Part 3
Closing entries (all dated December 31, 2013)
Instructor note: Entries are shown without an account reference column because no posting is required.
1 Repair Fees Earned 54,700
Income Summary 54,700
To close the revenue account.
2 Income Summary 35,760
Depreciation Expense, Equipment 2,000
Part 4
(a) If none of the $600 insurance expense had expired, the income statement
(b) If there were no earned and unpaid wages (meaning Wages Payable equals
Financial Statement Changes
The income statement would reflect the following:
Net income would be increased by $600 + $2,700 = $3,300. (a) & (b)
The balance sheet would reflect the following:
Parts 2 and 3
Part 3
Closing entries (all dated December 31, 2013)
Instructor note: Entries are shown without an account reference column because no posting is required.
Title: Problem 4-5B
QA_Ori:
Part 1
Anara CO.
Income Statement
For Year Ended December 31, 2013
Revenues
Professional fees earned $59,600
Expenses
Depreciation expense—Building 2,000
Depreciation expense—Equipment 1,000
Wages expense 18,500
ANARA CO.
Statement of Owner’s Equity
For Year Ended December 31, 2013
P. Anara, Capital, December 31, 2012 $52,800
Add: Investments by owner $40,000
ANARA CO.
Balance Sheet
31-Dec-13
Assets
Current assets
Cash $7,400
Short-term investments 11,200
Liabilities
Current liabilities
Accounts payable $3,500
Equity
P. Anara, Capital 113,690
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 59,600
Rent Earned 4,500
2 Income Summary 37,530
Depreciation Expense—Building 2,000
Depreciation Expense—Equipment 1,000
Wages Expense 18,500
3 Income Summary 28,890
4 P. Anara, Capital 8,000
Part 3
a. Return on assets = $28,890/[($160,000 + $164,700)/2] = 17.8% (or 0.178)
Title: Problem 4-6BA
QA_Ori:
Part 1
SOLUTIONS CO.
Work Sheet
For Year Ended December 31, 2013
Unadjusted
Trial Balance Adjustments
Adjusted
Trial Balance
Dr. Cr. Dr. Cr. Dr. Cr.
Cash………………………………….10,000 10,000
Accounts receivable……………….. (e) 2,450 2,450
Supplies…………………………….. 7,600 (b) 4,150 3,450
Machinery……………………………50,000 50,000
Accumulated depreciation—
Machinery…………………………. 20,000 (f) 3,800 23,800
Part 2 (all adjusting entries dated December 31, 2013)
Instructor note: Entries are shown without an account reference column because no posting is required.
(b) Supplies Expense 4,150
Supplies 4,150
To record cost of consumed supplies.
Part 3 (all reversing entries dated January 1, 2014)
(a) Salaries Payable 400
Salaries Expense 400
To reverse accrued wages.
Part 4
Instructor note: Entries are shown without an account reference column because no posting is required.
2014
4-Jan Salaries Expense 1,200
Cash 1,200
To record payroll.
Title: Serial Problem, Success Systems
QA_Ori:
Part 1
<Note: The general ledger is displayed at the end of Part 2>
Closing entries
2013
31-Dec Computer Services Revenue 403 31,284
Income Summary 901 31,284
To close the revenue account.
31-Dec Income Summary 901 17,036
Depreciation Exp–Office Equipment 612 400
Note: All accounts with numbers that start with the digits 1 or 2 (the permanent
accounts) are unaffected by the closing process.
Part 2
SUCCESS SYSTEMS
Post-Closing Trial Balance
31-Dec-13
Debit Credit
Cash $58,160
Accounts receivable 5,668
[Instructor Note: Ledger includes all entries from prior three months. The Working Papers
shorten the solution by showing account balances as of December 31.]
General Ledger
Cash Acct. No. 101
Date Explanation PR Debit Credit Balance
Oct. 1 55,000 55,000
2 3,300 51,700
5 2,220 49,480
8 1,420 48,060
Date Explanation PR Debit Credit Balance
Oct. 6 4,800 4,800
12 1,400 6,200
15 4,800 1,400
Computer Supplies Acct. No. 126
Date Explanation PR Debit Credit Balance
Oct. 3 1,420 1,420
Prepaid Insurance Acct. No. 128
Date Explanation PR Debit Credit Balance
Prepaid Rent Acct. No. 131
Date Explanation PR Debit Credit Balance
Office Equipment Acct. No. 163
Date Explanation PR Debit Credit Balance
Accumulated Depreciation—Office Equipment Acct. No. 164
Date Explanation PR Debit Credit Balance
Dec. 31 400 400
Computer Equipment Acct. No. 167
Date Explanation PR Debit Credit Balance
Oct. 1 20,000 20,000
Accumulated Depreciation—Computer Equipment Acct. No. 168
Date Explanation PR Debit Credit Balance
Accounts Payable Acct. No. 201
Date Explanation PR Debit Credit Balance
Wages Payable Acct. No. 210
Date Explanation PR Debit Credit Balance
Dec. 31 500 500
Unearned Computer Services Revenue Acct. No. 236
Date Explanation PR Debit Credit Balance
Dec. 14 1,500 1,500
A. Lopez, Capital Acct. No. 301
Date Explanation PR Debit Credit Balance
A. Lopez, Withdrawals Acct. No. 302
Date Explanation PR Debit Credit Balance
Oct. 31 3,600 3,600
Nov. 30 2,000 5,600
Dec. 31 1,500 7,100
31 Closing 7,100 0
Computer Services Revenue Acct. No. 403
Date Explanation PR Debit Credit Balance
Depreciation Expense—Office Equipment Acct. No. 612
Date Explanation PR Debit Credit Balance
Dec. 31 400 400
31 Closing 400 0
Depreciation Expense—Computer Equipment Acct. No. 613
Date Explanation PR Debit Credit Balance
Wages Expense Acct. No. 623
Date Explanation PR Debit Credit Balance
Insurance Expense Acct. No. 637
Date Explanation PR Debit Credit Balance
Dec. 31 555 555
31 Closing 555 0
Rent Expense Acct. No. 640
Date Explanation PR Debit Credit Balance
Computer Supplies Expense Acct. No. 652
Date Explanation PR Debit Credit Balance
Dec. 31 3,065 3,065
31 Closing 3,065 0
Advertising Expense Acct. No. 655
Date Explanation PR Debit Credit Balance
Oct. 20 1,940 1,940
Dec. 2 1,025 2,965
31 Closing 2,965 0
Mileage Expense Acct. No. 676
Date Explanation PR Debit Credit Balance
Miscellaneous Expense Acct. No. 677
Date Explanation PR Debit Credit Balance
Repairs Expense—Computer Acct. No. 684
Date Explanation PR Debit Credit Balance
Oct. 17 805 805
Dec. 3 500 1,305
31 Closing 1,305 0
Income Summary Acct. No. 901
Date Explanation PR Debit Credit Balance