Problem 3-8B (continued)
Requirement 8
Pipers Plumbing
Income Statement
For the year ended December 31, 2018
Service revenue
$92,000
Expenses:
Salaries
33,000
Utilities
Net income
Pipers Plumbing
Balance Sheet
December 31, 2018
Assets
Liabilities
Current assets:
Current liabilities:
Cash
$49,500
Accounts payable
$ 6,000
Accounts receivable
Deferred revenue
Supplies
Stockholders’ Equity
Long-term assets:
Common stock
34,000
Equipment
36,000
Retained earnings
49,100
*
Accumulated depr.
83,100
Total assets
Problem 3-8B (continued)
Requirement 9
December 31
Debit
Credit
Service Revenue
92,000
Retained Earnings
92,000
(Close revenue accounts)
Retained Earnings
(Close expense accounts)
(Close dividends account)
Chapter 3 – The Accounting Cycle: End of the Period
Problem 3-8B (continued)
Requirement 10 (closing 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
Utilities Payable
Deferred Revenue
Common Stock
23,000
3,000
Retained Earnings
Dividends
Service Revenue
0
9,500
0
0
Salaries Expense
Utilities Expense
Supplies Expense
0
0
0
0
Depr. Expense
0
© McGraw-Hill Education, 2016
Problem 3-8B (concluded)
Requirement 11
Pipers Plumbing
Post-Closing Trial Balance
December 31, 2018
Accounts
Debit
Credit
Cash
$ 49,500
Accounts Receivable
21,500
Equipment
Accounts Payable
Utilities Payable
Deferred Revenue
Common Stock
34,000
Retained Earnings
Total
Problem 3-9B (LO 3-3, 3-4, 3-5, 3-6, 3-7)
Requirement 1
Cash
Accounts Receivable
Supplies
41,500
25,700
0
41,500
25,700
0
Land
Accounts Payable
Salaries Payable
110,800
15,300
0
15,300
0
100,000
0
0
0
0
0
0
Problem 3-9B (continued)
Requirement 2
(a) January 12
Debit
Credit
Accounts Receivable
62,400
Service Revenue
62,400
(Provide services on account)
(b) February 25
Debit
Credit
Cash
75,300
Service Revenue
(Provide services for cash)
(c) March 19
Debit
Credit
Cash
45,700
Accounts Receivable
(Receive cash on account)
(d) April 30
Debit
Credit
Cash
30,000
Common Stock
30,000
(Issue common stock)
(e) June 16
Debit
Credit
Supplies
12,100
Accounts Payable
12,100
(Purchase supplies on account)
(f) July 7
Debit
Credit
Accounts Payable
11,300
Cash
11,300
(Pay cash on account)
(g) September 30
Debit
Credit
Salaries Expense
64,200
Cash
(Pay salaries for work in the current period)
(h) November 22
Debit
Credit
Advertising Expense
22,500
Cash
22,500
(Pay advertising for the current period)
(h) December 30
Debit
Credit
Dividends
Cash
(Pay dividends)
Chapter 3 – The Accounting Cycle: End of the Period
Problem 3-9B (continued)
Requirement 3 (entries posted in red)
Cash
Accounts Receivable
Supplies
12,100
41,500
11,300
25,700
0
Land
Accounts Payable
Salaries Payable
110,800
0
15,300
0
Interest Payable
Notes Payable
Common Stock
0
30,000
100,000
Retained Earnings
Dividends
Service Revenue
32,700
2,900
0
0
Salaries Expense
Advertising Expense
Interest Expense
64,200
0
0
0
0
Supplies Expense
0
0
Problem 3-9B (continued)
Requirement 4
Jackrabbit Rentals
Unadjusted Trial Balance
December 31, 2018
Accounts
Debit
Credit
Cash
$ 91,600
Accounts Receivable
Supplies
Land
Salaries Payable
0
Interest Payable
0
Notes Payable
30,000
Common Stock
130,000
Retained Earnings
32,700
Dividends
Service Revenue
Salaries Expense
Advertising Expense
Interest Expense
Supplies Expense
Requirement 5
December 31
Debit
Credit
Interest Expense
2,500
Salaries Expense
Supplies Expense
9,800
Problem 3-9B (continued)
Requirement 6 (adjusted entries posted in red)
Cash
Accounts Receivable
Supplies
91,600
42,400
Land
Accounts Payable
Salaries Payable
110,800
15,300
0
Interest Payable
