Problem 3-8A (connued)
Requirement 6 (adjusted entries posted in)
Cash Accounts Receivable Supplies
20,000
39,000
26,000
13,000
8,000
21,000 18,000
4,000
Equipment Accumulated Depr. Salaries Payable
15,000
5,000
7,500
Common Stock Retained Earnings Service Revenue
25,000
9,500 0
Dividends Salaries Expense R&M Expense
0
0
0
Depr. Expense Supplies Expense
0 0
Problem 3-8A (connued)
Requirement 7
Red Storm Cleaners
Adjusted Trial Balance
December 31, 2015
Accounts Debit Credit
Cash $ 34,900
Accounts Receivable 11,000
Supplies 1,200
Equipment 23,000
Problem 3-8A (connued)
Requirement 8
Red Storm Cleaners
Income Statement
For the year ended December 31, 2015
Service revenue $60,000
Expenses:
Salaries 19,600
Repairs and main. 13,000
Total expenses 40,400
Net income $19,600
Red Storm Cleaners
Balance Sheet
December 31, 2015
Assets Liabilities
Cash $34,900 Salaries payable $ 1,100
Accounts receivable 11,000
Supplies 1,200 Stockholders’ Equity
Total current assets 47,100 Common stock 31,000
* Retained earnings = Beginning retained earnings + Net income − Dividends
Problem 3-8A (connued)
Requirement 9
December 31, 2015 Debit Credit
Service Revenue 60,000
Retained Earnings 40,400
Salaries Expense 19,600
Repairs and Main. Expense 13,000
Depreciation Expense 5,000
Retained Earnings 1,100
Problem 3-8A (connued)
Requirement 10 (closing entries posted in)
Cash Accounts Receivable Supplies
20,000
39,000
18,000
26,000
13,000
8,000
8,000
21,000 18,000
4,000 2,800
Equipment Accumulated Depr. Salaries Payable
15,000
8,000
5,000
7,500
Common Stock Retained Earnings Service Revenue
25,000
9,500 0
Dividends Salaries Expense R&M Expense
0
1,100
0
18,500
0
13,000
Depr. Expense Supplies Expense
0
0
Problem 3-8A (concluded)
Requirement 11
Red Storm Cleaners
Post-Closing Trial Balance
December 31, 2015
Accounts Debit Credit
Cash $34,900
Accounts Receivable 11,000
Supplies 1,200
Equipment 23,000
Problem 3-1B (LO 3-1, 3-2)
Accrual-Basis Cash-Basis
Transaction Revenue Expense Revenue Expense
1. Receive cash from customers at the
2. Issue common stock for cash,
3. Receive cash from customers who
4. Incur utilities cost in the current
5. Pay workers’ salaries for the current
6. Pay for rent one year in advance,
7. Repay a long-term note to the bank,
8. Pay workers’ salaries for the
Problems: Set B
9. Pay dividends to stockholders, $500. $0 $0 $0 $0
10. Purchase office supplies for cash,
Problem 3-2B (LO 3-1, 3-2)
Horned Frogs Fine Cooking
Income Statement
For the year ended December 31, 2015
Service revenue $60,000a
Expenses:
Salaries $21,600b
Supplies 7,000c
a $65,000 (cash from customers) − $5,000 (decrease in accounts receivable) = $60,000
b $23,000 (cash paid for salaries) − $1,400 (decrease in salaries payable) = $21,600
Problem 3-3B (LO 3-3)
(a) Debit Credit
Depreciation Expense 7,000
(b) Debit Credit
Salaries Expense 4,000
(c) Debit Credit
Interest Receivable 1,500
(d) Debit Credit
Insurance Expense 4,950
(e) Debit Credit
Supplies Expense 1,700
(f) Debit Credit
Unearned Revenue 1,800
(g) Debit Credit
Rent Expense 2,000
Problem 3-4B (LO 3-3)
(a) Debit Credit
Depreciation Expense 10,000
(b) Debit Credit
Salaries Expense 4,000
(c) Debit Credit
Interest Expense 1,050
(d) Debit Credit
Insurance Expense 20,000
(e) Debit Credit
Supplies Expense 22,000
(f) Debit Credit
Utilities Expense 2,200