Chapter 03 – Adjusting Accounts for Financial Statements
Problem 3-7B (Continued)
Common Stock Acct. No. 307
Date Explanation PR Debit Credit Balance
July 1 180,000 180,000
Retained Earnings Acct. No. 318
31 Adjusting 1,150 10,950
31 Closing 10,950 0
Depreciation Expense—Buildings Acct. No. 606
Date Explanation PR Debit Credit Balance
July 31 Adjusting 1,500 1,500
31 Closing 400 0
Rent Expense Acct. No. 640
Date Explanation PR Debit Credit Balance
July 2 2,000 2,000
31 Closing 2,000 0
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Financial Accounting, 7th Edition
86
Cash ……………………………………………..101 500
Repaired the computer.
4 Cash ……………………………………………………. 101 3,950
Accounts Receivable ……………………..106 3,950
Collected accounts receivable.
20 Cash ……………………………………………………. 101 5,625
Computer Services Revenue ………….403 5,625
Collected cash revenue from customer.
28 Cash ……………………………………………………. 101 3,000
Accounts Receivable ……………………..106 3,000
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McGraw-Hill Education.
Solutions Manual, Chapter 3
87
Dec. 31 Computer Supplies Expense …………………….652 3,065
Computer Supplies …………………………...126 3,065
Adjustment for supplies used (supplies
balance less cost of supplies available).
31 Insurance Expense …………………………………..637 555
Cost ……………………………………………….. $20,000
Predicted life …………………………………… 4 years
Annual depreciation (cost/life) ………….. $5,000
Expense for three months ………………… $1,250
31 Depreciation Expense—Office Equip …………612 400
$3,300 original prepaid amount).
Chapter 03 – Adjusting Accounts for Financial Statements
Serial Problem, SP 3 (Continued)
Part 3
SUCCESS SYSTEMS
Adjusted Trial Balance
Accumulated depreciation—Computer equipment 1,250
Accounts payable …………………………………………….. 1,100
Wages payable …………………………………………………. 500
Unearned computer services revenue ………………. 1,500
Common stock ………………………………………………….. 83,000
Mileage expense ………………………………………………. 896
Miscellaneous expenses …………………………………… 250
Repairs expense—Computer …………………………….. 1,305 _______
Totals ……………………………………………………………….. $119,034 $119,034
Chapter 03 – Adjusting Accounts for Financial Statements
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McGraw-Hill Education.
Solutions Manual, Chapter 3
89
Serial Problem, SP 3 (Continued)
Part 4
SUCCESS SYSTEMS
Income Statement
For Three Months Ended December 31, 2013
Revenue
Computer services revenue ………………………………… $31,284
Expenses
Depreciation expense—Office equipment …………… $ 400
Depreciation expense—Computer equipment ……… 1,250
Wages expense ………………………………………………….. 3,875
Insurance expense …………………………………………….. 555
Rent expense …………………………………………………….. 2,475
Computer supplies expense ……………………………….. 3,065
Advertising expense …………………………………………… 2,965
Mileage expense ………………………………………………… 896
Miscellaneous expenses …………………………………….. 250
Repairs expense—Computer ………………………………. 1,305
Chapter 03 – Adjusting Accounts for Financial Statements
Serial Problem, SP 3 (Continued)
Part 6
SUCCESS SYSTEMS
Balance Sheet
December 31, 2013
Assets
Liabilities
Accounts payable ………………………………………………….. $ 1,100
Wages payable ……………………………………………………… 500
Unearned computer services revenue ……………………. 1,500
Total liabilities ………………………………………………………. 3,100
Equity