Ex 5.1 a.
Adequate disclosure
SOLUTIONS TO EXERCISES
Ex. 5.2 (concluded)
GREEN LAWNS, INC.
December 31, 201
5
Balance Shee
t
Asset
s
Ex. 5.3
a.
$ 102
,
000
$ 87
,
500
,
,
p
,
,
WILDERNESS GUIDE SERVICES, INC.
For the Year Ended December 31, 201
5
Salar
y
ex
p
ens
e
Income Statement
Revenues:
Guide revenue earned
Ex
p
enses:
,
Ex. 5.3 (Concluded)
Asset
s
$ 12
,
200
,
,
,
,
,
,
,
,
,
,
,
,
WILDERNESS GUIDE SERVICES, INC.
December 31, 201
5
Balance Shee
t
Cash
,
Ex. 5.4
a.
Dec. 31 192
,
000
Income Summar
y
192
,
000
31 132
,
200
31 59
,
800
Retained Earnin
g
s59
,
800
(
)
Lawn Care Revenue earned
To close Lawn Care Revenue Earned.
Income Summar
y
(
2
)
(
3
)
Income Summar
y
GREEN LAWNS, INC.
December 31, 201
5
(1)
General Journal
,
Ex. 5.4 (Concluded)
b.
$ 182
,
200
9
,
000
600
24
,
000
,
,
,
,
,
,
GREEN LAWNS, INC.
December 31, 201
5
After-Closing Trial Balanc
e
Cash
Su
pp
lies
E
q
ui
p
ment
Accounts receivabl
e
,
Ex. 5.5
a.
Dec. 31 102
,
000
Income Summar
y
102
,
000
y
WILDERNESS GUIDE SERVICES, INC.
December 31, 201
5
(1)
General Journal
Guide Revenue Earned
To close Guide Revenue Earned.
,
Ex. 5.5 (Concluded)
b.
$ 12
,
200
31
,
000
7
,
900
2
,
400
70
,
000
,
,
,
,
WILDERNESS GUIDE SERVICES, INC.
December 31, 201
5
After-Closing Trial Balanc
e
Cash
Cam
p
in
g
su
pp
lies
Unex
p
ired insurance
p
olicies
E
q
ui
p
ment
Accounts receivabl
e
,
Ex. 5.6 a. 1.
2.
3.
4.
b. 1. Cash………………………………………………
…
500
2. Unredeemed Gift Card 500
Sales (Revenue)……………………… 500
c. Best Buy matches advertising expense to revenue in the period in which the
ads are run. The ad should help generate revenue in the period in which the ad
The company matches the cost of property and equipment to the periods in
which it contributes to generating revenue. It does so by dividing the cost of
Best Buy recognizes revenue when customers take possession of their
The earnings process is not complete when the company first receives cash for
gift cards. This is because no products have been delivered. Thus, as gift cards
The company records advertising expense in the period the ad first runs. In
To record the redemption of a $500 gift card.
Ex. 5.7 a. 225,000 225,000
170,400
1,800
g
Counselin
g
Revenue………………………………………
…
To close counseling revenue earned.
Advertisin
g
Ex
p
ense………………………………
…
Close all expenses to the Income summary account:
Income Summar
y
…………………………………………
…
Income Summar
y
…………………………………
…
y
…
g
…
…
…
g
Ex. 5.8 a. 60,000
240,000 300,000
To close revenue accounts to income summary.
412,500
24,000
36,000
112,500
112,500
37,500
37,500
b. 450,000$
Ex. 5.9 a. 600 600
y
Consulting Revenue – Individual Clients……………..
Advertisin
g
Ex
p
ense………………………………
…
Depreciation Expense: Computers……………..
Income Summar
y
…………………………………………
…
Consulting Revenue – Corporate Clients……………..
Income Summar
y
…………………………………
…
p
Retained Earnin
g
s…………………………………………
…
Interest Expense………………………………..
To transfer a net loss for the period to retained earnings.
Retained Earnings……………………………………….
Income Summary…………………………………
Dividends…………………………………………….
Retained Earnings, (January 1, 2015)………………
Insurance Ex
p
ense……………………………………………
…
To close dividends to retained earnings.