Problem 3-6A (LO 3-6, 3-7)
Requirement 1
December 31 Debit Credit
Service Revenue 77,500
Retained Earnings 62,100
Salaries Expense 46,000
Utilities Expense 8,200
Insurance Expense 5,800
Retained Earnings 6,000
Requirement 2
Rattlers Tax Services
Post-Closing Trial Balance
Accounts Debit Credit
Cash $ 4,700
Accounts Receivable 7,200
Land 115,000
Problem 3-7A (LO 3-4, 3-5, 3-6, 3-7)
Requirements 1 and 2 (adjus!ng entries posted in)
Cash Accounts Receivable Supplies
10,300 9,500 2,000
Prepaid Rent Equipment Accumulated Depr.
Accounts Payable Salaries Payable Interest Payable
Utilities Payable Notes Payable Common Stock
0 20,000 45,000
Retained Earnings Service Revenue
Salaries Expense Interest Expense Rent Expense
Supplies Expense Utilities Expense Depr. Expense
Problem 3-7A (connued)
Requirement 3
Crimson Tide Music Academy
Adjusted Trial Balance
December 31, 2015
Accounts Debit Credit
Cash $ 10,300
Accounts Receivable 9,500
Supplies 700
Prepaid Rent 1,800
Equipment 90,000
Problem 3-7A (connued)
Requirement 4
Crimson Tide Music Academy
Income Statement
For the year ended December 31, 2015
Service revenue $42,200
Expenses:
Salaries 26,600
Interest 800
Rent 5,400
Supplies 1,300
Crimson Tide Music Academy
Statement of Stockholders’ Equity
For the year ended December 31, 2015
Common
Stock
Retained
Earnings
Total
Stockholders’
Equity
Balance at January 1 $45,000 $19,000 $64,000
Issuance of common stock 0 0
Problem 3-7A (continued)
Crimson Tide Music Academy
Balance Sheet
December 31, 2015
Assets Liabilities
Cash $ 10,300 Accounts payable $ 7,700
Accounts receivable 9,500 Salaries payable 2,100
Supplies 700 Interest payable 800
Accumulated depr. (18,000) Stockholders’ Equity
Common stock 45,000
Retained earnings 18,500
Total stockholders’ equity 63,500
Problem 3-7A (continued)
Requirement 5
December 31, 2015 Debit Credit
Service Revenue 42,200
Retained Earnings 42,700
Salaries Expense 26,600
Interest Expense 800
Rent Expense 5,400
Supplies Expense 1,300
Utilities Expense 2,600
Problem 3-7A (concluded)
Requirement 6 (closing entries posted in )
Retained Earnings Service Revenue
Salaries Expense Interest Expense Rent Expense
0 0 0
Supplies Expense Utilities Expense Depr. Expense
0
2,400
0
Requirement 7
Crimson Tide Music Academy
Post-Closing Trial Balance
December 31, 2015
Accounts Debit Credit
Cash $ 10,300
Accounts Receivable 9,500
Supplies 700
Prepaid Rent 1,800
Equipment 90,000
Problem 3-8A (LO 3-3, 3-4, 3-5, 3-6, 3-7)
Requirement 1
Cash Accounts Receivable Supplies
Equipment Accumulated Depr. Salaries Payable
Common Stock Retained Earnings Service Revenue
Dividends Salaries Expense R&M Expense
0 0 0
0 0 0
Depr. Expense Supplies Expense
0 0
0 0
Problem 3-8A (connued)
Requirement 2
(a) Debit Credit
Accounts Receivable 21,000
Cash 39,000
(b) Debit Credit
Cash 18,000
(c) Debit Credit
Cash 6,000
(d) Debit Credit
Salaries Payable 7,500
Salaries Expense 18,500
(e) Debit Credit
Repairs and Maintenance Expense 13,000
(f) Debit Credit
Equipment 8,000
(g) Debit Credit
Dividends 1,100
Problem 3-8A (connued)
Requirement 3 (entries posted in )
Cash Accounts Receivable Supplies
Equipment Accumulated Depr. Salaries Payable
Common Stock Retained Earnings Service Revenue
Dividends Salaries Expense R&M Expense
0 0 0
Depr. Expense Supplies Expense
Problem 3-8A (connued)
Requirement 4
Red Storm Cleaners
Unadjusted Trial Balance
December 31, 2015
Accounts Debit Credit
Cash $34,900
Accounts Receivable 11,000
Supplies 4,000
Equipment 23,000
Accumulated Depreciation $ 5,000
Salaries Payable 0
Common Stock 31,000
Retained Earnings 9,500
Dividends 1,100
Requirement 5
Debit Credit
Salaries Expense 1,100
Depreciation Expense 5,000
Supplies Expense 2,800