Problem 3-9A (concluded)
Requirement 11
Zips Storage
Unadjusted Trial Balance
December 31, 2018
Accounts
Debit
Credit
Cash
$103,800
Accounts Receivable
16,100
Prepaid Insurance
5,000
Supplies
Common Stock
Retained Earnings
$275,800
Chapter 3 – The Accounting Cycle: End of the Period
PROBLEMS: SET B
Problem 3-1B (LO 3-1, 3-2)
Cash-Basis
Transaction
Revenue
Expense
Revenue
Expense
1. Receive cash from customers at the
time of service, $3,700
$3,700
$0
$3,700
$0
2. Issue common stock for cash,
$6,000.
$0
$0
$0
$0
3. Receive cash from customers who
were previously billed, $1,700
$0
$0
$1,700
$0
4. Incur utilities cost in the current
month but do not pay, $600.
$0
$600
$0
$0
5. Pay workers’ salaries for the current
month, $700.
$0
$700
$0
$700
6. Pay for rent one year in advance,
$0
$0
$0
7. Repay a long-term note to the bank,
$3,000.
$0
$0
$0
$0
previous month, $850.
$0
$0
$0
$850
9. Pay dividends to stockholders, $500.
$0
$0
$0
$0
10. Purchase office supplies for cash,
$540.
$0
$0
$0
$540
Problem 3-2B (LO 3-1, 3-2)
Horned Frogs Fine Cooking
Income Statement
For the year ended December 31, 2018
Service revenue
$60,000a
Expenses:
Salaries
21,600b
Insurance
Advertising
Problem 3-3B (LO 3-3)
(a)
Debit
Credit
Depreciation Expense
7,000
Accumulated Depreciation
7,000
(Adjust accumulated depreciation)
(b)
Debit
Credit
Salaries Expense
4,000
Salaries Payable
4,000
Debit
Credit
Interest Receivable
Interest Revenue
(d)
Debit
Credit
Insurance Expense
4,950
Prepaid Insurance
4,950
Supplies Expense
Supplies
Deferred Revenue
Service Revenue
Rent Expense
Prepaid Rent
Chapter 3 – The Accounting Cycle: End of the Period
Problem 3-4B (LO 3-3)
(a)
Debit
Credit
Depreciation Expense
10,000
Accumulated Depreciation
10,000
(Adjust accumulated depreciation)
(b)
Debit
Credit
Salaries Expense
4,000
(c)
Debit
Interest Payable
(d)
Debit
Credit
Prepaid Insurance
20,000
(e)
Debit
Credit
Supplies Expense
22,000
Supplies
22,000
Utilities Expense
Utilities Payable
Problem 3-5B (LO 3-5)
Orange Designs
Income Statement
For the year ended December 31, 2018
Service revenue
$111,900
Expenses:
Salaries
43,000
Depreciation
Supplies
Advertising
14,000
Utilities
13,000
Interest
Problem 3-5B (concluded)
Orange Designs
Statement of Stockholders’ Equity
For the year ended December 31, 2018
Common
Stock
Retained
Earnings
Total
Stockholders’
Equity
Balance at January 1
$49,000
$16,000
$65,000
Add: Net income for 2018
Balance at December 31
$60,000
Orange Designs
Balance Sheet
December 31, 2018
Assets
Liabilities
Current assets:
Current liabilities:
Cash
$ 6,000
Accounts payable
$ 4,000
Accounts receivable
5,000
Salaries payable
5,000
Supplies
3,000
Utilities payable
1,100
Prepaid rent
7,000
Notes payable
Long-term assets:
Buildings
Common stock
Accum. depr.
