PROBLEM 4-8B (Continued)
GEOG CLEANERS
Retained Earnings Statement
For the Month Ended March 31, 2014
Retained earnings, March 1 …………………………….. $ 0
Add: Net income …………………………………………… 2,550
GEOG CLEANERS
Balance Sheet
March 31, 2014
Assets
Current assets
Cash ……………………………………………………….. $6,200
Accounts receivable ………………………………… 6,500
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable ……………………………………. $ 5,000
Salaries and wages payable ……………………… 1,080
Total current liabilities ………………………. $ 6,080
PROBLEM 4-8B (Continued)
(h)
General Journal
Date Account Titles and Explanation Debit Credit
Mar. 31 Service Revenue ………………………………………
8,100
31 Income Summary ……………………………………..
Salaries and Wages Expense ……………..
Supplies Expense………………………………
5,550
2,830
1,720
31 Income Summary ……………………………………..
2,550
(i) GEOG CLEANERS
Post-Closing Trial Balance
March 31, 2014
Debit Credit
Cash ……………………………………………………………
Accounts Receivable ……………………………………
$ 6,200
6,500
CCC4 CONTINUING COOKIE CHRONICLE
(a)
General Journal
Date Account Titles Debit Credit
Dec. 1 No journal entry required.
5 Cash ……………………………………………………….. 90
8 Cash ……………………………………………………….. 300
Accounts Receivable …………………………. 300
9 Cash ……………………………………………………….. 750
16 Accounts Payable ……………………………………. 600
Cash …………………………………………………. 600
23 Cash ……………………………………………………….. 3,000
23 Supplies ………………………………………………….. 1,250
Cash …………………………………………………. 1,250
CONTINUING COOKIE CHRONICLE (Continued)
(d)
Date Account Titles Debit Credit
(1)
Dec. 31 Supplies Expense ……………………………………… 45
(2)
31 Depreciation Expense
($1,200 ÷ 5 X 2/12) …………………………………… 40
(3)
31 Amortization Expense ($600 ÷ 24) ………………. 25
Website ………………………………………………. 25
(5)
31 Insurance Expense ($1,200 ÷ 12) ………………… 100
Prepaid Insurance ……………………………….. 100
(7)
31 Supplies Expense ……………………………………… 1,025
Supplies ……………………………………………… 1,025
(10)
31 Unearned Service Revenue ($750 X 3/5) ……… 450
Service Revenue …………………………………. 450
CONTINUING COOKIE CHRONICLE (Continued)
(b), (d), and (g)
Cash
A
ccumulated Depreciation
—
Equipment
11/30 Bal. 340 12/15 50 12/31 40
12/5 90 12/16 600 12/31 Bal. 40
Accounts Receivable
A
ccounts Payable
11/30 Bal. 300 12/8 300 12/15 50 11/30 Bal. 650
Interest Payable
12/31 23
Supplies 12/31 Bal. 23
11/30 Bal. 220 12/31 45
Prepaid Insurance Unearned Service Revenue
11/30 Bal. 1,200 12/31 100 12/5 60 11/30 Bal. 60
Equipment Notes Payable
11/30 Bal. 1,200 11/30 Bal. 2,000
CONTINUING COOKIE CHRONICLE (Continued)
Common Stock Salaries and Wages Expense
11/30 Bal. 800 12/23 800
Retained Earnings Supplies Expense
12/31 500 12/31 3,211 12/31 45 12/31 1,070
Dividends Depreciation Expense
12/28 500 12/31 500 12/31 40 12/31 40
Income Summary Interest Expense
12/31 2,239 12/31 5,450 12/31 23 12/31 23
Service Revenue Insurance Expense
11/30 Bal. 400 12/31 100 12/31 100
12/31 5,450 12/31 450
A
mortization Expense
12/31 Bal. 0 12/31 25 12/31 25
Utilities Expense
11/30 Bal. 50
CONTINUING COOKIE CHRONICLE (Continued)
(c)
COOKIE CREATIONS INC.
Trial Balance
December 31, 2014
Debit Credit
Cash …………………………………………………………… $1,340
Accounts Receivable …………………………………… 1,000
Supplies ……………………………………………………… 1,470
CONTINUING COOKIE CHRONICLE (Continued)
(e) COOKIE CREATIONS INC.
Adjusted Trial Balance
December 31, 2014
Debit Credit
Cash ……………………………………………………………. $1,340
Accounts Receivable ……………………………………. 1,450
Unearned Service Revenue ………………………….. 360
Notes Payable ……………………………………………… 2,000
Interest Payable …………………………………………… 23
Common Stock ……………………………………………. 800
CONTINUING COOKIE CHRONICLE (Continued)
(f) COOKIE CREATIONS INC.
Income Statement
For the Two Months Ended December 31, 2014
Revenue
Service revenue ………………………………….. $5,450
Operating expenses
Supplies expense ………………………………… $1,070
Salaries and wages expense ……………….. 856
COOKIE CREATIONS INC.
Retained Earnings Statement
For the Two Months Ended December 31, 2014
Retained earnings, November 1 ……………………………………… $ 0
CONTINUING COOKIE CHRONICLE (Continued)
COOKIE CREATIONS INC.
Balance Sheet
December 31, 2014
Assets
Current Assets
Cash ……………………………………………………. $1,340
Accounts receivable …………………………….. 1,450
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable ………………………………… $ 75
Unearned service revenue ……………………. 360
CONTINUING COOKIE CHRONICLE (Continued)
(g) 31 Service Revenue ……………………………………….. 5,450
Income Summary ………………………………. 5,450
31 Income Summary ………………………………………. 2,239
Supplies Expense ……………………………… 1,070
Salaries and Wages Expense …………….. 856
31 Income Summary ………………………………………. 3,211
Retained Earnings …………………………….. 3,211
(h) COOKIE CREATIONS INC.
Post-Closing Trial Balance
December 31, 2014
Debit
Credit
Cash …………………………………………………………………. $1,340
Accounts Receivable …………………………………………. 1,450
Supplies ……………………………………………………………. 400
Prepaid Insurance ……………………………………………… 1,100
BYP 4-1 FINANCIAL REPORTING PROBLEM
(a) Items that may result in adjusting entries for deferrals are:
(b) Accrual adjusting entries are often made for other income (i.e., interest)
(c) Depreciation expense was $19,229,000 in 2011 and $18,279,000 in
(d) The statement of cash flows (at the bottom) reports income taxes paid