Ex4-2 Complete the worksheet
The adjusted trial balance columns of the worksheet for Savaglia Company are as follows.
SAVAGLIA COMPANY
Account Titles Dr. Cr. Dr. Cr. Dr. Cr.
Cash 10,000
Accounts Receivable 7,840
Prepaid Rent 2,280
Equipment 23,050
Accumulated Depreciation – Equipment 4,900
Notes Payable 5,700
Accounts Payable 4,920
Owner’s Capital 27,960
Owner’s Drawings 3,650
Service Revenue 15,590
Salaries and Wages Expense 10,840
Rent Expense 760
Depreciation Expense 671
Interest Expense 57
Interest Payable 57
Totals 59,127 59,127
Instructions:
Complete the worksheet.
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a “?” .
Account Titles Dr. Cr. Dr. Cr. Dr. Cr.
Cash 10,000 ?
Accounts Receivable 7,840 ?
Prepaid Rent 2,280 ?
Equipment 23,050 ?
Accumulated Depreciation – Equipment 4,900 ?
Notes Payable 5,700 ?
Accounts Payable 4,920 ?
Owner’s Capital 27,960 ?
Owner’s Drawings 3,650 Value
Service Revenue 15,590 ?
Salaries and Wages Expense 10,840 ?
Rent Expense 760 ?
Depreciation Expense 650 ?
Interest Expense 57 ?
Interest Payable 57 Value
Totals 59,127 59,127 ? ? ? ?
Net income ? Value
Totals ? ? ? ?
After you have completed the requirements of E4-2, consider these additional questions.
Answers are on the other tab in this file.
1. Suppose Accounts Receivable balance changed to $10,840 and Service Revenue changed to $18,590, what is the impact on the Income Statement and
the Balance Sheet?
2. Suppose Savaglia received a utility bill for $375 which they failed to record. What is the impact on the Income Statement and the Balance Sheet?
For the Month Ended April 30, 2017
Adjusted Trial Balance
Income Statement
Balance Sheet
Worksheet (Partial)
Adjusted Trial Balance
Income Statement
Balance Sheet
Worksheet (Partial)
SAVAGLIA COMPANY
For the Month Ended April 30, 2017
Ex 4-2 Solution
Account Titles Dr. Cr. Dr. Cr. Dr. Cr.
Cash 10,000 10,000
Accounts Receivable 7,840 7,840
Owner’s Drawings 3,650 3,650
Service Revenue 15,590 15,590
Salaries and Wages Expense 10,840 10,840
Rent Expense 760 760
SAVAGLIA COMPANY
Worksheet (Partial)
Adjusted Trial Balance
Income Statement
Balance Sheet
For the Month Ended April 30, 2017
Ex 4-2 Solution to additional questions
1. Suppose Accounts Receivable balance changed to $10,840 and Service Revenue changed to $18,590, what is the impact on the Income Statement and
the Balance Sheet?
Account Titles Dr. Cr. Dr. Cr. Dr. Cr.
Cash 10,000 10,000
Accounts Receivable 10,840 10,840
Owner’s Drawings 3,650 3,650
Service Revenue 18,590 18,590
Salaries and Wages Expense 10,840 10,840
2.
Account Titles Dr. Cr. Dr. Cr. Dr. Cr.
Cash 10,000 10,000
Accounts Receivable 7,840 7,840
Prepaid Rent 2,280 2,280
Equipment 23,050 23,050
Service Revenue 15,590 15,590
Salaries and Wages Expense 10,840 10,840
Rent Expense 760 760
Suppose Savaglia received a utility bill for $375 which they failed to record. What is the impact on the Income Statement and the Balance Sheet?
SAVAGLIA COMPANY
Worksheet (Partial)
For the Month Ended April 30, 2017
Adjusted Trial
Income
Balance Sheet
SAVAGLIA COMPANY
Worksheet (Partial)
For the Month Ended April 30, 2017
Adjusted Trial
Income
Balance Sheet
Ex 4-3 Prepare financial statements from worksheet
Worksheet data for Savaglia Company are presented below. The owner did not make any additional investments in the business in April.
Account Titles Dr. Cr. Dr. Cr. Dr. Cr.
Cash 10,000
Accounts Receivable 7,840
Prepaid Rent 2,280
Equipment 23,050
Accumulated Depreciation – Equip 4,900
Notes Payable 5,700
Accounts Payable 4,920
Owner’s Capital 27,960
Owner’s Drawings 3,650
Service Revenue 15,590
Salaries and Wages Expense 10,840
Rent Expense 760
Depreciation Expense 650
Interest Expense 57
Interest Payable 57
Totals 59,127 59,127
Instructions:
Prepare an income statement, an owner’s equity statement, and a classified balance sheet.
