CHAPTER 4 The Accounting Cycle
4–81
Prob. 4–5B (Continued)
JOURNAL Page 2 _
Date
Post.
Ref.
Debit
Credit
20Y6
Apr.
17
Cash
11
6,600
Fees Earned
41
6,600
18
Supplies
14
725
Cash
11
725
20
Accounts Receivable
12
16,800
Fees Earned
41
16,800
24
Cash
11
4,450
Fees Earned
41
4,450
26
Cash
11
26,500
Accounts Receivable
12
26,500
27
Salary Expense
51
1,650
Cash
11
1,650
29
Miscellaneous Expense
59
540
Cash
11
540
30
Miscellaneous Expense
59
760
Cash
11
760
30
Cash
11
5,160
Fees Earned
41
5,160
30
Accounts Receivable
12
2,590
Fees Earned
41
2,590
30
Dividends
33
18,000
Cash
11
18,000
CHAPTER 4 The Accounting Cycle
Prob. 4–5B (Continued)
2., 6., and 9.
Account:
Cash
Account No.
11
Date
Item
Post.
Ref.
Debit
Balance
Credit
Debit
Credit
20Y6
Apr.
1
1
20,000
20,000
1
1
6,000
14,000
2
1
4,200
9,800
4
1
9,400
19,200
6
1
11,700
30,900
10
1
350
30,550
12
1
6,400
24,150
14
1
1,650
22,500
17
2
6,600
29,100
18
2
725
28,375
24
2
4,450
32,825
26
2
26,500
59,325
27
2
1,650
57,675
29
2
540
57,135
30
2
760
56,375
30
2
5,160
61,535
30
2
18,000
43,535
Account:
Accounts Receivable
Account No.
12
Date
Item
Post.
Ref.
Debit
Balance
Credit
Debit
Credit
20Y6
Apr.
1
1
14,700
14,700
6
1
11,700
3,000
12
1
21,900
24,900
20
2
16,800
41,700
26
2
26,500
15,200
30
2
2,590
17,790
Account:
Supplies
Account No.
14
Date
Item
Post.
Ref.
Debit
Balance
Credit
Debit
Credit
20Y6
Apr.
1
1
3,300
3,300
18
2
725
4,025
30
Adjusting
3
2,800
1,225
CHAPTER 4 The Accounting Cycle
4–83
Prob. 4–5B (Continued)
Account:
Prepaid Rent
Account No.
15
Post.
Balance
Date
Item
Ref.
Debit
Credit
Debit
Credit
20Y6
Apr.
1
1
6,000
6,000
30
Adjusting
3
2,000
4,000
Account:
Prepaid Insurance
Account No.
16
Post.
Balance
Date
Item
Ref.
Debit
Credit
Debit
Credit
20Y6
Apr.
2
1
4,200
4,200
30
Adjusting
3
350
3,850
Account:
Office Equipment
Account No.
18
Post.
Balance
Date
Item
Ref.
Debit
Credit
Debit
Credit
20Y6
Apr.
1
1
12,000
12,000
5
1
8,000
20,000
Account:
Accumulated Depreciation
Account No.
19
Post.
Balance
Date
Item
Ref.
Debit
Credit
Debit
Credit
20Y6
Apr.
30
Adjusting
3
400
400
Account:
Accounts Payable
Account No.
21
Post.
Balance
Date
Item
Ref.
Debit
Credit
Debit
Credit
20Y6
Apr.
5
1
8,000
8,000
12
1
6,400
1,600
Account:
Salaries Payable
Account No.
22
Post.
Ref.
Balance
Date
Item
Debit
Credit
Debit
Credit
20Y6
Apr.
30
Adjusting
3
275
275
CHAPTER 4 The Accounting Cycle
4–84
Prob. 4–5B (Continued)
Account:
Unearned Fees
Account No.
23
Post.
Ref.
Balance
Date
Item
Debit
Credit
Debit
Credit
20Y6
Apr.
4
1
9,400
9,400
30
Adjusting
3
7,050
2,350
Account:
Common Stock
Account No.
31
Post.
Ref.
Balance
Date
Item
Debit
Credit
Debit
Credit
20Y6
Apr.
1
1
50,000
50,000
Account:
Retained Earnings
Account No.
32
Date
Item
Post.
Ref.
Debit
Balance
Credit
Debit
Credit
20Y6
Apr.
