3-141
PROBLEM 3-32B (cont.)
e.
Price Corporation
Closing Entries, 2016
Date
Account Titles
Debit
Credit
Dec. 31
Service Revenue
29,400
Retained Earnings
29,400
Dec. 31
Retained Earnings
22,950
Salaries Expense
19,100
Rent Expense
3,500
Supplies Expense
350
Dec. 31
Retained Earnings
500
Dividends
500
3-142
PROBLEM 3-32B e. (cont.)
Assets
=
Liabilities
+
Stockholders’ Equity
Cash
Accounts Payable
Common Stock
Bal. 15,650
Bal. 100
Bal. 25,000
Unearned Revenue
Retained Earnings
Accounts Receivable
Bal. 6,000
cl 22,950
cl 29,400
Bal. 17,550
cl 500
Salaries Payable
Bal. 5,950
Bal. 1,100
Supplies
Dividends
Bal. 50
Bal. 500
cl 500
Bal. -0-
Prepaid Rent
Service Revenue
Bal. 4,900
cl 29,400
Bal. 29,400
Bal. -0-
Rent Expense
Bal. 3,500
cl 3,500
Bal. -0-
Salaries Expense
Bal. 19,100
cl 19,100
Bal. -0-
Supplies Expense
Bal. 350
cl 350
Bal. -0-
3-143
PROBLEM 3-32B (cont.)
f.
Price Corporation
Post-Closing Trial Balance
December 31, 2016
Account Titles
Debit
Credit
Cash
$ 15,650
Accounts Receivable
17,550
Supplies
50
Prepaid Rent
4,900
Accounts Payable
$ 100
Unearned Revenue
6,000
Salaries Payable
1,100
Common Stock
25,000
Retained Earnings
5,950
Totals
$38,150
$38,150
3-144
PROBLEM 3-33B
a.
Anchor Machining
General Journal, 2016
Event
Account Titles
Debit
Credit
1.
Cash
100,000
Common Stock
100,000
2.
Prepaid Rent
12,000
Cash
12,000
3.
Cash
9,600
Unearned Revenue
9,600
4.
Accounts Receivable
130,400
Service Revenue
130,400
5.
Operating Expenses
63,000
Accounts Payable
63,000
6.
Cash
113,800
Accounts Receivable
113,800
7.
Salaries Expense
44,000
Cash
44,000
8.
Accounts Payable
56,000
Cash
56,000
Adjusting Entries
9.
Rent Expense ($12,000 x 11/12)
11,000
Prepaid Rent
11,000
10.
Unearned Revenue ($9,600 x 4/12)
3,200
Service Revenue
3,200
11.
Salaries Expense
4,200
Salaries Payable
4,200
3-145
PROBLEM 3-33B (cont.)
b.
Anchor Machining
T-Accounts, 2016
Assets
=
Liabilities
+
Stockholders’ Equity
Cash
Accounts Payable
Common Stock
1. 100,000
2. 12,000
8. 56,000
5. 63,000
1. 100,000
3. 9,600
7. 44,000
Bal. 7,000
Bal. 100,000
6. 113,800
8. 56,000
Bal. 111,400
Service Revenue
Salaries Payable
4. 130,400
11. 4,200
10. 3,200
Accounts Receivable
Bal. 4,200
Bal. 133,600
4. 130,400
6. 113,800
Bal. 16,600
Unearned Revenue
Operating Expenses
10. 3,200
3. 9,600
5. 63,000
Prepaid Rent
Bal. 6,400
Bal. 63,000
2. 12,000
9. 11,000
Bal. 1,000
Rent Expense
9. 11,000
Bal. 11,000
Salaries Expense
7. 44,000
11. 4,200
Bal. 48,200
3-146
PROBLEM 3-33B (cont.)
c.
Anchor Machining
Trial Balance
December 31, 2016
Account Titles
Debit
Credit
Cash
$111,400
Accounts Receivable
16,600
Prepaid Rent
1,000
Accounts Payable
$ 7,000
Salaries Payable
4,200
Unearned Revenue
6,400
Common Stock
100,000
Service Revenue
133,600
Operating Expenses
63,000
Salaries Expense
48,200
Rent Expense
11,000
Totals
$251,200
$251,200
3-147
PROBLEM 3-33B (cont.)
d.
