PROBLEM 4-2A (Continued)
Income Summary No. 350
Date
Explanation
Ref.
Debit
Credit
Balance
Dec. 31
Closing entry
J14
61,000
61,000
31
Closing entry
J14
31
Closing entry
J14
Service Revenue No. 400
Date
Explanation
Ref.
Debit
Credit
Balance
Dec. 31
Balance
61,000
Closing entry
61,000
Advertising Expense No. 610
Date
Explanation
Ref.
Debit
Credit
Balance
Dec. 31
Balance
8,400
8,400
31
Closing entry
J14
8,400
0
Supplies Expense No. 631
Date
Explanation
Ref.
Debit
Credit
Balance
Dec. 31
Balance
Closing entry
J14
Depreciation Expense No. 711
Date
Explanation
Ref.
Debit
Credit
Balance
Dec. 31
Balance
5,600
31
Closing entry
Insurance Expense No. 722
Date
Explanation
Ref.
Debit
Credit
Balance
Dec. 31
Balance
Closing entry
J14
PROBLEM 4-2A (Continued)
Salaries and Wages Expense No. 726
Date
Explanation
Ref.
Debit
Credit
Balance
Balance
28,000
Interest Expense No. 905
Date
Explanation
Ref.
Debit
Credit
Balance
(e) THAO COMPANY
Post-Closing Trial Balance
December 31, 2017
Debit
Credit
Cash ………………………………………………………….. $ 5,300
Accounts Receivable ………………………………….. 10,800
Supplies …………………………………………………….. 1,500
PROBLEM 4-3A
(a) BRAY COMPANY
Income Statement
For the Year Ended December 31, 2017
Revenues
Service revenue……………………………………… $60,000
Expenses
Salaries and wages expense …………………… $30,000
BRAY COMPANY
Owner’s Equity Statement
For the Year Ended December 31, 2017
Owner’s Capital, January 1 ………………………………………. $19,500
BRAY COMPANY
Balance Sheet
December 31, 2017
Assets
Current assets
Cash ……………………………………………………… $8,800
Accounts receivable ………………………………. 10,800
PROBLEM 4-3A (Continued)
BRAY COMPANY
Balance Sheet (Continued)
December 31, 2017
Liabilities and Owner’s Equity
Current liabilities
Accounts payable ……………………………………. $9,000
(b)
General Journal
Date
Account Titles and Explanation
Ref.
Debit
Credit
Dec. 31
Service Revenue …………………………….
400
60,000
Income Summary……………………
350
60,000
31
Income Summary …………………………..
350
37,700
Maintenance and Repairs
Expense………………………………
622
1,700
Depreciation Expense …………….
711
Insurance Expense …………………
722
1,800
Salaries and Wages Expense ….
726
Utilities Expense …………………….
732
1,400
31
Income Summary …………………………..
350
22,300
Owner’s Capital ……………………..
301
22,300
31
301
Owner’s Drawings ………………….
306
11,000
PROBLEM 4-3A (Continued)
(c)
Owner’s Capital No. 301
12/31 11,000
1/1 Bal. 19,500
12/31 22,300
12/31 Bal. 30,800
12/31 Bal. 11,000
12/31 11,000
Income Summary No. 350
12/31 37,700
12/31 60,000
12/31 22,300
60,000
60,000
Depreciation Expense No. 711
12/31 Bal. 2,800
12/31 2,800
Insurance Expense No. 722
12/31 Bal. 1,800
12/31 1,800
Service Revenue No. 400
12/31 60,000
12/31 Bal. 60,000
Utilities Expense No. 732
12/31 Bal. 1,400
12/31 1,400
Maintenance and Repairs
Expense No. 622
12/31 Bal. 1,700
12/31 1,700
Expense No. 726
12/31 Bal. 30,000
12/31 30,000
(d) BRAY COMPANY
Post-Closing Trial Balance
December 31, 2017
Debit
Credit
Cash …………………………………………………………… $8,800
Accounts Receivable …………………………………… 10,800
(a) VANG MANAGEMENT SERVICES
Worksheet
For the Year Ended December 31, 2017
Account Titles
Trial Balance
Adjustments
Adjusted
Trial Balance
Income
Statement
Balance Sheet
Dr.