1
0
30
Closing
4
53,775
53,775
30
Closing
4
18,000
35,775
Account:
Dividends
Account No.
33
Post.
Ref.
Balance
Date
Item
Debit
Credit
Debit
Credit
20Y6
Apr.
30
2
18,000
18,000
30
Closing
4
18,000
—
—
CHAPTER 4 The Accounting Cycle
4–85
Prob. 4–5B (Continued)
Account:
Fees Earned
Account No.
41
Date
Item
Post.
Ref.
Debit
Credit
Balance
Debit
Credit
20Y6
Apr.
12
1
21,900
21,900
17
2
6,600
28,500
20
2
16,800
45,300
24
2
4,450
49,750
30
2
5,160
54,910
30
2
2,590
57,500
30
Adjusting
3
7,050
64,550
30
Closing
4
64,550
—
—
Account:
Salary Expense
Account No.
51
Post.
Ref.
Balance
Date
Item
Debit
Credit
Debit
Credit
20Y6
Apr.
14
1
1,650
1,650
27
2
1,650
3,300
30
Adjusting
3
275
3,575
30
Closing
4
3,575
—
—
Account:
Supplies Expense
Account No.
52
Post.
Ref.
Balance
Date
Item
Debit
Credit
Debit
Credit
20Y6
Apr.
30
Adjusting
3
2,800
2,800
30
Closing
4
2,800
—
—
Account:
Rent Expense
Account No.
53
Post.
Balance
Date
Item
Ref.
Debit
Credit
Debit
Credit
20Y6
Apr.
30
Adjusting
3
2,000
2,000
30
Closing
4
2,000
—
—
CHAPTER 4 The Accounting Cycle
4–86
Prob. 4–5B (Continued)
Account:
Depreciation Expense
Account No.
54
Post.
Ref.
Balance
Date
Item
Debit
Credit
Debit
Credit
20Y6
Apr.
30
Adjusting
3
400
400
30
Closing
4
400
—
—
Account:
Insurance Expense
Account No.
55
Post.
Ref.
Balance
Date
Item
Debit
Credit
Debit
Credit
20Y6
Apr.
30
Adjusting
3
350
350
30
Closing
4
350
—
—
Account:
Miscellaneous Expense
Account No.
59
Date
Item
Post.
Ref.
Debit
Credit
Balance
Debit
Credit
20Y6
Apr.
10
1
350
350
29
2
540
890
30
2
760
1,650
30
Closing
4
1,650
—
—
CHAPTER 4 The Accounting Cycle
4–87
Prob. 4–5B (Continued)
3.
Rosebud Consulting
Unadjusted Trial Balance
April 30, 20Y6
Account
No.
Debit
Balances
Credit
Balances
Cash
11
43,535
Accounts Receivable
12
17,790
Supplies
14
4,025
Prepaid Rent
15
6,000
Prepaid Insurance
16
4,200
Office Equipment
18
20,000
Accumulated Depreciation
19
0
Accounts Payable
21
1,600
Salaries Payable
22
0
Unearned Fees
23
9,400
Common Stock
31
50,000
Retained Earnings
32
0
Dividends
33
18,000
Fees Earned
41
57,500
Salary Expense
51
3,300
Supplies Expense
52
0
Rent Expense
53
0
Depreciation Expense
54
0
Insurance Expense
55
0
Miscellaneous Expense
59
1,650
118,500
118,500
CHAPTER 4 The Accounting Cycle
4–88
Prob. 4–5B (Continued)
5. Optional (Appendix)
Rosebud Consulting
End-of-Period Spreadsheet (Work Sheet)
For the Month Ended April 30, 20Y6
Unadjusted
Adjusted
Income
Balance
Trial Balance
Adjustments
Trial Balance
Statement
Sheet
Account Title
Debit
Credit
Debit
Credit
Debit
Credit
Debit
Credit
Debit
Credit
Cash
43,535
43,535
43,535
Accounts Receivable
17,790
17,790
17,790
Supplies
4,025
(b) 2,800
1,225
1,225
Prepaid Rent
6,000
(e) 2,000
4,000
4,000
Prepaid Insurance
4,200
(a) 350
3,850
3,850
Office Equipment
20,000
20,000
20,000
Accum. Depreciation
(c) 400
400
400
Accounts Payable
1,600
1,600
1,600
Salaries Payable
(d) 275
275
275
Unearned Fees
9,400
(f) 7,050
2,350
2,350
Common Stock
50,000
50,000
50,000
Retained Earnings
Dividends
18,000
18,000
18,000
Fees Earned
57,500
(f) 7,050
64,550
64,550
Salary Expense
3,300
(d) 275
3,575
3,575
Supplies Expense
(b) 2,800
2,800
2,800
Rent Expense
(e) 2,000
2,000
2,000
Depreciation Expense
(c) 400
400
400
Insurance Expense
(a) 350
350
350
Miscellaneous Expense
1,650
1,650
1,650
118,500
118,500
12,875
12,875
119,175
119,175
10,775
64,550
108,400
54,625
Net income
53,775
53,775
64,550
64,550
108,400
108,400
CHAPTER 4 The Accounting Cycle
4–89
Prob. 4–5B (Continued)
6.
