E4.12.
(continued)
Journal entries:
a.
b.
c.
d.
Dr. Supplies . ……….. ……….. ……….. ……….. ……….. ……….. ……….. 700
Cr. Supplies Expense …. ……….. ……….. ……….. ……….. ……….. 700
Dr. Supplies Expense ……….. ……….. ……….. ……….. ……….. ……… 1,900
Cr. Supplies ……. ……….. ……….. ……….. ……….. ……….. ……….. 1,900
Dr. Cash ……. ……….. ……….. ……….. ……….. ……….. ……….. ……….. 1,700
Cr. Service Revenue …… ……….. ……….. ……….. ……….. ……….. 1,700
Dr. Accounts Payable ………. ……….. ……….. ……….. ……….. ……….. 950
Cr. Cash . ……….. ……….. ……….. ……….. ……….. ……….. ……….. 950
E4.13.
Dividends …… ……….. ……….. ……….. ……….. ……….. ……….. (6,000)
Prepare an analysis of the change in stockholders’ equity for the month, showing the
E4.14.
a.
(Revenues – $312,000 Expenses) = $84,000 Net income
E4.15.
Balance Sheet Income Statement .
b.
-18,000
Accrual of 9 month’s interest at December 31, 2016:
Interest Interest
-18,000
Interest Receivable
E4.15.
(continued)
Journal entries:
a.
4/1/2016
Dr. Note Receivable ……….. ……….. ……….. ……….. ……….. ……… 18,000
E4.16.
Balance Sheet Income Statement .
Assets = Liabilities + Stockholders’ Equity Net income = Revenues – Expenses
a.
b.
c.
Converted account payable to a note payable on February 1:
Accounts Payable
Accrued interest expense for February and March ($42,000 * 7% * 2/12)
Interest Payable Interest
Paid note and accrued interest, including interest for April and May, on May 31:
Cash Note Payable Interest
-42,980 -42,000 Expense
E4.16.
(continued)
Journal entries:
a.
February 1
Dr. Accounts Payable ………. ……….. ……….. ……….. ……….. ……….. 42,000
E4.17.
a.
Net income for October would be overstated, because an expense was not recorded.
E4.18.
Retained
E4.19.
a.
$6,000 + ? – $7,500 = $10,500. Thus, the February 28 adjustment = $12,000
E4.20.
a.
Accounts Receivable
Beginning balance 8,100 Collections from
Sales revenue for month 45,000 customers during month ?
Ending balance 3,300
Solution: $8,100 + $45,000 – ? = $3,300
-49,800
Dr. Accounts Receivable ….. ……….. ……….. ……….. ……….. ……… 45,000
E4.20.
(continued)
b.
Supplies
Cost of supplies purchased during the month = $81,900
Beginning balance 17,500 Cost of supplies used 76,100
Cost of supplies purchased ?
Ending balance 23,300
Solution: $17,500 + ? – $76,100 = $23,300
-81,900 or Payable
-76,100 Expense
-76,100
Dr. Supplies . ……….. ……….. ……….. ……….. ……….. ……….. ……….. 81,900
Cr. Cash or Accounts Payable .. ……….. ……….. ……….. ……… 81,900
Supplies purchased during month.
c.
Wages Payable
Beginning balance 15,200
Wages paid 62,000 Wages accrued 78,000
Ending balance ? .
Solution: $15,200 + $78,000 – $62,000 = ?
E4.20.
(continued)
Balance Sheet Income Statement .
Assets = Liabilities + Stockholders’ Equity Net income = Revenues – Expenses
c.
Wage expense accrued during month:
Wages Wages
Wages paid during month:
Cash Wages
Dr. Wages Expense ……….. ……….. ……….. ……….. ……….. ……… 78,000
P4.21.
Balance Sheet Income Statement .
Assets = Liabilities + Stockholders’ Equity Net income = Revenues – Expenses
a.
c.
d.
Cash Common Stock
Cash Salaries Exp
-190,000 -190,000
Merch Accounts
-290,000 -290,000
Chapter 4 The Bookkeeping Process and Transaction Analysis
P4.21.
(continued)
Balance Sheet Income Statement .
Assets = Liabilities + Stockholders’ Equity Net income = Revenues – Expenses
f.
Cash Rent Exp
-55,000 -55,000
-360,000 Payable
-18,000 -18,000
-412,000
k.
l.
Interest Payable Interest Exp
+30,000 -30,000
Rent Payable Rent Exp
P4.21.
(continued)
e.
f.
g.
Dr. Accounts Receivable …… ……….. ……….. ……….. ……….. ……….. 455,000
Cr. Sales ……….. ……….. ……….. ……….. ……….. ……….. ……….. 455,000
Dr. Cost of Goods Sold …….. ……….. ……….. ……….. ……….. ……….. 290,000
Cr. Merchandise Inventory………. ……….. ……….. ……….. ……….. 290,000
Dr. Rent Expense ….. ……….. ……….. ……….. ……….. ……….. ……….. 55,000
Cr. Cash . ……….. ……….. ……….. ……….. ……….. ……….. ……….. 55,000
Dr. Equipment ………. ……….. ……….. ……….. ……….. ……….. ……….. 75,000
Cr. Cash . ……….. ……….. ……….. ……….. ……….. ……….. ……….. 25,000
Cr. Accounts Payable …. ……….. ……….. ……….. ……….. ……….. 50,000
P4.22.
a.
Solution approach: Prepare a T-account to determine the Cash account balance, and
then review the results of the horizontal model representations (or journal entries above).
Since there are a limited number of transactions in Problem 4.21, the balances of all of
P4.22.
(continued)
a.
Net loss (the problem ignores income taxes) ……….. ……….. ……….. $(133,000)
KISSICK CO.
Income Statement
Sales .. ……….. ……….. ……….. ……….. ……….. ……….. ……….. ……….. $ 455,000
Cost of goods sold ….. ……….. ……….. ……….. ……….. ……….. ……….. (290,000)
Gross profit … ……….. ……….. ……….. ……….. ……….. ……….. ……….. $ 165,000
KISSICK CO.
Balance Sheet
Assets:
Cash .. ……….. ……….. ……….. ……….. ……….. ……….. ……….. ……….. $ 514,000
Accounts receivable .. ……….. ……….. ……….. ……….. ……….. ……….. 43,000
Merchandise inventory ………. ……….. ……….. ……….. ……….. ……….. 30,000
Liabilities:
Accounts payable …… ……….. ……….. ……….. ……….. ……….. ……….. $ 10,000
Interest payable ……… ……….. ……….. ……….. ……….. ……….. ……….. 30,000
Stockholders’ Equity:
Common stock ……… ……….. ……….. ……….. ……….. ……….. ……….. $ 500,000
Deficit * ……… ……….. ……….. ……….. ……….. ……….. ……….. ……….. (133,000)
Total stockholders’ equity ….. ……….. ……….. ……….. ……….. ……….. $ 367,000
Total liabilities and stockholders’ equity …… ……….. ……….. ……….. $ 662,000
* Since this was the first year of operations, the Retained Earnings account would have a