Chapter 3 – The Accounting Cycle: End of the Period
Problem 3-8B (continued)
Requirement 7
Pipers Plumbing
Adjusted Trial Balance
December 31, 2021
Accounts
Debit
Credit
Cash
$ 55,500
Accounts Receivable
21,500
Supplies
1,100
Equipment
Accounts Payable
6,000
Utilities Payable
6,000
Deferred Revenue
3,000
Common Stock
34,000
Retained Earnings
Dividends
3,000
Service Revenue
Salaries Expense
Utilities Expense
Supplies Expense
2,400
Depreciation Expense
8,000
Chapter 3 – The Accounting Cycle: End of the Period
3-102 Financial Accounting, 5e
Problem 3-8B (continued)
Requirement 8
Pipers Plumbing
Income Statement
For the year ended December 31, 2021
$92,000
Pipers Plumbing
Balance Sheet
December 31, 2021
Assets
Liabilities
Current assets:
Current liabilities:
Cash
$55,500
Accounts payable
$ 6,000
Accounts receivable
21,500
Utilities payable
6,000
Supplies
Deferred revenue
Total current assets
Long-term assets:
Common stock
Equipment
Retained earnings
*
Accumulated depr.
Total assets
$98,100
Chapter 3 – The Accounting Cycle: End of the Period
Problem 3-8B (continued)
Requirement 9
December 31
Debit
Credit
Service Revenue
92,000
Retained Earnings
92,000
(Close revenue accounts)
Retained Earnings
(Close expense accounts)
(Close dividends account)
Problem 3-8B (continued)
Requirement 10 (closing entries posted in red)
Cash
Accounts Receivable
Supplies
1,100
36,000
16,000
6,000
4,500
20,000
33,000
9,500
65,000
53,000
3,500
2,400
Utilities Payable
Deferred Revenue
Common Stock
7,000
7,000
6,000
7,000
0
10,000
23,000
11,000
6,000
3,000
34,000
Retained Earnings
Dividends
Service Revenue
49,100
0
0
9,500
0
0
Chapter 3 – The Accounting Cycle: End of the Period
Problem 3-8B (concluded)
Requirement 11
Pipers Plumbing
Post-Closing Trial Balance
December 31, 2021
Accounts
Debit
Credit
Cash
$ 55,500
Accounts Receivable
21,500
Supplies
1,100
Equipment
Accounts Payable
Utilities Payable
Deferred Revenue
Common Stock
34,000
Retained Earnings
Total
3-106 Financial Accounting, 5e
Problem 3-9B (LO 3-3, 3-4, 3-5, 3-6, 3-7)
Requirement 1
Cash
Accounts Receivable
Supplies
41,500
25,700
0
41,500
25,700
0
Land
0
0
Common Stock
Retained Earnings
Dividends
Service Revenue
32,700
0
0
32,700
0
0
0
0
0
0
0
0
0
Chapter 3 – The Accounting Cycle: End of the Period
Problem 3-9B (continued)
Requirement 2
(1) January 12
Debit
Credit
Accounts Receivable
62,400
Service Revenue
62,400
(Provide services on account)
(2) February 25
Debit
Credit
Cash
75,300
Service Revenue
(Provide services for cash)
(3) March 19
Debit
Credit
Cash
45,700
Accounts Receivable
(Receive cash on account)
(4) April 30
Debit
Credit
Cash
Common Stock
(Issue common stock)
(5) June 16
Debit
Credit
Supplies
12,100
Accounts Payable
12,100
(Purchase supplies on account)
(6) July 7
Debit
Credit
Accounts Payable
11,300
Cash
11,300
(Pay cash on account)
(7) September 30
Debit
Credit
Salaries Expense
64,200
Cash
(Pay salaries for work in the current period)
(8) November 22
Debit
Credit
Advertising Expense
22,500
(Pay advertising for the current period)
(9) December 30
Debit
Credit
Dividends
Cash
(Pay dividends)
Chapter 3 – The Accounting Cycle: End of the Period
3-108 Financial Accounting, 5e
Problem 3-9B (continued)
Requirement 3 (entries posted in red)
Cash
Accounts Receivable
Supplies
12,100
41,500
11,300
25,700
0
Land
Accounts Payable
Salaries Payable
110,800
11,300
15,300
12,100
0
110,800
16,100
0
Common Stock
30,000
100,000
Retained Earnings
2,900
Salaries Expense
Advertising Expense
Interest Expense
0
64,200
0
22,500
0
64,200
22,500
0
0
0
Chapter 3 – The Accounting Cycle: End of the Period
Problem 3-9B (continued)