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
Rent Expense Value
Depreciation expense Value
Interest expense Value
Total expenses ?
Net income ?
Owner’s Capital, April 1 Value
Add: Net income Value
?
Less: Drawings Value
Owner’s Capital, April 30 ?
Current assets
Cash Value
Accounts receivable Value
Prepaid rent Value
Total current assets ?
Property, plant, and equipment
Equipment Value
Less: Accumulated depreciation – equipment Value ?
Total assets ?
Current liabilities
Notes payable Value
Accounts payable Value
SAVAGLIA COMPANY
SAVAGLIA COMPANY
Income Statement
For the Month Ended April 30, 2017
SAVAGLIA COMPANY
Adjusted Trial Balance
For the Month Ended April 30, 2017
Worksheet (Partial)
Income Statement
Balance Sheet
Liabilities and Owner’s Equity
Owner’s Equity Statement
For the Month Ended April 30, 2017
SAVAGLIA COMPANY
Balance Sheet
April 30, 2017
Assets
Interest payable Value
Total current liabilities ?
Owner’s Equity
Owner’s Capital Value
Total liabilities and owner’s equity ?
After you have completed the requirements of E4-3, consider these additional questions.
Answers are on the other tab in this file.
1. Suppose Accounts Receivable balance changed to $10,840 and Service Revenue changed to $18,590, what is the impact on the Income Statement and
the Balance Sheet?
2. Suppose Savaglia received a utility bill for $375 which they failed to record. What is the impact on the Income Statement and the Balance Sheet
Ex 4-3 Solution
Revenues
Service revenue 15,590$
Expenses
Salaries and wages expense 10,840$
Rent Expense 760
Owner’s Capital, April 1 27,960$
Add: Net income 3,283
Current assets
Cash 10,000$
Accounts receivable 7,840
Prepaid rent 2,280
SAVAGLIA COMPANY
Balance Sheet
April 30, 2017
Assets
Liabilities and Owner’s Equity
For the Month Ended April 30, 2017
SAVAGLIA COMPANY
Owner’s Equity Statement
SAVAGLIA COMPANY
Income Statement
For the Month Ended April 30, 2017
Interest payable 57
E4-3 Solution to Additional Questions
1. Suppose Accounts Receivable balance changed to $10,840 and Service Revenue changed to $18,590, what is the impact on the Income Statement and
the Balance Sheet?
Revenues
Service revenue 18,590$
Expenses
Salaries and wages expense 10,840$
Owner’s Capital, April 1 27,960$
Add: Net income 6,283
Less: Drawings 3,650
Owner’s Capital, April 30 30,593$
Current assets
Cash 10,000$
Accounts receivable 10,840
Prepaid rent 2,280
Less: Accumulated depreciation – equipment 4,900 18,150
Total current assets $23,120
Current liabilities
Notes payable 5,700$
Accounts payable 4,920
Interest payable 57
Owner’s Capital 30,593
Utilities expense 375
2. Suppose Savaglia received a utility bill for $375 which they failed to record. What is the impact on the Income Statement and the Balance Sheet
Revenues
Service revenue 15,590$
Expenses
Salaries and wages expense 10,840$
For the Month Ended April 30, 2017
SAVAGLIA COMPANY
SAVAGLIA COMPANY
Income Statement
For the Month Ended April 30, 2017
For the Month Ended April 30, 2017
Assets
Owner’s Equity Statement
Income Statement
SAVAGLIA COMPANY
SAVAGLIA COMPANY
Balance Sheet
April 30, 2017
Liabilities and Owner’s Equity
Interest expense 57
Net income 6,283$
Net income 2,908$
Owner’s Capital, April 1 27,960$
Current assets
Cash 10,000$
Accounts receivable 7,840
Prepaid rent 2,280
Less: Accumulated depreciation – equipment 4,900 18,150
Total current assets 20,120$
Property, plant, and equipment
Interest payable 57
Owner’s Capital 27,218
Current liabilities
Notes payable 5,700$
April 30, 2017
Assets
Liabilities and Owner’s Equity
SAVAGLIA COMPANY
Owner’s Equity Statement
For the Month Ended April 30, 2017
SAVAGLIA COMPANY
Balance Sheet
Add: Net income 2,908
Less: Drawings 3,650
Owner’s Capital, April 30 27,218$
P4-1A Prepare a worksheet, financial statements, and adjusting and closing entries
The trial balance columns of the worksheet for Warren Roofing at March 31, 2017 are as follows.
Account Titles Dr. Cr.
