978-0078025587 Chapter 4 Solution Manual Part 4

subject Type Homework Help
subject Pages 9
subject Words 1769
subject Textbook Fundamental Accounting Principles 21st Edition
subject Authors Barbara Chiappetta, John Wild, Ken Shaw
search this document

Unlock document.

This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
page-pf1
Problem 4-5A (Continued)
TYBALT CONSTRUCTION
Balance Sheet
December 31, 2013
Assets
Current assets
Cash ..................................................................... $ 5,000
Short-term investments ..................................... 23,000
Plant assets
Equipment ........................................................... 40,000
Accumulated depreciation—Equipment .......... (20,000) 20,000
Building ............................................................... 150,000
Accumulated depreciation—Building .............. (50,000) 100,000
Liabilities
Current liabilities
Accounts payable ............................................... $ 16,500
Interest payable .................................................. 2,500
Rent payable ....................................................... 3,500
Wages payable ................................................... 2,500
Long-term liabilities
Long-term notes payable ($67,000-$7,000) .......... 60,000
Total liabilities ...................................................... 100,400
Equity
page-pf2
Problem 4-5A (Continued)
Part 2
Closing entries (all dated December 31, 2013)
Instructor note: Entries are shown without an account reference column because no posting is required.
(1) Professional Fees Earned ........................... 97,000
Rent Earned .................................................. 14,000
(2) Income Summary ......................................... 110,800
Depreciation Expense—Building ........ 11,000
Depreciation Expense—Equipment .... 6,000
Wages Expense..................................... 32,000
Interest Expense ................................... 5,100
Insurance Expense ............................... 10,000
Rent Expense ........................................ 13,400
To close the expense accounts.
(3) Income Summary ......................................... 4,300
O. Tybalt, Capital................................... 4,300
To close the income summary account.
Part 3
a. Return on assets = $4,300/[($200,000 + $218,100)/2] = 2.1% (or 0.021)
b. Debt ratio = $100,400/$218,100 = 0.46
page-pf3
Problem 4-6AA (40 minutes)
Part 1
HAWKEYE RANGES
Work Sheet
For Year Ended December 31, 2013
Unadjusted
Trial Balance
Adjustments
Account Title
Dr.
Cr.
Dr.
Cr.
Dr.
Cr.
Cash .........................................
14,000
14,000
Accounts receivable ...........
(e)
9,300
9,300
Supplies ................................
6,500
(b)
3,500
3,000
Equipment .............................
135,000
135,000
Accumulated depre-
ciation--Equipment .............
30,000
(f)
15,000
45,000
Interest payable ....................
(c)
1,875
1,875
Salaries payable ...................
(a)
1,200
1,200
Unearned member fees .......
15,000
(d)
9,200
5,800
Notes payable .......................
75,000
75,000
P. Hawkeye, Capital ............
50,250
50,250
P. Hawkeye, Withdrawals .......
21,125
21,125
Member fees earned ...........
42,000
(d)
(e)
9,200
9,300
60,500
Depreciation expense—
Equipment ..............................
(f)
15,000
15,000
Salaries expense ..................
30,000
(a)
1,200
31,200
Interest expense ...................
5,625
(c)
1,875
7,500
Supplies expense ................
______
______
(b)
3,500
_____
3,500
______
Totals .......................................
212,250
212,250
40,075
40,075
239,625
239,625
page-pf4
Problem 4-6AA (Continued)
Part 2 (all adjusting entries dated December 31, 2013)
Instructor note: Entries are shown without an account reference column because no posting is required.
(a) Salaries Expense .......................................... 1,200
Salaries Payable.................................... 1,200
To record accrued salaries.
(d) Unearned Member Fees ............................... 9,200
Member Fees Earned ............................ 9,200
To record earned fees.
Part 3 (all reversing entries dated January 1, 2014)
(a) Salaries Payable ........................................... 1,200
Salaries Expense .................................. 1,200
To reverse accrued salaries.
page-pf5
Problem 4-6AA (Concluded)
Part 4
Instructor note: Entries are shown without an account reference column because no posting is required.
2014
15 Interest Expense .......................................... 2,250
Cash ....................................................... 2,250
To record interest payment.
page-pf6
PROBLEM SET B
Problem 4-1B (15 minutes)
1.
Z
6.
F
11.
A
16.
E
2.
A
7.
D
12.
E
17.
Z
3.
B
8.
E
13.
E
18.
A
4.
A
9.
C
14.
G
19.
C
5.
C
10.
C
15.
A
20.
Z
page-pf7
Problem 4-2B (90 minutes)
INSTRUCTOR NOTE: Ledger accounts are shown after Part 7 as they would appear after all
entries are posted.
Part 2
Transactions for July
July 1 Cash ............................................................... 101 30,000
Buildings ....................................................... 173 150,000
L. Plume, Capital ................................... 301 180,000
Owner invested in the business.
10 Prepaid Insurance ........................................ 128 7,200
Cash ....................................................... 101 7,200
Paid 12 months’ premium in advance.
