Accounting Chapter 5 Homework Problem 56a Brushstroke Art Studio Inc Concluded

subject Type Homework Help
subject Pages 14
subject Words 1943
subject Textbook Financial & Managerial Accounting 18th Edition
subject Authors Jan Williams, Joseph Carcello, Mark Bettner, Susan Haka
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a. (cont'd.)
51,402$
4,200
132
Prepaid rent 1,080
36,000
Retaining earnings 9,600
1,200
Consulting services revenue 76,800
Office supplies expense 840
Depreciation expense: office equipment 10,800
PROBLEM 5.5A
SILVER LINING, INC. (continued)
SILVER LINING, INC.
Adjusted Trial Balance
Cash
Office supplies
Accounts receivable
December 31, Current Year
Capital stock
Dividends
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b.
76,800$
840$
9,600$
Consulting services revenue
SILVER LINING, INC. (continued)
Revenues:
SILVER LINING, INC.
For the Year Ended December 31, Current Year
Income Statement
Expenses:
Office supplies expense
Retained earnings (1/1/Current Year)
Statement of Retained Earnings
For the Year Ended December 31, Current Year
SILVER LINING, INC.
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b. (cont'd)
Assets
$ 51,402
$ 1,680
10,800
2,820
1,200
Unearned consulting services revenue
Note payable (Due 3/1/Next Year)
Income taxes payable
PROBLEM 5.5A
SILVER LINING, INC. (continued)
SILVER LINING, INC.
December 31, Current Year
Liabilities
Accounts payable
Balance Sheet
Cash
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c.
Dec. 31 76,800
Income Summary 76,800
31 61,854
31 14,946
Retained Earnings 14,946
SILVER LINING, INC.
12/31/Current Year
(1)
General Journal
SILVER LINING, INC. (continued)
Consulting Services Revenue
To close revenue earned.
(2)
Income Summary
(3)
Income Summary
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d.
51,402$
4,200
132
1,080
216
64,800
e.
1,320$
1,080
Unexpired insurance
After-Closing Trial Balance
Cash
through December (at $108 per month)
Insurance expense incurred in Current Year
Less: Total insurance expense for March
Office equipment
PROBLEM 5.5A
SILVER LINING, INC. (continued)
Prepaid rent
SILVER LINING, INC.
December 31, Current Year
Accounts receivable
Office supplies
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f.
4,590$
g.
43,200$
PROBLEM 5.5A
SILVER LINING, INC. (concluded)
Rent expense incurred in Current Year
Accum. depreciation: office equip. (12/31/Current Yr.)
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a.
Dec. 31 5,000
Supplies 5,000
31 240
Interest Payable 240
31 750
Salaries Payable 750
(7)
December.
(8)
To record salary expense accrued at the end of
Salary Expense
Supply Expense
To record supplies used in December.
To record interest expense accrued in December.
Interest Expense
PROBLEM 5.6A
BRUSHSTROKE ART STUDIO, INC.
12/31/Current Year
(1)
General Journal
BRUSHSTROKE ART STUDIO, INC.
70 Minutes, Strong
(5)
(4)
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a. (cont'd)
Computations for each of the adjusting journal entries:
1. $6,000 (supplies per trial balance) - $1,000 (at 12/31) = $5,000 used in December.
BRUSHSTROKE ART STUDIO, INC. (continued)
PROBLEM 5.6A
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a. (cont'd.)
22,380$
71,940
1,000
1,250
96,000
Supply expense 9,000
Salary expense 18,000
Interest expense 720
Studio rent expense 12,500
Prepaid studio rent
Studio equipment
PROBLEM 5.6A
BRUSHSTROKE ART STUDIO, INC. (continued)
Cash
Supplies
Client fees receivable
BRUSHSTROKE ART STUDIO, INC. (continued)
December 31, Current Year
Adjusted Trial Balance
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b.
86,000$
9,000$
For the Year Ended December 31, Current Year
BRUSHSTROKE ART STUDIO, INC.
Statement of Retained Earnings
Client fees earned
Expenses:
Supply expense
BRUSHSTROKE ART STUDIO, INC. (continued)
Revenues:
BRUSHSTROKE ART STUDIO, INC.
For the Year Ended December 31, Current Year
Income Statement
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b. (cont'd)
Assets
$ 22,380
71,940
1,000
1,250
$ 96,000
Prepaid studio rent
Studio equipment
PROBLEM 5.6A
BRUSHSTROKE ART STUDIO, INC. (continued)
Client fees receivable
Supplies
BRUSHSTROKE ART STUDIO, INC.
December 31, Current Year
Balance Sheet
Cash
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c.
