1. May 2.
2. Revenue would be recognized as each magazine is delivered.
3. November 21.
4. July 7.
1. May 2.
2. November 21.
3. November 4.
4. One month’s worth of rent expense is recorded each month.
1. May 7.
2. September 6.
3. September 17.
4. July 7.
Chapter 3
The Accounting Cycle: End of the Period
EXERCISES
Exercise 3-1
Exercise 3-2
Exercise 3-3
1. April 1.
2. December 7.
3. November 12.
4. March 23.
Net income (unadjusted) $78,400
a. Record insurance expense of $1,600 per month (4,800)
b. Reclassify service revenue as unearned revenue (liability) (4,700)
(b) Use source documents to identify accounts affected by external
(g) Analyze the impact of the transaction on the accounting
(f) Assess whether the transaction results in a debit or a credit to
(c) Record the transaction.
(i) Post the transaction to the T-account in the general ledger.
Exercise 3-4
Exercise 3-5
Exercise 3-6
(a) Debit Credit
Supplies Expense 2,900
(b) Debit Credit
Insurance Expense 3,200
(c) Debit Credit
Salaries Expense 16,500
(d) Debit Credit
Unearned Revenue 1,600
(a) Debit Credit
Depreciation Expense 9,100
(b) Debit Credit
Interest Receivable 1,300
Exercise 3-7
Exercise 3-8
(c) Debit Credit
Unearned Revenue 4,200
Revenues −Expenses =Net Income
(a) $0 −−$9,100 =+$9,100
(a) Debit Credit
Unearned Revenue 2,100
(b) Debit Credit
Advertising Expense 600
(c) Debit Credit
Salaries Expense 12,000
Salaries Payable 12,000
(Adjust salaries payable)
Exercise 3-9
If the adjusting entry is NOT made:
Exercise 3-10
(d) Debit Credit
Interest Expense 1,100
Assets =Liabilities +Stockholders’
Equity
(a) $0 = +$2,100 + −$2,100
(b) +$600 = $0 + +$600
(a) Debit Credit
Unearned Revenue 2,200
(b) Debit Credit
Insurance Expense 5,000
(c) Debit Credit
Salaries Expense 3,200
Exercise 3-11
If the adjusting entry is NOT made:
Exercise 3-12
(d) Debit Credit
Interest Expense 250
(e) Debit Credit
Supplies Expense 2,500
(a) Debit Credit
Interest Receivable 200
(b) Debit Credit
Rent Expense 1,600
(c) Debit Credit
Unearned Revenue 7,500
(d) Debit Credit
Depreciation Expense 3,800
(e) Debit Credit
Exercise 3-13
(a) Debit Credit
Rent Expense 2,400
(b) Debit Credit
Unearned Revenue 900
(c) Debit Credit
Salaries Expense 1,200
(d) Debit Credit
Supplies Expense 1,700
Exercise 3-14
Requirement 1
Adjusted Trial Balance
Accounts Debit Credit
Cash $12,000
Accounts Receivable 10,500
Prepaid Rent 4,800
Supplies 1,000
Volunteers Inc.
(in millions)
Raiders Inc.
(in millions)
Year
Net
Income (Loss)
Retained
Earnings
Net
Income (Loss)
Retained
Earnings
2006 ___ $ 0 $ 32 $ 20
2007 $ 50 50 (48) (28)
2008 (14) 36 39 11
2009 12 48 63 74
2010 99 147 84 158
Exercise 3-14 (concluded)
Requirement 2
Exercise 3-15
Exercise 3-16
Requirement 1
Blue Hens Corporation
Income Statement
For the year ended December 31, 2015
Service revenue $420,000
Expenses:
Salaries $310,000
Rent 24,300
Requirement 2
Blue Hens Corporation
Statement of Stockholders’ Equity
For the year ended December 31, 2015
Common
Stock
Retained
Earnings
Total
Stockholders’
Equity
Beginning balance $126,200 $ 77,500 $203,700
Issuance of common stock 0 0