CHAPTER 3
(a) NEW DAWN WINDOW WASHING INC.
Assets
=
Liabilities
+
Stockholders’ Equity
+
Accounts
Receivable
+
Supplies
+
Equipment
=
Accounts
Payable
+
Common
Stock
+
Retained Earnings
Revenues
–
Expenses
–
Dividends
1.
+$20,000
2.
+$9,000
4.
+$300
5.
+$750
–750
Advertising Expense
6.
+$7,200
Service Revenue
7.
–$500
Dividends
Expense
9.
–140
Utilities Expense
10.
+$1,000
+1,000
Service Revenue
11.
+
+
+
=
+
+
$500
3.
–700
Rent Expense
PROBLEM 3-1C (Continued)
(b) Service Revenue ($7,200 + $1,000) …………………….. $8,200
Expenses
Salaries and Wages Expense ……………………… $1,700
(a) ALDRICH SERVICE INC.
Assets
=
Liabilities
+
Stockholders’ Equity
Date
Cash
+
Accounts
Receivable
+
Supplies
+
Equipment
=
Notes
Payable
+
Accounts
Payable
+
Common
Stock
+
Retained Earnings
Revenues
–
Expenses
–
Dividends
June 1
$15,000
$15,000
2
–2,000
+$15,000
+$13,000
3
–600
–$600
Rent Expense
5
+$2,400
+$2,400
Service Revenue
9
–300
–$300
Dividends
12
+$240
+$240
15
+750
–750
PROBLEM 3-2C
20
+1,500
+1,500
Service Revenue
23
–500
29
–240
$12,680
=
+
+
$15,000
+
PROBLEM 3-2C (Continued)
(b) ALDRICH SERVICE INC.
Income Statement
For the Month Ended June 30, 2014
Revenues
Service revenue ($2,400 + $1,500) ……………. $3,900
Expenses
Salaries and wages expense ……………………. $750
Rent expense ………………………………………….. 600
(c) ALDRICH SERVICE INC.
Balance Sheet
June 30, 2014
Assets
Current Assets
Cash ………………………………………………………. $12,680
Accounts receivable ……………………………….. 1,650
Liabilities and Stockholders’ Equity
Current Liabilities
Notes payable …………………………………………. $12,500
Accounts payable …………………………………… 200
(a) TIEDE COMPANY
Assets
=
Liabilities
+
Stockholders’ Equity
Cash
+
Accounts
Receivable
+
Supplies
+
Equipment
=
Notes
Payable
+
Accounts
Payable
+
Common
Stock
+
Retained
Earnings
+
Revenues
–
Expenses
–
Dividends
Bal.
$9,000
+
$1,700
+
$600
+
$5,000
=
$3,600
+
$12,000
+
$700
Sept. 2.
–3,400
–3,400
17.
–600
–$600
Dividends
–1,100
Rent Expense
–250
Advertising Expense
26.
+220
–220
Utilities Expense
+
+
=
+
+
+
+
+1,200
–1,200
–1,000
+5,100
+4,100
13.
+2,300
Service Revenue
PROBLEM 3-3C (Continued)
(b) TIEDE COMPANY
Income Statement
For the Month Ended September 30, 2014
Revenues
Service revenue……………………………………………. $10,600
Expenses
Rent expense ……………………………………………….. $1,100
Salaries and wages expense …………………………. 900
TIEDE COMPANY
Retained Earnings Statement
For the Month Ended September 30, 2014
Retained earnings, September 1 ……………………………………….. $ 700
Add: Net income …………………………………………………………….. 8,130
PROBLEM 3-3C (Continued)
TIEDE COMPANY
Balance Sheet
September 30, 2014
Assets
Current assets
Cash ………………………………………………………. $10,250
Accounts receivable ……………………………….. 8,800
Liabilities and Stockholders’ Equity
Current liabilities
Notes payable …………………………………………. $ 5,000
Accounts payable …………………………………… 4,520
PROBLEM 3-4C
Date
Account Titles and Explanation
Debit
Credit
Apr. 1
Cash ………………………………………………………..
Common Stock ………………………………….
