CHAPTER 4 Completing the Accounting Cycle
Appendix 1 Ex. 4-26 (Concluded)
Current assets:
Cash $ 12
Accounts receivable 103
Supplies 4
Prepaid insurance 2
Total assets $354
Current liabilities:
Accounts payable $ 36
Wages payable 1
Total liabilities $ 37
Liabilities
Alert Security Services Co.
Balance Sheet
October 31, 20Y7
Assets
CHAPTER 4 Completing the Accounting Cycle
Appendix 1 Ex. 4-27
20Y5
Oct. 31 Accounts Receivable 13
Fees Earned 13
Accrued fees.
31 Insurance Expense 10
Prepaid Insurance 10
Insurance expired.
31 Depreciation Expense 3
Accumulated Depreciation 3
Equipment depreciation.
Appendix 1 Ex. 4-28
20Y7
Oct. 31 Fees Earned 213
Wages Expense 111
Rent Expense 12
Insurance Expense 10
31 Brenda Schultz, Capital 8
Brenda Schultz, Drawing 8
Adjusting Entries
Closing Entries
CHAPTER 4 Completing the Accounting Cycle
Prob. 4-1A
1.
Revenues:
Fees earned $631,700
Rent revenue 2,000
Total revenues $633,700
Expenses:
Salaries and wages expense $264,520
Advertising expense 34,200
Utilities expense 17,900
2.
Inez Villanueva, capital, January 1, 20Y1 $375,000
Net income for the year $266,760
PROBLEMS
Outreach Signals Company
Income Statement
For the Year Ended December 31, 20Y1
Outreach Signals Company
Statement of Owner’s Equity
For the Year Ended December 31, 20Y1
CHAPTER 4 Completing the Accounting Cycle
Prob. 4-1A (Continued)
3.
Current assets:
Cash $ 20,500
Accounts receivable 83,500
Less accumulated depreciation 416,200 370,800
Equipment $192,000
Less accumulated decpreciation 164,700 27,300
Total property, plant, and equipment 552,400
Total assets $659,460
Current liabilities:
Accounts payable $ 24,700
Salaries and wages payable 7,700
Unearned rent 1,300
Liabilities
Outreach Signals Company
Balance Sheet
December 31, 20Y1
Assets
CHAPTER 4 Completing the Accounting Cycle
Prob. 4-1A (Concluded)
4. 20Y1
Dec. 31 Fees Earned 631,700
Rent Revenue 2,000
Salaries and Wages Expense 264,520
Advertising Expense 34,200
Utilities Expense 17,900
Depreciation Expense—Building 14,200
Repairs Expense 13,930
5.
Debit Credit
Balances Balances
Cash 20,500
Accounts Receivable 83,500
Prepaid Insurance 1,900
Supplies 1,160
Land 154,300
Building 787,000
Accumulated Depreciation—Building 416,200
Outreach Signals Company
Post-Closing Trial Balance
December 31, 20Y1
Closing Entries
CHAPTER 4 Completing the Accounting Cycle
Prob. 4-2A
1.
Revenues:
Service fees $718,000
Rent revenue 12,000
Total revenues $730,000
Expenses:
Salaries expense $522,100
Rent expense 48,000
Supplies expense 10,800
Stacy Tanner, capital, July 1, 20Y2 $373,800
Net income for the year $121,500
Finders Investigative Services
Statement of Owner’s Equity
For the Year Ended June 30, 20Y3
Finders Investigative Services
Income Statement
For the Year Ended June 30, 20Y3
CHAPTER 4 Completing the Accounting Cycle
Prob. 4-2A (Continued)
Current assets:
Cash $28,000
Accounts receivable 69,600
Building $439,500
Less accumulated depreciation 44,200
Total property, plant, and building 395,300
Total assets $500,000
Current liabilities:
Accounts payable $11,700
Salaries payable 3,000
Unearned rent 2,000
Liabilities
Finders Investigative Services
Balance Sheet
June 30, 20Y3
Assets
CHAPTER 4 Completing the Accounting Cycle
Prob. 4-2A (Concluded)
2. 20Y3
June 30 Service Fees 718,000
Rent Revenue 12,000
Salaries Expense 522,100
Rent Expense 48,000
Supplies Expense 10,800
30 Stacy Tanner, Capital 12,000
Stacy Tanner, Drawing 12,000
3. $(18,000) net loss ($30,000 – $12,000). The $30,000 decrease is caused by the
$(12,000) withdrawals and an $(18,000) net loss.
