PROBLEM 3-3B
(a) Dec. 31 Accounts Receivable ……………………….. 1,500
Service Revenue ……………………….. 1,500
31 Unearned Service Revenue ………………. 1,300
Service Revenue ……………………….. 1,300
31 Interest Expense ……………………………… 150
Interest Payable ………………………… 150
31 Insurance Expense …………………………... 850
Prepaid Insurance ……………………… 850
(b) DELGADO ADVERTISING AGENCY
Income Statement
For the Year Ended December 31, 2017
Revenues
Service revenue………………………………………… $61,400
Expenses
Salaries and wages expense ……………………… $12,100
Depreciation expense ……………………………….. 6,000
PROBLEM 3-3B (Continued)
DELGADO ADVERTISING AGENCY
Owner’s Equity Statement
For the Year Ended December 31, 2017
Owner’s capital, January 1 ……………………………………………… $25,500
Add: Net income …………………………………………………………… 34,150
DELGADO ADVERTISING AGENCY
Balance Sheet
December 31, 2017
Assets
Cash …………………………………………………………….. $11,000
Accounts receivable ……………………………………… 21,500
Supplies ………………………………………………………. 4,800
Liabilities and Owner’s Equity
Liabilities
Notes payable ………………………………………… $ 5,000
Accounts payable …………………………………… 5,000
Unearned service revenue ………………………. 5,900
Salaries and wages payable ……………………. 2,100
PROBLEM 3-3B (Continued)
(c) I = P X R X T
$150 = $5,000 X R X 1/2
PROBLEM 3-4B
1. Dec. 31 Salaries and Wages Expense …………….. 2,640
Salaries and Wages Payable ……….. 2,640
2. 31 Unearned Rent Revenue ……………………. 84,000
Rent Revenue …………………………….. 84,000
[5 X $5,000 X 2 = $50,000)
3. 31 Advertising Expense …………………………. 5,200
Prepaid Advertising ……………………. 5,200
[A650 – $500 per month
4. 31 Interest Expense ……………………………….. 6,300
PROBLEM 3-5B
(a), (c) & (e)
Cash No. 101
Date
Explanation
Debit
Credit
Balance
Sept. 1
8
10
12
Balance
1,200
3,400
1,400
4,880
3,480
4,680
8,080
Accounts Receivable No. 112
Date
Explanation
Ref.
Debit
Credit
Balance
Sept. 1
Balance
3,520
Supplies No. 126
Date
Explanation
Ref.
Debit
Credit
Balance
Sept. 1
Balance
2,000
Equipment No. 153
Date
Explanation
Ref.
Debit
Credit
Balance
Sept. 1
Balance
15,000
PROBLEM 3-5B (Continued)
Accumulated Depreciation—Equipment No. 154
Date
Explanation
Ref.
Debit
Credit
Balance
Accounts Payable No. 201
Date
Explanation
Ref.
Debit
Credit
Balance
Sept. 1
15
Balance
J1
3,000
3,400
6,400
Unearned Service Revenue No. 209
Date
Explanation
Ref.
Debit
Credit
Balance
Sept. 1
29
Balance
J1
650
1,400
2,050
Salaries and Wages Payable No. 212
Date
Explanation
Ref.
Debit
Credit
Balance
Sept. 1
Balance
500
Owner’s Capital No. 301
Date
Explanation
Ref.
Debit
Credit
Balance
PROBLEM 3-5B (Continued)
Service Revenue No. 407
Date
Explanation
Ref.
Debit
Credit
Balance
Sept. 12
J1
3,400
3,400
Depreciation Expense No. 615
Date
Explanation
Ref.
Debit
Credit
Balance
Sept. 30
Adjusting
J1
100
100
Supplies Expense No. 631
Date
Explanation
Ref.
Debit
Credit
Balance
Adjusting
J1
1,900
1,900
Salaries and Wages Expense No. 726
Date
Explanation
Ref.
Debit
Credit
Balance
Sept. 8
J1
900
Rent Expense No. 729
Date
Explanation
Ref.
Debit
Credit
Balance
Sept. 22
J1
500
500
PROBLEM 3-5B (Continued)
(b) General Journal
J1
Date
Account Titles
Ref.
Debit
Credit
Sept. 8
Salaries and Wages Payable …………….
Salaries and Wages Expense ……………
Cash …………………………………………
212
726
101
500
900
1,400
10
Cash ……………………………………………….
Accounts Receivable …………………
101
112
1,200
1,200
12
Cash ……………………………………………….
Service Revenue ……………………….
101
407
3,400
3,400
15
Equipment ………………………………………
Accounts Payable ……………………..
153
201
3,000
3,000
17
Supplies ………………………………………….
Accounts Payable ……………………..
126
201
1,200
1,200
20
Accounts Payable …………………………..
Cash …………………………………………
201
101
4,500
4,500
22
Rent Expense …………………………..……..
Cash …………………………………………
729
101
500
500
25
Salaries and Wages Expense ……………
Cash …………………………………………
726
101
1,250
1,250
27
Accounts Receivable ……………………….
Service Revenue ……………………….
112
407
2,100
2,100
29
Cash ……………………………………………….
Unearned Service Revenue ………….
101
209
650
650
PROBLEM 3-5B (Continued)
(d) & (f) PERCY EQUIPMENT REPAIR
Trial Balances
September 30, 2017
Before
Adjustment
After
Adjustment
Dr.
Cr.
Dr.
Cr.
Cash …………………………..………..
Accumulated Depreciation—
Equipment ………………………….
Salaries and Wages Payable ….
Owner’s Capital …………………….
Service Revenue ……………………
Depreciation Expense ……………
$ 2,480
$ 1,500
-0-
18,600
5,500
$ 2,480
100
$ 1,600
300
18,600
6,950
(e) 1. Sept. 30 Supplies Expense …………………… 631 1,900
Supplies ($3,200 – $1,300) …… 126 1,900
3. 30 Depreciation Expense …………….. 615 100
Accumulated Depreciation—
Equipment …………………….. 154 100
PROBLEM 3-5B (Continued)
(g) PERCY EQUIPMENT REPAIR
Income Statement
For the Month Ended September 30, 2017
Revenues
Service revenue …………………………………………. $6,950
Expenses
Salaries and wages expense ………………………. $2,450
Supplies expense ………………………………………. 1,900
PERCY EQUIPMENT REPAIR
Owner’s Equity Statement
For the Month Ended September 30, 2017
Owner’s capital, September 1 …………………………………………. $18,600
PROBLEM 3-5B (Continued)
PERCY EQUIPMENT REPAIR
Balance Sheet
September 30, 2017
Assets
Cash …………………………………………………………….. $ 2,480
Accounts receivable ……………………………………… 4,420
Liabilities and Owner’s Equity
Liabilities
Accounts payable …………………………………………………… $ 3,100
Unearned service revenue ……………………………………….. 600