Interest Payable 900
(Adjust interest payable)
= $150 (or 1% of $15,000) per month x 6 months (Jul. – Dec.)
(3) Interest
Payable
Interest
Expense
Jan. 1, 2015 Beginning balance $ 0 $ 0
Brief Exercise 3-13 (LO 3-3)
(1)
Jul. 1, 2015 Debit Credit
Notes Receivable 15,000
(2)
Dec. 31, 2015 Debit Credit
Interest Receivable 900
(3) Interest
Receivable
Interest
Revenue
Jan. 1, 2015 Beginning balance $ 0 $ 0
Brief Exercise 3-14 (LO 3-5)
Account Financial Statement
1
.
Accounts Receivable Balance Sheet
2
.
Unearned Revenue Balance Sheet
3
.
Supplies Expense Income Statement
.
Brief Exercise 3-15 (LO 3-5)
1
.
(b)
2
.
(d)
3
.
(a)
4
.
(c)
Brief Exercise 3-16 (LO 3-5)
Beavers Corporation
Income Statement
For the year ended December 31, 2015
Service revenue $275,000
Expenses:
Salaries $110,000
Supplies 20,000
Rent 26,000
Brief Exercise 3-17 (LO 3-5)
Spiders Corporation
Statement of Stockholders’ Equity
For the year ended December 31, 2015
Common
Stock
Retained
Earnings
Total
Stockholders’
Equity
Balance at January 1 $30,000 $8,000 $38,000
Issuance of common stock 0 0
* $3,000 is calculated as total revenues ($28,000) less total expenses ($25,000) for the year.
Brief Exercise 3-18 (LO 3-5)
Blue Devils Corporation
Balance Sheet
December 31, 2015
Assets Liabilities
Cash $ 5,000 Accounts payable $ 26,000
Accounts receivable 9,000 Salaries payable 16,000
Stockholders’ Equity
Equipment 120,000 Common stock 60,000
* Assets = Liabilities + Stockholders’ equity
Brief Exercise 3-19 (LO 3-6)
December 31 Debit Credit
Service Revenue 900,000
Retained Earnings 625,000
Salaries Expense 390,000
Rent Expense 150,000
Retained Earnings 60,000
Brief Exercise 3-20 (LO 3-7)
Hilltoppers Corporation
Post-Closing Trial Balance
Accounts Debit Credit
Cash $ 5,000
Equipment 17,000
Accounts Payable $ 3,000
* Retained Earnings
(before closing) + Revenues − Expenses − Dividends = Retained Earnings
(a$er closing)
Exercise 3-1 (LO 3-1)
1. August 16.
2. January 27.
3. April 2.
4. Revenue would be recognized as each magazine is delivered.
Exercise 3-2 (LO 3-1)
1. August 16.
Exercises
2. January 27.
3. One month’s worth of insurance expense is recorded each month.
4. February 4.
Exercise 3-3 (LO 3-2)
1. June 12.
2. February 2.
3. April 2.
4. July 1.
Exercise 3-4 (LO 3-2)
1. September 2.
2. January 6.
3. January 1.
4. February 23.
Exercise 3-5 (LO 3-1)
Net income (unadjusted) $100,000
a. Record insurance expense of $2,000 per month (6,000)
b. Reclassify service revenue as unearned revenue (liability) (4,000)
Exercise 3-6 (LO 3-3, 3-4, 3-5, 3-6, 3-7)
(i) Use source documents to identify accounts affected by external
(g) Analyze the impact of the transaction on the accounting
(h) Assess whether the transaction results in a debit or a credit to
(c) Record the transaction.
(b) Post the transaction to the T-account in the general ledger.
(f) Prepare a trial balance.
Exercise 3-7 (LO 3-3)
(a) Debit Credit
Supplies Expense 3,000
(b) Debit Credit
Insurance Expense 2,000
(c) Debit Credit
Salaries Expense 16,000
(d) Debit Credit
Unearned Revenue 1,500
Exercise 3-8 (LO 3-3)
(a) Debit Credit
Depreciation Expense 7,000
(b) Debit Credit
Interest Receivable 1,750
(c) Debit Credit
Unearned Revenue 4,000
Exercise 3-9 (LO 3-3)
If the adjusting entry is NOT made:
Revenues −Expenses =Net Income
(a) $0 −−$7,000 =+$7,000
Exercise 3-10 (LO 3-3)
(a) Debit Credit
Unearned Revenue 1,500
(b) Debit Credit
Advertising Expense 900
(c) Debit Credit
Salaries Expense 8,000
(d) Debit Credit
Interest Expense 2,100
Exercise 3-11 (LO 3-3, 3-4)
If the adjusting entry is NOT made:
Assets =Liabilities +Stockholders’
Equity
(a) $0 =+$1,500 +−$1,500
(b) +$900 =$0 ++$900
Exercise 3-12 (LO 3-3)
(a) Debit Credit
Unearned Revenue 2,000
(b) Debit Credit
Insurance Expense 6,600
(c) Debit Credit
Salaries Expense 3,000
(d) Debit Credit
Interest Expense 250