PROBLEM 4-1B
(a)
2. Unearned Service Revenue ………………………. 10,000
Service Revenue ……………………………….. 10,000
3. Cash ………………………………………………………… 40,000
Unearned Service Revenue ……………….. 40,000
4. Accounts Receivable ……………………………….. 157,000
5. Cash ………………………………………………………… 139,000
(b) Cash received with respect to fees:
3. Gift certificates ………………………………………… 40,000
5. Partial collection of fees receivable …………… 139,000
$199,000
T-account (not required)
Accounts Receivable
Bal. 20,000
1. 20,000
5. 139,000
Bal. 18,000
Service Revenue
2. 10,000
Unearned Service Revenue
3. 23,000
Bal. 10,000
Bal. 17,000
Cash
PROBLEM 4-2B
(a)
Date
Account Titles
Debit
Credit
2014
2.
31
Utilities Expense ……………………………………
Accounts Payable …………………………..
300
300
3.
31
Insurance Expense ………………………………..
100
4.
31
Unearned Service Revenue ……………………
Service Revenue ($4,000 – $1,500) ……
2,500
2,500
5.
31
480
Salaries and Wages Expense …………………
480
6.
31
200
Depreciation Expense …………………………...
200
7.
31
Accounts Receivable …………………………….
1,500
(b)
Cash
5/31 Bal. 7,500
Accounts Receivable
5/31 Bal. 4,500
5/31 Bal. 3,600
5/31 100
5/31 Bal. 3,500
5/31 Bal. 3,000
Supplies
5/31 Bal. 2,500
5/31 1,000
5/31 Bal. 1,500
Prepaid Insurance
PROBLEM 4-2B (Continued)
Equipment
5/31 Bal. 12,000
5/31 200
5/31 Bal. 200
5/31 Bal. 3,500
5/31 300
5/31 Bal. 4,480
5/31 Bal. 1,500
5/31 Bal. 3,800
5/31 480
5/31 Bal. 480
5/31 2,500
5/31 Bal. 4,000
5/31 Bal. 1,500
5/31 100
5/31 Bal. 100
5/31 Bal. 300
Common Stock
5/31 Bal. 19,100
5/31 Bal. 11,500
Salaries and Wages Expense
5/31 Bal. 4,000
5/31 480
5/31 200
5/31 Bal. 200
Insurance 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 …………………………
Salaries and Wages Expense ………………………..
Rent Expense ……………………………………………….
Depreciation Expense …………………………………..
Insurance Expense ……………………………………….
$ 7,500
4,500
4,480
1,500
200
100
$ 200
3,800
480
PROBLEM 4-3B
(a) 1. Aug. 31 Insurance Expense ($500 X 3) …………… 1,500
Prepaid Insurance ……………………… 1,500
3. 31 Depreciation Expense ………………………. 2,650
Accum. Depr.—Buildings
5. 31 Salaries and Wages Expense ……………. 600
Salaries and Wages Payable ………. 600
7. 31 Interest Expense ………………………………. 600
Interest Payable
[($120,000 X 6%) X 1/12] …………….. 600
(b)
Cash
8/31 Bal. 24,600
8/31 1,600
8/31 Bal. 1,600
8/31 Bal. 5,400
8/31 1,500
8/31 Bal. 3,900
Supplies
8/31 Bal. 4,300
8/31 3,400
8/31 Bal. 900
PROBLEM 4-3B (Continued)
Land
8/31 Bal. 40,000
Buildings
8/31 Bal. 132,000
8/31 1,650
8/31 Bal. 1,650
8/31 Bal. 120,000
8/31 Bal. 100,000
Equipment
8/31 Bal. 36,000
8/31 1,000
8/31 Bal. 1,000
8/31 Bal. 85,600
Accumulated Depreciation—
Accounts Payable
8/31 Bal. 6,500
Unearned Rent Revenue
8/31 4,000
8/31 Bal. 6,800
8/31 Bal. 2,800
8/31 600
8/31 Bal. 600
8/31 Bal. 9,400
8/31 Bal. 3,600
Interest Payable
8/31 600
8/31 Bal. 600
Mortgage Payable
Dividends
8/31 Bal. 5,000
Rent Revenue
8/31 Bal. 80,000
Salaries and Wages Expense
8/31 Bal. 53,000
8/31 600
8/31 Bal. 53,600
Utilities Expense
PROBLEM 4-3B (Continued)
Insurance Expense
8/31 1,500
8/31 Bal. 1,500
8/31 3,400
8/31 Bal. 3,400
8/31 600
8/31 Bal. 600
Depreciation Expense
8/31 2,650
8/31 Bal. 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 ………………………………………..
Unearned Rent Revenue ……………………………….
Salaries and Wages Payable …………………………
Interest Payable ……………………………………………
Mortgage Payable …………………………………………
Common Stock …………………………………………….
$ 24,600
1,600
36,000
$ 1,650
1,000
6,500
2,800
600
600
120,000
100,000
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
Property, plant, and equipment
Land ……………………………………. 40,000
Buildings ……………………………. $132,000
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable …………………………………. $ 6,500
Unearned rent revenue …………………………. 2,800
Total liabilities ………………………………… 130,500
Stockholders’ equity
Common stock …………………………………….. 100,000
(e) The following accounts would be closed:
PROBLEM 4-4B
(a) Dec. 31 Accounts Receivable ……………………………… 3,000
Service Revenue ……………………………… 3,000
31 Supplies Expense ………………………………….. 2,400
Supplies …………………………………………. 2,400
(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