PROBLEM 4-3B (Continued)
Insurance Expense
8/31 1,500
Depreciation Expense
8/31 2,650
PROBLEM 4-3B (Continued)
(c) DEATH VALLEY RESORT
Adjusted Trial Balance
August 31, 2014
Debit Credit
Cash …………………………………………………………
.
Accounts Receivable ………………………………..
.
.
.
Accumulated Depreciation—Buildings ………
.
Equipment ………………………………………………..
.
Accumulated Depreciation—Equipment …….
.
Accounts Payable …………………………………….
.
Dividends …………………………………………………
.
Rent Revenue …………………………………………..
.
Salaries and Wages Expense …………………….
.
Utilities Expense ……………………………………….
.
.
$ 24,600
1,600
36,000
5,000
53,600
9,400
$ 1,650
1,000
6,500
85,600
PROBLEM 4-3B (Continued)
(d) DEATH VALLEY RESORT
Income Statement
For the Three Months Ended August 31, 2014
Revenues
Rent revenue ………………………………………….. $85,600
Expenses
Salaries and wages expense ……………………. $53,600
Utilities expense ……………………………………… 9,400
DEATH VALLEY RESORT
Retained Earnings Statement
For the Three Months Ended August 31, 2014
Retained earnings, June 1 …………………………….. $ 0
Add: Net income …………………………………………. 10,850
PROBLEM 4-3B (Continued)
DEATH VALLEY RESORT
Balance Sheet
August 31, 2014
Assets
Current assets
Cash ……………………………………. $ 24,600
Accounts receivable ……………. 1,600
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable …………………………………. $ 6,500
Unearned rent revenue …………………………. 2,800
Stockholders’ equity
Common stock …………………………………….. 100,000
(e) The following accounts would be closed:
Rent Revenue, Salaries and Wages Expense, Utilities Expense, Mainte-
nance and Repairs Expense, Supplies Expense, Depreciation Expense,
Insurance Expense, Interest Expense, Dividends.
PROBLEM 4-4B
(a) Dec. 31 Accounts Receivable ……………………………… 3,000
Service Revenue ……………………………… 3,000
31 Depreciation Expense …………………………….. 5,000
Accumulated Depreciation—
Equipment ……………………………………. 5,000
31 Interest Expense ……………………………………. 560
Interest Payable ………………………………. 560
(b) ABDULLA ADVERTISING AGENCY
Income Statement
For the Year Ended December 31, 2014
Revenues
Service revenue……………………………………….. $62,500
Expenses
Salaries and wages expense …………………….. $9,820
PROBLEM 4-4B (Continued)
ABDULLA ADVERTISING AGENCY
Retained Earnings Statement
For the Year Ended December 31, 2014
Retained earnings, January 1 ………………………… $ 5,500
Add: Net income …………………………………………. 38,810
44,310
ABDULLA ADVERTISING AGENCY
Balance Sheet
December 31, 2014
Assets
Current assets
Cash ……………………………………………………….. $11,000
Accounts receivable ………………………………… 19,000
Liabilities and Stockholders’ Equity
Current liabilities
Notes payable ………………………………………….. $ 8,000
Accounts payable ……………………………………. 2,000
PROBLEM 4-4B (Continued)
(c) Service Revenue, Salaries and Wages Expense, Depreciation Expense,
Rent Expense, Supplies Expense, Insurance Expense, Interest Expense,
Dividends.
PROBLEM 4-5B
1. Dec. 31 Insurance Expense …………………………………. 6,000
Prepaid Insurance ……………………………. 6,000
[($11,400 ÷ 3) = $3,800
2. Dec. 31 Unearned Rent Revenue …………………………. 90,000
Rent Revenue ………………………………….. 90,000
[Nov. 5 X $6,000 X 2 = 60,000
3. Dec. 31 Interest Expense …………………………………….. 750
4. Dec. 31 Salaries and Wages Expense ………………….. 2,496
Salaries and Wages Payable …………….. 2,496
PROBLEM 4-6B
(a) 1. April 30 Service Revenue ………………………………….. 75,000
Unearned Service Revenue ……………… 75,000
2. 30 Supplies Expense ………………………………… 7,200
Supplies ($9,800 – $2,600) …………………. 7,200
PROBLEM 4-6B (Continued)
(b) TUTORS-PLUS TEST PREP
Income Statement
For the Quarter Ended April 30, 2014
Revenues
Service revenue ($240,000 – $75,000) ……………… $165,000
Expenses
Salaries and wages expense
($92,000 + $4,140) ………………………………………… $96,140
Income tax expense ……………………………………….. 15,200
(c) The generally accepted accounting principles pertaining to the income
statement not recognized by Jan were the revenue recognition principle
and the expense recognition principle.