Dec. 31 86,000
Income Summary 86,000
31 25,880
Retained Earnings 25,880
(2)
Income Summary
(3)
Client Fees Earned
To close Client Fees Earned.
BRUSHSTROKE ART STUDIO
12/31/Current Year
(1)
BRUSHSTROKE ART STUDIO, INC. (continued)
General Journal
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d.
22,380$
71,940
1,000
1,250
96,000
$ 11,250
Client fees receivable
Supplies
PROBLEM 5.6A
BRUSHSTROKE ART STUDIO, INC. (concluded)
Prepaid studio rent
Studio equipment
BRUSHSTROKE ART STUDIO, INC. (concluded)
December 31, Current Year
After-Closing Trial Balance
Cash
e.
The studio’s rent expense has increased by $250 per month as shown below:
Total rent expense through November 30, Current Yr. (per unadjusted trial
balance……………………………………………………………………………………………
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50 Minutes, Strong
Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr.
Balance sheet accounts:
Cash 49,100 49,100 49,100
Consulting fees receivable 23,400
(7)
11,000 34,400 34,400
Prepaid office rent 6,300 (1) 2,100 4,200 4,200
Salaries payable (8) 1,700 1,700 1,700
Interest payable (5) 100 100 100
Income statement accounts:
Consulting fees earned 257,180 (6) 2,850 271,030 271,030
(7) 11,000
Salaries expense 88,820
(8)
1,700 90,520 90,520
Telephone expense 2,550 2,550 2,550
Rent expense 22,000
(1)
2,100 24,100 24,100
Income taxes expense 51,000
(9)
5,000 56,000 56,000
Trial Balance
Adjustments *
Adjusted Trial Balance
Worksheet
For the Month Ended December 31, Current Year
SERVICE, INC.
PROBLEM 5.7A
INTERNET CONSULTING SERVICE, INC.
Income Statement
Balance Sheet
INTERNET CONSULTING
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15 Minutes, Medium
3.1%
The company was profitable, given its reported net income of $1,233 million. Its net
income percentage reveals that management earned income in excess of 3 cents for
c.
PROBLEM 5.8A
BEST BUY
Net income percentage: Net Income/Total Revenue
$1,233 million/$40,339 million =
a.
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a.
160,000$
1,800$
17,500$
Revenues:
SOLUTIONS TO PROBLEMS SET B
STRONG KNOT, INC.
For the Year Ended December 31, Current Year
20 Minutes, Easy
STRONG KNOT, INC.
Income Statement
Service revenue earned
Insurance expense
Expenses:
Statement of Retained Earnings
For the Year Ended December 31, Current Year
STRONG KNOT, INC.
Retained earnings (1/1/Current Year)
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Assets
15,400$
8,200
3,000
5,200$
33,000
900
400
Unexpired insurance
PROBLEM 5.1B
STRONG KNOT, INC. (continued)
Accounts receivable
a. (cont'd)
STRONG KNOT, INC.
Balance Sheet
Cash
December 31, Current Year
Notes payable*
Salaries payable
Income taxes payable
Accounts payable
Liabilities
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b.
Dec. 31 160,000
Income Summary 160,000
31 141,200
Insurance Expense 1,800
Office Rent Expense 18,000
Supplies Expense 1,200
Salaries Expense 96,000
31 18,800
Retained Earnings 18,800
(4)
To transfer net income earned in Current Year to the
c.
For the year ended December 31, Current Year, the company generated net income of
$18,800 on $160,000 sales. Thus, net income as a percentage of sales was 11.75%.
Retained Earnings account ($160,000 - $141,200 =
$18,800).
To close revenue account.
Income Summary
Income Summary
(2)
(3)
Service Revenue Earned
STRONG KNOT, INC.
12/31/Current Year
(1)
General Journal
STRONG KNOT, INC. (concluded)
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a.
232,800$
2,160$
33,600
25,200$
Retained earnings (1/1/Current Year)
GARDEN WIZARDS
Statement of Retained Earnings
For the Year Ended December 31, Current Year
Expenses:
Office rent expense
Insurance expense
Service revenue earned
GARDEN WIZARDS
Revenues:
GARDEN WIZARDS
For the Year Ended December 31, Current Year
Income Statement
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Assets
33,360$
5,160
2,640$
45,600
1,080
360
PROBLEM 5.2B
Liabilities
Salaries payable
Notes payable
Accounts payable
Interest payable
Cash
a. (cont'd)
GARDEN WIZARDS (continued)
Accounts receivable
GARDEN WIZARDS
December 31, Current Year
Balance Sheet

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