Problem 3-9A (continued)
Requirement 10 (closing entries posted in red)
Cash
Accounts Receivable
Prepaid Insurance
103,800
16,100
24,600
134,100
8,500
15,400
52,200
12,000
7,000
Supplies
Land
Accounts Payable
0
9,200
6,300
148,000
11,400
6,700
9,200
2,900
148,000
4,500
Deferred Revenue
Common Stock
Retained Earnings
6,900
5,800
44,500
Dividends
Service Revenue
Property Tax Expense
0
2,800
2,800
198,100
0
8,500
8,500
0
0
Salaries Expense
Supplies Expense
123,600
0
0
0
3-82 Financial Accounting, 5e
Problem 3-9A (concluded)
Requirement 11
Zips Storage
Unadjusted Trial Balance
December 31, 2021
Accounts
Debit
Credit
Cash
$103,800
Accounts Receivable
16,100
Prepaid Insurance
5,000
Supplies
Common Stock
Retained Earnings
$275,800
Chapter 3 – The Accounting Cycle: End of the Period
PROBLEMS: SET B
Problem 3-1B (LO 3-1, 3-2)
Accrual-Basis
Cash-Basis
Transaction
Revenue
Expense
Revenue
Expense
1. Receive cash from customers at the
time of service, $3,700
$3,700
$0
$3,700
$0
2. Issue common stock for cash,
$6,000.
$0
$0
$0
$0
3. Receive cash from customers who
were previously billed, $1,700
$0
$0
$0
4. Incur utilities cost in the current
month but do not pay, $600.
$0
$0
$0
$0
$0
6. Pay for rent one year in advance,
$3,600
$0
$0
$0
$3,600
7. Repay a long-term note to the bank,
$3,000.
$0
$0
$0
$0
previous month, $850.
$0
$0
$0
9. Pay dividends to stockholders, $500.
$0
$0
$0
$0
10. Purchase office supplies for cash,
$0
$0
$0
Chapter 3 – The Accounting Cycle: End of the Period
Problem 3-2B (LO 3-1, 3-2)
Horned Frogs Fine Cooking
Income Statement
For the year ended December 31, 2021
Service revenue
$60,000a
Expenses:
Salaries
21,600b
Insurance
Advertising
a $65,000 (cash from customers) − $5,000 (decrease in accounts receivable) = $60,000
b $23,000 (cash paid for salaries) − $1,400 (decrease in salaries payable) = $21,600
Chapter 3 – The Accounting Cycle: End of the Period
Problem 3-3B (LO 3-3)
(1)
Debit
Credit
Depreciation Expense
7,000
Accumulated Depreciation
7,000
(Record depreciation expense for year)
(2)
Debit
Credit
Salaries Expense
4,000
Salaries Payable
4,000
(Record salaries owed at December 31)
(3)
Debit
Credit
Interest Receivable
Interest Revenue
(4)
Debit
Credit
Insurance Expense
4,950
Prepaid Insurance
4,950
(Reduce prepaid insurance for nine months
used of twenty-four months paid in advance;
$13,200 × 9/24 = $4,950)
(5)
Debit
Credit
Supplies Expense
Supplies
(6)
Debit
Credit
Deferred Revenue
Service Revenue
(7)
Debit
Credit
Rent Expense
2,000
Prepaid Rent
2,000
(Reduce prepaid rent for one month used of
three months paid in advance)
3-86 Financial Accounting, 5e
Problem 3-4B (LO 3-3)
(1)
Debit
Credit
Interest Expense
1,200
Interest Payable
(2)
Debit
Credit
Rent Expense
5,000
Prepaid Rent
5,000
(Reduce prepaid rent for two months used of three month
prepaid; $7,500 × 2/3 = $5,000)
(3)
Debit
Credit
Deferred Revenue
5,000
Service Revenue
(4)
Debit
Credit
Depreciation Expense
18,000
Accumulated Depreciation
18,000
(Record depreciation expense for year)
(5)
Debit
Credit
Salaries Expense
8,000
Salaries Payable
(6)
Debit
Credit
Supplies Expense
57,000
Supplies
57,000
Chapter 3 – The Accounting Cycle: End of the Period
Problem 3-5B (LO 3-5)
Orange Designs
Income Statement
For the year ended December 31, 2021
Service revenue
$111,900
Expenses:
Salaries
43,000
Depreciation
Supplies
Advertising
14,000
Utilities
13,000
Interest
Net income
$ 2,900
Chapter 3 – The Accounting Cycle: End of the Period
Problem 3-5B (concluded)
Orange Designs
Statement of Stockholders’ Equity
For the year ended December 31, 2021
Common
Stock
Retained
Earnings
Total
Stockholders’
Equity
Balance at January 1
$49,000
$16,000
$65,000
Balance at December 31
$60,000
Orange Designs
Balance Sheet
December 31, 2021
Assets
Liabilities
Current assets:
Current liabilities:
Cash
$ 6,000
Accounts payable
$ 4,000
Accounts receivable
Salaries payable
Supplies
Utilities payable
Prepaid rent
Notes payable
Long-term assets:
Buildings
Common stock
Accum. depr.
