likewise, depreciation expense reported in the income statement does
not reflect a decline in fair market value, physical obsolescence, or wear-and-tear.
Accruing unpaid expenses.
40 Minutes, Medium
a.
Dec. 31 425
Interest Revenue 425
31 80
(
)
(
)
(
)
Interest Receivable
To record accrued interest revenue.
Interest Ex
p
ense
PROBLEM 4.2B
(
Ad
j
ustin
g
Entries
)
(
1
)
General Journal
BIG OAKS
(
2
)
(
)
(
)
(
To record accrued interest ex
p
ense in December
b. 1.
BIG OAKS (concluded)
PROBLEM 4.2B
Accruing uncollected revenue.
25 Minutes, Strong
a. (1)
(2) 150
(4)
PROBLEM 4.3B
RIVER RAT
Age of the ferry in months = accumulated depreciation/monthly depreciation.
Tickets used in April………………………………..
Accumulated depreciation $16,900/$650 monthly depreciation = 26 months.
Since 2 months of the 12-month life of the policy have expired, the $3,800 of unexpired
Education.
30 Minutes, Medium
Se
p
t. 30 600
Pre
p
aid Costume Rental 600
30 500
30 300
Accumulated Depreciation: Fixtures and Equip. 300
30 1,062
Interest Pa
y
able 1,062
30 500
Admissions Revenue 500
(
)
(
)
OFF-CAMPUS PLAYHOUSE
PROBLEM 4.4B
2015
Interest expense accrued in September.
Costume Rental Expense
Costume rental expense incurred in September.
(
5
)
(
months
)
.
(
4
)
To record earned revenue from nursin
g
homes.
Unearned Admissions Revenue
a.
(Adjusting Entries)
(1)
(
2
)
(
3
)
General Journal
Depreciation Expense: Buildin
g
s
Depreciation Expense: Fixtures and Equipment
To record September depreciation
(
$18,000 ÷ 60
Interest Expense
(
6
)
b.
c.
Nine months (bills received January through September). Utility bills are recorded as
monthly bills are received. As of September 30, nine monthly bills should have been
PROBLEM 4.4B
OFF-CAMPUS PLAYHOUSE (concluded)
Corporations must pay income taxes in several installments throughout the year. The
balance in the Income Taxes Expense account represents the total amount of income taxes
expense recognized since the beginning of the year. But Income Taxes Payable represents
only the portion of this expense that has not yet been paid.
(1)
30 Minutes, Medium
Dec. 31 3,200
Lesson Revenue Earned 3,200
31 800
Lesson Revenue Earned 800
31 250
Sheet Music Su
pp
lies 250
31 3,000
Accum. De
p
reciation: Music E
q
ui
p
ment 3,000
31 25
(
(
)
(
)
(
7
)
Interest Expense
PROBLEM 4.5B
(
$180,000 ÷ 60 mo.
)
.
(
6
)
MARVELOUS MUSIC
Accounts Receivable
To record accrued but uncollected revenue.
2015
Sheet Music Supplies Expense
(
$450 – $200
)
.
a.
(Adjusting Entries)
(1)
(
2
)
General Journal
Unearned Lesson Revenue
Depreciation Expense: Music Equipment
To record offices supplies used in December
To record December depreciation expense
(
)
Education.
(
)
(
)
1. $ 154,375
3,200
800
$ 158,375
2. $ 7,400
5. $ 780
250
$ 1,030
6. 5,000$
7. $ 33,000
3,000
$ 36,000
8. 25$
10. $ 13,845
8,155
$22,000
Income taxes expense (unadjusted)
Add: Adjusting entry #9
Income taxes expense incurred in 2015
Advertising expense (no adjustment required)
Add: Adjusting entry #6
Equipment depreciation expense in 2015
Interest expense (unadjusted)
Add: Ad
j
ustin
g
entr
y
#1
Sheet music supplies expense (unadjusted)
Add: Adjusting entry #5
Sheet music expense incurred in 2015
Utilities expense (no adjustment required)
Depreciation expense: music equipment
Ad
j
ustin
g
entr
y
#2
Fees Earned in 2015
Lesson revenue earned
(
unad
j
usted
)
PROBLEM 4.5B
b. MARVELOUS MUSIC (concluded)
Education.
30 Minutes, Medium
Dec. 31 21,000
Client Fees Earned 21,000
31 3,200
31 3,000
Accumulated De
p
.: Com
p
uter E
q
ui
p
. 3,000
(
)
(
)
Income Taxes Pa
y
able 2,000
(
2
)
earned revenue.
(
$108,000 ÷ 36 mo.
)
.
PROBLEM 4.6B
MATE EASE
a.
2015
General Journal
Unearned Member Dues
(Adjusting Entries)
(1)
To convert previousl
y
unearned revenue to
Insurance Expense
To record incomes taxes accrued in December.
To record office supplies used in December
To record December depreciation expense
(
5
)
Depreciation Expense: Computer Equip.
(
$2,160 – 440
)
.
Education.
(
)
(
)
1. $ 169,500
2. 12,800
(
3,200
)
$ 9,600
3. 14,600$
6. $ 54,000
3,000
$ 57,000
7. $ 4,300
8. $ 90,000
9. –$
10,500
Prepaid rent (unadjusted rent)
Cash
(
no ad
j
ustment required
)
Less: Ad
j
ustin
g
entr
y
#2
Unexpired insurance at December 31, 2015
Unexpired insurance
(
unad
j
usted
)
PROBLEM 4.6B
b. MATE EASE (continued)
Acc. Deprec.: computer equip. (unadjusted)
Add: Adjusting entry #5
Accum. Depreciation at December 31, 2015
Accounts payable (no adjustment necessary)
Notes payable (no adjustment necessary)
Add: Adjusting entry #7
Salaries payable (unadjusted)