CHAPTER 3
(a) HYMAN INC.
Assets
=
Liabilities
+
Stockholders’ Equity
+
Accounts
Receivable
+
Supplies
+
Equipment
=
Accounts
Payable
+
Common
Stock
+
Retained Earnings
Revenues
–
Expenses
–
Dividends
1.
+$30,000
2.
+$10,000
4.
+$300
5.
–750
Advertising Expense
7.
–$500
Dividends
Expense
9.
–140
Utilities Expense
10.
+$2,000
+2,000
Service Revenue
11.
+
+
+
=
+
+
$10,000
$500
3.
–700
Rent Expense
PROBLEM 3-1B (Continued)
(b) Service Revenue ($8,000 + $2,000) …………………….. $10,000
Expenses
Salaries and Wages Expense ……………………… $1,000
OR
Revenues …………………………………………………………. $10,000
(a) WALZ SERVICE INC.
Assets
=
Liabilities
+
Stockholders’ Equity
Date
Cash
+
Accounts
Receivable
+
Supplies
+
Equipment
=
Notes
Payable
+
Accounts
Payable
+
Common
Stock
+
Retained Earnings
Revenues
–
Expenses
–
Dividends
June 1
$20,000
$20,000
2
–2,000
+$10,000
+$8,000
12
+$240
+$240
15
+1,000
–1,000
17
+200
–200
Advertising
Expense
23
–1,000
26
Utilities Expense
29
30
Salaries and
$17,430
=
+
+
$20,000
+
–
3-54
3
Rent Expense
5
+$3,000
+$3,000
Service Revenue
9
Dividends
PROBLEM 3-2B (Continued)
(b) WALZ SERVICE INC.
Income Statement
For the Month Ended June 30, 2014
Revenues
Service revenue ($3,000 + $1,500) ……………. $4,500
Expenses
Salaries and wages expense ……………………. $750
(c) WALZ SERVICE INC.
Balance Sheet
June 30, 2014
Assets
Current assets
Cash ………………………………………………………. $17,430
Accounts receivable ……………………………….. 2,000
Liabilities and Stockholders’ Equity
Current liabilities
Notes payable …………………………………………. $7,000
Accounts payable …………………………………… 200
(a) THYME COMPANY
Assets
=
Liabilities
+
Stockholders’ Equity
Cash
+
Accounts
Receivable
+
Supplies
+
Equipment
=
Notes
Payable
+
Accounts
Payable
+
Common
Stock
+
Retained
Earnings
+
Revenues
–
Expenses
–
Dividends
Bal.
$9,000
+
$1,700
+
$600
+
$5,000
=
$3,600
+
$10,000
+
$2,700
Sept. 2.
–3,400
–3,400
17.
–600
–$600
Dividends
–1,100
Rent Expense
–250
Advertising Expense
26.
+220
–220
Utilities Expense
+
+
=
+
+
+
+
+1,200
–1,200
–1,000
+5,100
+4,100
13.
+2,300
Service Revenue
PROBLEM 3-3B (Continued)
(b) THYME COMPANY
Income Statement
For the Month Ended September 30, 2014
Revenues
Service revenue……………………………………………. $10,600
Expenses
Rent expense ……………………………………………….. $1,100
THYME COMPANY
Retained Earnings Statement
For the Month Ended September 30, 2014
Retained earnings, September 1 ……………………………………….. $ 2,700
PROBLEM 3-3B (Continued)
THYME COMPANY
Balance Sheet
September 30, 2014
Assets
Current assets
Cash ………………………………………………………. $10,250
Liabilities and Stockholders’ Equity
Current liabilities
Notes payable …………………………………………. $ 5,000
PROBLEM 3-4B
Date
Account Titles and Explanation
Debit
Credit
Apr. 1
Cash ………………………………………………………..
Common Stock ………………………………….
(Issued stock for cash)
100,000
100,000
4
Land …………………………………………………………
(Purchased land for cash)
account)
11
Salaries and Wages Expense …………………….
Cash ………………………………………………….
3,000
3,000
12
No entry—not a transaction.
13
Prepaid Insurance …………………………………….
Cash ………………………………………………….
(Paid for one-year insurance policy)
7,200
7,200
17
provided)
Dividends …………………………………………………
600
PROBLEM 3-4B (Continued)
Date
Account Titles and Explanation
Debit
Credit
Apr. 30
Cash ………………………………………………………..
7,900
PROBLEM 3-5B
(a)
Date
Account Titles and Explanation
Debit
Credit
May 1
Cash ………………………………………………………..
Common Stock ………………………………….
(Issued stock for cash)
100,000
100,000
2
No entry—not a transaction.
3
Supplies …………………………………………………..
Accounts Payable ………………………………
(Purchased supplies on account)
800
800
11
Accounts Receivable ………………………………..
(Billed client for services provided)
services)
17
Cash ………………………………………………………..
Salaries and Wages Expense …………………….
