Title: Problem 3-5B
Part 1
QA_Ori:
SPEEDY COURIER
Income Statement
For Year Ended December 31, 2013
Revenues
Delivery fees earned
$611,80
0
Interest earned 34,000
Total revenues
$645,80
0
SPEEDY COURIER
Statement of Owner’s Equity
For Year Ended December 31, 2013
L. Horace, Capital, December
31, 2012
$125,00
0
SPEEDY COURIER
Balance Sheet
December 31, 2013
Assets
Cash $ 58,000
Accounts receivable 120,000
Interest receivable 7,000
Liabilities
Accounts payable $134,000
Interest payable 20,000
Equity
Part 2
SPEEDY COURIER
Balance Sheet
December 31, 2013
Assets
Cash $ 58,000
Office supplies 22,000
Trucks $ 134,000
Liabilities
Accounts payable $134,000
Interest payable 20,000
Equity
Title: Problem 3-6BA
QA_Ori:
Part 1
Method that records prepaid expenses and unearned revenues in balance sheet
accounts
1-Apr Prepaid Consulting Fees 2,450
Cash 2,450
Paid for future consulting services.
1-Apr Prepaid Insurance 3,600
Cash 3,600
Paid insurance for one year.
Received fees in advance.
31-May Consulting Fees Expense 2,000
Prepaid Consulting Fees 2,000
To adjust prepaid consulting fees.
To adjust unearned service fees.
Part 2
Method that records prepaid expenses and unearned revenues in income
statement accounts
1-Apr Consulting Fees Expense 2,450
Cash 2,450
Paid for future consulting services.
1-Apr Insurance Expense 3,600
Cash 3,600
Paid insurance for one year.
Consulting Fees Expense 450
To adjust prepaid consulting fees ($2,450 –
$2,000).
Part 3
There are no differences between the two methods in terms of the amounts that
appear on the financial statements. In both cases, the financial statements
reflect the following:
Prepaid consulting fees as of May 31 $450
When prepaid expenses and unearned revenues are recorded in balance sheet
Title: Serial Problem, Success Systems
QA_Ori:
Part 1
<Note: The general ledger is displayed at the end of Part 6>
Journal entries
2-Dec Advertising Expense 655
1,02
5
Cash 101 1,025
Paid share of mall advertising costs.
3-Dec Repairs Expense–Computer 684 500
Cash 101 500
Repaired the computer.
3,95
Paid cash for owner withdrawal.
Part 2
Adjusting entries
31-De
c Computer Supplies Expense 652
3,06
5
3,06
31-De
c Insurance Expense 637 555
31-De
c Wages Expense 623 500
31-De
Depreciation
1,25
Adjustment for computer equipment
depreciation:
$20,00
31-De
c Depreciation Expense—Office Equip 612 400
Accumulated Depreciation—Office
Equipment 164 400
31-De
c Rent Expense 640
2,47
5
2,47
Part 3
SUCCESS SYSTEMS
Adjusted Trial Balance
December 31, 2013
Debit Credit
Cash $58,160
Accounts receivable 5,668
Computer supplies 580
Prepaid insurance 1,665
Prepaid rent 825
Office equipment 8,000
Totals
4
4
Part 4
SUCCESS SYSTEMS
Income Statement
For Three Months Ended December 31, 2013
Revenue
Computer services revenue $31,284
Expenses
Depreciation expense—Office
equipment $400
Depreciation expense—Computer
Part 5
SUCCESS SYSTEMS
Statement of Owner’s Equity
For Three Months Ended December 31, 2013
A. Lopez, Capital, October 1, 2013
$83,00
0
Plus: Net income 14,248
97,248