CHAPTER 3
SOLUTIONS TO PROBLEMS: SET B
PROBLEM 3-1B
(a)
J3
Date
Account Titles and Explanation
Ref.
Debit
Credit
2017
June 30
Supplies Expense ……………………….
Supplies
($2,000 – $750) ………………..
631
126
1,250
1,250
30
Utilities Expense …………………………
Accounts Payable ……………….
732
201
150
150
30
Service Revenue …………………
400
2,800
Insurance Expense ……………………..
Prepaid Insurance
722
250
30
Salaries and Wages Expense ………
Salaries and Wages
Payable …………………………...
726
212
1,900
1,900
30
Depreciation Expense …………………
711
250
30
Accounts Receivable …………………..
Service Revenue …………………
112
400
1,200
PROBLEM 3-1B (Continued)
(b)
Cash No. 101
Date
Explanation
Ref.
Debit
Credit
Balance
2017
June 30
Balance
7,150
Accounts Receivable No. 112
Date
Explanation
Ref.
Debit
Credit
Balance
Supplies No. 126
Date
Explanation
Ref.
Debit
Credit
Balance
2017
June 30
30
Balance
Adjusting
J3
1,250
2,000
750
Prepaid Insurance No. 130
Date
Explanation
Ref.
Debit
Credit
Balance
2017
Equipment No. 157
Date
Explanation
Ref.
Debit
Credit
Balance
2017
June 30
Balance
15,000
Accumulated Depreciation—Equipment No. 158
Date
Explanation
Ref.
Debit
Credit
Balance
PROBLEM 3-1B (Continued)
Accounts Payable No. 201
Date
Explanation
Ref.
Debit
Credit
Balance
June 30
Balance
2017
Unearned Service Revenue No. 209
Date
Explanation
Ref.
Debit
Credit
Balance
2017
June 30
30
Balance
Adjusting
J3
2,800
4,000
1,200
Salaries and Wages Payable No. 212
Date
Explanation
Ref.
Debit
Credit
Balance
J3
Owner’s Capital No. 301
Date
Explanation
Ref.
Debit
Credit
Balance
2017
June 30
Balance
21,750
Service Revenue No. 400
Date
Explanation
Ref.
Debit
Credit
Balance
PROBLEM 3-1B (Continued)
Supplies Expense No. 631
Date
Explanation
Ref.
Debit
Credit
Balance
2017
June 30
Adjusting
J3
1,250
1,250
Depreciation Expense No. 711
Date
Explanation
Ref.
Debit
Credit
Balance
June 30
Adjusting
J3
250
250
Insurance Expense No. 722
Date
Explanation
Ref.
Debit
Credit
Balance
2017
June 30
Adjusting
J3
250
250
Salaries and Wages Expense No. 726
Date
Explanation
Ref.
Debit
Credit
Balance
Rent Expense No. 729
Date
Explanation
Ref.
Debit
Credit
Balance
2017
June 30
Balance
1,000
Utilities Expense No. 732
Date
Explanation
Ref.
Debit
Credit
Balance
PROBLEM 3-1B (Continued)
(c) ELSNER COMPANY
Adjusted Trial Balance
June 30, 2017
Debit
Credit
Cash …………………………………………………………..
Accounts Receivable …………………………………..
Supplies ……………………………………………………..
Accumulated Depreciation—
Equipment ……………………………………………….
Accounts Payable ……………………………………….
Unearned Service Revenue ………………………….
Salaries and Wages Payable ………………………..
$ 7,150
7,200
750
$ 250
4,650
1,200
1,900
PROBLEM 3-2B
(a)
J1
Date
Account Titles and Explanation
Ref.
Debit
Credit
Aug. 31
Insurance Expense ($300 X 3) ………..
Prepaid Insurance ………………….
722
130
900
900
31
Supplies Expense ($3,300 – $800) ………
631
2,500
Accumulated Depreciation—
31
Unearned Rent Revenue ………………..
Rent Revenue ………………………..
208
429
4,800
4,800
31
Salaries and Wages Expense …………
Salaries and Wages Payable …..
726
212
400
400
31
Accounts Receivable …………………….
112
4,000
(b)
Cash No. 101
Date
Explanation
Ref.
Debit
Credit
Balance
Aug. 31
Balance
19,600
PROBLEM 3-2B (Continued)
Accounts Receivable No. 112
Date
Explanation
Ref.
Debit
Credit
Balance
Aug. 31
Adjusting
J1
4,000
4,000
Date
Explanation
Credit
Prepaid Insurance No. 130
Date
Explanation
Ref.