Retained earnings
Total assets
Problem 3-6B (LO 3-6, 3-7)
December 31
Debit
Credit
Service Revenue
89,700
Retained Earnings
89,700
(Close revenue accounts)
Retained Earnings
73,300
Salaries Expense
50,000
Supplies Expense
Rent Expense
Delivery Expense
(Close expense accounts)
Retained Earnings
7,000
Dividends
(Close dividends account)
Fighting Illini
Post-Closing Trial Balance
Accounts
Debit
Credit
Cash
$ 7,600
Accounts Receivable
10,200
Land
Accounts Payable
$ 5,100
Common Stock
Retained Earnings
Totals
Chapter 3 – The Accounting Cycle: End of the Period
Problem 3-7B (LO 3-4, 3-5, 3-6, 3-7)
Requirements 1 and 2 (adjusting entries posted in red)
Cash
Accounts Receivable
Supplies
22,000
15,000
27,000
22,000
5,000
Prepaid Insurance
Equipment
Accumulated Depr.
95,000
37,000
47,000
Accounts Payable
Salaries Payable
Utilities Payable
12,000
0
0
Interest Payable
Notes Payable
Common Stock
1,050
0
35,000
35,000
Retained Earnings
Dividends
Service Revenue
10,000
3,000
227,000
10,000
3,000
227,000
Salaries Expense
Depreciation Expense
Insurance Expense
0
10,000
Utilities Expense
Interest Expense
0
12,000
22,000
1,050
© McGraw-Hill Education, 2016
Problem 3-7B (continued)
Requirement 3
Jaguar Auto Company
Adjusted Trial Balance
December 31, 2018
Accounts
Debit
Credit
Cash
$ 22,000
Accounts Receivable
15,000
Supplies
5,000
Prepaid Insurance
Equipment
95,000
Accounts Payable
12,000
Salaries Payable
4,000
Utilities Payable
Interest Payable
1,050
Notes Payable
Common Stock
35,000
Retained Earnings
10,000
Dividends
3,000
Service Revenue
227,000
Salaries Expense
162,000
Depreciation Expense
10,000
Insurance Expense
20,000
Supplies Expense
22,000
Utilities Expense
Interest Expense
Problem 3-7B (continued)
Requirement 4
Jaguar Auto Company
Income Statement
For the year ended December 31, 2018
Service revenue
$227,000
Expenses:
Salaries
162,000
Depreciation
10,000
Utilities
14,200
Interest
Jaguar Auto Company
Statement of Stockholders’ Equity
For the year ended December 31, 2018
Common
Stock
Retained
Earnings
Total
Stockholders’
Equity
Balance at January 1
$35,000
$10,000
$45,000
Issuance of common stock
Less: Dividends
Balance at December 31
$35,000
$ 4,750
Problem 3-7B (continued)
Jaguar Auto Company
Balance Sheet
December 31, 2018
Assets
Liabilities
Current assets
Current liabilities
Cash
$22,000
Accounts payable
$12,000
Accounts receivable
15,000
Salaries payable
4,000
Supplies
Utilities payable
Prepaid insurance
Interest payable
1,050
Long-term assets:
Equipment
Accumulated depr.
Common stock
$94,000
Chapter 3 – The Accounting Cycle: End of the Period
Problem 3-7B (continued)
Requirement 5
December 31, 2018
Debit
Credit
Service Revenue
227,000
Retained Earnings
227,000
(Close revenue accounts)
Retained Earnings
229,250
Salaries Expense
162,000
Interest Expense
(Close expense accounts)
Retained Earnings
3,000
© McGraw-Hill Education, 2016
Problem 3-7B (concluded)
Requirement 6 (closing entries posted in red)
Retained Earnings
Dividends
Service Revenue
10,000
3,000
227,000
Salaries Expense
Depreciation Expense
Insurance Expense
158,000
0
0
Supplies Expense
Utilities Expense
Interest Expense
0
12,000
0
Requirement 7
Jaguar Auto Company
Post-Closing Trial Balance
December 31, 2018
Accounts
Debit
Credit
Cash
$ 22,000
Accounts Receivable
Supplies
5,000
Prepaid Insurance
4,000
Equipment
Accounts Payable
Salaries Payable
4,000
Utilities Payable
2,200
Interest Payable
1,050
Notes Payable
Common Stock
Retained Earnings
4,750
Problem 3-8B (LO 3-3, 3-4, 3-5, 3-6, 3-7)
Requirement 1
Cash
Accounts Receivable
Supplies
4,500
9,500
3,500
4,500
9,500
3,500
Equipment
Accumulated Depr.
