Exercise 3-21A, Objs. 2, 3
Student Name
Course Name
Student ID:
Date:
1 2 3 4
Beginning supplies………………………………. 2,500$ 600$ 700$ 700$
Payments for supplies during the year…….
500 900
Total cost to account for …………..……..….. 3,500 1,600
Ending supplies ………………………………….. (1,030) (300) (400)
Supplies expense………………………..……….. 2,470$ 2,200$ 1,000$
Exercise 3-21A
Instructions:
Fill in areas above and journalize situations 1 and 2
Situation 1
–
Situation 2
–
Financial Accounting
Rankle Corporation experienced four situations for its supplies. Compute the amounts
that have been left blank for each situation. For situations 1 and 2, journalize the needed
transaction. Consider each situation separately.
Students: Please fill-in areas that are
shaded light-yellow.
Apply the revenue and expense recognition principles; adjust the
account
Situation
Test Your Knowledge
Exercise 3-21A, Objs. 2, 3
Student Name
Course Name
Student ID:
Date:
1 2 3 4
Beginning supplies………..…………..………… 2,500$ 600$ 700$ 700$
Exercise 3-21A
Instructions:
Fill in areas above and journalize situations 1 and 2
Situation 1
Situation 2
Cash or Accounts Payable
Supplies expense
Financial Accounting
Rankle Corporation experienced four situations for its supplies. Compute the amounts
that have been left blank for each situation. For situations 1 and 2, journalize the needed
transaction. Consider each situation separately.
Test Your Knowledge
Students: Please fill-in areas that are
shaded light-yellow.
Apply the revenue and expense recognition principles; adjust the
account
Situation
BU 122 ID 50003
Exercise 3-24A, Obj. 4
Construct the financial statements
Student Name
Course Name
Student ID:
Date:
Debit Credit
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,900
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . 1,400
Inventories . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . 2,200
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . 1,800
Property, plant, equipment . . . . . . . . . . . . . . 16,700
Accumulated depreciation . . . . . . . . . . . . . . 2,800
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,500
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . 7,400
Income tax payable . . . . . . . . . . . . . . . . . . . . . . . 400
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 2,500
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,600
Retained earnings (beginning December 31, 2009) 5,900
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,300
Sales revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . 41,200
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . 25,500
Selling, administrative, and general expenses 10,500
Income tax expense . . . . . . . . . . . . . . . . . . . . . . 2,000
Total . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . 74,800 74,800
Adjusted Trial Balance
The adjusted trial balance of Honeybell, Inc., follows.
Honeybell, Inc.
Adjusted Trial Balance
December 31, 2016
Thousands
Financial Accounting
Students: Please fill-in areas that are
shaded.
Exercise 3-24A
Instructions
Revenue:
Expenses:
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Add: Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –
–
Retained earnings, December 31, 2016 . . . . . . . . . . . . . . . . . . –$
Total liabilities . . . . . . . . . . FORMULA
Property, Plant, & Equip. 16,700$
Less: Accum. Deprec. . . . (2,800) 13,900
Retained earnings. . . . . . . . 0
Total stockholders’ equity. –
Total liabilities and
Total assets . . . . . . . . . . . . . . . . . . . . . . FORMULA stockholders’ equity. . . . FORMULA
Account name here
Account name here
STOCKHOLDERS’ EQUITY
Honeybell, Inc.
Enter appropriate date here
Thousands
ASSETS
LIABILITIES
Account name here
Account name here
Account name here
Account name here
Account name here
Account name here
Account name here
Account name here
Account name here
Account name here
Statement of Retained Earnings
Year Ended December 31, 2016
Thousands
Account name here
Account name here
Honeybell, Inc.
Income Statement
Year Ended December 31, 2016
Thousands
Account name here
Year Ended December 31, 2016
Honeybell, Inc.
Test Your Knowledge
Prepare Honeybell, Inc.’s income statement and statement of retained earnings for
the year ended December 31, 2016, and its balance sheet on that date.
Exercise 3-24A, Obj. 4
Construct the financial statements
Student Name
Course Name
Student ID:
Date:
Debit Credit
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,900
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . 1,400
Inventories . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . 2,200
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . 1,800
Property, plant, equipment . . . . . . . . . . . . . . 16,700
Accumulated depreciation . . . . . . . . . . . . . . 2,800
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,500
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . 7,400
Income tax payable . . . . . . . . . . . . . . . . . . . . . . . 400
Adjusted Trial Balance
The adjusted trial balance of Honeybell, Inc., follows.
Honeybell, Inc.
Adjusted Trial Balance
December 31, 2016
Thousands
Students: Please fill-in areas that are
shaded.
Financial Accounting
Total . . . . . . . . . . . . . . . . . . . . . . . . .
Exercise 3-24A
Instructions
Revenue:
Honeybell, Inc.
Income Statement
Year Ended December 31, 2016
Honeybell, Inc.
December 31,2016
Statement of Retained Earnings
Test Your Knowledge
Prepare Honeybell, Inc.’s income statement and statement of retained earnings for
the year ended December 31, 2016, and its balance sheet on that date.
Honeybell, Inc.
