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CHAPTER 3
(a) NEW DAWN WINDOW WASHING INC.
Assets
=
Liabilities
+
Stockholders’ Equity
Cash
+
Accounts
Receivable
+
Supplies
+
Equipment
=
Accounts
Payable
+
Common
Stock
+
Retained Earnings
Revenues
–
Expenses
–
Dividends
1.
+$20,000
+$20,000
2.
–9,000
+$9,000
7.
–500
–$500
Dividends
9.
–140
–140
Utilities Expense
10.
+$1,000
+1,000
Service Revenue
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
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
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
12
No entry—not a transaction.
13
Prepaid Insurance ...........................................
Cash ..........................................................
(Paid for one-year insurance policy)
7,200
7,200
17
Dividends .........................................................
600
PROBLEM 3-4C (Continued)
Date
Account Titles and Explanation
Debit
Credit
Apr. 30
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.
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
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
Accounts Payable
5/31 400
5/3 800
Bal. 400
Unearned Service Revenue
5/12 4,200
Bal. 4,200
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
Supplies
7/1 Bal. 3,592
7/17 720
Accounts Payable
7/14 9,810
7/1 Bal. 15,800
7/17 720
Bal. 6,710
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
14
Accounts Payable ...........................................
Cash ..........................................................
(Paid creditors)
9,810
9,810
17
Supplies ...........................................................
Accounts Payable ....................................
(Purchased supplies on account)
720
720
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
4/1 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
Bal. 8,000
Equipment
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
4/2 800
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
Cash .................................................................
4,700
11
No entry—not a transaction.
12
Advertising Expense .......................................
Cash ..........................................................
(Paid advertising expenses)
410
410
PROBLEM 3-8C (Continued)
Date
Account Titles and Explanation
Debit
Credit
Apr. 29
Salaries and Wages Expense .........................
1,900
30
Cash .................................................................
Accounts Receivable ......................................
Rent Revenue (17% X $2,000) ...................
170
170
340
(d) RIVIERA THEATER INC.
Trial Balance
April 30, 2014
Debit
Credit
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
4.
Yes
None
N/A
6.
Yes
None
N/A
