Problem 3-3B (Continued)
Part 2
Adjustment (a)
Dec. 31 Insurance Expense ………………………………………… 9,500
Prepaid Insurance …………………………………… 9,500
To record the insurance expired.
Adjustment (b)
Adjustment (c)
Adjustment (d)
31 Depreciation Expense—Professional Library …. 2,400
Adjustment (e)
Adjustment (f)
Adjustment (g)
31 Salaries Expense …………………………………………… 450
Salaries Payable……………………………………… 450
To accrue salaries expense (3 days x $150).
Adjustment (h)
Problem 3-3B (Continued)
Part 3
ALONZO INSTITUTE
Adjusted Trial Balance
December 31, 2015
Debit
Credit
Cash ……………………………………………………………………………….
$ 60,000
Accounts receivable ……………………………………………………...
5,750
Teaching supplies ………………………………………………………….
20,000
Prepaid insurance ………………………………………………………….
9,500
Prepaid rent …………………………………………………………………...
0
Professional library ……………………………………………………….
12,000
Accumulated depreciation—Professional library ………...
$ 4,900
Equipment …………………………..………………………………………...
40,000
Accumulated depreciation—Equipment ……………………….
25,000
Accounts payable ………………………………………………………….
11,200
Salaries payable …………………………………………………………….
450
Unearned training fees …………………………………………………..
0
Common stock ……………………………………………………………...
11,000
Retained earnings …………………………..……………………………..
60,500
Dividends ……………………………………………………………………….
20,000
Tuition fees earned ……………………………………………………….
134,950
Training fees earned ……………………………………………………...
96,600
Depreciation expense—Professional library ………………...
2,400
Depreciation expense—Equipment ……………………………...
5,000
Salaries expense …………………………………………………………...
44,650
Insurance expense ………………………………………………………...
9,500
Rent expense ………………………………………………………………...
33,400
Teaching supplies expense …………………………………………..
50,000
Advertising expense ……………………………………………………...
19,000
Utilities expense …………………………………………………………….
13,400
_______
Totals ……………………………………………………………………………..
$344,600
$344,600
Problem 3-3B (Continued)
Part 4
ALONZO INSTITUTE
Income Statement
For Year Ended December 31, 2015
Revenues
Tuition fees earned …………………………………………… $134,950
Training fees earned …………………………………………. 96,600
Total revenues ………………………………………………….. $231,550
Expenses
ALONZO INSTITUTE
Statement of Retained Earnings
For Year Ended December 31, 2015
Retained earnings, December 31, 2014 ………….. $ 60,500
Plus: Net income ………………………………………….. 54,200
Problem 3-3B (Concluded)
ALONZO INSTITUTE
Balance Sheet
December 31, 2015
Assets
Cash …………………………………………………………………… $ 60,000
Accounts receivable …………………………………………… 5,750
Teaching supplies ………………………………………………. 20,000
Prepaid insurance ………………………………………………. 9,500
Problem 3-4B (45 minutes) — Part 1
Account
Adjustments
Adjusted
Trial Balance
Cash …………………………………….
$ 45,000
$ 45,000
Accounts receivable ……….….
60,000
(a)
6,660
66,660
Office supplies …………………….
40,000
(b)
23,000
17,000
Prepaid insurance …………..….
8,200
(c)
4,600
3,600
Office equipment …………….….
120,000
120,000
Accumulated depreciation—
Office equipment ……………….…..
$ 20,000
(d)
10,000
$30,000
Accounts payable ……………….
26,000
(e)
6,000
32,000
Interest payable ……………….….
(f)
2,150
2,150
Salaries payable ………………….
(g)
16,000
16,000
Unearned consulting fees ..…..
40,000
(h)
12,200
27,800
Long–term notes payable .….
75,000
75,000
Common stock ………………..….
4,000
4,000
Retained earnings …………..….
76,200
76,200
Dividends …………………………..
20,000
20,000
Consulting fees earned ….….
234,600
(a)
(h)
6,660
12,200
253,460
Depreciation expense—
Office equipment ………….….
(d)
10,000
10,000
Salaries expense ……………..….
112,000
(g)
16,000
128,000
Interest expense ………………….
8,600
(f)
2,150
10,750
Insurance expense …………….
(c)
4,600
4,600
Rent expense …………………..….
20,000
20,000
Office supplies expense …….
(b)
23,000
23,000
Advertising expense ……….….
42,000
_______
(e)
6 ,000
______
48,000
_______
Totals………………………………..….
$475,800
$475,800
$80,610
$80,610
$516,610
$516,610
Adjustment Descriptions
(a) Earned but uncollected revenues.
(b) Cost of office supplies used.
