Type
Solution Manual
Book Title
Financial Accounting Fundamentals 5th Edition
ISBN 13
978-0078025754

978-0078025754 Chapter 3 Solution Manual Part 6

March 26, 2020
Problem 3-6B (Continued)
Part 6
Closing entries
July 31 Storage Fees Earned ................................. 401 10,950
Income Summary .................................. 901 10,950
To close the revenue account.
Office Supplies Expense ...................... 650 875
Repairs Expense ................................... 684 950
Telephone Expense .............................. 688 400
To close the expense accounts.
31 Income Summary ....................................... 901 2,725
Part 7
SAFE STORAGE CO.
Post-Closing Trial Balance
July 31, 2015
Debit Credit
Cash ............................................................. $ 22,850
Accounts receivable .................................. 1,150
Office supplies ............................................ 1,525
Prepaid insurance ...................................... 6,800
Buildings ..................................................... 150,000
Problem 3-6B (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
Accounts Receivable Acct. No. 106
Date Explanation PR Debit Credit Balance
Office Supplies Acct. No. 124
Date Explanation PR Debit Credit Balance
Prepaid Insurance Acct. No. 128
Date Explanation PR Debit Credit Balance
Buildings Acct. No. 173
Date Explanation PR Debit Credit Balance
Accumulated DepreciationBuildings Acct. No. 174
Date Explanation PR Debit Credit Balance
Salaries Payable Acct. No. 209
Date Explanation PR Debit Credit Balance
Problem 3-6B (Continued)
Common Stock Acct. No. 307
Retained Earnings Acct. No. 318
Date Explanation PR Debit Credit Balance
Dividends Acct. No. 319
Date Explanation PR Debit Credit Balance
Storage Fees Earned Acct.No. 401
Date Explanation PR Debit Credit Balance
Depreciation ExpenseBuildings Acct. No. 606
Date Explanation PR Debit Credit Balance
Salaries Expense Acct. No. 622
Date Explanation PR Debit Credit Balance
Insurance Expense Acct. No. 637
Date Explanation PR Debit Credit Balance
Rent Expense Acct. No. 640
Date Explanation PR Debit Credit Balance
Problem 3-6B (Concluded)
Office Supplies Expense Acct. No. 650
Date Explanation PR Debit Credit Balance
Repairs Expense Acct. No. 684
Date Explanation PR Debit Credit Balance
Telephone Expense Acct. No. 688
Date Explanation PR Debit Credit Balance
Income Summary Acct. No. 901
Date Explanation PR Debit Credit Balance
Problem 3-7B (15 minutes)
1.
Z
6.
F
11.
A
E
Problem 3-8B (75 minutes)
Part 1
ANARA CO.
Income Statement
For Year Ended December 31, 2015
Revenues
Professional fees earned ................................... $59,600
Rent earned ......................................................... 4,500
Expenses
Depreciation expenseBuilding ...................... 2,000
Depreciation expenseEquipment .................. 1,000
Wages expense .................................................. 18,500
Interest expense ................................................. 1,550
ANARA CO.
Statement of Retained Earnings
For Year Ended December 31, 2015
Retained earnings, December 31, 2014 .............. $ 62,800
Problem 3-8B (Continued)
ANARA CO.
Balance Sheet
December 31, 2015
Assets
Current assets
Plant assets
Equipment ........................................................... $24,000
Accumulated depreciationEquipment .......... (4,000) 20,000
Building ............................................................... 100,000
Liabilities
Current liabilities
Accounts payable ............................................... $ 3,500
Interest payable .................................................. 1,750
Rent payable ....................................................... 400
Equity
Problem 3-8B (Continued)
Part 2
Closing entries (all dated December 31, 2015)
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 ExpenseBuilding ........ 2,000
Depreciation ExpenseEquipment .... 1,000
Wages Expense..................................... 18,500
Part 3
a. Return on assets = $28,890/[($160,000 + $164,700)/2] = 17.8% (or 0.178)
SERIAL PROBLEM SP 3
Serial Problem, Business Solutions (180 minutes) Part 1
<Note: The general ledger is displayed at the end of Part 8>
Journal entries
Dec. 2 Advertising Expense .................................. 655 1,025
Cash .....................................................101 1,025
Paid share of mall advertising costs.
3 Repairs ExpenseComputer ..................... 684 500
Cash .....................................................101 500
Repaired the computer.
Serial Problem, SP 3 (Continued)
Part 2
Adjusting entries
31 Wages Expense ..............................................623 500
Wages Payable ........................................210 500
Adjustment for accrued wages.
31 Depreciation ExpenseOffice Equip ............612 400
Serial Problem, SP 3 (Continued)
Part 3
BUSINESS SOLUTIONS
Adjusted Trial Balance
December 31, 2015
Debit Credit
Cash ........................................................................... $ 48,372
Accounts receivable ................................................. 5,668
Computer supplies ................................................... 580
Prepaid insurance ..................................................... 1,665
Prepaid rent ............................................................... 825
Office equipment ...................................................... 8,000
Accumulated depreciationOffice equipment ....... $ 400
Serial Problem, SP 3 (Continued)
Part 4
BUSINESS SOLUTIONS
Income Statement
For Three Months Ended December 31, 2015
Revenue
Computer services revenue ....................................... $31,284
Expenses
Depreciation expenseOffice equipment ............... $ 400
Depreciation expenseComputer equipment ......... 1,250
Wages expense ........................................................... 3,875
Insurance expense ..................................................... 555
Part 5
BUSINESS SOLUTIONS
Statement of Retained Earnings
For Three Months Ended December 31, 2015
Retained earnings, October 1, 2015 ............................ $ 0
Plus: Net income .......................................................... 14,460
Serial Problem, SP 3 (Continued)
Part 6
BUSINESS SOLUTIONS
Balance Sheet
December 31, 2015
Assets
Office equipment ........................................................... $ 8,000
Accumulated depreciationOffice equipment ............. (400) 7,600
Computer equipment ..................................................... 20,000
Accumulated depreciationComputer equipment ...... (1,250) 18,750
Total assets ..................................................................... $ 83,460
Equity
Serial Problem, SP 3 (Continued)
Part 7
Closing entries
2015
Dec. 31 Computer Services Revenue .......................... 403 31,284
Income Summary ...................................... 901 31,284
To close the revenue account.
31 Income Summary ............................................. 901 16,824
Depreciation ExpOffice Equipment ....... 612 400
Depreciation ExpComputer Equipment .. 613 1,250
31 Income Summary ............................................. 901 14,460
Retained Earnings .................................... 318 14,460
To close the Income Summary account.
Note: All accounts with numbers that start with the digits 1 or 2 (the permanent
accounts) are unaffected by the closing process.

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