PROBLEM 4-7B
(a), (c) & (e)
Cash
8/1 Bal. 6,040
8/10 3,120
Accounts Receivable
8/1 Bal. 2,910
8/5 1,200
Supplies
8/1 Bal. 1,030
8/31 930
Equipment
8/1 Bal. 10,000
Accumulated Depreciation
—
Equipment
A
ccounts Payable
8/20 2,000 8/1 Bal. 2,300
Unearned
Service Revenue
8/31 800 8/1 Bal. 1,260
Salaries and Wages Payable
8/10 1,420 8/1 Bal. 1,420
Common Stock
8/1 Bal. 10,000
Retained Earnings
8/1 Bal. 4,400
8/31 Bal. 4,400
PROBLEM 4-7B (Continued)
Service Revenue
8/12 2,800
8/27 3,130
Salaries and Wages Expense
8/10 1,700
8/25 2,900
PROBLEM 4-7B (Continued)
(b) General Journal
Date Account Titles Debit Credit
Aug. 5 Cash ……………………………………………………….
.
Accounts Receivable ………………………..
.
1,200
1,200
.
.
.
.
15 Equipment ………………………………………………
.
Accounts Payable …………………………….
.
2,000
2,000
.
.
.
25 Salaries and Wages Expense …………………..
.
Cash ………………………………………………..
.
2,900
2,900
27 Accounts Receivable……………………………….
.
Service Revenue ………………………………
.
3,130
3,130
.
PROBLEM 4-7B (Continued)
(d) & (f) D & D REPAIR SERVICES
Trial Balances
August 31, 2014
Before
Adjustment
After
Adjustment
Dr. Cr. Dr. Cr.
Cash ……………………………………..
Accounts Receivable ……………..
Supplies ………………………………..
Salaries and Wages Payable …..
Common Stock ………………………
Retained Earnings ………………….
Service Revenue ……………………
Salaries and Wages Expense ….
$ 2,420
4,840
1,890
4,600
10,000
4,400
5,930
$ 2,420
4,840
960
6,140
1,540
10,000
4,400
6,730
(e) 1.
Aug. 31 Supplies Expense ……………………………………. 930
Supplies ($1,890 – $960) ……………………. 930
PROBLEM 4-7B (Continued)
(g) D & D REPAIR SERVICES
Income Statement
For the Month Ended August 31, 2014
Revenues
Service revenue………………………………………..
($6,730)
Expenses
Salaries and wages expense …………………….. $6,140
D & D REPAIR SERVICES
Retained Earnings Statement
For the Month Ended August 31, 2014
Retained earnings, August 1 …………………………… $4,400
PROBLEM 4-7B (Continued)
D & D REPAIR SERVICES
Balance Sheet
August 31, 2014
Assets
Current assets
Cash ………………………………………………………. $ 2,420
Accounts receivable ……………………………….. 4,840
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable ………………………………………… $ 3,160
PROBLEM 4-8B
(a)
General Journal
Date Account Titles Debit Credit
Mar. 1 Cash ………………………………………………………..
.
Common Stock …………………………………
.
15,000
15,000
.
.
14 Accounts Receivable ……………………………….
.
Service Revenue ……………………………….
.
3,700
3,700
18 Accounts Payable…………………………………….
.
Cash …………………………………………………
.
2,000
2,000
.
.
.
.
.
31 Maintenance and Repairs Expense …………..
.
Cash …………………………………………………
.
350
350
31 Dividends ………………………………………………..
.
Cash …………………………………………………
.
900
900
PROBLEM 4-8B (Continued)
(b), (e) & (h)
Cash
3/1 15,000
3/21 1,600
3/1 3,000
3/5 2,400
Accounts Receivable
3/14 3,700
3/21 1,600
Prepaid Insurance
3/5 2,400 3/31 400
3/31 Bal. 2,000
Accumulated Depreciation—
Equipment
3/31 250
A
ccounts Payable
3/18 2,000 3/1 5,000
3/3 2,000
Common Stock
Retained Earnings
3/31 900 3/31 2,550
Dividends
3/31 900 3/31 900
3/31 Bal. 0
Income Summary
Service Revenue
3/31 8,100 3/14 3,700
3/28 4,200
3/31 200
PROBLEM 4-8B (Continued)
Maintenance and Repairs
Expense
Supplies Expense
Depreciation Expense
Insurance Expense
3/31 400 3/31 400
3/31 Bal. 0
Salaries and Wages Expense
3/20 1,750
3/31 2,830
(c) & (f) GEOG CLEANERS
Trial Balance
March 31, 2014
Before
Adjustment
A
fter
Adjustment
Debit Credit Debit Credit
Cash ……………………………………………….
Accounts Receivable ………………………
Accumulated Depreciation—
Equipment ……………………………………
Accounts Payable …………………………..
Maintenance and Repairs Expense ….
Salaries and Wages Expense …………..
Depreciation Expense ……………………..
$ 6,200
6,300
350
1,750
$ 5,000
$ 6,200
6,500
350
2,830
250
$ 250
5,000
PROBLEM 4-8B (Continued)
(d)
General Journal
Date Account Titles Debit Credit
1. March 31 Accounts Receivable………………………..
200
3. 31 Insurance Expense …………………………..
Prepaid Insurance
400
5. 31 Salaries and Wages Expense ……………
1,080
(g) GEOG CLEANERS
Income Statement
For the Month Ended March 31, 2014
Revenues
Service revenue ………………………………………… $8,100
Expenses
Salaries and wages expense ……………………… $2,830
Supplies expense ……………………………………… 1,720