Exercise 2–15
Requirement 1
Supplies
11/30 Balance 1,500
Expense 2,000
Requirement 2
Prepaid insurance
11/30 Balance 6,000
Expense ?
December 31, 2018
Solutions Manual, Vol.1, Chapter 2 2–1
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McGraw-Hill Education.
Exercise 2–15 (concluded)
Requirement 3
Salaries and Wages Payable
10,000 11/30 Balance
Salaries and wages paid 10,000 ? Accrued salaries and wages
15,000 12/31 Balance
Accrued salaries and wages for December = $15,000
December 31, 2018
Requirement 4
Deferred rent revenue
2,000 11/30 Balance
December 31, 2018
Deferred rent revenue…………………………………………….. 1,000
Solutions Manual, Vol.1, Chapter 2 2–2
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McGraw-Hill Education.
Solutions Manual, Vol.1, Chapter 2 2–3
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McGraw-Hill Education.
Exercise 2–16
Requirement 1
2018 Debit Credit
Feb. 1 Cash ……………………………………………. 12,000
Note payable …………………………….. 12,000
Requirement 2
2018 Debit Credit
Dec. 31 Interest expense ($12,000 x 10% x 11/12)1,100
Interest payable ………………………….. 1,100
Solutions Manual, Vol.1, Chapter 2 2–4
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McGraw-Hill Education.
Exercise 2–17
Unadjusted net income $30,000
Adjustments:
a. Only $2,000 in insurance should be expensed + 4,000
Exercise 2–18
Stanley and Jones Lawn Service Company
Income Statement
For the Year Ended December 31, 2018
Sales revenue (1)……………………………………. $315,000
Operating expenses:
Salaries ……………………………………………… $180,000
4,000
Miscellaneous (4) ……………………………….. 21,000
Depreciation ………………………………………. 10,000
Solutions Manual, Vol.1, Chapter 2 2–5
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McGraw-Hill Education.
(2) $25,000 cash paid for the purchase of supplies less $500 increase in supplies.
Solutions Manual, Vol.1, Chapter 2 2–6
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McGraw-Hill Education.
Exercise 2–18 (concluded)
(3) $6,000 cash paid for insurance less $2,000 ending balance in prepaid insurance.
(4) $20,000 cash paid for miscellaneous expenses plus increase in accrued liabilities.
Miscellaneous expense (to balance) ……………………… 21,000
(5) $100,000 x 6% x 3/12 = $1,500
Solutions Manual, Vol.1, Chapter 2 2–7
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McGraw-Hill Education.
Exercise 2–19
Cash basis income ($545,000 – 412,000) $133,000
Add:
Deduct:
Depreciation expense (22,000)
Solutions Manual, Vol.1, Chapter 2 2–8
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McGraw-Hill Education.
Exercise 2–20
Requirement 1
Account Title Unadjusted Trial Balance Adjusting Entries Adjusted Trial Balance Income Statement Balance Sheet
Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr.
Cash 20,000 20,000 20,000
Accounts receivable 35,000 35,000 35,000
Prepaid rent 5,000 5,000 5,000
Inventory 50,000 50,000 50,000
Solutions Manual, Vol.1, Chapter 2 2–9
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Exercise 2–20 (continued)
Requirement 2
WOLKSTEIN DRUG COMPANY
Income Statement
For the Year Ended December 31, 2018
Sales revenue ……………………………………….. $323,000
Cost of goods sold ………………………………… 180,000
Gross profit ………………………………………….. 143,000
Solutions Manual, Vol.1, Chapter 2 2–
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consent of McGraw-Hill Education.
Exercise 2–20 (concluded)
WOLKSTEIN DRUG COMPANY
Balance Sheet
At December 31, 2018
Assets
Current assets:
Cash ……………………………………………………. $ 20,000
Accounts receivable ………………………………. 35,000
Property and equipment:
Liabilities and Shareholders’ Equity
Current liabilities:
Shareholders’ equity:
Solutions Manual, Vol.1, Chapter 2 2–
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consent of McGraw-Hill Education.