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3-6-113
EXERCISE 3-21B a.
Perry Carpet Cleaners
General Journal, 2016
Event
Account Titles
Debit
Credit
1.
Cash
45,000
Common Stock
45,000
2.
Accounts Receivable
37,500
Service Revenue
37,500
3.
Operating Expenses
15,000
Accounts Payable
15,000
4.
Cash
30,000
Service Revenue
30,000
5.
Land
12,000
Cash
12,000
6.
Cash
33,000
Accounts Receivable
33,000
7.
Cash
9,000
Unearned Revenue
9,000
8.
Supplies
1,350
Accounts Payable
1,350
9.
Accounts Payable
11,250
Cash
11,250
10.
Dividends
7,500
Cash
7,500
11.
Supplies Expense
750
Supplies
750
12.
Unearned Revenue
7,500
Service Revenue
7,500
13.
Interest Receivable
1,350
3-6-114
Interest Revenue
1,350
3-6-115
EXERCISE 3-21B
b.
Perry Carpet Cleaners
T-Accounts, 2016
ASSETS
=
LIABILITIES
+
STOCKHOLDERS’ EQUITY
Cash
Accounts Payable
Common Stock
Retained Earnings
Debit
Credit
Debit
Credit
Debit
Credit
Debit
Credit
1. 45,000
5. 12,000
9. 11,250
3. 15,000
1. 45,000
-0-
4. 30,000
9. 11,250
8. 1,350
Bal. 45,000
6. 33,000
10. 7,500 0
Bal. 5,100
7. 9,000
Bal. 86,250
Unearned Revenue
Dividends
Debit
Credit
Debit
Credit
12. 7,500
7. 9,000
10. 7,500
Bal. 1,500
Bal. 7,500
Service Revenue
Accounts Rec.
Debit
Credit
Debit
Credit
2. 37,500
2. 37,500
6. 33,000
4. 30,000
Bal. 4,500
12. 7,500
Bal. 75,000
Interest Rec.
Operating Expense
13. 1,350
Debit
Credit
Bal. 1,350
3. 15,000
Bal. 15,000
Supplies
Supplies Expenses
Debit
Credit
Debit
Credit
8. 1,350
11. 750
11. 750
Bal. 600
Bal. 750
Land
Interest Revenue
Debit
Credit
Debit
Credit
5. 12,000
13. 1,350
Bal. 12,000
Bal. 1,350
3-6-116
3-6-117
EXERCISE 3-21B (cont.)
c.
Perry Carpet Cleaners
Trial Balance
As of December 31, 2016
Account Titles
Debit
Credit
Cash
$ 86,250
Accounts Receivable
4,500
Interest Receivable
1,350
Supplies
600
Land
12,000
Accounts Payable
$ 5,100
Unearned Revenue
1,500
Common Stock
45,000
Dividends
7,500
Service Revenue
75,000
Interest Revenue
1,350
Operating Expenses
15,000
Supplies Expense
750
Totals
$127,950
$127,950
3-6-118
EXERCISE 3-22B
a.
Event Services Co.
General Journal, 2016
Date
Account Titles
Debit
Credit
1.
Accounts Receivable
130,000
Service Revenue
130,000
2.
Operating Expenses
6,200
Accounts Payable
6,200
3.
Cash
112,000
Accounts Receivable
112,000
4.
Salaries Expense
72,000
Cash
72,000
5.
Accounts Payable
30,000
Cash
30,000
6.
Dividends
16,000
Cash
16,000
3-6-119
EXERCISE 3-22B (cont.)
b. and d.
Event Servicesn Co.
T-Accounts, 2016
Assets
=
Liabilities
+
Stockholders’ Equity
Cash
Accounts Payable
Common Stock
Debit
Credit
Debit
Credit
Debit
Credit
Bal. 60,000
Bal. 24,800
Bal. 48,000
3. 112,000
4. 72,000
5. 30,000
2. 6,200
5. 30,000
Bal. 1,000
Retained Earnings
6. 16,000
Debit
Credit
Bal. 54,000
Bal. 25,200
cl 78,200
cl 130,000
Accounts Receivable
cl 16,000
Debit
Credit
Bal. 61,000
Bal. 38,000
1. 130,000
3. 112,000
Dividends
Bal. 56,000
Debit
Credit
6. 16,000
Bal. 16,000
cl 16,000
Bal. -0-
Service Revenue
Debit
Credit
1. 130,000
Bal. 130,000
cl 130,000
Bal. -0-
Operating Expenses
Debit
Credit
2. 6,200
Bal. 6,200
cl 6,200
Bal. -0-
Salaries Expense
Debit
Credit
4. 72,000
Bal. 72,000
cl 72,000
Bal. -0-
3-120
EXERCISE 3-22B (cont.)
c. NC = Net Change in Cash
Event Services Co.
Effect of Transactions on the Financial Statements for 2016
Balance Sheet
Income Statement
Statement of
Assets
=
Liab.
+
Stockholders’ Equity
Rev.
−
Exp.
=
Net Inc.
Cash Flows
No.
Cash
+
Accts. Rec.
=
Acc.
Pay.
+
Comm.
Stock
+
Ret.
Earn.
Bal.
60,000
38,000
24,800
48,000
25,200
NA
NA
NA
NA
1.
NA
130,000
NA
NA
130,000
130,000
NA
130,000
NA
2.
NA
NA
6,200
NA
(6,200)
NA
6,200
(6,200)
NA
3.
112,000
(112,000)
NA
NA
NA
NA
NA
NA
112,000 OA
4.
(72,000)
NA
NA
NA
(72,000)
NA
72,000
(72,000)
(72,000) OA
5.
(30,000)
NA
(30,000)
NA
NA
NA
NA
NA
(30,000) OA
6.
(16,000)
NA
NA
NA
(16,000)
NA
NA
NA
(16,000) FA
Bal.
54,000
+
56,000
=
1,000
+
48,000
+
61,000
130,000
−
78,200
=
51,800
(6,000) NC
EXERCISE 3-22B (cont.)
d.
Event
Account Titles
Debit
Credit
Closing Entries
7.
Service Revenue
130,000
Retained Earnings
130,000
8.
Retained Earnings
78,200
Operating Expenses
6,200
Salaries Expense
72,000
9.
Retained Earnings
16,000
Dividends
16,000
Net Income = $51,800
e. Change in retained earnings = $35,800 (NI $51,800 − Div. $16,000)
3-122
EXERCISE 3-23B
a.
Company
Total
Debt
Total
Assets
=
Debt to Assets
Ratio
North
$ 24,500
$100,000
=
24.5%
South
$220,000
$500,000
=
44.0%
3-123
EXERCISE 3-24B
The IASB is the International Accounting Standards Board. It is an
