Wild and Shaw Financial and Managerial Accounting 9e Solutions Manual: Chapter 3
Problem 3-3B (Concluded)
ALONZO INSTITUTE
Balance Sheet
December 31
Assets
Cash …………………………………………………………………… $ 60,000
Accounts receivable …………………………………………… 5,750
Teaching supplies ………………………………………………. 20,000
Liabilities
Accounts payable ……………………………………………….. $ 11,200
Salaries payable …………………………………………………. 450
Wild and Shaw Financial and Managerial Accounting 9e Solutions Manual: Chapter 3
Problem 3-4B (50 minutes)
SPEEDY COURIER
Income Statement
For Year Ended December 31
Revenues
Services revenue ……………………………………. $611,800
Interest revenue ……………………………………… 34,000
Total revenues ……………………………………….. $645,800
SPEEDY COURIER
Statement of Retained Earnings
For Year Ended December 31
Retained earnings, Dec. 31 prior yr end ……. $110,000
Add: Net income ……………………………………… 86,000
196,000
Problem 3-4B (Concluded)
SPEEDY COURIER
Balance Sheet
December 31
Assets
Cash …………………………………………………………….
$ 58,000
Accounts receivable ……………………………………..
120,000
Interest receivable …………………………………………
7,000
Notes receivable (due in 90 days)…………………….
210,000
Office supplies ……………………………………………..
Trucks ………………………………………………………….
Accumulated depreciation—Trucks ……………….
Equipment …………………………………………………….
Accumulated depreciation—Equipment …………
100,000
Total assets ………………………………………………….
Liabilities
Accounts payable …………………………………………
$134,000
Interest payable …………………………………………….
20,000
Salaries payable …………………………..……………….
28,000
Unearned revenue …………………………………………
200,000
Total liabilities ………………………………………………
Equity
Common stock ……………………………………………..
15,000
Retained earnings …………………………………………
146,000
Total equity …………………………………………………..
161,000
Wild and Shaw Financial and Managerial Accounting 9e Solutions Manual: Chapter 3
Problem 3-5B (90 minutes)
INSTRUCTOR NOTE: Ledger accounts are shown after Part 7 as they would appear after
all entries are posted.
Part 2
Transactions for July
July 2 Cash ……………………………………………………… 101 30,000
Buildings ………………………………………………. 173 150,000
Common Stock……………………………….. 307 180,000
Owner invested in the business.
14 Salaries Expense …………………………………… 622 1,000
Cash ………………………………………………. 101 1,000
Paid two weeks’ salary.
24 Cash ……………………………………………………… 101 9,800
Storage Revenue…………………………….. 403 9,800
Collected storage revenue.
Wild and Shaw Financial and Managerial Accounting 9e Solutions Manual: Chapter 3
Problem 3-5B (Continued)
Part 3
SAFE STORAGE CO.
Unadjusted Trial Balance
July 31
No. Account Title Debit Credit
101 Cash …………………………………………………………… $ 22,850
106 Accounts receivable …………………………………… 0
124 Office supplies ……………………………………………. 2,400
319 Dividends …………………………………………………… 2,000
403 Storage revenue …………………………………………. 9,800
606 Depreciation expense–Buildings …………………. 0
622 Salaries expense ………………………………………… 2,000
Wild and Shaw Financial and Managerial Accounting 9e Solutions Manual: Chapter 3
Problem 3-5B (Continued)
Part 4
Adjusting entries
July 31 Insurance Expense …………………………………………637 400
Prepaid Insurance …………………………………..128 400
Expired insurance.
(2/3 x $7,200/12 per month)
Wild and Shaw Financial and Managerial Accounting 9e Solutions Manual: Chapter 3
Problem 3-5B (Continued)
Part 4
SAFE STORAGE CO.
Adjusted Trial Balance
July 31
No. Account Title Debit Credit
101 Cash …………………………………………………………… $ 22,850
106 Accounts receivable …………………………………… 1,150
124 Office supplies ……………………………………………. 1,525
403 Storage revenue …………………………………………. 10,950
606 Depreciation expense–Buildings …………………. 1,500
622 Salaries expense ………………………………………… 2,100
637 Insurance expense ……………………………………… 400
Wild and Shaw Financial and Managerial Accounting 9e Solutions Manual: Chapter 3
Problem 3-5B (Continued)
Part 5
SAFE STORAGE CO.