Requirement 4
Jackrabbit Rentals
Unadjusted Trial Balance
December 31, 2021
Accounts
Debit
Credit
Cash
$ 91,600
Accounts Receivable
42,400
Supplies
12,100
Land
110,800
Salaries Payable
Interest Payable
Notes Payable
Common Stock
Retained Earnings
Dividends
Service Revenue
Salaries Expense
Advertising Expense
22,500
Interest Expense
Supplies Expense
Requirement 5
December 31
Debit
Credit
Interest Expense
2,500
Interest Payable
2,500
(Accrue interest on notes payable)
Salaries Expense
1,500
Salaries Payable
1,500
Supplies Expense
9,800
Supplies
9,800
Chapter 3 – The Accounting Cycle: End of the Period
Problem 3-9B (continued)
Requirement 6 (adjusted entries posted in red)
Cash
Accounts Receivable
Supplies
41,500
75,300
45,700
30,000
11,300
64,200
22,500
2,900
25,700
62,400
45,700
0
12,100
9,800
91,600
42,400
2,300
Land
Accounts Payable
110,800
Common Stock
130,000
Retained Earnings
Dividends
Service Revenue
32,700
0
2,900
0
62,400
75,300
32,700
2,900
137,700
Salaries Expense
Advertising Expense
Interest Expense
0
64,200
0
0
22,500
Problem 3-9B (continued)
Requirement 7
Jackrabbit Rentals
Adjusted Trial Balance
December 31, 2021
Accounts
Debit
Credit
Cash
$ 91,600
Accounts Receivable
42,400
Supplies
2,300
Land
110,800
Accounts Payable
$ 16,100
Salaries Payable
Interest Payable
Notes Payable
Common Stock
Retained Earnings
Dividends
Service Revenue
Salaries Expense
Advertising Expense
22,500
Interest Expense
Supplies Expense
Chapter 3 – The Accounting Cycle: End of the Period
3-112 Financial Accounting, 5e
Problem 3-9B (continued)
Requirement 8
Jackrabbit Rentals
Income Statement
For the year ended December 31, 2021
$137,700
Jackrabbit Rentals
Balance Sheet
December 31, 2021
Assets
Liabilities
Current assets:
Current liabilities:
Cash
$ 91,600
Accounts Payable
$ 16,100
Accounts Receivable
42,400
Salaries Payable
1,500
Supplies
Interest Payable
Notes Payable
Land
Common stock
Chapter 3 – The Accounting Cycle: End of the Period
Problem 3-9B (continued)
Requirement 9
December 31
Debit
Credit
Service Revenue
137,700
Retained Earnings
137,700
(Close revenue accounts)
Retained Earnings
(Close expense accounts)
(Close dividends account)
Chapter 3 – The Accounting Cycle: End of the Period
Problem 3-9B (continued)
Requirement 10 (closing entries posted in red)
Cash
Accounts Receivable
Supplies
41,500
75,300
45,700
30,000
11,300
64,200
22,500
2,900
25,700
62,400
45,700
0
12,100
9,800
91,600
42,400
2,300
Land
Accounts Payable
1,500
Common Stock
Retained Earnings
Dividends
Service Revenue
100,500
2,900
32,700
137,700
0
2,900
2,900
137,700
0
62,400
75,300
67,000
0
0
Advertising Expense
0
64,200
0
0
0
0
0
0
Chapter 3 – The Accounting Cycle: End of the Period
Problem 3-9B (concluded)
Requirement 11
Jackrabbit Rentals
Post-Closing Trial Balance
December 31, 2021
Accounts
Debit
Credit
Cash
$ 91,600
Accounts Receivable
42,400
Salaries Payable
Interest Payable
Notes Payable
Common Stock
Chapter 3 – The Accounting Cycle: End of the Period
3-116 Financial Accounting, 5e
ADDITIONAL PERSPECTIVES
Additional Perspective 3-1
Requirement 1
July 1, 2021
Debit
Credit
Cash
10,000
Common Stock
(Issue common stock to Suzie)
July 1, 2021
Cash
10,000
Common Stock
(Issue common stock to Tony)
July 1, 2021
Prepaid Insurance
Cash
4,800
(Purchase one-year insurance policy)
July 2, 2021
Legal Fees Expense
1,500
Cash
1,500
(Pay legal fees for incorporation)
July 4, 2021
Supplies (Office)
1,800
Accounts Payable
1,800
(Purchase office supplies on account)
July 7, 2021
Cash
(Pay cash for advertising)
July 8, 2021
Cash
July 15, 2021
Service Revenue (Clinic)
2,000
(Receive cash for mountain bike clinic)