Accounts Payable
36,000
36,000
Utilities Payable
Deferred Revenue
Common Stock
7,000
0
23,000
7,000
0
23,000
Retained Earnings
Dividends
Service Revenue
9,500
Problem 3-8B (continued)
Requirement 2
(a) January 24
Debit
Credit
Accounts Receivable
65,000
Cash
20,000
Service Revenue
85,000
(Provide services on account and for cash)
(b) March 13
Debit
Credit
Cash
Accounts Receivable
(Collect on account)
(c) May 6
Debit
Credit
Cash
11,000
Common Stock
11,000
(Issue common stock)
(d) June 30
Debit
Credit
Salaries Expense
33,000
Cash
33,000
(Pay current salaries)
(e) September 15
Debit
Credit
Utilities Payable
(Pay for past and current utilities expenses)
(f) November 24
Debit
Credit
Cash
Deferred Revenue
(Receive cash in advance)
(g) December 30
Debit
Dividends
Cash
(Pay dividends)
Chapter 3 – The Accounting Cycle: End of the Period
Problem 3-8B (continued)
Requirement 3 (entries posted in red)
Cash
Accounts Receivable
Supplies
4,500
9,500
3,500
Equipment
Accumulated Depr.
Accounts Payable
36,000
8,000
6,000
36,000
8,000
6,000
Utilities Payable
Deferred Revenue
Common Stock
Retained Earnings
Dividends
Service Revenue
9,500
0
3,000
0
85,000
9,500
3,000
85,000
Salaries Expense
Utilities Expense
Supplies Expense
0
33,000
0
6,000
0
33,000
Problem 3-8B (continued)
Requirement 4
Pipers Plumbing
Unadjusted Trial Balance
December 31, 2018
Accounts
Debit
Credit
Cash
$ 49,500
Accounts Receivable
Supplies
Equipment
Accounts Payable
Utilities Payable
Deferred Revenue
10,000
Common Stock
34,000
Retained Earnings
9,500
Dividends
3,000
Service Revenue
Salaries Expense
Utilities Expense
6,000
Supplies Expense
Depreciation Expense
Requirement 5
December 31
Debit
Credit
Depreciation Expense
8,000
Accumulated Depreciation
8,000
Supplies Expense
Supplies
Deferred Revenue
7,000
Service Revenue
7,000
Problem 3-8B (continued)
Requirement 6 (adjusted entries posted in red)
Cash
Accounts Receivable
Supplies
49,500
4,500
9,500
3,500
Equipment
Accumulated Depr.
Accounts Payable
36,000
36,000
16,000
6,000
8,000
6,000
Utilities Payable
Deferred Revenue
Common Stock
7,000
7,000
7,000
0
10,000
23,000
11,000
0
3,000
34,000
Retained Earnings
Dividends
Service Revenue
9,500
0
0
Salaries Expense
Utilities Expense
Supplies Expense
33,000
2,400
8,000
0
0
0
Problem 3-8B (continued)
Requirement 7
Pipers Plumbing
Adjusted Trial Balance
December 31, 2018
Accounts
Debit
Credit
Cash
$ 49,500
Accounts Receivable
21,500
Supplies
1,100
Equipment
Accounts Payable
Utilities Payable
Deferred Revenue
Common Stock
34,000
Retained Earnings
Dividends
Service Revenue
Salaries Expense
Utilities Expense
Supplies Expense
Depreciation Expense