Income Statement
For Month Ended July 31
Storage revenue ………………………………….. $10,950
Expenses
Depreciation expense–Buildings ………… $1,500
SAFE STORAGE CO.
Statement of Retained Earnings
For Month Ended July 31
Retained earnings, July 1 …………………….. $ 0
Add: Net income ………………………………… 2,725
2,725
Wild and Shaw Financial and Managerial Accounting 9e Solutions Manual: Chapter 3
Problem 3-5B (Continued)
Part 5
SAFE STORAGE CO.
Balance Sheet
July 31
Assets
Cash ……………………………………………………. $ 22,850
Accounts receivable ……………………………. 1,150
Office supplies …………………………………….. 1,525
Problem 3-5B (Continued)
Part 6
Closing entries
July 31 Storage Revenue ………………………………… 403 10,950
Income Summary ……………………………. 901 10,950
Close revenue account.
31 Income Summary ………………………………… 901 8,225
Depreciation Exp—Buildings ………….. 606 1,500
31 Income Summary ………………………………… 901 2,725
Retained Earnings ………………………….. 318 2,725
Close Income Summary.
31 Retained Earnings ………………………………. 318 2,000
Dividends ……………………………………….. 319 2,000
Close Dividends account.
Part 7
SAFE STORAGE CO.
Post-Closing Trial Balance
July 31
Debit Credit
Cash ……………………………………………………. $ 22,850
Accounts receivable ……………………………. 1,150
Wild and Shaw Financial and Managerial Accounting 9e Solutions Manual: Chapter 3
Problem 3-5B (Continued)
Ledger as of July 31
Cash Acct. No. 101
Date Explanation PR Debit Credit Balance
July 2 30,000 30,000
3 2,000 28,000
5 2,400 25,600
Accounts Receivable Acct. No. 106
Date Explanation PR Debit Credit Balance
July 31 Adjusting 1,150 1,150
Office Supplies Acct. No. 124
Buildings Acct. No. 173
Date Explanation PR Debit Credit Balance
July 2 150,000 150,000
Accumulated Depreciation—Buildings Acct. No. 174
Problem 3-5B (Continued)
Common Stock Acct. No. 307
Date Explanation PR Debit Credit Balance
July 2 180,000 180,000
Retained Earnings Acct. No. 318
Date Explanation PR Debit Credit Balance
July 31 Closing 2,725 182,725
31 Closing 2,000 180,725
Dividends Acct. No. 319
Depreciation Expense—Buildings Acct. No. 606
Date Explanation PR Debit Credit Balance
July 31 Adjusting 1,500 1,500
31 Closing 1,500 0
Salaries Expense Acct. No. 622
Date Explanation PR Debit Credit Balance
Wild and Shaw Financial and Managerial Accounting 9e Solutions Manual: Chapter 3
Problem 3-5B (Concluded)
Office Supplies Expense Acct. No. 650
Date Explanation PR Debit Credit Balance
July 31 Adjusting 875 875
31 Closing 875 0
Repairs Expense Acct. No. 684
Date Explanation PR Debit Credit Balance
July 29 950 950
31 Closing 950 0
Problem 3-6B (15 minutes)
Balance sheet category
Account
1.
Not on balance sheet
Commissions revenue
2.
Current assets
Interest receivable
3.
Long-term investment in stock
4.
Current assets
Prepaid insurance (4 months of rent)
6.
Notes payable (due in 15 years)
7.
Copyrights
8.
Current liabilities
Rent payable
9.
Plant assets
Trucks
10.
Plant assets
Office equipment
11.
Current assets
Rent receivable
12.
Current liabilities
Salaries payable
13.
Current liabilities
Income taxes payable (due in 11 weeks)
14.
Patents
15.
Current assets
Office supplies
16.
Current liabilities
Interest payable
17.
Not on balance sheet
Rent revenue
18.
Notes receivable (due in 10 years)
19.
Plant assets
Land
20.
Not on balance sheet
Depreciation expense—Trucks
Wild and Shaw Financial and Managerial Accounting 9e Solutions Manual: Chapter 3
Problem 3-7B (75 minutes)
Part 1
ANARA CO.
Income Statement
For Year Ended December 31
Revenues
Services revenue ………………………………………… $59,600
Rent revenue ………………………………………………. 4,500
Interest revenue ………………………………………….. 2,320
ANARA CO.
Statement of Retained Earnings
For Year Ended December 31
Retained earnings, December 31 prior year …… $ 77,800
Add: Net income ………………………………………… 28,890
Problem 3-7B (Continued)
ANARA CO.
