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b.
Office Rent Ex
p
ense 28
,
000
Su
pp
lies Ex
p
ense 5
,
600
Salar
y
Ex
p
ense 72
,
000
De
p
reciation Ex
p
ense: Trucks 16
,
000
De
p
reciation Ex
p
ense: E
q
ui
p
ment 4
,
000
31 43
,
600
Retained Earnin
g
s43
,
600
Retained Earnin
g
s account
(
$194,000 - $150,400 =
General Journal
To close all ex
p
ense accounts.
Income Summar
y
To transfer net income earned in 2015 to the
(
3
)
PROBLEM 5.2B
GARDEN WIZARD
S
December 31, 201
5
(1)
GARDEN WIZARDS (continued
)
c.
PROBLEM 5.2B
GARDEN WIZARDS (concluded
)
GARDEN WIZARDS
December 31, 201
5
After-Closing Trial Balanc
e
a.
56
,
700$
Client revenue earned
PROBLEM 5.3B
DEBIT DOCTORS, INC.
Ex
p
enses:
DEBIT DOCTORS, INC.
For the Year Ended December 31, 201
5
Income Statement
Revenues:
a. (cont'd)
450$ 220
1
,
600 1
,
800 900
Accounts receivabl
e
Unex
p
ired insurance
Pre
p
aid rent
Su
pp
lies
PROBLEM 5.3B
DEBIT DOCTORS, INC. (continued)
Cash
December 31, 201
5
Balance Shee
t
Asset
s
DEBIT DOCTORS, INC.
b.
PROBLEM 5.3B
DEBIT DOCTORS, INC.
General Journal
DEBIT DOCTORS, INC. (continued)
c.
10
,
000 6
,
600$ 7
,
100
24
,
000 2
,
100 170 600
d.
e.
PROBLEM 5.3B
DEBIT DOCTORS, INC. (concluded)
DEBIT DOCTORS, INC.
Furniture & fixtures
Su
pp
lies
After-Closing Trial Balanc
e
December 31, 201
5
The primary issue to be addressed in the notes to the financial statements is the company's
ability, or lack thereof, to remain a going concern. In other words, just how much longer
For the
y
ear ended December 31, 2015, the com
p
an
y
suffered a net loss of $31,600 on
$56,700 sales. Thus, net loss as a percentage of sales was approximately 56%. The net loss
Accumulated de
p
reciation: furniture and fixtures
Notes
p
a
y
able
Accounts
p
a
y
abl
e
Interest
p
a
y
able
Salaries
p
a
y
able
a.
Month Ended Quarter Ended 9 Months Ended
Sept. 30 Sept. 30 Sept. 30
30
,
000$ 120
,
000$ 320
,
000$
For the Following Time Periods
Commissions earned
Revenue:
Ex
p
enses:
Income Statement
PROBLEM 5.4B
HOWARD REALT
Y
HOWARD REALT
Y
a. (continued)
Computations for each of the adjusting journal entries:
1. Accounts receivable increased by the $25,000 of accrued revenue in December.
2. Unearned revenue is reduced by the $15,000 amount earned in December.
NEXT JOB, INC. (continued)
PROBLEM 5.5B
The company’s adjusted trial balance dated December 31, 2015, appears on the following page.
a. (cont'd.)
276
,
500$ 115
,
000 300
3
,
000
Consultin
g
fees earned 540
,
000
Rent ex
p
ense 15
,
900
Dividends
NEXT JOB, INC.
December 31, 201
5
Adjusted Trial Balanc
e
Accounts receivabl
e
Cash
Office su
pp
lies
NEXT JOB, INC. (continued)
PROBLEM 5.5B
