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EXERCISE 4-7
(a) Service Revenue .................................................... 4,300
Income Summary ............................................. 4,300
Income Summary ................................................... 3,416
Salaries and Wages Expense ......................... 1,260
(b) VICTORIA LEE COMPANY
Post-Closing Trial Balance
June 30, 2017
Account Titles
Debit
Credit
Cash ........................................................................ $3,712
Accounts Receivable ............................................. 3,904
EXERCISE 4-8
(a)
General Journal J15
Date
Account Titles
Ref.
Debit
Credit
July 31
Service Revenue .................................
400
64,000
Rent Revenue ......................................
429
6,500
Income Summary .......................
350
70,500
31
Owner’s Capital ..................................
301
8,100
Income Summary .......................
350
8,100
(b)
Owner’s Capital No. 301
Date
Explanation
Ref.
Debit
Credit
Balance
July 31
Balance
✓
45,200
Income Summary No. 350
Date
Explanation
Ref.
Debit
Credit
Balance
July 31
Close revenue
J15
70,500
70,500
EXERCISE 4-8 (Continued)
(c) OKABE COMPANY
Post-Closing Trial Balance
July 31, 2017
Debit
Credit
Cash ..................................................................... $9,840
Accounts Receivable .......................................... 8,780
EXERCISE 4-9
(a) OKABE COMPANY
Income Statement
For the Year Ended July 31, 2017
Revenues
Service revenue........................................... $64,000
Rent revenue ............................................... 6,500
Total revenues ..................................... $70,500
EXERCISE 4-9 (Continued)
OKABE COMPANY
Owner’s Equity Statement
For the Year Ended July 31, 2017
Owner’s Capital, August 1, 2016 ....................... $45,200
Less: Net loss .................................................... $ 8,100
(b) OKABE COMPANY
Balance Sheet
July 31, 2017
Assets
Current assets
Cash................................................................ $9,840
Accounts receivable ...................................... 8,780
Total current assets ............................... $18,620
Property, plant, and equipment
Liabilities and Owner’s Equity
Current liabilities
Accounts payable .......................................... $4,220
EXERCISE 4-10
1. False “Analyze business transactions” is the first step in the accounting
cycle.
2. False. Reversing entries are an optional step in the accounting cycle.
3. True.
EXERCISE 4-11
(a) June 30 Service Revenue ................................... 18,100
Income Summary ........................... 18,100
30 Income Summary .................................. 13,100
Salaries and Wages Expense ....... 8,800
(b)
Income Summary
June 30 13,100
June 30 18,100
EXERCISE 4-12
(a) 1. Cash ................................................................. 700
Equipment ............................................... 700
Cash ................................................................. 1,000
Accounts Receivable .............................. 1,000
(b) 1. Salaries and Wages Expense ......................... 700
Equipment ............................................... 700
2. Service Revenue .............................................. 100
EXERCISE 4-13
1. Accounts Payable ($750 – $570) ............................. 180
Cash .................................................................. 180
EXERCISE 4-14
(a) MCCOY BOWLING ALLEY
Balance Sheet
December 31, 2017
Assets
Current assets
Cash ............................................. $18,040
Accounts receivable ................... 14,520
EXERCISE 4-14 (Continued)
MCCOY BOWLING ALLEY
Balance Sheet (Continued)
December 31, 2017
Liabilities and Owner’s Equity
Current liabilities
Notes payable(due 2018) .................................. $20,000
Accounts payable ............................................. 12,300
(b) Current assets exceed current liabilities by only $1,140 ($37,240 –
$36,100). However, approximately 50% of current assets are in the form
of cash. The company’s liquidity appears to be reasonably good, but
some caution is needed.
