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Chapter 03 - The Accounting Cycle: End of the Period
Chapter 3
The Accounting Cycle: End of the Period
EXERCISES
Exercise 3-1
1.
May 2.
Exercise 3-2
1.
May 2.
Exercise 3-3
1.
May 7.
Exercise 3-4
1.
April 1.
Exercise 3-5
Net income (unadjusted)
$78,400
a. Record insurance expense of $1,600 per month
(4,800)
Exercise 3-6
(b)
Use source documents to identify accounts affected by external
transactions.
(g)
Analyze the impact of the transaction on the accounting
Exercise 3-7
(a)
Debit
Credit
Supplies Expense
2,900
Supplies
2,900
Chapter 03 - The Accounting Cycle: End of the Period
Exercise 3-8
(a)
Debit
Credit
Depreciation Expense
9,100
Exercise 3-9
If the adjusting entry is NOT made:
Revenues
−
Expenses
=
Net Income
(a)
$0
−
−$9,100
=
+$9,100
Exercise 3-10
(a)
Debit
Credit
Deferred Revenue
2,100
Service Revenue
2,100
(Adjust deferred revenue)
Exercise 3-11
If the adjusting entry is NOT made:
Assets
=
Liabilities
+
Stockholders’
Equity
(a)
$0
=
+$2,100
+
−$2,100
Exercise 3-12
(a)
Debit
Credit
Deferred Revenue
2,200
Service Revenue
2,200
(Adjust deferred revenue)
(b)
Debit
Credit
Exercise 3-13
(a)
Debit
Credit
Interest Receivable
200
Interest Revenue
200
(Adjust interest receivable)
Chapter 03 - The Accounting Cycle: End of the Period
Exercise 3-14
Requirement 1
(a)
Debit
Credit
Rent Expense
2,400
Prepaid Rent
2,400
(Adjust prepaid rent)
(b)
Debit
Credit
Exercise 3-14 (concluded)
Requirement 2
Adjusted Trial Balance
Accounts
Debit
Credit
Cash
$12,000
Accounts Receivable
10,500
Exercise 3-15
Volunteers Inc.
(in millions)
Raiders Inc.
(in millions)
Year
Net
Income (Loss)
Retained
Earnings
Net
Income (Loss)
Retained
Earnings
2009
___
$ 0
$ 32
$ 20
2010
$ 50
50
(48)
(28)
Exercise 3-16
Requirement 1
Blue Hens Corporation
Income Statement
For the year ended December 31, 2018
Service revenue
$420,000
Expenses:
Salaries
$310,000
Requirement 2
Blue Hens Corporation
Statement of Stockholders’ Equity
For the year ended December 31, 2018
Common
Stock
Retained
Earnings
Total
Stockholders’
Equity