Debit
Credit
Balance
Aug. 31
31
Balance
Adjusting
J1
900
6,000
5,100
Land No. 140
Date
Explanation
Ref.
Debit
Credit
Balance
Aug. 31
Balance
25,000
Date
Explanation
Ref.
Debit
Credit
Balance
Aug. 31
Balance
Accumulated Depreciation—Buildings No. 144
Date
Explanation
Ref.
Debit
Credit
Balance
Aug. 31
Adjusting
J1
1,500
1,500
Date
Explanation
Ref.
Debit
Balance
Aug. 31
Balance
PROBLEM 3-2B (Continued)
Accumulated Depreciation—Equipment No. 150
Date
Explanation
Ref.
Debit
Credit
Balance
Aug. 31
Adjusting
J1
600
600
Date
Explanation
Debit
Credit
Aug. 31
6,500
Unearned Rent Revenue No. 208
Date
Explanation
Ref.
Debit
Credit
Balance
Aug. 31
31
Balance
Adjusting
J1
4,800
7,400
2,600
Date
Explanation
Debit
Credit
Balance
Aug. 31
Adjusting
J1
400
400
Interest Payable No. 230
Date
Explanation
Ref.
Debit
Credit
Balance
Aug. 31
Adjusting
J1
600
600
Date
Explanation
Ref.
Debit
Credit
Balance
Aug. 31
Balance
Owner’s Capital No. 301
Date
Explanation
Ref.
Debit
Credit
Balance
Aug. 31
Balance
100,000
PROBLEM 3-2B (Continued)
Owner’s Drawings No. 306
Date
Explanation
Ref.
Debit
Credit
Balance
Aug. 31
Balance
5,000
Date
Explanation
Ref.
Debit
Credit
Balance
Depreciation Expense No. 620
Date
Explanation
Ref.
Debit
Credit
Balance
Aug. 31
Adjusting
J1
2,100
2,100
Maintenance and Repairs Expense No. 622
Date
Explanation
Ref.
Debit
Credit
Balance
Aug. 31
Balance
3,600
Date
Explanation
Ref.
Debit
Credit
Balance
Aug. 31
Adjusting
J1
2,500
2,500
Date
Explanation
Ref.
Debit
Credit
Balance
Aug. 31
Adjusting
J1
Insurance Expense No. 722
Date
Explanation
Ref.
Debit
Credit
Balance
Aug. 31
Adjusting
J1
900
900
PROBLEM 3-2B (Continued)
Salaries and Wages Expense No. 726
Date
Explanation
Ref.
Debit
Credit
Balance
Aug. 31
31
Balance
Adjusting
J1
400
51,000
51,400
Date
Ref.
Debit
Credit
Balance
(c) MAQUOKETA RIVER RESORT
Adjusted Trial Balance
August 31, 2017
Debit
Credit
Cash …………………………………………………………..
Accounts Receivable …………………………………..
Supplies ……………………………………………………..
Accumulated Depreciation—Buildings ………….
Equipment …………………………………………………..
Accumulated Depreciation—Equipment ………..
Accounts Payable …………………………..……………
Unearned Rent Revenue ………………………………
Salaries and Wages Payable…………………………
Depreciation Expense ………………………………….
Maintenance and Repairs Expense ……………….
Supplies Expense ………………………………………..
Interest Expense ………………………………………….
$ 19,600
4,000
800
26,000
2,100
3,600
2,500
600
$ 1,500
600
6,500
2,600
400
PROBLEM 3-2B (Continued)
(d) MAQUOKETA RIVER RESORT
Income Statement
For the Three Months Ended August 31, 2017
Revenues
Rent revenue …………………………………………. $88,800
Expenses
Salaries and wages expense …………………… $51,400
Utilities expense …………………………………….. 9,400
MAQUOKETA RIVER RESORT
Owner’s Equity Statement
For the Three Months Ended August 31, 2017
Owner’s Capital, June 1 ………………………………… $ 0
Investment by owner …………………………………….. $100,000
Add: Net income ………………………………………….. 18,300 118,300
PROBLEM 3-2B (Continued)
MAQUOKETA RIVER RESORT
Balance Sheet
August 31, 2017
Assets
Cash ………………………………………………………… $ 19,600
Accounts receivable …………………………………. 4,000
Supplies …………………………………………………… 800
Liabilities and Owner’s Equity
Liabilities
Accounts payable ………………………………. $ 6,500
Mortgage payable ………………………………. 80,000
Unearned rent revenue ………………………. 2,600