Exercise 3-6 (20 minutes)
adidas AG
Balance Sheet
December 31, 2013
(Euros in millions)
Assets
Noncurrent assets
Exercise 3-7 (20 minutes)
WILSON TRUCKING COMPANY
Income Statement
For Year Ended December 31, 2015
Exercise 3-8 (10 minutes)
Dec. 31 Net Sales ………………………………………………. 1,014,345
Income Summary ……………………………. 1,014,345
Exercise 3-9 (20 minutes)
WILSON TRUCKING COMPANY
Balance Sheet
December 31, 2015
Assets
Current assets
Liabilities
Current liabilities
Accounts payable …………………………………… $ 12,000
Interest payable ……………………………………… 4,000
Total current liabilities ……………………………. 16,000
Exercise 3–10 (10 minutes)
a. $ 4,361 / $ 44,500 = 9.8%
b. $ 97,706 / $ 398,800 = 24.5%
Exercise 3-11 (15 minutes)
Current
Assets
Current
Liabilities
Current
Ratio
Case 1
$ 79,040
/
$ 32,000
=
2.47
Case 2
104,880
/
76,000
=
1.38
Case 3
45,080
/
49,000
=
0.92
Case 4
85,680
/
81,600
=
1.05
Case 5
61,000
/
100,000
=
0.61
Analysis: Company 1 is in the strongest liquidity position. It has about $2.47
Exercise 3-12A (30 minutes)
a.
Dec. 1 Supplies Expense …………………………………………… 2,000
Cash ……………………………………………………….. 2,000
Purchased supplies.
b.
Dec. 2 Insurance Expense …………………………………………. 1,540
Exercise 3-13A (25 minutes)
a. Initial credit recorded in the Unearned Fees account
July 1 Cash …………………………………………………………….. 3,000
Unearned Fees ………………………………………. 3,000
Received fees for work to be done for Solana.
Fees Earned…………………………………………… 7,500
Completed work for customer Haru.
31 No adjusting entries required.
b. Initial credit recorded in the Fees Earned account
July 1 Cash …………………………………………………………….. 3,000
Exercise 3-13A –concluded
c. Under the first method (and using entries from a)
Exercise 3-14B (25 minutes)
WESTCOTT COMPANY
December 31, 2015
Unadjusted
Trial Balance
Dr. Cr.
Adjustments
Dr. Cr.
Adjusted
Trial Balance
Dr. Cr.
Cash ………………………………………….…
21
21
Accounts receivable ………………….…
12
12
Supplies ………………………………………
24
(d)
9
15
Prepaid insurance ……………………..…
18
(e)
15
3
Equipment ……………………………………
39
39
Accumulated depreciation–Equip
15
(a)
3
18
Accounts payable …………………………
6
6
Salaries payable ………………………..…
(b)
6
6
Unearned revenue ……………………..…
12
(c)
12
Common stock …………………………..
10
10
Retained earnings ……………………..…
32
32
Dividends …………………………..……..…
6
6
Revenue ………………………………………
75
(c)
12
87
Depreciation expense–Equip ……..…
(a)
3
3
Salaries expense ……………………….…
18
(b)
6
24
Insurance expense …………………….…
(e)
15
15
Supplies expense …………………………
(d)
9
9
Utilities expense ………………………..…
12
___
__
__
12
___
Totals ………………………………………..…
150
150
45
45
159
159
Exercise 3-15C (30 minutes)
1. Adjusting entries
Oct. 31 Rent Expense ………………………………………… 2,800
2. Subsequent entries without reversing
Nov. 5 Rent Payable …………………………………………. 2,800
Rent Expense ………………………………………… 2,800
3. Reversing entries and subsequent entries
Nov. 1 Rent Payable …………………………………………. 2,800
Rent Expense …………………………………. 2,800
To reverse accrual of rent expense.
Problem 3-1A (10 minutes)
1. E 5. C 9. D
Problem 3-2A (35 minutes)
Part 1
Adjustment (a)
Dec. 31 Office Supplies Expense ………………………….. 14,846
Office Supplies ………………………………….. 14,846
To record cost of supplies used