Accounting Chapter 4 Homework Enter Number Cells Requesting Value Enter Either

E4-13 Prepare a correct income statement

The income statement of Norski Co. for the month of July shows net income of $2,000

based on Service Revenue $5,500; Salaries and Wages $2,100; Supplies Expense $900;

and Utilities Expense $500. In reviewing the statement, you discover the following:

1. Insurance expired during July of $350 was omitted.

2. Supplies expense includes $200 of supplies that are still on hand at July 31.

3. Depreciation on equipment of $150 was omitted.

4. Accrued but unpaid wages at July 31 of $360 were not included,

5. Services performed but unrecorded totaled $700.

Instructions

Prepare a correct income statement for July 2017.

NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a “?” .

Revenues

Service revenue Value

Expenses

Salaries and wages expense

Value

Supplies expense Value

Utilities expense Value

Insurance expense Value

Depreciation expense Value

Total expenses ?

Net income ?

After you have completed E4-13, consider the following additional question

1. Assume that services performed but unrecorded was $950; supplies expense included

$285 of supplies still on hand; and, insurance expense of $450 was omitted. What

impact do these changes have on the income statement?

NORSKI Co.

Income Statement

For the Month Ended July 31, 2017

E4-13 Solution

Revenues

Service revenue ($5,500 + $700) $6,200

Expenses

$2,460

700

NORSKI Co.

Income Statement

For the Month Ended July 31, 2017

Salaries and wages expense ($2,100 + $360)

Supplies expense ($900 – $200)

E4-13 Solution to additional question

1. Assume that services performed but unrecorded was $950; supplies expense included

$285 of supplies still on hand; and, insurance expense of $450 was omitted. What

impact do these changes have on the income statement?

Revenues

Expenses

Salaries and wages expense ($2,100 + $360) $2,460

Supplies expense ($900 – $285) 615

NORSKI Co.

Income Statement

For the Month Ended July 31, 2017

E4-15 Analyze adjusted data

This is a partial adjusted trial balance of Barone Company

RAMON COMPANY

Debit Credit

Supplies $700

Prepaid Insurance 1,560

Salaries and Wages Payable $1,060

Unearned Service Revenue 750

Supplies Expense 950

Insurance Expense 520

Salaries and Wages Expense 1,800

Service Revenue 4,000

Instructions

Answer these questions, assuming the year begins January 1.

(a) If the amount in Supplies Expense is the January 31 adjusting entry, and

$300 of supplies was purchased in January, what was the balance in Supplies

on January 1?

(b) If the amount in Insurance Expense is the January 31 adjusting entry, and the

original insurance premium was for 1 year, what was the total premium and

when was the policy purchased?

(c ) If $2,500 of salaries was paid in January, what was the balance in Salaries and

Wages Payable at December 31, 2016?

(d) If $1,800 was received in January for services performed in January, what was

the balance in Unearned Service Revenue at December 31, 2016?

NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a “?” .

(a) Supplies expense Value

Add: Supplies (1/31) Value

Less: Supplies purchased

Value

Supplies (1/1) ?

(b) Monthly premium Value

Number of months X 12

Total premium ?

Prepaid Insurance, 1/31 Value

Monthly premium Value

Number of months remaining,1/31 ?

Date of Purchase Date

(c) Cash Paid Value

Salaries and wages payable, 1/31/17 Value

Adjusted Trial Balance

January 31, 2017

?

Less: Salaries and wages expense Value

Salaries and wages payable, 12/31/16 ?

(d) Service revenue Value

unearned revenue, 1/31/17 Value

Value

Cash received in January Value

Unearned revenue, 12/31/16 ?

After you have completed E4-15, consider the following additional question.

1. Assume that amounts for purchase of supplies, salaries paid and cash received in services performed in

January changed to $500, $1,800 and $2,800 respectively. How do these changes impact your responses?

E4-15 Solution

(a) Supplies expense $950

Add: Supplies (1/31) 700

(b) Monthly premium $520

Prepaid Insurance, 1/31 $1,560

(c) Cash Paid $2,500

Salaries and wages payable, 1/31/17 1,060

(d) Service revenue $4,000

unearned revenue, 1/31/17 750

1. Assume that amounts for purchase of supplies, salaries paid and cash received in services performed in

January changed to $500, $1,800 and $2,800 respectively. How do these changes impact your responses?

(a) Supplies expense $950

(b) Monthly premium $520

Number of months X 12

(c) Cash Paid $1,800

Salaries and wages payable, 1/31/17 1,060

(d) Service revenue $4,000

unearned revenue, 1/31/17 750

E4-21 Prepare adjusting entries from analysis of trial balance

The trial balance shown below are before and after adjustment for Ryan Company at the end of its fiscal year.

Dr. Cr. Dr. Cr.

Cash $10,900 $10,900

Accounts Receivable 8,800 9,400

Supplies 2,500 500

Prepaid Insurance 4,000 2,500

Equipment 16,000 16,000

Accumulated Depreciation – Equipment $3,600 $4,800

Accounts Payable 5,800 5,800

Salaries and Wages Payable 0 1,100

Unearned Rent Revenue 1,800 800

Common Stock 10,000 10,000

Retained Earnings

5,500 5,500

Dividends 2,800 2,800

Service Revenue 34,000 34,600

Rent Revenue 12,100 13,100

Salaries and Wages Expense 17,000 18,100

Supplies Expense 0 2,000

Rent Expense 10,800 10,800

Insurance Expense 0 1,500

Depreciation Expense 0 1,200

$72,800 $72,800 $75,700 $75,700

Instructions

Prepare the adjusting entries that were made

NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a “?” .

