Exercise 3-4 (LO 3-2)
Exercise 3-5 (LO 3-1)
Net income (unadjusted)
$100,000
a. Record insurance expense of $2,000 per month
(6,000)
Exercise 3-6 (LO 3-3, 3-4, 3-5, 3-6, 3-7)
(i)
Use source documents to identify accounts affected by external
transactions.
Exercise 3-7 (LO 3-3)
(a)
Debit
Credit
Supplies Expense
3,000
Supplies
3,000
(Adjust supplies)
Exercise 3-8 (LO 3-3)
(a)
Debit
Credit
Depreciation Expense
7,000
Accumulated Depreciation
7,000
Exercise 3-9 (LO 3-3)
If the adjusting entry is NOT made:
Revenues
−
Expenses
=
Net Income
(a)
$0
−
−$7,000
=
+$7,000
Chapter 3 - The Accounting Cycle: End of the Period
Exercise 3-10 (LO 3-3)
(a)
Debit
Credit
Deferred Revenue
1,500
Exercise 3-11 (LO 3-3, 3-4)
If the adjusting entry is NOT made:
Assets
=
Liabilities
+
Stockholders’
Equity
(a)
$0
=
+$1,500
+
−$1,500
Exercise 3-12 (LO 3-3)
(a)
Debit
Credit
Deferred Revenue
2,000
Service Revenue
2,000
(Adjust deferred revenue)
Chapter 3 - The Accounting Cycle: End of the Period
Exercise 3-13 (LO 3-3)
(a)
Debit
Credit
Interest Receivable
270
Interest Revenue
270
(Adjust interest receivable)
Exercise 3-14 (LO 3-3, 3-4)
Requirement 1
(a)
Debit
Credit
Rent Expense
2,400
Chapter 3 - The Accounting Cycle: End of the Period
Exercise 3-14 (concluded)
Requirement 2
Demon Deacons Corporation
Adjusted Trial Balance
December 31, 2018
Accounts
Debit
Credit
Cash
$ 10,000
Accounts Receivable
15,000
Exercise 3-15 (LO 3-5)
Volunteers Inc.
(in millions)
Raiders Inc.
(in millions)
Year
Net
Income (Loss)
Retained
Earnings
Net
Income (Loss)
Retained
Earnings
2009
—
$ 0
$ 35
$ 11
2010
$ 30
30
(43)
(32)
Exercise 3-16 (LO 3-5)
Requirement 1
Fightin’ Blue Hens Corporation
Income Statement
For the year ended December 31, 2018
Service revenue
$500,000
Expenses:
Salaries
400,000
Requirement 2
Fightin’ Blue Hens Corporation
Statement of Stockholders’ Equity
For the period ended December 31, 2018
Common
Stock
Retained
Earnings
Total
Stockholders’
Equity
Exercise 3-16 (concluded)
Requirement 3
Fightin’ Blue Hens Corporation
Balance Sheet
December 31, 2018
Assets
Liabilities
Current assets:
Current liabilities:
Cash
$ 12,000
Accounts payable
$ 12,000
Accounts receivable
150,000
Salaries payable
11,000
Chapter 3 - The Accounting Cycle: End of the Period
Exercise 3-17 (LO 3-6)
Requirement 1
December 31, 2018
Debit
Credit
Service Revenue
50,000
Interest Revenue
6,000
Requirement 2
Retained Earnings
30,000
Exercise 3-18 (LO 3-6)
Requirement 1
December 31, 2018
Debit
Credit
Service Revenue
54,000
Retained Earnings
54,000
(Close revenue accounts)
Requirement 2
Retained Earnings
9000
Exercise 3-18 (concluded)
Requirement 3
Laker Incorporated
Post-Closing Trial Balance
December 31, 2018
Accounts
Debit
Credit
Cash
$12,000
Exercise 3-19 (LO 3-6, 3-7)
Requirement 1
December 31, 2018
Debit
Credit
Service Revenue
500,000
Retained Earnings
465,000
Salaries Expense
400,000
Requirement 2
Fightin’ Blue Hens Corporation
Post-Closing Trial Balance
December 31, 2018
Accounts
Debit
Credit
Cash
$ 12,000
Accounts Receivable
150,000
Chapter 3 - The Accounting Cycle: End of the Period
Exercise 3-20 (LO 3-3, 3-4, 3-5, 3-6, 3-7)
Requirement 1
February 15
Debit
Credit
1. Cash
20,000
May 20
2. Cash
35,000
August 31
October 1
November 17
December 30
6. Dividends
2,000
Exercise 3-20 (continued)
Requirement 2
December 31
Debit
Credit
1. Salaries Expense
4,000
2. Rent Expense
3,000
3. Supplies Expense
25,000
4. Deferred Revenue
5,000
Exercise 3-20 (continued)
Requirement 3
Red Flash Photography
Adjusted Trial Balance
December 31, 2018
Accounts
Debit
Credit
Cash
$ 30,000
Accounts Receivable
30,000
Supplies
5,000
Exercise 3-20 (continued)
Requirement 4
Red Flash Photography
Income Statement
For the year ended December 31, 2018
Service revenue
$70,000
Expenses:
Red Flash Photography
Statement of Stockholders’ Equity
For the period ended December 31, 2018
Common
Stock
Retained
Earnings
Total
Stockholders’
Equity