Anchor Machining
Financial Statements
For the Year Ended December 31, 2016
Income Statement
Service Revenue
$133,600
Expenses
Operating Expenses
$63,000
Salaries Expense
48,200
Rent Expense
11,000
Total Expenses
(122,200)
Net Income
$ 11,400
Statement of Changes in Stockholders’ Equity
Beginning Common Stock
$ -0-
Plus: Stock Issued
100,000
Ending Common Stock
$100,000
Beginning Retained Earnings
$ -0-
Plus: Net Income
11,400
Ending Retained Earnings
11,400
Total Stockholders’ Equity
$111,400
3-148
PROBLEM 3-33B d. (cont.)
Anchor Machining
Balance Sheet
As of December 31, 2016
Assets
Cash
$111,400
Accounts Receivable
16,600
Prepaid Rent
1,000
Total Assets
$129,000
Liabilities
Accounts Payable
$ 7,000
Salaries Payable
4,200
Unearned Revenue
6,400
Total Liabilities
$ 17,600
Stockholders’ Equity
Common Stock
$100,000
Retained Earnings
11,400
Total Stockholders’ Equity
111,400
Total Liabilities and Stockholders’ Equity
$129,000
Statement of Cash Flows
For the Year Ended December 31, 2016
Cash Flows From Operating Activities:
Received Cash from Customers
$123,400
Paid Cash for Expenses
(112,000)
Net Cash Flow from Operating Activities
$ 11,400
Cash Flows From Investing Activities
–0-
Cash Flows From Financing Activities:
Received Cash from Stock Issue
$100,000
Net Cash Flow from Financing Activities
100,000
Net Change in Cash
111,400
Plus: Beginning Cash Balance
-0-
3-149
Ending Cash Balance
$111,400
PROBLEM 3-33B (cont.)
e.
Anchor Machining
Closing Entries, 2016
Date
Account Titles
Debit
Credit
Dec. 31
Service Revenue
133,600
Retained Earnings
133,600
Dec. 31
Retained Earnings
122,200
Operating Expenses
63,000
Salaries Expense
48,200
Rent Expense
11,000
=
+
3-151
Bal. 11,000
cl 11,000
Bal. -0-
3-152
PROBLEM 3-33B (cont.)
f.
Anchor Machining
Post-Closing Trial Balance
December 31, 2016
Account Titles
Debit
Credit
Cash
$111,400
Accounts Receivable
16,600
Prepaid Rent
1,000
Accounts Payable
$ 7,000
Salaries Payable
4,200
Unearned Revenue
6,400
Common Stock
100,000
Retained Earnings
11,400
Totals
$129,000
$129,000
3-153
PROBLEM 3-33B (cont.) g.
Anchor Machining
General Journal, 2017
Event
Account Titles
Debit
Credit
1.
Salaries Payable
4,200
Cash
4,200
2.
Cash
81,000
Service Revenue
81,000
3.
Land
50,000
Cash
50,000
4.
Prepaid Rent
10,800
Cash
10,800
5.
Accounts Receivable
164,000
Service Revenue
164,000
6.
Operating Expenses
98,200
Accounts Payable
98,200
7.
Cash
152,600
Accounts Receivable
152,600
8.
Accounts Payable
96,000
Cash
96,000
9.
Salaries Expense
82,000
Cash
82,000
10.
Dividends
10,000
Cash
10,000
11.
Unearned Revenue
6,400
Service Revenue1
6,400
12.
Rent Expense2
10,900
Prepaid Rent
10,900
13.
Salaries Expense
7,000
Salaries Payable
7,000
1 $9,600 x 8/12 = $6,400
3-154
2 ($12,000 x 1/12) + ($10,800 x 11/12) = $10,900
3-155
PROBLEM 3-33B g. (cont.)
