Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
Problem 3-7A (concluded)
Requirement 6 (closing entries posted in red)
Retained Earnings
Service Revenue
19,000
42,200
Salaries Expense
Interest Expense
Rent Expense
24,500
0
0
Requirement 7
Crimson Tide Music Academy
Post-Closing Trial Balance
December 31, 2018
Accounts
Debit
Credit
Cash
$ 10,300
Accounts Receivable
9,500
Accumulated Depreciation
$ 18,000
Accounts Payable
7,700
Salaries Payable
2,100
Problem 3-8A (LO 3-3, 3-4, 3-5, 3-6, 3-7)
Requirement 1
Cash
Accounts Receivable
Supplies
Equipment
Accumulated Depr.
Salaries Payable
15,000
5,000
7,500
15,000
5,000
7,500
Common Stock
Retained Earnings
Service Revenue
Dividends
Salaries Expense
R&M Expense
0
0
0
Chapter 3 - The Accounting Cycle: End of the Period
Problem 3-8A (continued)
Requirement 2
(a) March 12
Debit
Credit
Accounts Receivable
21,000
Cash
39,000
Service Revenue
60,000
(Service revenue on account and for cash)
(b) May 2
Debit
Credit
(Collect on account)
(c) June 30
Debit
Credit
Cash
6,000
Common Stock
6,000
(Issue common stock)
(d) August 1
Debit
Credit
Problem 3-8A (continued)
Requirement 3 (entries posted in red)
Cash
Accounts Receivable
Supplies
20,000
39,000
26,000
13,000
8,000
4,000
Equipment
Accumulated Depr.
Salaries Payable
15,000
5,000
7,500
Common Stock
Retained Earnings
Service Revenue
25,000
6,000
9,500
0
60,000
Problem 3-8A (continued)
Requirement 4
Red Storm Cleaners
Unadjusted Trial Balance
December 31, 2018
Accounts
Debit
Credit
Cash
$34,900
Accounts Receivable
11,000
Dividends
1,100
Service Revenue
60,000
Requirement 5
December 31
Debit
Credit
Salaries Expense
1,100
Salaries Payable
1,100
(Adjust salaries payable)
Problem 3-8A (continued)
Requirement 6 (adjusted entries posted in red)
Cash
Accounts Receivable
Supplies
20,000
26,000
8,000
4,000
2,800
Equipment
Accumulated Depr.
Salaries Payable
15,000
8,000
5,000
5,000
7,500
7,500
1,100
23,000
10,000
1,100
Common Stock
Retained Earnings
Service Revenue
25,000
9,500
0
Chapter 3 - The Accounting Cycle: End of the Period
Problem 3-8A (continued)
Requirement 7
Red Storm Cleaners
Adjusted Trial Balance
December 31, 2018
Accounts
Debit
Credit
Cash
$ 34,900
Accounts Receivable
11,000
Supplies
1,200
Problem 3-8A (continued)
Requirement 8
Red Storm Cleaners
Income Statement
For the year ended December 31, 2018
Service revenue
$60,000
Expenses:
Salaries
19,600
Red Storm Cleaners
Balance Sheet
December 31, 2018
Assets
Liabilities
Current assets
Current liabilities.
Cash
$34,900
Salaries payable
$ 1,100
Accounts receivable
11,000
Supplies
1,200
Problem 3-8A (continued)
Requirement 9
December 31
Debit
Credit
Service Revenue
60,000
Retained Earnings
60,000
Problem 3-8A (continued)
Requirement 10 (closing entries posted in red)
Cash
Accounts Receivable
Supplies
20,000
26,000
8,000
4,000
Equipment
Accumulated Depr.