(Issued stock for cash)
70,000
70,000
4
Land …………………………………………………………
Cash ………………………………………………….
(Purchased land for cash)
50,000
50,000
(Incurred advertising expense on
account)
11
Salaries and Wages Expense …………………….
Cash ………………………………………………….
(Paid salaries)
2,700
2,700
12
No entry—not a transaction.
13
Prepaid Insurance …………………………………….
Cash ………………………………………………….
(Paid for one-year insurance policy)
7,200
7,200
17
Cash ………………………………………………….
(Payment of cash dividend)
Service Revenue ………………………………..
(Received cash for services
provided)
6,000
Unearned Service Revenue ………………..
9,000
Dividends …………………………………………………
600
PROBLEM 3-4C (Continued)
Date
Account Titles and Explanation
Debit
Credit
Apr. 30
provided)
(Paid creditor on account)
Cash ………………………………………………………..
7,900
PROBLEM 3-5C
(a)
Date
Account Titles and Explanation
Debit
Credit
May 1
Cash …………………………………………………………
Common Stock ………………………………….
(Issued stock for cash)
40,000
40,000
2
No entry—not a transaction.
3
Supplies …………………………………………………..
Accounts Payable ………………………………
(Purchased supplies on account)
7
Rent Expense ……………………………………………
Cash …………………………..……………………..
(Paid office rent)
1,400
1,400
11
Accounts Receivable ………………………………..
Service Revenue ………………………………..
(Billed client for services provided)
1,500
1,500
12
Cash …………………………………………………………
Unearned Service Revenue ………………..
(Received an advance for future
services)
4,200
4,200
17
Cash …………………………………………………………
Service Revenue ………………………………..
(Received cash for revenue earned)
3,300
3,300
Salaries and Wages Expense …………………….
Cash …………………………..……………………..
(Paid salaries)
2,000
2,000
Accounts Payable ($800 X 50%) …………………
Cash …………………………..……………………..
(Paid creditor on account)
PROBLEM 3-5C (Continued)
(b)
Cash
5/1 40,000
5/12 4,200
5/17 3,300
5/7 1,400
5/31 2,000
5/31 400
Bal. 43,700
5/11 1,500
Bal. 1,500
5/3 800
Bal. 800
5/7 1,400
Bal. 1,400
Accounts Payable
5/31 400
5/3 800
Bal. 400
Unearned Service Revenue
5/12 4,200
Bal. 4,200
5/1 40,000
Bal. 40,000
5/17 3,300
Bal. 4,800
Salaries and Wages Expense
5/31 2,000
Bal. 2,000
PROBLEM 3-5C (Continued)
(c) RIDGELL CONSULTING
Trial Balance
May 31, 2014
Debit
Credit
Cash ……………………………………………………………
$43,700
PROBLEM 3-6C
(a) & (c) Cash
7/1 Bal. 24,532
7/8 5,189
7/11 7,320
7/9 2,100
7/14 9,810
7/30 5,267
7/31 400
Bal. 19,464
7/1 Bal. 10,536
7/22 4,700
7/8 5,189
Bal. 10,047
7/1 Bal. 12,000
Bal. 12,000
7/31 400
Bal. 400
Supplies
7/1 Bal. 3,592
7/17 720
Bal. 4,312
7/1 Bal. 25,950
Bal. 25,950
Bal. 12,020
Expense
7/30 386
Bal. 386
Accounts Payable
7/14 9,810
7/1 Bal. 15,800
7/17 720
Bal. 6,710
7/1 Bal. 1,810
Bal. 1,810
Bal. 5,214
Utilities Expense
7/30 1,767
Bal. 1,767
Common Stock
7/1 Bal. 35,000
Bal. 35,000
Service Revenue
7/11 7,320
7/22 4,700
Salaries and Wages Expense
7/9 2,100
7/30 3,114
PROBLEM 3-6C (Continued)
(b)
Date
Account Titles and Explanation
Debit
Credit
July 8
Cash ………………………………………………………..
Accounts Receivable …………………………
(Received cash on account)
5,189
5,189
9
Salaries and Wages Expense …………………….
Cash ………………………………………………….
