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Problem 2–4 (continued)
Sales revenue Interest revenue
___________________________ ___________________________
148,000 Bal. 0 Bal.
Cost of goods sold Salaries and wages expense
___________________________ ___________________________
Bal. 70,000 Bal. 18,900
Rent expense Depreciation expense
___________________________ ___________________________
Bal. 11,000 Bal. 0
Interest expense Supplies expense
___________________________ ___________________________
Bal. 0 Bal. 1,100
2–62 Intermediate Accounting, 8/e
Problem 2–4 (continued)
Insurance expense Advertising expense
___________________________ ___________________________
Bal. 6,000 Bal. 3,000
Income summary Retained earnings
___________________________ ___________________________
Bal. 0 24,500 Bal.
147,333 Closing
Problem 2–4 (concluded)
Requirement 6
Account Title
Debits
Credits
Cash
30,000
Accounts receivable
40,000
Prepaid rent
1,000
equipment
40,000
Accounts payable
31,000
Salaries and wages payable
1,500
Problem 2–5
Rent expense ................................................................... 800
Prepaid rent ................................................................ 800
Supplies expense ............................................................. 700
Supplies ....................................................................... 700
Problem 2–6
Requirement 2
a. Cash ............................................................................ 70,000
Accounts receivable .................................................. 30,000
Service revenue ...................................................... 100,000
b. Cash ............................................................................ 27,300
Accounts receivable ............................................... 27,300
Problem 2–6 (continued)
Requirements 1 and 3
BALANCE SHEET ACCOUNTS
Cash Accounts receivable
___________________________ ___________________________
1/1 Bal. 30,000 1/1 Bal. 15,000
Equipment
___________________________
1/1 Bal. 20,000
f. 15,000
_______________
12/31 Bal. 35,000
Accumulated depreciation Salaries payable
___________________________ ___________________________
6,000 1/1 Bal. 9,000 1/1 Bal.
d. 9,000
2–66 Intermediate Accounting, 8/e
Problem 2–6 (continued)
INCOME STATEMENT ACCOUNTS
Service revenue Miscellaneous expenses
___________________________ ___________________________
0 1/1 Bal. 1/1 Bal. 0
Salaries expense
___________________________
1/1 Bal. 0
Requirement 4
Account Title
Debits
Credits
Cash
45,800
Accounts receivable
17,700
Equipment
35,000
Problem 2–6 (continued)
Requirement 5
Salaries expense .............................................................. 1,000
Salaries payable .......................................................... 1,000
Problem 2–6 (continued)
BALANCE SHEET ACCOUNTS
Cash Accounts receivable
___________________________ ___________________________
1/1 Bal. 30,000 1/1 Bal. 15,000
a. 70,000 50,000 d. a. 30,000 27,300 b.
Equipment
___________________________
1/1 Bal. 20,000
Accumulated depreciation Salaries payable
___________________________ ___________________________
6,000 1/1 Bal. 9,000 1/1 Bal.
Common stock Retained earnings
___________________________ ___________________________
40,500 1/1 Bal. 9,500 1/1 Bal.
Problem 2–6 (continued)
INCOME STATEMENT ACCOUNTS
Service revenue Miscellaneous expenses
___________________________ ___________________________
0 1/1 Bal. 1/1 Bal. 0
Depreciation expense
___________________________
1/1 Bal. 0
Salaries expense
___________________________
1/1 Bal. 0
d. 41,000
2–70 Intermediate Accounting, 8/e
Problem 2–6 (continued)
Requirement 6
Account Title
Debits
Credits
Cash
45,800
Accounts receivable
17,700
Equipment
35,000
Requirement 7
KARLIN COMPANY
Income Statement
For the Year Ended December 31, 2016
Service revenue ...........................................
$100,000
Operating expenses:
Problem 2–6 (continued)
KARLIN COMPANY
Balance Sheet
At December 31, 2016
Assets
Current assets:
Cash ............................................................
$45,800
Liabilities and Shareholders' Equity
Current liabilities:
Salaries payable .........................................
$ 1,000
Total current liabilities ...........................
1,000
Problem 2–6 (continued)
Requirement 8
December 31, 2016
Service revenue ............................................................... 100,000
Income summary ......................................................... 100,000
Problem 2–6 (continued)
BALANCE SHEET ACCOUNTS
Cash Accounts receivable
___________________________ ___________________________
1/1 Bal. 30,000 1/1 Bal. 15,000
a. 70,000 50,000 d. a. 30,000 27,300 b.
Equipment
___________________________
1/1 Bal. 20,000
Accumulated depreciation Salaries payable
___________________________ ___________________________
6,000 1/1 Bal. 9,000 1/1 Bal.
Common stock Retained earnings
___________________________ ___________________________
40,500 1/1 Bal. 9,500 1/1 Bal.
2–74 Intermediate Accounting, 8/e
Problem 2–6 (continued)
INCOME STATEMENT ACCOUNTS
Service revenue Miscellaneous expenses
___________________________ ___________________________
0 1/1 Bal. 1/1 Bal. 0
100,000 a. e. 24,000
Salaries expense Income summary
___________________________ ___________________________
1/1 Bal. 0 100,000 Closing
d. 41,000 Closing 68,000
Problem 2–6 (concluded)
Requirement 9
Account Title
Debits
Credits
Cash
45,800
Accounts receivable
17,700
Problem 2–7
Requirement 1
a. Interest receivable ..................................................... 600
Interest revenue ($10,000 x 12% x 1/2) ...................... 600
b. Depreciation expense ($30,000 x 1/5) ........................... 6,000
Requirement 2
Income overstated
(understated)
Adjustments to revenues:
Adjustments to expenses:
Overstatement of insurance expense (1,500)
Problem 2–8
1. Depreciation expense ($75,000 ÷ 8 years) .................... 9,375
Accumulated depreciation ..................................... 9,375
2. Salaries and wages expense ($4,500 – 3,000) ............... 1,500
2–78 Intermediate Accounting, 8/e
Problem 2–9
Requirements 1 and 2
a. Depreciation expense ($50,000 ÷ 50 years) ................... 1,000
Accumulated depreciation - buildings ................... 1,000
Problem 2–9 (continued)
BALANCE SHEET ACCOUNTS
Cash Accounts receivable
___________________________ ___________________________
Bal. 8,000 Bal. 9,000
_______________ ______________
12/31 Bal. 8,000 12/31 Bal. 9,000
Land Buildings
___________________________ ___________________________
Bal. 200,000 Bal. 50,000
_______________ ______________
12/31 Bal. 200,000 12/31 Bal. 50,000
Office equipment Accumulated depreciation—bldg.
Problem 2–9 (continued)
Salaries and wages payable Deferred rent revenue
___________________________ ___________________________
0 Bal. 0 Bal.
1,500 Adjusting 1,200 Adjusting
_______________ ______________
1,500 12/31 Bal. 1,200 12/31 Bal.
Common stock Retained earnings
INCOME STATEMENT ACCOUNTS
Sales revenue Interest revenue
___________________________ ___________________________
90,000 Bal. 3,000 Bal.
_______________ ______________
90,000 12/31 Bal. 3,000 12/31 Bal.
Rent revenue Salaries and wages expense
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