Thousands
Year Ended December 31, 2016
Year Ended December 31, 2016
Thousands
Thousands
ASSETS
LIABILITIES
Expenses:
Problem 3-62A, Obj. 3
Adjust the accounts
Lemontree Rentals, Inc.’s unadjusted and adjusted trial balances at June 30, 2016, follow.
Debit Credit Debit Credit
Cash 8,000 8,000
Accounts receivable 6,000 6,810
Interest receivable 300
Note receivable 4,500 4,500
Supplies 1,400 700
Prepaid insurance 2,600 900
Building 63,000 63,000
Accumulated depreciation 7,900 9,500
Accounts payable 6,500 6,500
Wages payable 840
Unearned rent revenue 1,800 1,380
Common stock 23,000 23,000
Retained earnings 41,400 41,400
Dividends 3,600 3,600
Rental revenue 10,300 11,530
Interest revenue 700 1,000
Depreciation expense 1,600
Supplies expense 700
Utlities expense 400 400
Wage expense 1,400 2,240
Property tax expense 700 700
Insurance expense 1,700
91,600 91,600 95,150 95,150
Trial Balance
Adjusted Trial Balance
Account Title
Students: Please fill-in areas that are shaded. Use
formulas as requested.
Financial Accounting
Student Name
Course Name
Student ID:
Date:
Lemontree Rentals, Inc.
Adjusted Trial Balance
June 30, 2016
Problem 3-62A
Instructions
1 Make the adjusting entries that account for the differences between the two trial balances.
2 Compute Lemontree Rental’s total assets, total liabilities, net income, and total equity.
DEBIT CREDIT
June30
June 30
June 30
June 30
June 30
June 30
June 30
Requirement 2
Total Assets = FORMULA Total liabilities = FORMULA
Total equity = FORMULA
Net income = FORMULA
Enter explanation here
Enter account name here
Enter account name here
Enter explanation here
Enter account name here
Enter account name here
Enter account name here
Enter account name here
Enter explanation here
Enter account name here
Enter account name here
Enter explanation here
Enter account name here
Enter account name here
Enter explanation here
Test Your Knowledge
DATE
ACCOUNT TITLES AND EXPLANATION
Enter account name here
Enter account name here
Enter explanation here
Enter account name here
Enter account name here
Enter explanation here
Problem 3-62A, Obj. 3
Adjust the accounts
Lemontree Rentals, Inc.’s unadjusted and adjusted trial balances at June 30, 2016, follow.
Debit Credit Debit Credit
Cash 8,000 8,000
Accounts receivable 6,000 6,810
Interest receivable 300
Note receivable 4,500 4,500
Supplies 1,400 700
Prepaid insurance 2,600 900
Building 63,000 63,000
Accumulated depreciation 7,900 9,500
Accounts payable 6,500 6,500
Wages payable 840
Unearned rent revenue 1,800 1,380
Common stock 23,000 23,000
Retained earnings 41,400 41,400
Dividends 3,600 3,600
Rental revenue 10,300 11,530
Interest revenue 700 1,000
Depreciation expense 1,600
Supplies expense 700
Utlities expense 400 400
Wage expense 1,400 2,240
Property tax expense 700 700
Insurance expense 1,700
91,600 91,600 95,150 95,150
Students: Please fill-in areas that are shaded. Use
formulas as requested.
Lemontree Rentals, Inc.
Adjusted Trial Balance
June 30, 2016
Trial Balance
Adjusted Trial Balance
Financial Accounting
Student Name
Course Name
Student ID:
Date:
Account Title
BU121 ID0503
Problem 3-62A
Instructions
1 Make the adjusting entries that account for the differences between the two trial balances.
2 Compute Lemontree Rental’s total assets, total liabilities, net income, and total equity.
DEBIT CREDIT
June30 810
June 30 1,700
1,700
June 30 1,600
1,600
June 30 840
June 30 420
Unearned Rental Revenue
To record revenue that was collected in advance
Depreciation expense – building
Accumulated depreciation – building
To record depreciation expense
Wages Payable
To accrue wage expense
Rental Revenue
Wage Expense
Requirement 2
Total Assets = 74,710 Total liabilities = 8720
Insurance Expense
Test Your Knowledge
ACCOUNT TITLES AND EXPLANATION
Accounts Receivable
DATE
To record supplies expense
Prepaid Insurance
To recors insurance expense
BU121 ID0503
June 30 300
June 30 700
Supplies expense
Rental Revenue
To accrue rental revenue
Interest Revenue
Interest Receivable
To accrue interest revenue
Problem 3-63A. Obj. 4, 6
Student Name
Course Name
Student ID:
Date:
Cash…..……………………………………. 15,000$
Accounts receivable….………………… 18,600
Supplies….………………………………… 2,500
Prepaid rent………………………………. 1,800
Equipment…..……………………………. 36,000
Accumulated depreciation …….…….. 4,700$
Accounts payable ………………………. 8,800
Interest payable .………………………… 600
Unearned service revenue ……………. 200
Income tax payable ……………………. 2,500
Note payable..…………………………… 18,000
Common stock….………………………. 16,000
Retained earnings..…………………….. 2,900
Dividends..……………………………….. 4,000
Service revenue………………………….. 93,200
Depreciation expense …..…………….. 1,700
Salary expense.………………………….. 40,500
Rent expense…………………………….. 10,400
Interest expense…..…………………….. 2,600
Insurance expense ……………………… 3,800
Supplies expense…..……………………. 2,500
Income tax expense ….………………… 7,500
Total …….…………………………………. 146,900$ 146,900$
Students: Please fill-in areas that are
shaded light-yellow.