(Paid salaries)
2,100
(Received cash for services
provided)
14
Accounts Payable …………………………………….
Cash ………………………………………………….
(Paid creditors)
9,810
9,810
17
Supplies …………………………………………………..
Accounts Payable ………………………………
(Purchased supplies on account)
720
720
Service Revenue ………………………………..
(Billed for services provided)
4,700
Cash ………………………………………………….
(Paid for various expenses)
5,267
31
Dividends …………………………………………………
Cash ………………………………………………….
(Payment of cash dividend)
PROBLEM 3-6C (Continued)
(d) KINNEAR DRY CLEANERS
Trial Balance
July 31, 2014
Debit
Credit
Cash ……………………………………………………………
Accounts Receivable …………………………..……….
Supplies ………………………………………………………
$19,464
10,047
4,312
PROBLEM 3-7C
LAGERSTROM COMPANY
Trial Balance
May 31, 2014
Debit
Credit
Cash ($6,340 + $350 – $441) ………………………………..
Accounts Receivable ($2,750 – $180 – $240) ………..
Prepaid Insurance ($700 + $100) ………………………….
Supplies ($0 + $350) ……………………………………………
$ 6,249
2,330
800
350
PROBLEM 3-8C
(a) & (c) Cash
4/30 170
4/29 1,900
4/30 1,200
Bal. 6,660
Bal. 1,850
4/10 2,000
4/1 Bal. 8,000
4/1 Bal. 6,300
4/9 4,700
4/2 800
4/10 3,200
Accounts Receivable
4/30 170
Bal. 170
Prepaid Rent
4/30 1,200
Bal. 1,200
4/1 Bal. 10,000
Bal. 10,000
4/1 Bal. 8,000
4/25 3,000
Bal. 7,700
4/30 340
Bal. 340
Bal. 8,000
Equipment
4/1 Bal. 6,000
Bal. 6,000
Accounts Payable
4/10 1,200
4/1 Bal. 2,300
4/20 750
Bal. 6,000
Common Stock
4/1 Bal. 20,000
Bal. 20,000
Service Revenue
4/9 4,700
Advertising Expense
4/12 410
Bal. 410
PROBLEM 3-8C (Continued)
Rent Expense
4/20 750
Bal. 1,550
Bal. 1,900
4/2 800
Salaries and Wages Expense
4/29 1,900
(b)
Date
Account Titles and Explanation
Debit
Credit
Apr. 2
Rent Expense …………………………………………..
Cash ………………………………………………….
(Paid film rental)
800
800
3
No entry—not a transaction.
9
Service Revenue ………………………………..
(Received cash for admissions)
4,700
Cash ………………………………………………….
(Made payments on mortgage
and accounts payable)
3,200
Cash ………………………………………………………..
4,700
11
No entry—not a transaction.
12
Advertising Expense …………………………………
Cash ………………………………………………….
(Paid advertising expenses)
410
410
Accounts Payable ……………………………..
(Rented film on account)
750
25
Cash ………………………………………………………..
(Received cash for admissions)
3,000
PROBLEM 3-8C (Continued)
Date
Account Titles and Explanation
Debit
Credit
Apr. 29
Salaries and Wages Expense …………………….
1,900
30
account for concession revenue)
30
Prepaid Rent …………………………………………….
(Paid cash for future film rental)
1,200
Cash ………………………………………………………..
Accounts Receivable ………………………………..
Rent Revenue (17% X $2,000) ……………….
170
170
340
(d) RIVIERA THEATER INC.
Trial Balance
April 30, 2014
Debit
Credit
Rent Revenue ………………………………………………
Advertising Expense ……………………………………
Rent Expense ………………………………………………
$35,890
$35,890
Cash ……………………………………………………………
Accounts Receivable …………………………..……….
Prepaid Rent ………………………………………………..
Land ……………………………………………………………
$ 6,660
170
1,200
10,000
PROBLEM 3-9C
(b)
Error
(1) In Balance
(2) Difference
(3) Larger Column
1.
No
$270
Credit
3.
No
$880
Credit
4.
Yes
None
N/A
5.
Yes
None
N/A
6.
Yes
None
N/A
8.
No
Credit