4,500
3,200
2,000
11,000 1,250
2,500 550
12,900
1,100 6,300
1,300 400
23,500 23,500
Other data:
1. A physical count reveals only $480 of roofing supplies on hand.
2. Depreciation for March is $250.
3. Unearned service revenue amounted to $260 at March 31.
4. Accrued salaries are $700.
Instructions:
(a) Enter the trial balance on a worksheet and complete the worksheet.
(b) Prepare an income statement and owner’s equity statement for the month of March
and a classified balance sheet at March 31. T. Warren made an additional investment
in the business of $10,000 in March.
(c) Journalize the adjusting entries from the adjustments columns of the worksheet.
(d) Journalize the closing entries from the financial statement columns of the worksheet.
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a “?” .
(a)
Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr.
4,500 Value Value
3,200 Value Value
2,000 Value ? Value
11,000 Value Value `
1,250 Value ? Value
2,500 Value Value
550 Value ? Value
12,900 Value Value
1,100 Value Value
6,300 Value ? Value
1,300 Value ? Value
400 Value Value
Totals 23,500 23,500
Supplies Expense Value Value Value
Depreciation Expense Value Value
Salaries and Wages Payable Value Value Value
Totals ? ? ? ? ? ? ?
Net income Value
Totals ? ? ?
(b)
Value
Value
Value
Value
Value
?
?
Value
Value
Value ?
?
Value
Owner’s Capital, March 1
Add: Investments
Net income
Less: Drawings
Owner’s Capital
Owner’s Equity Statement
For the Month Ended March 31, 2017
WARREN ROOFING
Unearned Service Revenue
WARREN ROOFING
Revenues
Service Revenues
Expenses
Salaries and wages expense
Supplies expense
Miscellaneous expense
Depreciation expense
Total expenses
Net income
Income Statement
For the Month Ended March 31, 2017
Service Revenue
Salaries and Wages Expense
Miscellaneous Expense
Service Revenue
Owner’s Drawings
Cash
Accounts Receivable
Supplies
WARREN ROOFING
Worksheet
For the Month Ended March 31, 2017
Income Statement
Balance Sheet
Trial Balance
Adjustments
Adjusted Trial Balance
Equipment
Accumulated Depreciation-Equipment
Accounts Payable
Account Titles
Cash
WARREN ROOFING
Worksheet
For the Month Ended March 31, 2017
Salaries and Wages Expense
Trial Balance
Miscellaneous Expense
Accounts Receivable
Supplies
Equipment
Accumulated Depreciation-Equipment
Accounts Payable
Unearned Service Revenue
Owner’s Capital
Owner’s Drawings
?
Value
Value
Value
?
Value
Value ?
?
Value
Value
Value
?
Value
?
(c ) Adjusting entries:
Mar 31 Account Value Value
Mar 31 Value Value
Mar 31 Value Value
Mar 31 Value Value
(d) Closing entries:
Mar 31 Value Value
Mar 31 Value Value
Value
Value
Value
Mar 31 Value Value
Mar 31 Value Value
After you have completed the requirements of P4-1A, consider these additional questions.
Answers are on the other tab in this file.
1. Suppose the March 31 balance of Supplies changed to $750, show how this changes the Worksheet, Income Statement, the Balance Sheet,
adjusting and closing entries.
2. Suppose the March 31 balance of Unearned Service Revenue changed to $350, show how this changes the Worksheet, Income Statement, the Balance Sheet,
adjusting and closing entries.
Account
Account
Account
Account
Account
Account
Account
Account
Account
Account
Account
Account
Account
Account
Account
Account
Account
Account
Owner’s capital
Total liabilities and owner’s equity
Owner’s Capital, March 31
Current liabilities
Accounts payable
Salaries and wages payable
Unearned service revenue
Total current liabilities
Owner’s equity
Liabilities and Owner’s Equity
Current Assets
Equipment
Less: Accumulated depreciation -equipment
Total assets
WARREN ROOFING
Balance Sheet
March 31, 2017
Assets
Cash
Accounts receivable
Supplies
Total current assets
Property, plant and equipment
Salaries and Wages Expense
Miscellaneous Expense
Service Revenue
P4-1A Solution
(a)
Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr.