Anchor Machining
T-Accounts, 2017
Assets
=
Liabilities
+
Stockholders’ Equity
Cash
Accounts Payable
Common Stock
Bal. 111,400
Bal. 7,000
Bal. 100,000
2. 81,000
1. 4,200
8. 96,000
6. 98,200
7. 152,600
3. 50,000
Bal. 9,200
4. 10,800
8. 96,000
Salaries Payable
Retained Earnings
9. 82,000
Bal. 4,200
Bal. 11,400
10. 10,000
1. 4,200
13. 7,000
Bal. 92,000
Bal. 7,000
Dividends
10. 10,000
Accounts Rec.
Unearned Revenue
Bal. 10,000
Bal. 16,600
Bal. 6,400
5. 164,000
7. 152,600
11. 6,400
Service Revenue
Bal. 28,000
Bal. -0-
2. 81,000
5. 164,000
Prepaid Rent
11. 6,400
Bal. 1,000
Bal. 251,400
4. 10,800
12. 10,900
Bal. 900
Operating Expenses
6. 98,200
Land
Bal. 98,200
3. 50,000
Bal. 50,000
Rent Expense
12. 10,900
Bal. 10,900
Salaries Expense
9. 82,000
13. 7,000
Bal. 89,000
3-156
PROBLEM 3-33B g. (cont.)
Anchor Machining
Trial Balance
December 31, 2017
Account Titles
Debit
Credit
Cash
$ 92,000
Accounts Receivable
28,000
Prepaid Rent
900
Land
50,000
Accounts Payable
$ 9,200
Salaries Payable
7,000
Common Stock
100,000
Retained Earnings
11,400
Dividends
10,000
Service Revenue
251,400
Operating Expenses
98,200
Salaries Expense
89,000
Rent Expense
10,900
Totals
$379,000
$379,000
3-157
PROBLEM 3-33B g. (cont.)
Anchor Machining
Financial Statements
For the Year Ended December 31, 2017
Income Statement
Service Revenue
$251,400
Expenses
Operating Expenses
$98,200
Rent Expense
10,900
Salaries Expense
89,000
Total Expenses
(198,100)
Net Income
$ 53,300
Statement of Changes in Stockholders’ Equity
Beginning Common Stock
$100,000
Plus: Stock Issued
-0-
Ending Common Stock
$100,000
Beginning Retained Earnings
$ 11,400
Plus: Net Income
53,300
Less: Dividends
(10,000)
Ending Retained Earnings
54,700
Total Stockholders’ Equity
$154,700
3-158
PROBLEM 3-33B g. (cont.)
Anchor Machining
Balance Sheet
As of December 31, 2017
Assets
Cash
$92,000
Accounts Receivable
28,000
Prepaid Rent
900
Land
50,000
Total Assets
$170,900
Liabilities
Accounts Payable
$ 9,200
Salaries Payable
7,000
Total Liabilities
$ 16,200
Stockholders’ Equity
Common Stock
$100,000
Retained Earnings
54,700
Total Stockholders’ Equity
154,700
Total Liabilities and Stockholders’ Equity
$170,900
3-159
PROBLEM 3-33B g. (cont.)
Anchor Machining
Statement of Cash Flows
For the Year Ended December 31, 2017
Cash Flows From Operating Activities:
Received Cash from Customers*
$233,600
Paid Cash for Expenses**
(193,000)
Net Cash Flow from Operating Activities
$ 40,600
Cash Flows From Investing Activities:
Paid Cash for Purchase of Land
$(50,000)
Net Cash Flow from Investing Activities
(50,000)
Cash Flows From Financing Activities:
Paid Cash for Dividends
$(10,000)
Net Cash Flow from Financing Activities
(10,000)
Net Change in Cash
(19,400)
Plus: Beginning Cash Balance
111,400
Ending Cash Balance
$ 92,000
3-1-4
PROBLEM 3-33B g. (cont.)
Anchor Machining
Closing Entries, 2017
Date
Account Titles
Debit
Credit
Dec. 31
Service Revenue
251,400
Retained Earnings
251,400
Dec. 31
Retained Earnings
198,100
Operating Expenses
98,200
Salaries Expense
89,000
Rent Expense
10,900
Dec. 31
Retained Earnings
10,000
Dividends
10,000