Exercise 3-6 (20 minutes)
adidas Group
Balance Sheet
December 31, 2014
(Euros in millions)
Assets
Noncurrent assets
Intangible assets …………………………………………… € 2,763
Property, plant and equipment ………………………. 1,454
Exercise 3-7 (20 minutes)
WILSON TRUCKING COMPANY
Income Statement
For Year Ended December 31, 2016
WILSON TRUCKING COMPANY
Statement of Retained Earnings
For Year Ended December 31, 2016
Retained earnings, December 31, 2015 ………………. $155,000
Exercise 3-8 (10 minutes)
Exercise 3-9 (20 minutes)
WILSON TRUCKING COMPANY
Balance Sheet
December 31, 2016
Assets
Current assets
Cash ………………………………………………………. $ 8,000
Plant assets
Liabilities
Current liabilities
Accounts payable …………………………………… $ 12,000
Equity
* Retained earnings is computed as:
Exercise 3-10 (10 minutes)
Exercise 3-11 (15 minutes)
Current
Assets
Current
Liabilities
Current
Ratio
Case 1
$ 79,040
/
$ 32,000
=
2.47
Case 2
104,880
/
=
1.38
Case 3
/
=
0.92
Case 4
/
=
1.05
Exercise 3-12A (30 minutes)
a.
Dec. 1 Supplies Expense …………………………………………… 2,000
c.
e.
Dec. 31 Supplies ………………………………………………………… 1,840
Supplies Expense ……………………………………. 1,840
Adjust expenses for unused supplies.
f.
Exercise 3-13A (25 minutes)
a. Initial credit recorded in the Unearned Fees account
July 1 Cash …………………………………………………………….. 3,000
12 Unearned Fees ……………………………………………… 3,000
b. Initial credit recorded in the Fees Earned account
12 No entry required.
Exercise 3-13A –concluded
c. Under the first method (and using entries from a)
Exercise 3-14B (25 minutes)
WESTCOTT COMPANY
Work Sheet
December 31, 2016
Unadjusted
Trial Balance
Dr. Cr.
Adjustments
Dr. Cr.
Adjusted
Trial Balance
Dr. Cr.
Cash …………………………………………….
21
21
Accounts receivable …………………….
12
12
Supplies ………………………………………
24
(d)
9
15
Prepaid insurance ………………………..
18
(e)
15
3
Equipment ……………………………………
39
39
Accumulated depreciation–Equip
(a)
3
18
Accounts payable …………………………
6
Salaries payable …………………………..
(b)
6
6
Unearned revenue ………………………..
Common stock …………………………..
10
6
6
Revenue ………………………………………
(c)
12
87
Depreciation expense–Equip ………..
3
3
Salaries expense ………………………….
18
6
24
Insurance expense ……………………….
15
Supplies expense …………………………
9
9
__
Exercise 3-15C (30 minutes)
1. Adjusting entries
Oct. 31 Rent Expense ………………………………………… 2,800
2. Subsequent entries without reversing
Nov. 5 Rent Payable …………………………………………. 2,800
3. Reversing entries and subsequent entries
1 Rent Earned ………………………………………….. 850
Rent Receivable ……………………………… 850
To reverse accrual of rent income.
PROBLEM SET A
Problem 3-1A (10 minutes)
Problem 3-2A (35 minutes)
Part 1
Adjustment (a)
Adjustment (b)
Policy
Cost per Month
Months Active
in 2016
2016 Cost
A
$600
($14,400/24 mo.)
3
$ 1,800
C
($ 2,400 /12 mo.)
1,000
Adjustment (c)
Problem 3-2A −concluded
Adjustment (d)
Adjustment (e)
Adjustment (f)
31 Unearned Rent ………………………………………. 5,600
Part 2
Cash Payment for (c)
Jan. 6 Salaries Payable ……………………………………. 3,920
Cash Payment for (e)
15 Cash ……………………………………………………… 6,000
Problem 3-3A (90 minutes)
Parts 1 and 2
Cash
Equipment
Unadj. Bal.
Unadj. Bal.
Accounts Receivable
Accumulated Depreciation—
Equipment
Unadj. Bal.
0
Unadj. Bal.
15,000
(c)
13,200
Adj. Bal.
Adj. Bal.
28,200
Unadj. Bal.
Bal.
26,000
(b)
Adj. Bal.
Unadj. Bal.
0
Prepaid Insurance
(g)
400
Unadj. Bal.
400
(a)
Adj. Bal.
Unadj. Bal.
12,500
(e)
Unadj. Bal.
Adj. Bal.
(h)
Adj. Bal.
0
Bal.
10,000
Professional Library
Bal.
Bal.
Professional Library
Bal.
Problem 3-3A (Continued)
Tuition Fees Earned
Rent Expense
(h)
Adj. Bal.
Unadj. Bal.
Unadj. Bal.
Training Fees Earned
Teaching Supplies Expense
Unadj. Bal.
40,000
(e)
(b)
5,200
Adj. Bal.
5,200
Unadj.
0
Depreciation Expense—
Professional Library
Advertising Expense
Unadj. Bal.
0
Bal.
6,000
(d)
Depreciation Expense—
Equipment
Utilities Expense
Unadj. Bal.
0
Bal.