EXERCISE 4-15
CL
Accounts payable
PPE
Accumulated depreciation–
equipment
CA
Accounts receivable
PPE
Buildings
EXERCISE 4-16
J. PINEDA COMPANY
Balance Sheet
December 31, 2017
(in thousands)
Assets
Current assets
Cash ............................................................ $ 2,668
Short-term investments ............................. 3,690
Accounts receivable .................................. 1,696
Liabilities and Owner’s Equity
Current liabilities
Notes payable (due in 2018) ...................... $ 500
Accounts payable ...................................... 1,444
Total current liabilities ....................... $ 1,944
EXERCISE 4-17
(a)
BASTEN COMPANY
Income Statement
For the Year Ended July 31, 2017
Revenues
Service revenue ....................................... $63,000
Rent revenue ............................................ 8,500
BASTEN COMPANY
Owner’s Equity Statement
For the Year Ended July 31, 2017
Owner’s Capital, August 1, 2016 .................... $51,200
Less: Net loss ................................................. $3,800
EXERCISE 4-17 (Continued)
(b)
BASTEN COMPANY
Balance Sheet
July 31, 2017
Assets
Current assets
Cash ................................................................ $14,200
Accounts receivable ...................................... 9,780
Total current assets ............................... $23,980
Liabilities and Owner’s Equity
Current liabilities
Accounts payable .......................................... $4,100
Salaries and wages payable .......................... 2,080
*EXERCISE 4-18
(a) Dec. 31 Salaries and Wages Expense
($12,000 X 2/5) ...................................... 4,800
Salaries and Wages Payable .......... 4,800
Cash ................................................. 12,000
(b) Dec. 31 Salaries and Wages Expense ................. 4,800
Salaries and Wages Payable .......... 4,800
*EXERCISE 4-19
(a) Dec. 31 Service Revenue ..................................... 92,500
Income Summary ............................ 92,500
*EXERCISE 4-19 (Continued)
(c) & (e)
Accounts Receivable
Dec. 31 Balance *19,500
31 Adjusting 5,000
24,500
Jan. 1 Reversing 5,000
Interest Payable
Dec. 31 Adjusting 2,200
Jan. 1 Reversing 2,200
(d) (1)
Jan. 10 Cash .............................................................. 5,000
Service Revenue ................................... 5,000
(2)
15 Interest Expense .......................................... 3,000
Cash ....................................................... 3,000
(a) WARREN ROOFING
Worksheet
For the Month Ended March 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
Accumulated
Depreciation—Equipment
Accounts Payable
Salaries and Wages
Expense
4,500
1,300
1,250
2,500
(d) 700
(b) 250
4,500
2,000
1,500
2,500
2,000
4,500
1,500
2,500
Key: (a) Supplies Used; (b) Depreciation Expensed; (c) Service Revenue Recognized; (d) Salaries Accrued.
PROBLEM 4-1A (Continued)
(b) WARREN ROOFING
Income Statement
For the Month Ended March 31, 2017
Revenues
Service revenue.................................................. $6,590
Expenses
Salaries and wages expense ............................. $2,000
WARREN ROOFING
Owner’s Equity Statement
For the Month Ended March 31, 2017
Owner’s Capital, March 1 ....................................... $ 2,900
WARREN ROOFING
Balance Sheet
March 31, 2017
Assets
Current assets
Cash .................................................................... $4,500
Accounts receivable .......................................... 3,200
PROBLEM 4-1A (Continued)
WARREN ROOFING
Balance Sheet (Continued)
March 31, 2017
Liabilities and Owner’s Equity
Current liabilities
Accounts payable ................................................. $2,500
Salaries and wages payable ................................ 700
(c) Mar. 31 Supplies Expense ....................................... 1,520
Supplies ............................................... 1,520
31 Depreciation Expense ................................ 250
Accumulated Depreciation—
Equipment ........................................ 250
(d) Mar. 31 Service Revenue ......................................... 6,590
Income Summary ................................ 6,590
31 Income Summary ........................................ 4,170
Salaries and Wages Expense ............. 2,000
PROBLEM 4-2A
(a) THAO COMPANY
Partial Worksheet
For the Year Ended December 31, 2017
Account
Adjusted
Trial Balance
Income
Statement
Balance
Sheet
No.
Titles
Dr.
Cr.
Dr.
Cr.
Dr.
Cr.
101
Cash
5,300
5,300
112
Accounts Receivable
10,800
10,800
158
Acc. Depr.—Equip.
5,600
5,600
200
Notes Payable
15,000
15,000
201
Accounts Payable
6,100
6,100
212
Salaries and Wages
Payable
2,400
2,400
230
Interest Payable
600
600
722
Insurance Expense
3,500
3,500
726
Salaries and Wages
Expense
28,000
28,000
PROBLEM 4-2A (Continued)
(b) THAO COMPANY
Income Statement
For the Year Ended December 31, 2017
Revenues
Service revenue ............................................. $61,000
Expenses
Salaries and wages expense ........................ $28,000
Advertising expense ..................................... 8,400
THAO COMPANY
Owner’s Equity Statement
For the Year Ended December 31, 2017
Owner’s Capital, January 1 .................................................... $13,000
PROBLEM 4-2A (Continued)
THAO COMPANY
Balance Sheet
December 31, 2017
Assets
Current assets
Cash ............................................................... $ 5,300
Accounts receivable ..................................... 10,800
Liabilities and Owner’s Equity
Current liabilities
Notes payable ................................................ $5,000
Accounts payable ......................................... 6,100
PROBLEM 4-2A (Continued)
(c)
General Journal J14
Date
Account Titles and Explanation
Ref.
Debit
Credit
31
Income Summary ................................
350
50,100
31
Income Summary ................................
350
10,900
Owner’s Capital ..........................
301
10,900
(d)
Owner’s Capital No. 301
Date
Explanation
Ref.
Debit
Credit
Balance
Jan. 1
Balance
13,000
13,000
Owner’s Drawings No. 306
Date
Explanation
Ref.
Debit
Credit
Balance
Dec. 31
Balance
7,000
7,000