JOURNAL
Page
3
Date
Post.
Ref.
Debit
Credit
20Y6
Adjusting Entries
Apr.
30
Insurance Expense
55
350
Prepaid Insurance
16
350
Insurance expired.
30
Supplies Expense
52
2,800
Supplies
14
2,800
Supplies used ($4,025 – $1,225).
30
Depreciation Expense
54
400
Accumulated Depreciation
19
400
Equipment depreciation.
30
Salary Expense
51
275
Salaries Payable
22
275
Accrued salaries.
30
Rent Expense
53
2,000
Prepaid Rent
15
2,000
Rent expired.
30
Unearned Fees
23
7,050
Fees Earned
41
7,050
Unearned fees earned
($9,400 – $2,350).
CHAPTER 4 The Accounting Cycle
4–90
Prob. 4–5B (Continued)
7.
Rosebud Consulting
Adjusted Trial Balance
April 30, 20Y6
Account
No.
Debit
Balances
Credit
Balances
Cash
11
43,535
Accounts Receivable
12
17,790
Supplies
14
1,225
Prepaid Rent
15
4,000
Prepaid Insurance
16
3,850
Office Equipment
18
20,000
Accumulated Depreciation
19
400
Accounts Payable
21
1,600
Salaries Payable
22
275
Unearned Fees
23
2,350
Common Stock
31
50,000
Retained Earnings
32
0
Dividends
33
18,000
Fees Earned
41
64,550
Salary Expense
51
3,575
Supplies Expense
52
2,800
Rent Expense
53
2,000
Depreciation Expense
54
400
Insurance Expense
55
350
Miscellaneous Expense
59
1,650
119,175
119,175
CHAPTER 4 The Accounting Cycle
4–91
Prob. 4–5B (Continued)
8.
Rosebud Consulting
Income Statement
For the Month Ended April 30, 20Y6
Fees earned
$ 64,550
Expenses:
Salary expense
$3,575
Supplies expense
2,800
Rent expense
2,000
Depreciation expense
400
Insurance expense
350
Miscellaneous expense
1,650
Total expenses
(10,775)
Net income
$ 53,775
Rosebud Consulting
Statement of Stockholders’ Equity
For the Month Ended April 30, 20Y6
Common
Stock
Retained
Earnings
Total
Balances, April 1, 20Y6
$ 0
$ 0
$ 0
Issued common stock
50,000
50,000
Net income
53,775
53,775
Dividends
(18,000)
(18,000)
Balances, April 30, 20Y6
$50,000
$ 35,775
$ 85,775
CHAPTER 4 The Accounting Cycle
4–92
Prob. 4–5B (Continued)
Rosebud Consulting
Balance Sheet
April 30, 20Y6
Assets
Current assets:
Cash
$ 43,535
Accounts receivable
17,790
Supplies
1,225
Prepaid rent
4,000
Prepaid insurance
3,850
Total current assets
$ 70,400
Property, plant, and equipment:
Office equipment
$ 20,000
Accumulated depreciation
(400)
Total property, plant, and equipment
19,600
Total assets
$ 90,000
Liabilities
Current liabilities:
Accounts payable
$ 1,600
Salaries payable
275
Unearned fees
2,350
Total liabilities
$ 4,225
Stockholders’ Equity
Common stock
$ 50,000
Retained earnings
35,775
Total stockholders’ equity
85,775
Total liabilities and stockholders’ equity
$ 90,000
CHAPTER 4 The Accounting Cycle
4–93
Prob. 4–5B (Continued)
9.
JOURNAL
Page
4
Date
Post.
Ref.
Debit
Credit
20Y6
Closing Entries
Apr.
