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Part 2
SPEEDY COURIER
Balance Sheet
December 31, 2013
Assets
Cash $ 58,000
Accounts receivable 120,000
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.
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.
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:
Service fees earned for two months ($3,900 + $5,500) 9,400
Prepaid advertising as of May 31 2,050
Advertising expense for two months 2,400
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
Part 2
Adjusting entries
31-De
c Computer Supplies Expense 652
3,06
5
3,06
available).
31-De
c Insurance Expense 637 555
31-De
c Wages Expense 623 500
Wages Payable 210 500
Adjustment for computer equipment
depreciation:
$20,00
Expense for three months $1,250
31-De
c Depreciation Expense—Office Equip 612 400
Accumulated Depreciation—Office
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
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
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
