PROBLEM 4-6A (Continued)
(b) ASTROMECH TRAVEL COURT
Income Statement
For the Quarter Ended June 30, 2014
Revenues
Rent revenue ($212,000 – $57,000) ………………….. $155,000
Expenses
Salaries and wages expense
($80,500 + $1,200) ……………………………………….. $ 81,700
(c) The generally accepted accounting principles pertaining to the income
statement not recognized by Jessica were the revenue recognition
principle and the expense recognition principle.
The revenue recognition principle states that revenue is recognized
when the performance obligation is satisfied. The cash payments of
PROBLEM 4-7A
(a), (c) & (e)
Cash
11/1 Bal. 2,790
11/10 1,800
11/8 1,220
11/20 2,500
Accounts Receivable
11/1 Bal. 2,910
11/10 1,800
Supplies
11/1 Bal. 1,120
11/30 1,320
Equipment
11/1 Bal. 10,000
Accumulated Depreciation—
Equipment
11/1 Bal. 500
A
ccounts Payable
11/20 2,500 11/1 Bal. 2,300
11/15 3,600
Unearned
Service Revenue
11/30 500 11/1 Bal. 400
Salaries and Wages Payable
11/8 620 11/1 Bal. 620
Common Stock
11/1 Bal. 10,000
Retained Earnings
11/1 Bal. 3,000
11/30 Bal. 3,000
PROBLEM 4-7A (Continued)
Service Revenue
11/12 3,700
11/27 900
Depreciation Expense
11/30 250
Salaries and Wages Expense
11/8 600
11/25 1,000
Rent Expense
11/22 480
PROBLEM 4-7A (Continued)
(b)
General Journal
Date Account Titles Debit Credit
Nov. 8 Salaries and Wages Payable …………………….
Salaries and Wages Expense ……………………
620
600
12 Cash ………………………………………………………..
Service Revenue ……………………………….
3,700
3,700
20 Accounts Payable ……………………………………
Cash …………………………………………………
2,500
2,500
22 Rent Expense …………………………………………..
Cash …………………………………………………
480
480
PROBLEM 4-7A (Continued)
(d) & (f) RIJO EQUIPMENT REPAIR
Trial Balances
November 30, 2014
Before
Adjustment
A
fter
Adjustment
Dr. Cr. Dr. Cr.
Cash ……………………………………..
Accounts Receivable ……………..
Accounts Payable ………………….
Unearned Service Revenue …….
Salaries and Wages Payable …..
Common Stock ………………………
$3,840
2,010
4,700
1,150
10,000
$ 3,840
2,010
4,700
650
480
10,000
(e) 1.
Nov. 30 Supplies Expense ……………………………………. 1,320
Supplies ($2,420 – $1,100) …………………. 1,320
2.
30 Salaries and Wages Expense ……………………. 480
PROBLEM 4-7A (Continued)
(g) RIJO EQUIPMENT REPAIR
Income Statement
For the Month Ended November 30, 2014
Revenues
Service revenue ……………………………………….. ( $5,100)
Expenses
Salaries and wages expense …………………….. $2,080
RIJO EQUIPMENT REPAIR
Retained Earnings Statement
For the Month Ended November 30, 2014
Retained earnings, November 1 ……………………….. $3,000
PROBLEM 4-7A (Continued)
RIJO EQUIPMENT REPAIR
Balance Sheet
November 30, 2014
Assets
Current assets
Cash ………………………………………………………….. $ 3,840
Accounts receivable …………………………………… 2,010
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable ………………………………………. $ 4,700
Unearned service revenue ………………………….. 650
PROBLEM 4-8A
(a)
General Journal
Date Account Titles Debit Credit
July 1 Cash ………………………………………………………..
Common Stock ………………………………….
12,000
12,000
3 Supplies …………………………………………………..
Accounts Payable ……………………………..
900
900
5 Prepaid Insurance …………………………………….
Cash …………………………………………………
1,800
1,800
18 Accounts Payable …………………………………….
Cash …………………………………………………
1,500
1,500
20 Salaries and Wages Expense ……………………
Cash …………………………………………………
2,000
2,000
25 Accounts Receivable ………………………………..
Service Revenue ……………………………….
2,500
2,500
PROBLEM 4-8A (Continued)
(b), (e) & (h)
Cash
7/1 12,000
7/21 1,600
7/1 2,000
7/5 1,800
Accounts Receivable
7/12 3,700
7/25 2,500
7/21 1,600
Supplies
7/3 900 7/31 580
Prepaid Insurance
Equipment
Accumulated Depreciation
—
Equipment
A
ccounts Payable
7/18 1,500 7/1 6,000
7/3 900
7/31 Bal. 400
Common Stock
7/1 12,000
Retained Earnings
7/31 600 7/31 4,300
7/31 Bal. 3,700
Dividends
7/31 600 7/31 600
Income Summary
7/31 3,600
7/31 7,900
Service Revenue
7/31 7,900 7/12 3,700
7/31 Bal. 0
PROBLEM 4-8A (Continued)
Maintenance and Repairs
Expense
7/31 290 7/31 290
Depreciation Expense
7/31 180 7/31 180
Insurance Expense
7/31 150 7/31 150
7/31 Bal. 0
PROBLEM 4-8A (Continued)
(c) & (f) CLEAN WINDOW WASHING INC.
Trial Balance
July 31, 2014
Before
Adjustment
A
fter
Adjustment
Debit Credit Debit Credit
Cash …………………………………………….