30
Fees Earned
41
64,550
Salary Expense
51
3,575
Supplies Expense
52
2,800
Rent Expense
53
2,000
Depreciation Expense
54
400
Insurance Expense
55
350
Miscellaneous Expense
59
1,650
Retained Earnings
32
53,775
30
Retained Earnings
32
18,000
Dividends
33
18,000
10.
Rosebud Consulting
Post-Closing Trial Balance
April 30, 20Y6
Account
No.
Debit
Balances
Credit
Balances
Cash
11
43,535
Accounts Receivable
12
17,790
Supplies
14
1,225
Prepaid Rent
15
4,000
Prepaid Insurance
16
3,850
Office Equipment
18
20,000
Accumulated Depreciation
19
400
Accounts Payable
21
1,600
Salaries Payable
22
275
Unearned Fees
23
2,350
Common Stock
31
50,000
Retained Earnings
32
35,775
90,400
90,400
CHAPTER 4 The Accounting Cycle
4–94
CONTINUING PROBLEM
1. Optional (Appendix)
PS Music
End-of-Period Spreadsheet (Work Sheet)
For the Two Months Ended July 31, 20Y5
Unadjusted
Adjusted
Income
Balance
Trial Balance
Adjustments
Trial Balance
Statement
Sheet
Account Title
Debit
Credit
Debit
Credit
Debit
Credit
Debit
Credit
Debit
Credit
Cash
9,945
9,945
9,945
Accounts Receivable
2,750
(a) 1,400
4,150
4,150
Supplies
1,020
(b) 745
275
275
Prepaid Insurance
2,700
(c) 225
2,475
2,475
Office Equipment
7,500
7,500
7,500
Accum. Depr.—Off. Equip.
(d) 50
50
50
Accounts Payable
8,350
8,350
8,350
Wages Payable
(f) 140
140
140
Unearned Revenue
7,200
(e) 3,600
3,600
3,600
Common Stock
9,000
9,000
9,000
Dividends
1,750
1,750
1,750
Fees Earned
16,200
(a) 1,400
21,200
21,200
(e) 3,600
Music Expense
3,610
3,610
3,610
Wages Expense
2,800
(f) 140
2,940
2,940
Office Rent Expense
2,550
2,550
2,550
Advertising Expense
1,500
1,500
1,500
Equip. Rent Expense
1,375
1,375
1,375
Utilities Expense
1,215
1,215
1,215
Supplies Expense
180
(b) 745
925
925
Insurance Expense
(c) 225
225
225
Depreciation Expense
(d) 50
50
50
Miscellaneous Expense
1,855
1,855
1,855
40,750
40,750
6,160
6,160
42,340
42,340
16,245
21,200
26,095
21,140
Net income
4,955
4,955
21,200
21,200
26,095
26,095
CHAPTER 4 The Accounting Cycle
4–95
Continuing Problem (Continued)
2.
PS Music
Income Statement
For the Two Months Ended July 31, 20Y5
Fees earned
$ 21,200
Expenses:
Music expense
$3,610
Wages expense
2,940
Office rent expense
2,550
Advertising expense
1,500
Equipment rent expense
1,375
Utilities expense
1,215
Supplies expense
925
Insurance expense
225
Depreciation expense
50
Miscellaneous expense
1,855
Total expenses
(16,245)
Net income
$ 4,955
PS Music
Statement of Stockholders’ Equity
For the Two Months Ended July 31, 20Y5
Common
Stock
Retained
Earnings
Total
Balances, June 1, 20Y5
$ 0
$ 0
$ 0
Issued common stock
9,000
9,000
Net income
4,955
4,955
Dividends
(1,750)
(1,750)
Balances, July 31, 20Y5
$9,000
$ 3,205
$12,205
CHAPTER 4 The Accounting Cycle
4–96
Continuing Problem (Continued)
PS Music
Balance Sheet
July 31, 20Y5
Assets
Current assets:
Cash
$9,945
Accounts receivable
4,150
Supplies
275
Prepaid insurance
2,475
Total current assets
$16,845
Property, plant, and equipment:
Office equipment
$7,500
Accumulated depreciation—office equipment
(50)
Total property, plant, and equipment
7,450
Total assets
$24,295
Liabilities
Current liabilities:
Accounts payable
$8,350
Wages payable
140
Unearned revenue
3,600
Total liabilities
$12,090
Stockholders’ Equity
Common stock
$9,000
Retained earnings
3,205
Total stockholders’ equity
12,205
Total liabilities and stockholders’ equity
$24,295
CHAPTER 4 The Accounting Cycle
4–97
Continuing Problem (Continued)
3.