Balance Sheet
December 31
Assets
Current assets
Cash …………………………………………………………… $ 7,400
Supplies …………………………………………………….. 15,800
Prepaid insurance ………………………………………. 1,000
Liabilities
Current liabilities
Accounts payable ……………………………………….. $ 3,500
Interest payable ………………………………………….. 1,750
Equity
Common stock …………………………………………….. 15,000
Retained earnings ………………………………………… 98,690
Wild and Shaw Financial and Managerial Accounting 9e Solutions Manual: Chapter 3
Problem 3-7B (Continued)
Part 2
Closing entries (all dated December 31)
Instructor note: Entries are shown without an account reference column because no posting is required.
(1) Services Revenue ………………………………….. 59,600
Rent Revenue ……………………………………….. 4,500
(2) Income Summary ………………………………….. 37,530
Depreciation Expense—Building …….. 2,000
Depreciation Expense—Equipment …. 1,000
(3) Income Summary ………………………………….. 28,890
(4) Retained Earnings …………………………………. 8,000
Dividends ……………………………………….. 8,000
Wild and Shaw Financial and Managerial Accounting 9e Solutions Manual: Chapter 3
Problem 3-8BB (90 minutes) Part 1
POWER DEMOLITION COMPANY
Work Sheet
For Year Ended April 30
Unadjusted
Trial Balance
Adjustments
Adjusted
Trial Balance
Income
Statement
Balance Sheet
No.
Account Title
Dr.
Cr.
Dr.
Cr.
Dr.
Cr.
Dr.
Cr.
Dr.
Cr.
101
Cash ……………………………………………
7,000
7,000
7,000
126
Supplies ………………………………………
16,000
(a)
8,100
7,900
7,900
128
Prepaid insurance ………………………
12,600
(b)
10,600
2,000
2,000
167
Equipment …………………………………..
200,000
200,000
200,000
168
Accumulated depreciation—
Equipment …………………………………
14,000
(c)
7,000
21,000
21,000
201
Accounts payable ……………………….
6,800
(d)
7,600
203
Interest payable …………………………..
(h)
300
208
Rent payable …………………………..
0
3,000
3,000
210
Wages payable …………………………..
0
(e)
2,000
2,000
213
Property taxes payable ……………….
0
(g)
251
Long-term notes payable ……………
30,000
30,000
307
Common stock …………………………..
318
Retained earnings ………………………
76,900
76,900
Dividends ……………………………………
12,000
12,000
403
Demolition revenue …………………….
612
Depreciation expense—Equip ……
0
(c)
7,000
7,000
7,000
623
Wages expense …………………………..
41,400
(e)
43,400
43,400
633
Interest expense …………………………
3,300
(h)
3,600
3,600
637
Insurance expense ……………………..
0
(b)
10,600
10,600
10,600
640
Rent expense …………………………..
13,200
(f)
3,000
16,200
16,200
652
Supplies expense ……………………….
0
(a)
8,100
8,100
8,100
683
Property taxes expense ………………
9,700
(g)
550
10,250
10,250
684
Repairs expense …………………………
4,700
4,700
4,700
Totals ………………………………………….
32,350
32,350
228,900
Net Income ………………………………….
77,550
77,550
Wild and Shaw, Fundamental Accounting Principles 25e Solutions Manual: Chapter 3
Problem 3-8BB (Continued)
Part 2 Adjusting entries (all dated April 30)
Instructor note: Entries are shown without an account reference column because no posting is required.
(a) Supplies Expense ……………………………………… 8,100
Supplies …………………………………………….. 8,100
Record consumption of supplies.
(e) Wages Expense ………………………………………… 2,000
Wages Payable …………………………………… 2,000
Record accrued wages.
(f) Rent Expense ……………………………………………. 3,000
Rent Payable ……………………………………… 3,000
Record remainder of annual rent.
Wild and Shaw, Fundamental Accounting Principles 25e Solutions Manual: Chapter 3
Problem 3-8BB (Continued)
Closing entries (all dated April 30)
Instructor note: Entries are shown without an account reference column because no posting is required.
(1) Demolition Revenue ………………………………. 187,000
(2) Income Summary ………………………………….. 109,450
Depreciation Expense–Equipment …… 7,000
Wages Expense………………………………. 43,400
(3) Income Summary ………………………………….. 77,550
(4) Retained Earnings …………………………………. 12,000