Problem 3-4B (continued)
Part 2
YAN CONSULTING COMPANY
Income Statement
For Year Ended December 31, 2015
Revenues
Consulting fees earned ………………………………. $253,460
Expenses
Depreciation expense—Office equipment ……. $ 10,000
YAN CONSULTING COMPANY
Statement of Retained Earnings
For Year Ended December 31, 2015
Retained earnings, December 31, 2014 ………….. $ 76,200
Plus: Net income ………………………………………….. 9,110
Problem 3-4B (Concluded)
Part 2
YAN CONSULTING COMPANY
Balance Sheet
December 31, 2015
Assets
Cash ……………………………………………………………………..
$ 45,000
Accounts receivable ……………………………………………..
66,660
Office supplies ……………………………………………………...
17,000
Prepaid insurance ………………………………………………...
3,600
Office equipment …………………………………………………..
$120,000
Accumulated depreciation—Office equipment ……….
(30,000)
90,000
Total assets …………………………………………………………..
$222,260
Liabilities
Accounts payable ………………………………………………….
$ 32,000
Interest payable …………………………………………………….
2,150
Salaries payable …………………………………………………...
16,000
Unearned consulting fees ……………………………………..
27,800
Long-term notes payable ……………………………………….
75,000
Total liabilities ……………………………………………………...
152,950
Equity
Common stock ……………………………………………………..
4,000
Retained earnings ………………………………………………...
65,310
Total liabilities and equity ……………………………………..
$222,260
Problem 3-5B (50 minutes)
Part 1
SPEEDY COURIER
Income Statement
For Year Ended December 31, 2015
Revenues
Delivery fees earned ………………………………. $611,800
Interest earned ……………………………………….. 34,000
Total revenues ……………………………………….. $645,800
Expenses
Depreciation expense—Trucks ……………….. 29,000
SPEEDY COURIER
Statement of Retained Earnings
For Year Ended December 31, 2015
Retained earnings, December 31, 2014 ……… $110,000
Plus : Net income ……………………………………. 86,000
Problem 3-5B (Concluded)
SPEEDY COURIER
Balance Sheet
December 31, 2015
Assets
Cash …………………………………………………………….
$ 58,000
Accounts receivable ……………………………………..
120,000
Interest receivable …………………………………………
7,000
Notes receivable (due in 90 days)…………………….
210,000
Office supplies ……………………………………………..
22,000
Trucks ………………………………………………………….
$ 134,000
Accumulated depreciation—Trucks ……………….
(58,000)
76,000
Equipment …………………………………………………….
270,000
Accumulated depreciation—Equipment …………
(200,000)
70,000
Land ……………………………………………………………..
100,000
Total assets ………………………………………………….
$663,000
Liabilities
Accounts payable …………………………………………
$134,000
Interest payable …………………………………………….
20,000
Salaries payable ……………………………………………
28,000
Unearned delivery fees ………………………………….
120,000
Long-term notes payable ………………………………
200,000
Total liabilities ………………………………………………
502,000
Equity
Common stock ……………………………………………..
15,000
Retained earnings …………………………………………
146,000
Total liabilities and equity ……………………………..
$663,000
Part 2
Problem 3-6B (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
Paid one month’s rent.
5 Office Supplies ……………………………………… 124 2,400
Cash ………………………………………………. 101 2,400
Acquired office supplies.
Collected fees from customers.
28 Salaries Expense …………………………………… 622 1,000
Cash ………………………………………………. 101 1,000
Paid two weeks’ salary.
Paid cash for dividends.
Problem 3-6B (Continued)
Part 3
SAFE STORAGE CO.
Unadjusted Trial Balance
July 31, 2015
No. Account Title Debit Credit
101 Cash …………………………………………………………… $ 22,850
106 Accounts receivable …………………………………… 0
124 Office supplies ……………………………………………. 2,400
128 Prepaid insurance ………………………………………. 7,200
173 Buildings ……………………………………………………. 150,000
174 Accumulated depreciation–Buildings ………….. $ 0
209 Salaries payable …………………………………………. 0
Problem 3-6B (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).
Problem 3-6B (Continued)
Part 4
SAFE STORAGE CO.
Adjusted Trial Balance
July 31, 2015
No. Account Title Debit Credit
101 Cash …………………………………………………………… $ 22,850
106 Accounts receivable …………………………………… 1,150
124 Office supplies ……………………………………………. 1,525
128 Prepaid insurance ………………………………………. 6,800
Problem 3-6B (Continued)
Part 5
SAFE STORAGE CO.
Income Statement
For Month Ended July 31, 2015
Storage fees earned …………………………….. $10,950
Expenses
Depreciation expense–Buildings ………… $1,500
Salaries expense ……………………………….. 2,100
SAFE STORAGE CO.
Statement of Retained Earnings
For Month Ended July 31, 2015
Retained earnings, July 1, 2015 ……………. $ 0
Problem 3-6B (Continued)
Part 5
SAFE STORAGE CO.
Balance Sheet
July 31, 2015
Assets
Cash ……………………………………………………. $ 22,850
Accounts receivable ……………………………. 1,150
Office supplies …………………………………….. 1,525
Prepaid insurance ……………………………….. 6,800
Buildings …………………………………………….. $150,000