JOURNAL
Page
4
Date
Post.
Ref.
Debit
Credit
20Y5
Closing Entries
July
31
Fees Earned
41
21,200
Wages Expense
50
2,940
Office Rent Expense
51
2,550
Equipment Rent Expense
52
1,375
Utilities Expense
53
1,215
Music Expense
54
3,610
Advertising Expense
55
1,500
Supplies Expense
56
925
Insurance Expense
57
225
Depreciation Expense
58
50
Miscellaneous Expense
59
1,855
Retained Earnings
32
4,955
31
Retained Earnings
32
1,750
Dividends
33
1,750
CHAPTER 4 The Accounting Cycle
4–98
Continuing Problem (Continued)
Account:
Cash
Account No.
11
Date
Item
Post.
Ref.
Debit
Credit
Balance
Debit
Credit
20Y5
July
1
Balance
✓
3,920
1
1
5,000
8,920
1
1
1,750
7,170
1
1
2,700
4,470
2
1
1,000
5,470
3
1
7,200
12,670
3
1
250
12,420
4
1
900
11,520
8
1
200
11,320
11
1
1,000
12,320
13
1
700
11,620
14
1
1,200
10,420
16
2
2,000
12,420
21
2
620
11,800
22
2
800
11,000
23
2
750
11,750
27
2
915
10,835
28
2
1,200
9,635
29
2
540
9,095
30
2
500
9,595
31
2
3,000
12,595
31
2
1,400
11,195
31
2
1,250
9,945
Account:
Accounts Receivable
Account No.
12
Date
Item
Post.
Ref.
Debit
Balance
Credit
Debit
Credit
20Y5
July
1
Balance
✓
1,000
2
1
1,000
—
—
23
2
1,750
1,750
30
2
1,000
2,750
31
Adjusting
3
1,400
4,150
CHAPTER 4 The Accounting Cycle
4–99
Continuing Problem (Continued)
Account:
Supplies
Account No.
14
Date
Item
Post.
Ref.
Debit
Credit
Balance
Debit
Credit
20Y5
July
1
Balance
✓
170
18
2
850
1,020
31
Adjusting
3
745
275
Account:
Prepaid Insurance
Account No.
15
Post.
Ref.
Balance
Date
Item
Debit
Credit
Debit
Credit
20Y5
July
1
1
2,700
2,700
31
Adjusting
3
225
2,475
Account:
Office Equipment
Account No.
17
Post.
Ref.
Balance
Date
Item
Debit
Credit
Debit
Credit
20Y5
July
5
1
7,500
7,500
Post.
Ref.
Balance
Date
Item
Debit
Credit
Debit
Credit
20Y5
July
31
Adjusting
3
50
50
Account:
Accounts Payable
Account No.
21
Date
Item
Post.
Ref.
Debit
Credit
Balance
Debit
Credit
20Y5
July
1
Balance
✓
250
3
1
250
—
—
5
1
7,500
7,500
18
2
850
8,350
CHAPTER 4 The Accounting Cycle
Continuing Problem (Continued)
Account:
Wages Payable
Account No.
22
Post.
Ref.
Balance
Date
Item
Debit
Credit
Debit
Credit
20Y5
July
31
Adjusting
3
140
140
Account:
Unearned Revenue
Account No.
23
Post.
Ref.
Balance
Date
Item
Debit
Credit
Debit
Credit
20Y5
July
3
1
7,200
7,200
31
Adjusting
3
3,600
3,600
Account:
Common Stock
Account No.
31
Post.
Ref.
Balance
Date
Item
Debit
Credit
Debit
Credit
20Y5
July
1
Balance
✓
4,000
1
1
5,000
9,000
Account:
Retained Earnings
Account No.
32
Post.
Ref.
Balance
Date
Item
Debit
Credit
Debit
Credit
20Y5
July
1
Balance
0
31
Closing
4
4,955
4,955
31
Closing
4
1,750
3,205
Account:
Dividends
Account No.
33
Post.
Ref.
Balance
Date
Item
Debit
Credit
Debit
Credit
20Y5
July
1
Balance
✓
500
31
2
1,250
1,750
31
Closing
4
1,750
—
—