Problem 4-4A (Continued)
TYBALT CONSTRUCTION
Balance Sheet
December 31, 2017
Assets
Current assets
Cash …………………………………………………………… $ 5,000
Liabilities
Current liabilities
Accounts payable ……………………………………….. $ 16,500
240
Problem 4-4A (Continued)
Part 2
Closing entries (all dated December 31, 2017)
Instructor note: Entries are shown without an account reference column because no posting is required.
(1) Professional Fees Earned ……………………… 97,000
(2) Income Summary ………………………………….. 110,800
Depreciation Expense—Building …….. 11,000
Depreciation Expense—Equipment …. 6,000
(3) Income Summary ………………………………….. 4,300
Part 3
a. Return on assets = $4,300/[($200,000 + $218,100)/2] = 2.1% (or 0.021)
241
Problem 4-5A (90 minutes)
Part 1
KARISE REPAIRS
Income Statement
For Year Ended December 31, 2017
Repair fees earned ………………………………. $90,950
Expenses
242
Problem 4-5A – (Continued)
KARISE REPAIRS
Statement of Owner‘s Equity
For Year Ended December 31, 2017
C. Karise, Capital, Jan. 1, 2017……………… $33,000
KARISE REPAIRS
Balance Sheet
December 31, 2017
Assets
Current assets
Cash …………………………………………………….. $14,000
Office supplies ……………………………………… 1,300
243
Problem 4-5A (Continued)
Parts 2 and 3
KARISE REPAIRS
Work Sheet
For Year Ended December 31, 2017
Adjusted
Trial Balance
Closing
Entry Information
Post–Closing
Trial Balance
No.
Account Title
Dr.
Cr.
Dr.
Cr.
Dr.
Cr.
101
Cash ………………………………..
14,000
14,000
124
Office supplies ………………..
1,300
1,300
128
Prepaid insurance ………….
2,050
50,000
50,000
201
Accounts payable …………..
14,000
210
Wages payable ……………….
301
401
637
640
650
901
Problem 4-5A (Continued)
Closing entries (all dated December 31, 2017)
Instructor note: Entries are shown without an account reference column because no posting is required.
(1) Repair Fees Earned ………………………………….. 90,950
(2) Income Summary …………………………………….. 60,200
Depreciation Expense—Equipment ……. 5,000
(3) Income Summary …………………………………….. 30,750
(4) C. Karise, Capital ……………………………………… 16,000
245
Problem 4-5A (Concluded)
Part 4
(a) If none of the $800 insurance expense had expired, the income statement
Financial Statement Changes
The income statement would reflect the following:
246
Problem 4-6AA (40 minutes)
Part 1
HAWKEYE RANGES
Work Sheet
For Year Ended December 31, 2017
Unadjusted
Trial Balance
Adjustments
Adjusted
Trial Balance
Account Title
Dr.
Cr.
Dr.
Cr.
Dr.
Cr.
Cash …………………………..
14,000
14,000
Accounts receivable …..
Supplies …………………….
6,500
3,500
Equipment …………………
Interest payable ………….
1,875
Salaries payable …………
1,200
Notes payable…………….
75,000
75,000
P. Hawkeye, Capital ……
50,250
50,250
Withdrawals ……………….
9,300
Salaries expense ………..
31,200
Interest expense ………..
5,625
Supplies expense ………
247
Problem 4-6AA (Continued)
Part 2 (all adjusting entries dated December 31, 2017)
Instructor note: Entries are shown without an account reference column because no posting is required.
(a) Salaries Expense …………………………………… 1,200
Part 3 (all reversing entries dated January 1, 2018)
(a) Salaries Payable ……………………………………. 1,200
248
Problem 4-6AA (Concluded)
Part 4
Instructor note: Entries are shown without an account reference column because no posting is required.
2018
Jan. 4 Salaries Expense ………………………………….. 1,500
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 4
249
PROBLEM SET B
Problem 4-1B (90 minutes)
INSTRUCTOR NOTE: Ledger accounts are shown after Part 7 as they would appear after all
entries are posted.
Part 2
Transactions for July
July 1 Cash ……………………………………………………… 101 30,000
Buildings ………………………………………………. 173 150,000
250
Problem 4-1B (Continued)
Part 3
SAFE STORAGE CO.
Unadjusted Trial Balance
July 31, 2017
No. Account Title Debit Credit
101 Cash …………………………………………………………… $ 22,850
Problem 4-1B (Continued)
Part 4
Adjusting entries
July 31 Insurance Expense …………………………..…………….637 400
Prepaid Insurance …………………………………..128 400
252
Problem 4-1B (Continued)
Part 4
SAFE STORAGE CO.
Adjusted Trial Balance
July 31, 2017
No. Account Title Debit Credit
101 Cash …………………………………………………………… $ 22,850
253
Problem 4-1B (Continued)
Part 5
SAFE STORAGE CO.
Income Statement
For Month Ended July 31, 2017
Storage fees earned …………………………….. $10,950
Expenses
SAFE STORAGE CO.
Statement of Owner’s Equity
For Month Ended July 31, 2017
L. Plume, Capital, July 1, 2017 ……………… $ 0
254
Problem 4-1B (Continued)
Part 5
SAFE STORAGE CO.
Balance Sheet
July 31, 2017
Assets
Cash ……………………………………………………. $ 22,850
Accounts receivable ……………………………. 1,150
Problem 4-1B (Continued)
Part 6
Closing entries
July 31 Storage Fees Earned …………………………... 401 10,950
Income Summary ……………………………. 901 10,950
Close the revenue account.
Part 7
SAFE STORAGE CO.
Post-Closing Trial Balance
July 31, 2017
Debit Credit
Cash ……………………………………………………. $ 22,850
256
Problem 4-1B (Continued)
Ledger as of July 31
Cash Acct. No. 101
Date Explanation PR Debit Credit Balance
July 1 30,000 30,000
2 2,000 28,000
Accounts Receivable Acct. No. 106
Date Explanation PR Debit Credit Balance
July 31 Adjusting 1,150 1,150
Office Supplies Acct. No. 124
Date Explanation PR Debit Credit Balance
257
Problem 4-1B (Continued)
L. Plume, Capital Acct. No. 301
Date Explanation PR Debit Credit Balance
July 1 180,000 180,000
31 Closing 2,725 182,725
Depreciation Expense—Buildings Acct. No. 606
Date Explanation PR Debit Credit Balance
July 31 Adjusting 1,500 1,500
31 Closing 1,500 0
Salaries Expense Acct. No. 622
Date Explanation PR Debit Credit Balance
258
Problem 4-1B (Concluded)
Office Supplies Expense Acct. No. 650
Date Explanation PR Debit Credit Balance
July 31 Adjusting 875 875