Accounts Receivable ……………………
Accumulated Depreciation—
Equipment ………………………………..
Accounts Payable ………………………..
Salaries and Wages Payable …………
$5,410
4,600
$ 5,400
$ 5,410
6,300
$ 180
5,400
400
PROBLEM 4-8A (Continued)
(d)
General Journal
Date Account Titles Debit Credit
1. July 31 Accounts Receivable………………………………….
Service Revenue …………………………………..
1,700
1,700
4. 31 Supplies Expense ($900
–
$320) ………………….
Supplies ……………………………………………….
580
580
(g) CLEAN WINDOW WASHING INC.
Income Statement
For the Month Ended July 31, 2014
Revenues
Service revenue ………………………………………… $7,900
Expenses
Salaries and wages expense ……………………… $2,400
PROBLEM 4-8A (Continued)
(g) CLEAN WINDOW WASHING INC.
Retained Earnings Statement
For the Month Ended July 31, 2014
Retained earnings, July 1 ……………………………….. $ 0
Add: Net income …………………………………………… 4,300
4,300
CLEAN WINDOW WASHING INC.
Balance Sheet
July 31, 2014
Assets
Current assets
Cash ……………………………………………………….. $ 5,410
Accounts receivable ………………………………… 6,300
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable ……………………………………. $ 5,400
Salaries and wages payable ……………………… 400
Total current liabilities ………………………. $ 5,800
PROBLEM 4-8A (Continued)
(h)
General Journal
Date Account Titles and Explanation Debit Credit
July 31 Service Revenue ………………………………………
Income Summary ………………………………
7,900
7,900
31 Income Summary ……………………………………..
Salaries and Wages Expense ……………..
3,600
2,400
31 Income Summary ……………………………………..
Retained Earnings ……………………………..
4,300
4,300
(i) CLEAN WINDOW WASHING INC.
Post-Closing Trial Balance
July 31, 2014
Debit Credit
Cash …………………………………………………………….
Accounts Receivable ……………………………………
Supplies ………………………………………………………
$5,410
6,300
320
PROBLEM 4-1B
(a)
1. Cash ………………………………………………………… 20,000
Accounts Receivable …………………………. 20,000
Unearned Service Revenue
($40,000 – $17,000) …………………………………. 23,000
Service Revenue ……………………………….. 23,000
(b) Cash received with respect to fees:
1. Collection of accounts receivable …………….. $ 20,000
3. Gift certificates ………………………………………… 40,000
T-account (not required)
Accounts Receivable
Bal. 20,000
4. 157,000 1. 20,000
5. 139,000
Unearned Service Revenue
2. 10,000
3. 23,000
Bal. 10,000
3. 40,000
PROBLEM 4-2B
(a)
Date Account Titles Debit Credit
1.
2014
May 31
Supplies Expense …………………………………
Supplies ………………………………………..
1,000
1,000
4. 31 Unearned Service Revenue …………………..
Service Revenue ($4,000 – $1,500) …..
.
2,500
2,500
6. 31 Depreciation Expense …………………………..
Accumulated Depreciation—
Equipment ……………………………….
200
200
(b)
Cash
5/31 Bal. 7,500
Accounts Receivable
Supplies
5/31 Bal. 2,500 5/31 1,000
5/31 Bal. 1,500
PROBLEM 4-2B (Continued)
Equipment
5/31 Bal. 12,000
Accounts Payable
5/31 Bal. 3,500
Salaries and Wages Payable
Unearned Service Revenue
Common Stock
5/31 Bal. 19,100
Service Revenue
5/31 Bal. 7,500
Salaries and Wages Expense
5/31 Bal. 4,000
5/31 480
Depreciation Expense
Insurance Expense
Utilities Expense
Supplies Expense
5/31 1,000
5/31 Bal. 1,000
PROBLEM 4-2B (Continued)
(c) OKENDO CONSULTING
Adjusted Trial Balance
May 31, 2014
Debit Credit
Cash …………………………………………………………….
Accounts Receivable ……………………………………
Accumulated Depreciation—
Equipment …………………………………………………
Accounts Payable ………………………………………..
Salaries and Wages Payable …………………………
Unearned Service Revenue …………………………..
$ 7,500
4,500
$ 200
3,800
480
1,500
PROBLEM 4-3B
(a) 1. Aug. 31 Insurance Expense ($500 X 3) …………… 1,500
Prepaid Insurance ……………………… 1,500
4. 31 Unearned Rent Revenue …………………… 4,000
Rent Revenue ……………………………. 4,000
5. 31 Salaries and Wages Expense ……………. 600
Salaries and Wages Payable ………. 600
(b)
Cash
8/31 Bal. 24,600
Supplies
8/31 Bal. 4,300 8/31 3,400
8/31 Bal. 900
PROBLEM 4-3B (Continued)
Land
8/31 Bal. 40,000
Equipment
8/31 Bal. 36,000
Accumulated Depreciation—
Accounts Payable
Unearned Rent Revenue
8/31 4,000 8/31 Bal. 6,800
8/31 Bal. 2,800
Salaries and Wages Payable
Interest Payable
8/31 600
8/31 Bal. 600
Dividends
8/31 Bal. 5,000
Rent Revenue
8/31 Bal. 80,000
8/31 4,000
Salaries and Wages Expense
8/31 Bal. 53,000
Utilities Expense
8/31 Bal. 9,400
Maintenance and Repairs