Retained earnings
Total assets
Chapter 3 – The Accounting Cycle: End of the Period
Problem 3-6B (LO 3-6, 3-7)
December 31
Debit
Credit
Service Revenue
89,700
Retained Earnings
89,700
(Close revenue accounts)
Retained Earnings
Supplies Expense
(Close expense accounts)
(Close dividends account)
Fighting Illini
Post-Closing Trial Balance
Accounts
Debit
Credit
Cash
$ 7,600
Land
Accounts Payable
$ 5,100
Common Stock
Retained Earnings
Totals
3-90 Financial Accounting, 5e
Problem 3-7B (LO 3-4, 3-5, 3-6, 3-7)
Requirements 1 and 2 (adjusting entries posted in red)
Cash
Accounts Receivable
Supplies
76,000
15,000
27,000
22,000
76,000
15,000
5,000
Prepaid Insurance
Equipment
95,000
37,000
95,000
47,000
Deferred Revenue
60,000
Interest Payable
Notes Payable
Common Stock
0
1,000
35,000
35,000
1,000
35,000
35,000
Retained Earnings
Dividends
Service Revenue
10,000
3,000
10,000
3,000
4,000
10,000
22,000
0
22,000
Chapter 3 – The Accounting Cycle: End of the Period
Problem 3-7B (continued)
Requirement 3
Jaguar Auto Company
Adjusted Trial Balance
December 31, 2021
Accounts
Debit
Credit
Cash
$ 76,000
Accounts Receivable
15,000
Supplies
5,000
Equipment
Accounts Payable
12,000
Salaries Payable
4,000
Deferred Revenue
Interest Payable
1,000
Common Stock
35,000
Retained Earnings
Dividends
3,000
Service Revenue
Depreciation Expense
Insurance Expense
20,000
Supplies Expense
Utilities Expense
Chapter 3 – The Accounting Cycle: End of the Period
Problem 3-7B (continued)
Requirement 4
Jaguar Auto Company
Income Statement
For the year ended December 31, 2021
Service revenue
$242,000
Expenses:
Salaries
168,000
Depreciation
Supplies
Utilities
Interest
Net income
Jaguar Auto Company
Statement of Stockholders’ Equity
For the year ended December 31, 2021
Common
Stock
Retained
Earnings
Total
Stockholders’
Equity
Balance at January 1
$35,000
$10,000
$45,000
Less: Dividends
Balance at December 31
$35,000
$51,000
Problem 3-7B (continued)
Jaguar Auto Company
Balance Sheet
December 31, 2021
Assets
Liabilities
Current assets
Current liabilities
Cash
$ 76,000
Accounts payable
$12,000
Accounts receivable
Supplies
45,000
Prepaid insurance
Total current liabilities
62,000
35,000
Long-term assets:
Total liabilities
97,000
Equipment
95,000
Stockholders’ Equity
Accumulated depr.