Cr.
Dr.
Cr.
Dr.
Cr.
Dr.
Cr.
Dr.
Cr.
Cash
Accounts Receivable
Prepaid Insurance
Accounts Payable
Unearned Rent Revenue
Mortgage Payable
Owner’s Capital
Owner’s Drawings
Insurance Expense
Depr. Expense
Accum. Depr.—Buildings
Accum. Depr.—Equipment
13,800
28,300
3,600
22,000
12,500
6,000
120,000
144,000
(c) 4,500
(a) 1,200
(b) 6,600
(a) 1,200
(b) 3,000
(b) 3,600
13,800
28,300
2,400
22,000
1,200
6,600
12,500
1,500
120,000
144,000
3,000
3,600
1,200
6,600
13,800
28,300
2,400
22,000
12,500
1,500
120,000
144,000
3,000
3,600
PROBLEM 4-4A (Continued)
(b) VANG MANAGEMENT SERVICES
Balance Sheet
December 31, 2017
Assets
Current assets
Cash ……………………………………. $13,800
Accounts receivable …………….. 28,300
Less: Accumulated
depreciation—buildings ……. 3,000 124,000
Equipment …………………………... 59,000
Less: Accumulated
Liabilities and Owner’s Equity
Current liabilities
Mortgage payable (due in 2018) ……………… $30,000
Accounts payable …………………………………. 12,500
Owner’s equity
Owner’s capital
PROBLEM 4-4A (Continued)
(c) Dec. 31 Insurance Expense …………………………. 1,200
Prepaid Insurance ……………………. 1,200
31 Depreciation Expense …………………….. 6,600
Accumulated Depreciation—
31 Interest Expense …………………………….. 10,000
Interest Payable ………………………. 10,000
(d) Dec. 31 Service Revenue …………………………….. 90,700
31 Income Summary …………………………... 99,300
Salaries and Wages Expense ……. 42,000
Advertising Expense ……………….. 20,500
31 Income Summary …………………………... 24,900
Owner’s Capital ……………………….. 24,900
PROBLEM 4-4A (Continued)
(e) VANG MANAGEMENT SERVICES
Post-Closing Trial Balance
December 31, 2017
Debit
Credit
Cash ……………………………………………………….. $ 13,800
PROBLEM 4-5A
(a)
General Journal J1
Date
Account Titles and Explanation
Ref.
Debit
Credit
July 1
Cash …………………………………………….
101
20,000
Owner’s Capital …………………….
301
20,000
1
Equipment ……………………………………
157
Cash …………………………………….
101
Accounts Payable …………………
201
8,000
3
Supplies ……………………………………….
126
2,100
Accounts Payable …………………
201
2,100
5
Prepaid Insurance …………………………
130
1,800
Cash …………………………………….
101
1,800
12
Accounts Receivable …………………….
112
4,500
Service Revenue …………………..
400
4,500
18
Accounts Payable …………………………
201
2,900
Cash …………………………………….
101
2,900
20
Salaries and Wages Expense …………
726
Cash …………………………………….
101
21
Cash …………………………………………….
101
3,400
Accounts Receivable …………….
112
3,400
25
Accounts Receivable …………………….
112
6,000
Service Revenue …………………..
400
6,000
31
Gasoline Expense …………………………
633
350
Cash …………………………………….
101
31
306
5,600
Cash …………………………………….
101
5,600
PROBLEM 4-5A (Continued)
(b) & (c) ANYA’S CLEANING SERVICE
Worksheet
For the Month Ended July 31, 2017
Account Titles
Trial Balance
Adjustments
Adjusted
Trial Balance
Income
Statement
Balance Sheet
Dr.
Cr.
Dr.
Cr.
Dr.
Cr.
Dr.
Cr.
Dr.
Cr.