14 Salaries Expense .......................................... 622 1,000
Cash ....................................................... 101 1,000
Paid two weeks’ salary.
29 Repairs Expense .......................................... 684 950
Cash ....................................................... 101 950
Repaired the roof.
page-pf8
Problem 4-2B (Continued)
Part 3
SAFE STORAGE CO.
Unadjusted Trial Balance
July 31, 2013
No. Account Title Debit Credit
101 Cash ..................................................................... $ 22,850
106 Accounts receivable .......................................... 0
124 Office supplies .................................................... 2,400
302 L. Plume, Withdrawals ....................................... 2,000
401 Storage fees earned ........................................... 9,800
606 Depreciation expense–Buildings ...................... 0
622 Salaries expense ................................................ 2,000
637 Insurance expense ............................................. 0
page-pf9
Problem 4-2B (Continued)
Part 4
Adjusting entries
July 31 Insurance Expense ...........................................637 400
Prepaid Insurance ....................................128 400
To record expired insurance
(2/3 x $7,200/12 per month).
To record accrued salaries.
31 Accounts Receivable ........................................106 1,150
Storage Fees Earned ...............................401 1,150
To record accrued storage fees.
page-pfa
Problem 4-2B (Continued)
Part 4
SAFE STORAGE CO.
Adjusted Trial Balance
July 31, 2013
No. Account Title Debit Credit
101 Cash ..................................................................... $ 22,850
106 Accounts receivable .......................................... 1,150
124 Office supplies .................................................... 1,525
401 Storage fees earned ........................................... 10,950
606 Depreciation expense–Buildings ...................... 1,500
622 Salaries expense ................................................ 2,100
637 Insurance expense ............................................. 400
640 Rent expense ...................................................... 2,000
page-pfb
Problem 4-2B (Continued)
Part 5
SAFE STORAGE CO.
Income Statement
For Month Ended July 31, 2013
Storage fees earned ................................... $10,950
Expenses
Depreciation expense–Buildings ............ $1,500
Salaries expense ...................................... 2,100
Insurance expense ................................... 400
SAFE STORAGE CO.
Statement of Owner’s Equity
For Month Ended July 31, 2013
L. Plume, Capital, July 1, 2013 .................. $ 0
Add: Owner’s investment ........................$180,000
Net income ....................................... 2,725
page-pfc
Problem 4-2B (Continued)
Part 5
SAFE STORAGE CO.
Balance Sheet
July 31, 2013
Assets
Cash ............................................................. $ 22,850
Accounts receivable .................................. 1,150
Liabilities
Salaries payable ......................................... $ 100
Equity
page-pfd
Problem 4-2B (Continued)
Part 6
Closing entries
July 31 Storage Fees Earned ................................. 401 10,950
Income Summary .................................. 901 10,950
To close the revenue account.
31 Income Summary ....................................... 901 8,225
Depreciation Exp—Buildings .............. 606 1,500
Salaries Expense .................................. 622 2,100
31 Income Summary ....................................... 901 2,725
L. Plume, Capital ................................... 301 2,725
To close the Income Summary.
Part 7
SAFE STORAGE CO.
Post-Closing Trial Balance
July 31, 2013
Debit Credit
Cash ............................................................. $ 22,850
Accounts receivable .................................. 1,150
Office supplies ............................................ 1,525
page-pfe
Problem 4-2B (Continued)
Ledger as of July 31
Cash Acct. No. 101
Date Explanation PR Debit Credit Balance
July 1 30,000 30,000
2 2,000 28,000
5 2,400 25,600
10 7,200 18,400
Accounts Receivable Acct. No. 106
Date Explanation PR Debit Credit Balance
July 31 Adjusting 1,150 1,150
Office Supplies Acct. No. 124
Date Explanation PR Debit Credit Balance
Buildings Acct. No. 173
Date Explanation PR Debit Credit Balance
July 1 150,000 150,000
Accumulated Depreciation—Buildings Acct. No. 174
Date Explanation PR Debit Credit Balance
page-pff
Problem 4-2B (Continued)
L. Plume, Capital Acct. No. 301
Date Explanation PR Debit Credit Balance
L. Plume, Withdrawals Acct. No. 302
Date Explanation PR Debit Credit Balance
July 31 2,000 2,000
31 Closing 2,000 0
Storage Fees Earned Acct.No. 401
Date Explanation PR Debit Credit Balance
Depreciation Expense—Buildings Acct. No. 606
Date Explanation PR Debit Credit Balance
July 31 Adjusting 1,500 1,500
31 Closing 1,500 0
Salaries Expense Acct. No. 622
Date Explanation PR Debit Credit Balance
Insurance Expense Acct. No. 637
Date Explanation PR Debit Credit Balance
July 31 Adjusting 400 400
31 Closing 400 0
Rent Expense Acct. No. 640
Date Explanation PR Debit Credit Balance

Trusted by Thousands of
Students

Here are what students say about us.

Resources
Company
Legal

Copyright ©2022 All rights reserved. | CoursePaper is not sponsored or endorsed by any college or university.