Aug . 31 Value

Value

Aug . 31 Value

Value

Aug . 31 Value

Value

Aug . 31 Value

Value

Aug . 31 Value

Value

Account

Before

Adjustment

After

Adjustment

RYAN COMPANY

Trial Balance

August 31, 2017

Aug . 31 Value

Value

After you have completed E4-21, consider the additional question.

1. Assume that the balance after adjustment for Accounts Receivable, Supplies, Prepaid Insurance,

and Unearned Rent Revenue changed to $9,800, $750, $2,750 and $900 respectively. Show the

impact on these changes on the adjusting entries.

Account

Rent Revenue

Depreciation Expense

Accumulated Depreciation – Equipment

Salaries and Wages Expense

Salaries and Wages Payable

Unearned Rent Revenue

E4-21 Solution

Aug . 31 600

600

Aug . 31 1,500

1,500

Accounts Receivable

Service Revenue

Insurance Expense

Prepaid Insurance

Supplies Expense

Rent Revenue

Salaries and Wages Expense

Salaries and Wages Payable

Unearned Rent Revenue

E4-21 Solution to additional question

1. Assume that the balance after adjustment for Accounts Receivable, Supplies, Prepaid Insurance,

and Unearned Rent Revenue changed to $9,800, $750, $2,750 and $900 respectively. Show the

impact on these changes on the adjusting entries.

Aug . 31 1,000

1,000

Aug . 31 1,200

1,200

Accounts Receivable

Service Revenue

Depreciation Expense

Accumulated Depreciation – Equipment

Supplies Expense

Insurance Expense

Prepaid Insurance

P4-1A Record transactions on accrual basis; convert revenue to cash receipts

The following selected data are taken from the comparative financial statements of Yankee

Curling Club. The club prepares its financial statements using the accrual basis of accounting.

2017 2016

Accounts receivable for member dues 15,000$ 19,000$

Unearned sales revenue 20,000 23,000

Service revenue (from member dues) 151,000 135,000

Dues are billed to members based upon their use of the club‘s facilities. Unearned sales

revenues arise from the sale of tickets to events, such as the Skins Game.

Instructions

(Hint: You will find it helpful to use T-accounts to analyze the following data. You must

analyze these data sequentially, as missing information must first be deduced before

moving on. Post your journal entries as you progress, rather than waiting until the end.)

(a) Prepare journal entries for each of the following events that took place during 2017.

1. Dues receivable from members from 2016 were all collected during 2017.

2. During 2017, goods were provided for all of the unearned sales revenue at the end

of 2016.

3. Additional tickets were sold for $44,000 cash during 2017, a portion of these were

used by the purchasers during the year. The entire balance remaining in Unearned

Sales Revenue relates to the upcoming Skins Game in 2017.

4. Dues for the 2016-2017 fiscal year were billed to members.

5. Dues receivable for 2017 (i.e., those billed in item (4) above ) were partially collected.

(b) Determine the amount of cash received by Yankee from the above transactions during

the year ended September 30, 2017.

NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a “?” .

(a)(1) Value

Value

(a)(2) Value

Value

(a)(3) Value

Value

(a)(4) Value

Value

(a)(5) Value

Value

(b) Cash received with respect to fees and dues

1. Collection of 2016 dues Value

Account

September 30

3. Sales of tickets Value

5. Collection of 2017 dues Value

?

1. Value 4. Value

3. Value

5. Value 2017 ?

2017 ? Bal.

Bal.

2016 Value 1. Value 2. Value

Bal. 5. Value 3. Value

4. Value

2017 ?

2017 ? Bal.

Bal.

2. Value 2016 Value

3. Value Bal.

3. Value

2017 ?

Bal.

After you have completed P4–1A, consider the following additional question.

1. Assume that the 2017 balances for Unearned sales revenue and that additional ticket sold during

the year changed to $18,000 and $48,000 respectively. Recalculate the amount of cash collected

for the year ended September 30, 2017.

Unearned Sales Revenue

Service Revenue

Sales Revenue

Cash

Accounts Receivable

Cash

Accounts Receivable

P4-1A Solution

(a)(1) 19,000

19,000

(a)(4) 151,000

151,000

(b) Cash received with respect to fees and dues

1. Collection of 2016 dues $19,000

1. 19,000 4. 151,000

3. 44,000

2016 19,000 1. 19,000 2. 23,000

2. 23,000 2016 23,000

Cash

Accounts Receivable

Service Revenue

Unearned Sales Revenue

Cash

Service Revenue

Accounts Receivable

Sales Revenue

Unearned Sales Revenue

Sales Revenue

Cash

Unearned Sales Revenue

Sales Revenue

3. 24,000 Bal.

Service Revenue

Cash

P4-1A Solution to additional question

1. Assume that the 2017 balances for unearned sales revenue and that additional ticket sold during

the year changed to $18,000 and $48,000 respectively. Recalculate the amount of cash collected

for the year ended September 30, 2017.

(a)(1) 19,000

19,000

30,000

(b) Cash received with respect to fees and dues

1. Collection of 2016 dues $19,000

1. 19,000 4. 151,000

2016 19,000 1. 19,000 2. 23,000

2. 23,000 2016 23,000

Cash

Accounts Receivable

Service Revenue

Accounts Receivable

Sales Revenue

Unearned Sales Revenue

($48,000 – $18,000)

Sales Revenue

Cash

Unearned Sales Revenue

Sales Revenue