Closing Entries
CHAPTER 4 Completing the Accounting Cycle
Prob. 4-3A
1., 3., and 6.
June 30 Bal. 11,000
June 30 Bal. 21,500 June 30 Adj. 17,900
30 Adj. Bal. 3,600
June 30 Bal. 125,400
30 Adj. 6,500
30
Adj. Bal.
131
,
900
June 30 Bal. 11,800
June 30 Adj. 1,100
Cash
Laundry Supplies
Prepaid Insurance
Accumulated Depreciation
Accounts Payable
Wages Payable
CHAPTER 4 Completing the Accounting Cycle
Prob. 4-3A (Continued)
June 30 Clos. 232,200 June 30 Bal. 232,200
June 30 Bal. 40,000 June 30 Clos. 40,000
June 30 Bal. 19,700 June 30 Clos. 19,700
June 30 Adj. 17,900 June 30 Clos. 17,900
Rent Expense
Utilities Expense
Laundry Revenue
Laundry Supplies Expense
Depreciation Expense
2. Optional (Appendix)
Account Title Debit Credit Debit Credit Debit Credit Debit Credit
Cash 11,000 11,000 11,000
Wages Payable (d) 1,100 1,100 1,100
Sophie Perez, Capital 105,600 105,600 105,600
Sophie Perez, Drawing 10,000 10,000 10,000
Laundry Revenue 232,200 232,200 232,200
Wages Expense 125,200 (d) 1,100 126,300 126,300
Rent Expense 40,000 40,000 40,000
Utilities Expense 19,700 19,700 19,700
Net income 10,700 10,700
232,200 232,200 261,100 261,100
Debit Credit
Trial Balance
Income
StatementAdjustments SheetTrial Balance
Epicenter Laundry
End-of-Period Spreadsheet (Work Sheet)
For the Year Ended June 30, 20Y3
BalanceUnadjusted Adjusted
CHAPTER 4 Completing the Accounting Cycle
Prob. 4-3A (Continued)
3.
20Y3
June 30 Laundry Supplies Expense 17,900
Laundry Supplies 17,900
Supplies used ($21,500 – $3,600).
30 Depreciation Expense 6,500
Accumulated Depreciation 6,500
Equipment depreciation.
4.
Debit Credit
Balances Balances
Cash 11,000
Laundry Supplies 3,600
Prepaid Insurance 3,900
Laundry Equipment 232,600
Accumulated Depreciation 131,900
Accounts Payable 11,800
Wages Payable 1,100
Sophie Perez, Capital 105,600
Sophie Perez, Drawing 10,000
Epicenter Laundry
Adjusted Trial Balance
June 30, 20Y3
Adjusting Entries
CHAPTER 4 Completing the Accounting Cycle
Prob. 4-3A (Continued)
5.
Laundry revenue $232,200
Expenses:
Wages expense $126,300
Rent expense 40,000
Utilities expense 19,700
Laundry supplies expense 17,900
Sophie Perez, capital, July 1, 20Y2 $105,600
Net income for the year $ 10,700
Statement of Owner’s Equity
For the Year Ended June 30, 20Y3
Epicenter Laundry
Income Statement
For the Year Ended June 30, 20Y3
Epicenter Laundry
CHAPTER 4 Completing the Accounting Cycle
Prob. 4-3A (Continued)
Current assets:
Cash $ 11,000
Laundry supplies 3,600
Less accumulated depreciation 131,900
Total property, plant, and equipment 100,700
Total assets $119,200
Current liabilities:
Accounts payable $ 11,800
Wages payable 1,100
Total liabilities $ 12,900
Liabilities
Epicenter Laundry
Balance Sheet
June 30, 20Y3
Assets
CHAPTER 4 Completing the Accounting Cycle
Prob. 4-3A (Concluded)
6.