6,400
(c)
13,200
13,200
Salaries Expense
Unadj. Bal.
50,000
(g)
50,400
Unadj. Bal.
0
(a)
Problem 3-3A (Continued)
Part 2
Adjustment (a)
Dec. 31
Insurance Expense ………………………………………………
2,400
Adjustment (b)
31
Teaching Supplies Expense …………………………..
5,200
Teaching Supplies ………………………………………….
Adjustment (c)
31
Depreciation Expense—Equipment ………………………
Adjustment (d)
31
Depreciation Expense—Profess. Library ………………
7,200
Accumul. Depreciation—Profess. Library …………….
Adjustment (e)
31
Unearned Training Fees ……………………………………….
5,000
Training Fees Earned ……………………………………..
Adjustment (f)
31
Accounts Receivable ……………………………………………
7,500
Tuition Fees Earned………………………………………..
Adjustment (g)
31
Salaries Expense …………………………………………………
Salaries Payable……………………………………………..
Adjustment (h)
31
Rent Expense …………………………..………………………….
3,000
Problem 3-3A (Continued)
Part 3
WELLS TECHNICAL INSTITUTE
Adjusted Trial Balance
December 31, 2016
Debit
Credit
Cash ……………………………………………………….……….
$ 34,000
Accounts receivable …………………………………………
7,500
Teaching supplies ……………………………………………
2,800
9,600
Professional library ………………………………………….
35,000
Equipment ……………………………………………………….
80,000
Accumulated depreciation—Equipment …………….
28,200
Accounts payable …………………………………………….
26,000
Salaries payable ……………………………………………….
Unearned training fees ……………………………………..
Common stock …………………………………………………
Retained earnings …………………………………………….
Dividends …………………………………………………………
50,000
Tuition fees earned …………………………………………..
Training fees earned …………………………………………
45,000
Depreciation expense—Professional library ……..
7,200
Depreciation expense—Equipment …………………..
13,200
Salaries expense ……………………………………………..
50,400
Insurance expense …………………………………………..
2,400
Rent expense ……………………………………………………
36,000
Teaching supplies expense ………………………………
5,200
Advertising expense …………………………………………
6,000
Problem 3-3A (Continued)
Part 4
WELLS TECHNICAL INSTITUTE
Income Statement
For Year Ended December 31, 2016
Revenues
Tuition fees earned …………………………………….. $131,400
Expenses
Depreciation expense—Professional library … 7,200
WELLS TECHNICAL INSTITUTE
Statement of Retained Earnings
For Year Ended December 31, 2016
Retained earnings, December 31, 2015 ………………………… $ 80,000
Problem 3-3A (Concluded)
WELLS TECHNICAL INSTITUTE
Balance Sheet
December 31, 2016
Assets
Cash ……………………………………………………………………… $ 34,000
Accounts receivable ……………………………………………… 7,500
Liabilities
Accounts payable ………………………………………………….. $ 26,000
Salaries payable …………………………..……………………….. 400
Problem 3-4A (45 minutes) — Part 1
Account
Unadjusted
Trial Balance
Adjustments
Adjusted
Trial Balance
Cash ……………………………..
$ 34,000
$ 34,000
Accounts receivable …….
14,000
(a)
8,000
22,000
Office supplies ……………..
16,000
(b)
14,000
2,000
Prepaid insurance ………..
8,540
(c)
5,580
2,960
Office equipment ………….
84,000
84,000
Accounts payable ………….
10,000
Interest payable ……………..
1,000
1,000
Salaries payable …………….
(g)
7,000
7,000
Unearned consulting fees .
18,000
3,000
15,000
Long–term notes payable ..
52,000
52,000
Common stock …………….
Retained earnings ………..
Dividends ……………………..
5,000
5,000
123,240
(h)
3,000
134,240
Salaries expense ………….
67,000
7,000
74,000
Interest expense …………..
1,200
1,000
2,200
Insurance expense ………
(c)
5,580
Rent expense ……………….
14,500
14,500
Office supplies expense
14,000
(e)
Accumulated depreciation
Adjustment description
(a) Earned but uncollected revenues.
Problem 3-4A (Continued)
Part 2
JKL COMPANY
Income Statement
For Year Ended July 31, 2016
Revenues
Consulting fees earned ………………………….. $134,240
Expenses
Depreciation expense—Office equipment .. $ 6,000
Salaries expense …………………………………… 74,000
JKL COMPANY
Statement of Retained Earnings
For Year Ended July 31, 2016
Retained earnings, July 31, 2015 ………………. $25,000
Problem 3-4A (Concluded)
Part 2
JKL COMPANY
Balance Sheet
July 31, 2016
Assets
Cash …………………………………………………………………..
$ 34,000
Accounts receivable …………………………………………..
22,000
Office supplies ……………………………………………………
2,000
2,960
Office equipment ………………………………………………..
Accumulated depreciation—Office equipment …….
Total assets ………………………………………………………..
$124,960
Liabilities
Accounts payable ……………………………………………….
$ 10,000
Interest payable ………………………………………………….
1,000
Salaries payable …………………………..…………………….
7,000
Unearned consulting fees …………………………………..
15,000
Total liabilities …………………………..……………………….
85,000
Common stock …………………………………………………..
Retained earnings ………………………………………………