Construct the financial statements; analyze and evaluate debt paying
ability
Financial Accounting
The adjusted trial balance for the year of Nicholl Corporation at October 31, 2016, follows.
Nicholl Corporation
Adjusted Trial Balance
October 31,2016
Problem 3-63A
Instructions
1. Prepare Nicholl Corporation’s 2016 income statement, statement of retained earnings, and
balance sheet. List expenses (except for income tax) in decreasing order on the income state-
ment, and show total liabilities on the balance sheet. Draw arrows linking the three financial
statements.
2. Nicholl’s lenders require that the company maintain a debt ratio no higher than 0.50.
Compute Nicholl’s debt ratio at October 31, 2016, to determine whether the company is in
compliance with this debt restriction. If not, suggest a way that Nicholl could have avoided
this difficult situation.
Problem 3-63A
Requirement 1
Revenues:
Service revenue $ 93,200
Expenses:
Income before tax
Income tax expense
Net income
Retained earnings, October 31, 2015 $ 2,900
Add:
$ 2,900
Less:
Retained earnings, October 31, 2016
Cash $ 15,000 Accounts payable $ 8,800
Equipment
Less: Accum. Total liabilities FORMULA
deprec.
Total stockholders’ equity
Total liabilities and
Total assets stockholders’ equity
Problem 3-63A
Requirement 2
Debt ratio:
Balance Sheet
October 31, 2016
ASSETS
LIABILITIES
STOCKHOLDERS’ EQUITY
Nicholl Corporation
Test Your Knowledge
Is Nicholl in compliance?
Income Statement
Year Ended October 31, 2016
Nicholl Corporation
Statement of Retained Earnings
Year Ended October 31, 2016
Nicholl Corporation
Solution – Extra Prob Sat, Nov. 3, 2007
Problem 3-63A. Obj. 4, 6
Student Name
Course Name
Student ID:
Date:
Cash………………….…………………….. 15,000$
Accounts receivable………………….... 18,600
Supplies…………………….……………… 2,500
Prepaid rent………………………………. 1,800
Equipment………………………………… 36,000
Accumulated depreciation …………… 4,700$
Accounts payable ………………….…… 8,800
Interest payable …………….…………… 600
Unearned service revenue ……………. 200
Income tax payable ………………….… 2,500
Note payable…………………………….. 18,000
Common stock…………..……………… 16,000
Retained earnings………………………. 2,900
Dividends……………………..………….. 4,000
Service revenue……………..…………… 93,200
Depreciation expense …………………. 1,700
Salary expense…………………..………. 40,500
Rent expense…………………….………. 10,400
Interest expense……………..………….. 2,600
Insurance expense ……………………... 3,800
Supplies expense………………………… 2,500
Income tax expense ………………..….. 7,500
Total …………..………………..…………. 146,900$ 146,900$
Financial Accounting
The adjusted trial balance for the year of Nicholl Corporation at October 31, 2016, follows.
Nicholl Corporation
Adjusted Trial Balance
October 31,2016
Students: Please fill-in areas that are
shaded light-yellow.
Construct the financial statements; analyze and evaluate debt paying
ability
BU 122 ID 50003
Solution – Extra Prob Sat, Nov. 3, 2007
Problem 3-63A
Instructions
1. Prepare Nicholl Corporation’s 2016 income statement, statement of retained earnings, and
balance sheet. List expenses (except for income tax) in decreasing order on the income state-
ment, and show total liabilities on the balance sheet. Draw arrows linking the three financial
statements.
2. Nicholl’s lenders require that the company maintain a debt ratio no higher than 0.50.
Compute Nicholl’s debt ratio at October 31, 2016, to determine whether the company is in
compliance with this debt restriction. If not, suggest a way that Nicholl could have avoided
this difficult situation.
Problem 3-63A
Requirement 1
Revenues:
Service revenue $ 2,900
Expenses:
Salary expense $ 40,500
Retained earnings, October 31, 2015 $ 18,000
Cash $ 15,000 Accounts payable $ 8,800
Accounts Receivable 18,600 Interest payable 600
Supplies 2,500 Unearned service revenue 200
Prepaid Rent 1,800 Income tax payable 2,500
Less: Accum. Total liabilities 30,100
Test Your Knowledge
Nicholl Corporation
Balance Sheet
October 31, 2016
ASSETS
LIABILITIES
Year Ended October 31, 2016
Statement of Retained Earnings
Nicholl Corporation
Income Statement
Year Ended October 31, 2016
Nicholl Corporation
BU 122 ID 50003
Rent expense 10,400
Insurance expense 3,800
Interest expense 2,600
Supplies expense 2,500
Income before tax 31,700