4,500 4,500 4,500
550 (c) 290 260 260
12,900 12,900 12,900
23,500 23,500
Supplies Expense (a) 1,520 1,520 1,520
Depreciation Expense (b) 250 250 250
Supplies expense
Miscellaneous expense
(b)
6,590$
2,000$
2,900$
10,000$
4,500$ 3,200
Property, plant and equipment
Equipment
2,500$ 700
Owner’s equity
Current liabilities
Accounts payable
Salaries and wages payable
WARREN ROOFING
Worksheet
For the Month Ended March 31, 2017
Balance Sheet
Liabilities and Owner’s Equity
March 31, 2017
Assets
Current Assets
Cash
Accounts receivable
Balance Sheet
WARREN ROOFING
Owner’s Equity Statement
For the Month Ended March 31, 2017
WARREN ROOFING
WARREN ROOFING
Income Statement
For the Month Ended March 31, 2017
Revenues
Service Revenues
Expenses
Salaries and wages expense
Owner’s Capital, March 1
Add: Investments
Income Statement
Cash
Adjusted Trial
Balance
Unearned Service Revenue
Owner’s Capital
Owner’s Drawings
Trial Balance
Adjustments
Account Titles
Accounts Receivable
Supplies
Equipment
Accumulated Depreciation-Equipment
Accounts Payable
Owner’s Drawing
Mar 31 Supplies Expense 1,520 1,520
(d) Closing entries:
Mar 31 Service Revenue 6,590 6,590
Mar 31 Income Summary 4,170 2,000
Mar 31 Income Summary 2,420 2,420
Supplies
Income Summary
Owner’s Capital
Service Revenue
P4-1A Solution to additional questions
1. Suppose the March 31 balance of Supplies changed to $750, show how this changes the Worksheet, Income Statement, the Balance Sheet,
adjusting and closing entries.
(a)
Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr.
4,500 4,500 4,500
3,200 3,200 3,200
1,100 1,100 1,100
6,300 ( c) 290 6,590 6,590
1,300 (d) 700 2,000 2,000
400 400 400
23,500 23,500
Salaries and wages expense
Supplies expense
Miscellaneous expense
(b)
6,590$
2,900$
10,000$
4,500$ 3,200
Property, plant and equipment
2,500$ 700
Salaries and wages payable
Income Statement
Balance Sheet
Cash
Accounts Receivable
WARREN ROOFING
Income Statement
For the Month Ended March 31, 2017
Revenues
WARREN ROOFING
Owner’s Equity Statement
For the Month Ended March 31, 2017
Owner’s Capital, March 1
Service Revenues
Expenses
WARREN ROOFING
Worksheet
For the Month Ended March 31, 2017
Trial Balance
Adjustments
Adjusted Trial
Balance
Account Titles
Salaries and Wages Expense
Miscellaneous Expense
Owner’s Drawings
Service Revenue
March 31, 2017
Assets
Current Assets
Cash
Accounts receivable
Add: Investments
WARREN ROOFING
Balance Sheet
Current liabilities
Accounts payable
Liabilities and Owner’s Equity
Equipment
Accumulated Depreciation-Equipment
Accounts Payable
Owner’s Capital
Depreciation Expense
Miscellaneous Expense
Owner’s Capital
(c ) Adjusting entries:
Mar 31 Supplies Expense 1,250 1,250
(d) Closing entries:
Mar 31 Income Summary 3,900 2,000
2. Suppose the March 31 balance of Unearned Service Revenue changed to $350, show how this changes the Worksheet, Income Statement, the Balance Sheet,
adjusting and closing entries.
(a)
Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr.
Cash 4,500 4,500 4,500
Accounts Receivable 3,200 3,200 3,200
Supplies 2,000 (a) 1,520 480 480
Owner’s Drawings 1,100 1,100 1,100
Service Revenue 6,300 ( c) 200 6,500 6,500
Salaries and Wages Expense 1,300 (d) 700 2,000 2,000
Miscellaneous Expense 400 400 400
23,500 23,500
Salaries and Wages Payable (d) 700 700 700
Salaries and wages expense
Supplies expense
Miscellaneous expense
(b)
6,500$
Add: Investments
2,900$
Supplies
WARREN ROOFING
Worksheet
For the Month Ended March 31, 2017
Account Titles
Adjusted Trial
Balance
Adjustments
Income Statement
Balance Sheet
Trial Balance
Salaries and Wages Expense
Revenues
Service Revenues
Expenses
WARREN ROOFING
Income Statement
For the Month Ended March 31, 2017
Owner’s Capital, March 1
WARREN ROOFING
WARREN ROOFING
Owner’s Equity Statement
For the Month Ended March 31, 2017
Balance Sheet
March 31, 2017
Assets
4,500$
3,200$ 480$ 8,180$
2,500$ 700
350
Owner’s equity
Total current liabilities
Owner’s Capital
(c ) Adjusting entries:
Mar 31 Unearned Service Revenue 200
Service Revenue 200
(d) Closing entries:
Supplies
Total current assets
Current Assets
Cash
Accounts receivable
Liabilities and Owner’s Equity
Current liabilities
Accounts payable
Salaries and wages payable
Unearned service revenue
Property, plant and equipment
Equipment
Less: Accumulated depreciation -equipment