(47,000)
Common stock
35,000
Retained earnings
16,000
Total assets
Chapter 3 – The Accounting Cycle: End of the Period
3-94 Financial Accounting, 5e
Problem 3-7B (continued)
Requirement 5
December 31, 2021
Debit
Credit
Service Revenue
242,000
Retained Earnings
242,000
(Close revenue accounts)
Retained Earnings
233,000
Salaries Expense
168,000
Interest Expense
(Close expense accounts)
Retained Earnings
Chapter 3 – The Accounting Cycle: End of the Period
Problem 3-7B (concluded)
Requirement 6 (closing entries posted in red)
Retained Earnings
Dividends
Service Revenue
233,000
3,000
10,000
242,000
3,000
242,000
242,000
16,000
0
0
0
0
0
0
0
0
Requirement 7
Jaguar Auto Company
Post-Closing Trial Balance
December 31, 2021
Accounts
Debit
Credit
Cash
$ 76,000
Accounts Receivable
15,000
Supplies
5,000
Prepaid Insurance
4,000
Equipment
95,000
Accounts Payable
12,000
Salaries Payable
4,000
Deferred Revenue
Interest Payable
1,000
Notes Payable
35,000
Common Stock
35,000
Retained Earnings
Problem 3-8B (LO 3-3, 3-4, 3-5, 3-6, 3-7)
Requirement 1
Cash
Accounts Receivable
Supplies
4,500
3,500
4,500
3,500
36,000
36,000
7,000
Retained Earnings
Dividends
Service Revenue
9,500
0
9,500
0
0
0
0
0
0
0
Chapter 3 – The Accounting Cycle: End of the Period
Problem 3-8B (continued)
Requirement 2
(1) January 24
Debit
Credit
Accounts Receivable
65,000
Cash
20,000
Service Revenue
85,000
(Provide services on account and for cash)
(2) March 13
Debit
Credit
Cash
Accounts Receivable
(Collect on account)
(3) May 6
Debit
Credit
Cash
11,000
Common Stock
11,000
(Issue common stock)
(4) June 30
Debit
Credit
Salaries Expense
33,000
Cash
33,000
(Pay current salaries)
(5) September 15
Debit
Credit
Utilities Payable
7,000
Cash
7,000
(Pay for past utilities)
(6) November 24
Debit
Credit
Cash
(7) December 30
Debit
Credit
Dividends
3,000
Chapter 3 – The Accounting Cycle: End of the Period
Problem 3-8B (continued)
Requirement 3 (entries posted in red)
Cash
Accounts Receivable
Supplies
4,500
20,000
33,000
3,500
Equipment
Accumulated Depr.
Accounts Payable
36,000
8,000
6,000
36,000
8,000
6,000
Utilities Payable
Deferred Revenue
Common Stock
Retained Earnings
0
85,000
85,000
Salaries Expense
Utilities Expense
Supplies Expense
0
33,000
0
33,000
0
Chapter 3 – The Accounting Cycle: End of the Period
Problem 3-8B (continued)
Requirement 4
Pipers Plumbing
Unadjusted Trial Balance
December 31, 2021
Accounts
Debit
Credit
Cash
$ 55,500
Accounts Receivable
21,500
Supplies
3,500
Equipment
36,000
Accumulated Depreciation
$ 8,000
Accounts Payable
Utilities Payable
Deferred Revenue
Common Stock
Retained Earnings
Dividends
3,000
Service Revenue
Salaries Expense
33,000
Utilities Expense
Supplies Expense
Depreciation Expense
Total
$152,500
$152,500
Requirement 5
December 31
Debit
Credit
Depreciation Expense
8,000
Accumulated Depreciation
8,000
(Record depreciation expense for year)
Supplies Expense
Supplies
Service Revenue
7,000
Utilities Expense
6,000
Utilities Payable
6,000
3-100 Financial Accounting, 5e
Problem 3-8B (continued)
Requirement 6 (adjusted entries posted in red)
Cash
Accounts Receivable
Supplies
55,500
4,500
20,000
33,000
3,500
2,400
Equipment
Accumulated Depr.
Accounts Payable
36,000
8,000
8,000
6,000
23,000
6,000
Retained Earnings
Dividends
Service Revenue
9,500
0
85,000
7,000
9,500
92,000
Salaries Expense