20Y3
June 30 Laundry Revenue 232,200
Wages Expense 126,300
Rent Expense 40,000
Utilities Expense 19,700
7.
Debit Credit
Balances Balances
Cash 11,000
Laundry Supplies 3,600
Prepaid Insurance 3,900
Epicenter Laundry
Post-Closing Trial Balance
June 30, 20Y3
Closing Entries
CHAPTER 4 Completing the Accounting Cycle
Prob. 4-4A
1., 3., and 6.
Account No. 11
Post.
Item Ref. Debit Credit Debit Credit
20Y7
Mar. 31 Balance 12,000
Account No. 13
31 Adjusting 26 22,500 7,500
Account No. 14
Post.
Item Ref. Debit Credit Debit Credit
20Y7
Mar. 31 Balance 3,600
31 Adjusting 26 1,800 1,800
Account No. 16
Account No. 17
Post.
Item Ref. Debit Credit Debit Credit
20Y7
Mar. 31 Balance 25,000
31 Adjusting 26 8,350 33,350
Account No. 18
Account: Prepaid Insurance
Account: Accumulated Depreciation—Equipment
Account: Equipment
Date
Balance
Date
Account: Trucks
Cash
Account:
Account: Supplies
Balance
Balance
Date
CHAPTER 4 Completing the Accounting Cycle
Prob. 4-4A (Continued)
Account No. 19
Account No. 21
Post.
Item Ref. Debit Credit Debit Credit
20Y7
Mar. 31 Balance 4,000
Account No. 22
Account No. 31
Post.
Item Ref. Debit Credit Debit Credit
20Y7
Mar. 31 Balance 96,000
31 Closing 27 51,150 147,150
31 Closing 27 15,000 132,150
Account: Kaya Tarango, Capital
Balance
Date
Accumulated Depreciation—Trucks
Account:
Account: Accounts Payable
Balance
Date
Account: Wages Payable
CHAPTER 4 Completing the Accounting Cycle
Prob. 4-4A (Continued)
Account No. 41
Account No. 51
Post.
Item Ref. Debit Credit Debit Credit
20Y7
Mar. 31 Balance 45,000
31 Adjusting 26 600 45,600
31 Closing 27 45,600 — —
Account No. 52
Account No. 53
Post.
Item Ref. Debit Credit Debit Credit
20Y7
Mar. 31 Balance 10,600
31 Closing 27 10,600 — —
Account No. 54
Truck Expense
Account:
Date
Account: Service Revenue
Balance
Balance
Account: Rent Expense
Account: Wages Expense
Date
Account: Supplies Expense
CHAPTER 4 Completing the Accounting Cycle
Prob. 4-4A (Continued)
Account No. 55
Account No. 56
Post.
Item Ref. Debit Credit Debit Credit
20Y7
Mar. 31 Adjusting 26 6,200 6,200
31 Closing 27 6,200 — —
Account No. 57
31 Closing 27 1,800 — —
Account No. 59
Post.
Item Ref. Debit Credit Debit Credit
20Y7
Mar. 31 Balance 4,800
31 Closing 27 4,800 — —
Account: Depreciation Expense—Equipment
Date
Account: Miscellaneous Expense
Balance
Account: Insurance Expense
Balance
Date
Account: Depreciation Expense—Trucks
CHAPTER 4 Completing the Accounting Cycle
Prob. 4-4A (Continued)
2. Optional (Appendix)
Account Title Debit Credit Debit Credit Debit Credit Debit Credit
Cash 12,000 12,000 12,000
Accounts Payable 4,000 4,000 4,000
Wages Payable (e) 600 600 600
Kaya Tarango, Capital 96,000 96,000 96,000
Kaya Tarango, Drawing 15,000 15,000 15,000
Service Revenue 160,000 160,000 160,000
Wages Expense 45,000 (e) 600 45,600 45,600
Supplies Expense (a) 22,500 22,500 22,500
Rent Expense 10,600 10,600 10,600
Debit Credit
Trial Balance
Income
StatementAdjustments SheetTrial Balance
Lakota Freight Co.
End-of-Period Spreadsheet (Work Sheet)
For the Year Ended March 31, 20Y7
BalanceUnadjusted Adjusted