Notes Payable
Common Stock
0
30,000
100,000
Retained Earnings
Dividends
Service Revenue
32,700
0
2,900
32,700
2,900
0
62,400
Salaries Expense
Advertising Expense
Interest Expense
64,200
22,500
0
0
0
3-110 Financial Accounting, 4e
Problem 3-9B (continued)
Requirement 7
Jackrabbit Rentals
Adjusted Trial Balance
December 31, 2018
Accounts
Debit
Credit
Cash
$ 91,600
Accounts Receivable
42,400
Supplies
2,300
Land
110,800
Salaries Payable
Interest Payable
Notes Payable
Common Stock
Retained Earnings
Dividends
Service Revenue
Salaries Expense
Advertising Expense
22,500
Interest Expense
Supplies Expense
9,800
Chapter 3 – The Accounting Cycle: End of the Period
Problem 3-9B (continued)
Requirement 8
Jackrabbit Rentals
Income Statement
For the year ended December 31, 2018
Service revenue
$137,700
Expenses:
Salaries
65,700
Advertising
22,500
Net income
Jackrabbit Rentals
Balance Sheet
December 31, 2018
Assets
Liabilities
Current assets:
Current liabilities:
Cash
$ 91,600
Accounts Payable
$ 16,100
Accounts Receivable
42,400
Salaries Payable
1,500
20,100
Notes Payable
Long-term assets:
Stockholders’ Equity
Land
110,800
Common stock
130,000
Retained earnings
67,000
*
Total assets
Problem 3-9B (continued)
Requirement 9
December 31
Debit
Credit
Service Revenue
137,700
Retained Earnings
137,700
(Close revenue accounts)
Retained Earnings
(Close expense accounts)
(Close dividends account)
Problem 3-9B (continued)
Requirement 10 (closing entries posted in red)
Cash
Accounts Receivable
Supplies
91,600
42,400
41,500
11,300
25,700
0
Land
Accounts Payable
Salaries Payable
110,800
15,300
0
Interest Payable
Notes Payable
Common Stock
0
30,000
100,000
Retained Earnings
Dividends
Service Revenue
32,700
0
0
Salaries Expense
Advertising Expense
Interest Expense
0
0
0
Supplies Expense
Problem 3-9B (concluded)
Requirement 11
Jackrabbit Rentals
Unadjusted Trial Balance
December 31, 2018
Accounts
Debit
Credit
Cash
$ 91,600
Accounts Receivable
42,400
Interest Payable
Notes Payable
Common Stock
Chapter 3 – The Accounting Cycle: End of the Period
ADDITIONAL PERSPECTIVES
Additional Perspective 3-1
Requirement 1
July 1, 2018
Debit
Credit
Cash
10,000
Common Stock
10,000
(Issue common stock to Suzie)
July 1, 2018
Cash
10,000
Common Stock
10,000
(Issue common stock to Tony)
July 1, 2018
Prepaid Insurance
4,800
Cash
4,800
(Purchase one-year insurance policy)
July 2, 2018
Legal Fees Expense
1,500
Cash
1,500
(Pay legal fees for incorporation)
July 4, 2018
Supplies (Office)
1,800
Accounts Payable
1,800
(Purchase office supplies on account)
July 7, 2018
Advertising Expense
Cash
(Pay cash for advertising)
July 8, 2018
Equipment (Bikes)
Cash
12,000
(Pay cash for mountain bikes)
July 15, 2018
Cash
2,000
Service Revenue (Clinic)
2,000
(Receive cash for mountain bike clinic)
Chapter 3 – The Accounting Cycle: End of the Period
Additional Perspective 3-1 (continued)
Requirement 1 (continued)
July 22, 2018
Cash
2,300
Service Revenue (Clinic)
2,300
(Receive cash for mountain bike clinic)
July 24, 2018
Advertising Expense
700
Cash
700
(Pay cash for advertising)
July 30, 2018
Cash
4,000
Deferred Revenue
4,000
(Receive cash in advance for kayak clinic)
Aug. 1, 2018
Cash
Notes Payable
(Obtain loan from city council)
Aug. 4, 2018
Equipment (Kayaks)
Cash
(Pay cash for kayaks)
Aug. 10, 2018
Cash
3,000
Deferred Revenue
4,000
Service Revenue (Clinic)
7,000
(Receive cash and hold kayak clinic)
Aug. 17, 2018
Cash
Service Revenue (Clinic)
(Receive cash and hold kayak clinic)
Accounts Payable
Cash
1,800
(Pay cash on account)