(Paid salaries)
PROBLEM 3-5B (Continued)
(b)
Cash
5/1 100,000
5/12 4,200
5/17 3,300
5/7 1,400
5/31 2,500
5/31 400
Bal. 103,200
5/11 2,500
Bal. 2,500
5/3 800
Bal. 800
5/7 1,400
Bal. 1,400
Accounts Payable
5/31 400
5/3 800
Bal. 400
Unearned Service Revenue
5/12 4,200
Bal. 4,200
5/1 100,000
Bal. 100,000
Bal. 5,800
Salaries and Wages Expense
5/31 2,500
Bal. 2,500
PROBLEM 3-5B (Continued)
(c) ROYCE CONSULTING
Trial Balance
May 31, 2014
Debit
Credit
Cash ……………………………………………………………
Accounts Receivable …………………………..……….
$103,200
2,500
PROBLEM 3-6B
(a) & (c)
Cash
7/31 400
Bal. 20,464
Bal. 25,000
7/1 Bal. 15,532
7/9 2,100
Accounts Receivable
7/1 Bal. 10,536
7/22 4,700
7/8 10,189
Bal. 5,047
7/31 400
Bal. 400
Supplies
Bal. 4,312
7/22 4,700
Bal. 12,020
7/1 Bal. 3,592
Equipment
7/1 Bal. 25,950
Bal. 25,950
Accounts Payable
7/14 4,810
7/1 Bal. 15,800
7/17 720
Bal. 11,710
7/1 Bal. 1,810
Bal. 1,810
7/30 3,114
Bal. 5,214
Utilities Expense
7/30 1,767
Bal. 1,767
Common Stock
7/1 Bal. 25,000
7/1 Bal. 13,000
Bal. 13,000
Dividends
Service Revenue
7/11 7,320
Maintenance and Repairs
Expense
7/30 386
Bal. 386
Salaries and Wages Expense
7/9 2,100
PROBLEM 3-6B (Continued)
(b)
Date
Account Titles and Explanation
Debit
Credit
July 8
Cash ………………………………………………………..
Accounts Receivable …………………………
(Received cash on account)
10,189
10,189
9
Salaries and Wages Expense …………………….
Cash ………………………………………………….
(Paid salaries)
2,100
provided)
14
Accounts Payable …………………………………….
Cash ………………………………………………….
(Paid creditors)
4,810
4,810
17
Supplies …………………………………………………..
Accounts Payable ………………………………
(Purchased supplies on account)
720
720
31
Dividends …………………………………………………
Cash ………………………………………………….
(Payment of cash dividend)
400
400
PROBLEM 3-6B (Continued)
(d) AMERICAN DRY CLEANERS
Trial Balance
July 31, 2014
Debit
Credit
Cash ……………………………………………………………
Accounts Receivable …………………………..……….
Supplies ………………………………………………………
$20,464
5,047
4,312
PROBLEM 3-7B
LINDBERGH COMPANY
Trial Balance
May 31, 2014
Debit
Credit
Cash ($5,340 + $350 – $441) ………………………………..
Accounts Receivable ($2,750 – $180 – $240) ………..
Prepaid Insurance ($700 + $100) ………………………….
Supplies ($0 + $350) ……………………………………………
$ 5,249
2,330
800
350
PROBLEM 3-8B
(a) & (c)
Cash
4/30 170
4/29 1,900
4/30 1,200
Bal. 1,850
4/1 Bal. 6,300
4/9 5,700
4/2 1,800
4/10 3,200
Bal. 6,660
Accounts Receivable
4/30 170
Bal. 170
Bal. 40,000
4/30 1,200
Bal. 1,200
4/1 Bal. 10,000
Bal. 10,000
Bal. 8,700
Buildings
4/1 Bal. 58,000
Bal. 58,000
4/1 Bal. 6,000
Bal. 6,000
Bal. 410
Accounts Payable
4/10 1,200
4/1 Bal. 2,300
4/20 750
Mortgage Payable
4/10 2,000
4/1 Bal. 38,000
Bal. 36,000
Common Stock
4/1 Bal. 40,000
Service Revenue
4/9 5,700
4/25 3,000
Sales Revenue
4/30 340
Bal. 340
Advertising Expense
4/12 410
PROBLEM 3-8B (Continued)
Rent Expense
Salaries and Wages Expense
4/2 1,800
4/29 1,900
4/20 750
Bal. 1,900
Bal. 2,550
(b)
Date
Account Titles and Explanation
Debit
Credit
Apr. 2
3
No entry—not a transaction.
9
Cash ………………………………………………………..
Service Revenue ………………………………..
5,700
Rent Expense …………………………………………..
Cash ………………………………………………….
1,800
1,800
10
Mortgage Payable …………………………………….
Accounts Payable …………………………..………..
Cash ………………………………………………….
(Made payments on mortgage
and accounts payable)
2,000
1,200
3,200
11
No entry—not a transaction.
12
Advertising Expense …………………………………
Cash ………………………………………………….
(Paid advertising expenses)
410
20
Rent Expense …………………………………………..
750
25
Cash ………………………………………………………..
Service Revenue ………………………………..
(Received cash for admissions)
3,000
3,000