Net Income
Totals
Cash
Accounts Payable
Owner’s Capital
Owner’s Drawings
Service Revenue
Accum. Depr.—Equipment
Insurance Expense
Supplies Expense
5,950
5,600
7,200
20,000
10,500
(c) 150
(d) 1,500
(a) 2,700
(b) 500
5,950
5,600
150
1,500
7,200
20,000
13,200
500
150
1,500
13,200
5,950
5,600
7,200
20,000
500
PROBLEM 4-5A (Continued)
(a), (e) & (f)
Cash No. 101
Date
Explanation
Ref.
Debit
Credit
Balance
July 1
J1
20,000
20,000
1
J1
4,000
16,000
5
J1
2,900
11,300
J1
3,400
J1
J1
5,600
Accounts Receivable No. 112
Date
Explanation
Ref.
Debit
Credit
Balance
July 12
J1
4,500
4,500
J1
J1
6,000
7,100
J2
2,700
9,800
Supplies No. 126
Date
Explanation
Ref.
Debit
Credit
Balance
July 3
J1
2,100
2,100
J2
Prepaid Insurance No. 130
Date
Explanation
Ref.
Debit
Credit
Balance
July 5
J1
1,800
1,800
J2
1,650
Date
Ref.
Debit
Credit
Balance
PROBLEM 4-5A (Continued)
Accumulated Depreciation—Equipment No. 158
Date
Explanation
Ref.
Debit
Credit
Balance
July 31
Adjusting
J2
500
500
Accounts Payable No. 201
Date
Explanation
Ref.
Debit
Credit
Balance
July 1
J1
8,000
8,000
J1
J1
Salaries and Wages Payable No. 212
Date
Explanation
Ref.
Debit
Credit
Balance
July 31
Adjusting
J2
1,000
1,000
Owner’s Capital No. 301
Date
Explanation
Ref.
Debit
Credit
Balance
July 1
J1
20,000
Closing
J3
Closing
J3
Date
Explanation
Ref.
Debit
Credit
July 31
J1
5,600
5,600
Closing
J3
Income Summary No. 350
Date
Explanation
Ref.
Debit
Credit
Balance
July 31
Closing
J3
13,200
13,200
Closing
J3
Closing
J3
PROBLEM 4-5A (Continued)
Service Revenue No. 400
Date
Explanation
Ref.
Debit
Credit
Balance
July 12
J1
4,500
4,500
J1
31
Adjusting
J2
13,200
Closing
J3
13,200
Date
Explanation
Ref.
Debit
Credit
Balance
July 31
Adjusting
J2
31
Closing
J3
1,500
0
Gasoline Expense No. 633
Date
Explanation
Ref.
Debit
Credit
Balance
July 31
J1
350
350
31
Closing
J3
350
0
Depreciation Expense No. 711
Date
Explanation
Ref.
Debit
Credit
Balance
July 31
Adjusting
J2
500
31
Closing
J3
500
0
Insurance Expense No. 722
Date
Explanation
Ref.
Debit
Credit
Balance
July 31
Adjusting
J2
150
150
31
Closing
J3
150
0
Salaries and Wages Expense No. 726
Date
Explanation
Ref.
Debit
Credit
Balance
July 20
J1
2,800
Adjusting
J2
PROBLEM 4-5A (Continued)
(d) ANYA’S CLEANING SERVICE
Income Statement
For the Month Ended July 31, 2017
Revenues
Service revenue ………………………………………. $13,200
Expenses
Salaries and wages expense ……………………. $3,800
Supplies expense ……………………………………. 1,500
ANYA’S CLEANING SERVICE
Owner’s Equity Statement
For the Month Ended July 31, 2017
Owner’s Capital, July 1 …………………………………… $ 0
Add: Investments …………………………………………. $20,000
Net income ………………………………………….. 6,900 26,900
ANYA’S CLEANING SERVICE
Balance Sheet
July 31, 2017
Assets
Current assets
Cash ………………………………………………………. $5,950
Accounts receivable ……………………………….. 9,800
PROBLEM 4-5A (Continued)
ANYA’S CLEANING SERVICE
Balance Sheet (Continued)
July 31, 2017
Assets (Continued)
Property, plant, and equipment
Equipment ………………………………………………. $12,000
Liabilities and Owner’s Equity
Current liabilities
Accounts payable …………………………………… $7,200
Salaries and wages payable …………………….. 1,000
(e)
General Journal J2
Date
Account Titles and Explanation
Ref.
