This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 3
151
PROBLEM SET A
Problem 3-1A (10 minutes)
1. E 5. C 9. D
Problem 3-2A (35 minutes)
Part 1
Adjustment (a)
Dec. 31 Office Supplies Expense ................................ 14,846
Office Supplies ......................................... 14,846
152
Problem 3-2A (Concluded)
Adjustment (d)
Dec. 31 Depreciation Expense—Building ................... 30,500
Accumulated Depreciation—Building ... 30,500
Part 2
Cash Payment for (c)
Jan. 6 Salaries Payable ........................................... 3,920
Problem 3-3A (90 minutes)
Parts 1 and 2
Cash
Equipment
Unadj. Bal.
34,000
Unadj. Bal.
80,000
(b)
5,200
Adj. Bal.
2,800
Salaries Payable
Unadj. Bal.
0
3,000
7,500
(h)
3,000
Adj. Bal.
0
T. Wells, Capital
154
Problem 3-3A (Continued)
Tuition Fees Earned
Rent Expense
Unadj. Bal.
123,900
Unadj. Bal.
33,000
(f)
7,500
(h)
3,000
Depreciation Expense—
Professional Library
Advertising Expense
Unadj. Bal.
0
Bal.
6,000
(d)
7,200
155
Problem 3-3A (Continued)
Part 2
Adjustment (a)
Dec. 31
Insurance Expense ......................................................
2,400
Prepaid Insurance ..................................................
2,400
Adjustment (d)
31
Depreciation Expense—Profess. Library ..................
7,200
Accumul. Depreciation—Profess. Library ................
7,200
Record professional library depreciation.
Adjustment (e)
Adjustment (g)
31
Salaries Expense .........................................................
400
Salaries Payable.....................................................
400
156
Problem 3-3A (Continued)
Part 3
WELLS TECHNICAL INSTITUTE
Adjusted Trial Balance
December 31, 2017
Debit
Credit
Cash ..........................................................................
$ 34,000
Accumulated depreciation—Equipment ................
28,200
Accounts payable ....................................................
26,000
157
Problem 3-3A (Continued)
Part 4
WELLS TECHNICAL INSTITUTE
Income Statement
For Year Ended December 31, 2017
Revenues
Tuition fees earned ............................................ $131,400
Training fees earned .......................................... 45,000
WELLS TECHNICAL INSTITUTE
Statement of Owner’s Equity
For Year Ended December 31, 2017
T. Wells, Capital, December 31, 2016 ................................. $ 90,000
158
Problem 3-3A (Concluded)
WELLS TECHNICAL INSTITUTE
Balance Sheet
December 31, 2017
Assets
Cash ................................................................................. $ 34,000
Accounts receivable ...................................................... 7,500
Liabilities
Accounts payable ........................................................... $ 26,000
Problem 3-4A (45 minutes) — Part 1
Account
Unadjusted
Trial Balance
Adjustments
Adjusted
Trial Balance
Cash ...................................
$ 34,000
$ 34,000
Accounts receivable .......
14,000
(a)
8,000
22,000
J. Logan, Capital ..............
40,000
40,000
J. Logan, Withdrawals ....
5,000
5,000
Adjustment description
(a) Earned but uncollected revenues.
(b) Cost of office supplies used.
160
Problem 3-4A (Continued)
Part 2
JKL COMPANY
Income Statement
For Year Ended July 31, 2017
Revenues
Consulting fees earned ................................. $134,240
Expenses
Depreciation expense—Office equipment .. $ 6,000
JKL COMPANY
Statement of Owner’s Equity
For Year Ended July 31, 2017
J. Logan, Capital, July 31, 2016 ..................... $40,000
161
Problem 3-4A (Concluded)
Part 2
JKL COMPANY
Balance Sheet
July 31, 2017
Assets
Cash .............................................................................
$ 34,000
Accounts receivable ..................................................
22,000
Liabilities
Accounts payable .......................................................
$ 10,000
Interest payable ..........................................................
1,000
162
Problem 3-5A (50 minutes)
Part 1
CHIARA COMPANY
Income Statement
For Year Ended December 31, 2017
Revenues
Fees earned .............................................. $484,000
CHIARA COMPANY
Statement of Owner's Equity
For Year Ended December 31, 2017
R. Chiara, Capital, December 31, 2016 ............. $255,800
163
Problem 3-5A (Concluded)
CHIARA COMPANY
Balance Sheet
December 31, 2017
Assets
Cash ........................................................................
$ 30,000
Liabilities
Accounts payable ..................................................
$ 96,000
Interest payable ......................................................
20,000
Part 2
Problem 3-6AA (40 minutes)
Part 1
Assume prepaid expenses are recorded as assets and unearned revenues as liabilities.
Nov. 1 Prepaid Advertising ....................................... 1,800
Cash .......................................................... 1,800
Dec. 1 Prepaid Consulting Fees ............................... 3,000
Cash .......................................................... 3,000
Paid for future consulting.
165
Problem 3-6AA (Continued)
Part 2
Assume prepaid expenses are recorded as expenses and unearned revenues as revenues.
Nov. 1 Advertising Expense ....................................... 1,800
Dec. 1 Consulting Fees Expense ............................... 3,000
Cash .......................................................... 3,000
Paid for future consulting.
166
Problem 3-6AA (Concluded)
Part 3
There are no differences between the two methods in terms of the amounts
that appear on the financial statements. In both cases, the financial
statements reflect the following:
Advertising expense for two months ..................................... $ 600
Prepaid advertising as of December 31 ................................. 1,200
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 3
PROBLEM SET B
Problem 3-1B (15 minutes)
1. H 5. B 9. I
Problem 3-2B (30 minutes)
Part 1
Adjustment (a)
Oct. 31 Office Supplies Expense ....................................... 4,370
Office Supplies ................................................ 4,370
168
Problem 3-2B (Concluded)
Adjustment (d)
Oct. 31 Depreciation Expense—Building .......................... 5,400
Accumulated Depreciation—Building .......... 5,400
Part 2
Cash Payment for (c)
Nov. 7 Salaries Payable ..................................................... 1,000
169
Problem 3-3B (90 minutes)
Parts 1 and 2
Cash
Accounts Payable
Accounts Receivable
Salaries Payable
Prepaid Insurance
C. Alonzo, Capital
Professional Library
Accumulated Depreciation—
Professional Library
Unadj. Bal.
2,500
170
Problem 3-3B (Continued)
Parts 1 and 2
Tuition Fees Earned
Advertising Expense
Unadj. Bal.
129,200
Bal.
19,000
Depreciation Expense—
Depreciation Expense—
Equipment
Salaries Expense
Insurance Expense
33,400
Teaching Supplies Expense
Trusted by Thousands of
Students
Here are what students say about us.
Resources
Company
Copyright ©2022 All rights reserved. | CoursePaper is not sponsored or endorsed by any college or university.