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Chapter 03 - The Accounting Cycle: End of the Period
Requirement 3
Blue Hens Corporation
Balance Sheet
December 31, 2018
Assets
Liabilities
Cash
$ 15,700
Accounts payable
$ 9,300
Accts. receivable
132,500
Salaries payable
12,500
Stockholders’ Equity
Equipment
280,000
Common stock
126,200
Accum. depr.
(156,900)
Retained earnings
131,500
*
*
Retained earnings = beginning retained earnings + net income − dividends
Exercise 3-17
Requirement 1
December 31, 2018
Debit
Credit
Service Revenue
48,500
Interest Revenue
11,500
Retained Earnings
60,000
Requirement 2
Retained Earnings
20,000
Exercise 3-18
Requirement 1
December 31, 2018
Debit
Credit
Service Revenue
36,300
Retained Earnings
36,300
(Close revenue accounts)
Requirement 2
Retained Earnings
16,500
Exercise 3-18 (concluded)
Requirement 3
Laker Incorporated
Post-Closing Trial Balance
December 31, 2018
Accounts
Debit
Credit
Cash
$29,700
Supplies
25,200
Chapter 03 - The Accounting Cycle: End of the Period
Exercise 3-19
Requirement 1
December 31, 2018
Debit
Credit
Service Revenue
420,000
Retained Earnings
420,000
Requirement 2
Blue Hens Corporation
Post-Closing Trial Balance
December 31, 2018
Accounts
Debit
Credit
Cash
$ 15,700
Accounts receivable
132,500
Prepaid rent
6,100
Exercise 3-20
Requirement 1
Debit
Credit
1. Cash
22,000
2. Cash
40,000
Accounts Receivable
30,000
3. Salaries Expense
25,000
4. Prepaid Rent
18,000
5. Supplies
20,000
6. Dividends
3,000
Exercise 3-20 (continued)
Requirement 2
Debit
Credit
1. Salaries Expense
5,000
Exercise 3-20 (continued)
Requirement 3
Red Flash Photography
Adjusted Trial Balance
December 31, 2018
Accounts
Debit
Credit
Cash
$ 31,000
Accounts Receivable
30,000
Supplies
4,000
Chapter 03 - The Accounting Cycle: End of the Period
Exercise 3-20 (continued)
Requirement 4
Red Flash Photography
Income Statement
For the year ended December 31, 2018
Service revenue
$76,000
Expenses:
Salaries
30,000
Red Flash Photography
Statement of Stockholders’ Equity
For the period ended December 31, 2018
Common
Stock
Retained
Earnings
Total
Stockholders’
Equity
Balance at January 1
$60,000
$20,000
$ 80,000
Exercise 3-20 (continued)
Requirement 4 (continued)
Red Flash Photography
Balance Sheet
December 31, 2018
Assets
Liabilities
Cash
$ 31,000
Accounts payable
$ 20,000
Accounts receivable
30,000
Salaries payable
5,000
Exercise 3-20 (concluded)
Requirement 5
December 31, 2018
Debit
Credit
Service Revenue
76,000
Retained Earnings
76,000