Salaries Payable
15,000
5,000
7,500
Common Stock
Retained Earnings
Service Revenue
25,000
6,000
40,400
9,500
60,000
60,000
0
60,000
Dividends
Salaries Expense
R&M Expense
0
0
0
Depr. Expense
Supplies Expense
0
0
Chapter 3 - The Accounting Cycle: End of the Period
Problem 3-8A (concluded)
Requirement 11
Red Storm Cleaners
Post-Closing Trial Balance
December 31, 2018
Accounts
Debit
Credit
Cash
$34,900
Accounts Receivable
11,000
Problem 3-9A (LO 3-3, 3-4, 3-5, 3-6, 3-7)
Requirement 1
Cash
Accounts Receivable
Prepaid Insurance
24,600
15,400
12,000
24,600
15,400
12,000
Supplies
Land
Accounts Payable
Problem 3-9A (continued)
Requirement 2
(a) January 9
Debit
Credit
Cash
134,100
Accounts Receivable
52,200
Service Revenue
186,300
(d) May 6
Debit
Credit
Supplies
9,200
Accounts Payable
9,200
(Purchase supplies on account)
(e) July 15
Debit
Credit
(Pay salaries for the current year)
(g) November 20
Debit
Credit
Cash
27,000
Common Stock
27,000
(Issue shares of common stock)
Problem 3-9A (continued)
Requirement 3 (entries posted in red)
Cash
Accounts Receivable
Prepaid Insurance
24,600
15,400
12,000
Supplies
Land
Accounts Payable
0
148,000
6,700
Deferred Revenue
Common Stock
Retained Earnings
5,800
143,000
44,500
Dividends
Service Revenue
Property Tax Expense
0
0
0
Salaries Expense
Insurance Expense
Supplies Expense
0
0
0
Chapter 3 - The Accounting Cycle: End of the Period
Problem 3-9A (continued)
Requirement 4
Zips Storage
Unadjusted Trial Balance
December 31, 2018
Accounts
Debit
Credit
Cash
$103,800
Accounts Receivable
16,100
Prepaid Insurance
12,000
Retained Earnings
44,500
Dividends
2,800
Service Revenue
186,300
Requirement 5
December 31
Debit
Credit
Insurance Expense
7,000
Prepaid Insurance
7,000
(Reduce prepaid insurance due to passage of time)
Problem 3-9A (continued)
Requirement 6 (adjusted entries posted in red)
Cash
Accounts Receivable
Prepaid Insurance
24,600
8,500
15,400
12,000
7,000
Supplies
Land
Accounts Payable
Deferred Revenue
Common Stock
Retained Earnings
Dividends
Service Revenue
Property Tax Expense
0
2,800
0
186,300
0
8,500
Salaries Expense
Insurance Expense
Supplies Expense
0
0
0
Problem 3-9A (continued)
Requirement 7
Zips Storage
Adjusted Trial Balance
December 31, 2018
Accounts
Debit
Credit
Cash
$103,800
Accounts Receivable
16,100
Prepaid Insurance
5,000
Supplies
2,900
Problem 3-9A (continued)
Requirement 8
Zips Storage
Income Statement
For the year ended December 31, 2018
Service revenue
$198,100
Expenses:
Property Tax
8,500
Zips Storage
Balance Sheet
December 31, 2018
Assets
Liabilities
Current assets:
Current liabilities:
Cash
$103,800
Accounts Payable
$ 4,500
Accounts receivable
16,100
Deferred Revenue
6,900
Chapter 3 - The Accounting Cycle: End of the Period
Problem 3-9A (continued)
Requirement 9
December 31
Debit
Credit
Service Revenue
198,100
Retained Earnings
198,100
(Close revenue accounts)
Problem 3-9A (continued)
Requirement 10 (closing entries posted in red)
Cash
Accounts Receivable
Prepaid Insurance
24,600
134,100
8,500
11,400
15,400
52,200
51,500
12,000
7,000
Supplies
Land
Accounts Payable
0
9,200
6,300
148,000
11,400
6,700
9,200
2,900
148,000
4,500
Deferred Revenue
Common Stock
Retained Earnings
5,800
143,000
44,500