Debit
Credit
July 31
Accounts Receivable …………………….
112
2,700
Service Revenue …………………..
400
2,700
Depreciation Expense …………………..
711
Accumulated Depreciation—
Insurance Expense ……………………….
722
Supplies Expense …………………………
631
1,500
Salaries and Wages Expense …………
726
1,000
PROBLEM 4-5A (Continued)
(f) General Journal
J3
Date
Account Titles and Explanation
Ref.
Debit
Credit
July 31
Service Revenue …………………………...
400
13,200
Income Summary…………………..
350
13,200
31
Income Summary …………………………..
350
Salaries and Wages Expense …
726
Supplies Expense ………………….
631
Depreciation Expense ……………
711
Insurance Expense ………………..
722
31
Income Summary …………………………..
350
6,900
Owner’s Capital …………………….
301
6,900
31
301
Owner’s Drawings …………………
306
(g) ANYA’S CLEANING SERVICE
Post-Closing Trial Balance
July 31, 2017
Debit
Credit
Cash ………………………………………………………….. $ 5,950
Accounts Receivable ………………………………….. 9,800
Supplies …………………………………………………….. 600
(a)
(1) INCORRECT ENTRY
(2) CORRECT ENTRY
(3) CORRECTING ENTRY
1.
Cash ……………………………..
Accts. Receivable ……..
950
950
Cash ……………………………..
Accts. Receivable ……..
590
590
Accounts Receivable ………
Cash ………………………….
360
360
4.
Supplies ………………………..
Accounts Payable …….
310
310
Equipment …………………….
Accounts Payable ……..
310
310
Equipment ……………………..
Supplies …………………….
310
310
Cash …………………………
96
Cash ………………………….
Equipment …………………
2.
Misc. Expense ……………….
Cash …………………………
75
75
Advertising Expense ……..
Cash …………………………
75
75
Advertising Expense ………
Misc. Expense ……………
PROBLEM 4-6A (Continued)
(b) GLOBAL CABLE
Trial Balance
April 30, 2017
Debit
Credit
Cash ($4,100 – $360 – $27) …………………………….. $ 3,713
Accounts Receivable ($3,200 + $360) ……………… 3,560
Unearned Service Revenue ……………………………. 890
Owner’s Capital ……………………………………………. 12,900
Service Revenue …………………………………………… 5,450
Salaries and Wages Expense ($3,300 – $700) ….. 2,600
Advertising Expense ($600 + $75) ………………….. 675
COMPREHENSIVE PROBLEM: CHAPTERS 2 TO 4
(a)
General Journal J1
Date
Account Titles and Explanation
Ref.
Debit
Credit
July 1
Cash ……………………………………………..
101
14,000
Owner’s Capital …………………….
301
14,000
1
Equipment …………………………………….
157
10,000
Cash …………………………………….
101
Accounts Payable …………………
201
7,000
3
Supplies ………………………………………..
126
800
Accounts Payable …………………
201
800
5
Prepaid Insurance ………………………….
130
2,160
Cash …………………………………….
101
2,160
Accounts Receivable ……………………..
112
3,800
Service Revenue …………………..
400
3,800
18
Accounts Payable ………………………….
201
1,400
Cash …………………………………….
101
1,400
20
Salaries and Wages Expense ………….
726
1,600
Cash …………………………………….
101
1,600
21
Cash ……………………………………………..
101
1,400
Accounts Receivable …………….
112
1,400
25
Accounts Receivable ……………………..
112
Service Revenue …………………..
400
31
Gasoline Expense ………………………….
633
400
Cash …………………………………….
101
400
31
306
Cash …………………………………….
101