FINANCIAL ACCOUNTING - Eighth Edition

Solutions Manual

E3-31A
(15-25 min.)
Learning Objectives 3, 5: Identifying and recording adjusting and closing entries
The unadjusted trial balance and income statement amounts from the December 31
adjusted trial balance of Draper Production Company follow.
Draper Production Company
Unadjusted
Account
Trial Balance
Cash.................................................
14,800
Prepaid rent......................................
1,000
Equipment........................................
44,000
Accumulated depreciation ................
3,100
Accounts payable .............................
5,100
Salary payable ..................................
Unearned service revenue .................
9,300
Income tax payable ..........................
Notes payable, long-term .................
13,000
Common stock.................................
8,500
Retained earnings.............................
14,100
Dividends.........................................
1,300
Service revenue.................................
13,600
Salary expense..................................
4,600
Rent expense....................................
1,000
Depreciation expense .......................
Income tax expense ..........................
Total ................................................
66,700
66,700
1.

From the Adjusted

Trial Balance

20,100
5,100
1,300
400
1,000
7,800

20,100

Journalize the adjusting and closing entries of Draper Production Company at

December 31. There was only one adjustment to Service Revenue.

Chapter 3: Accrual Accounting and Income

Page 1 of 2

FINANCIAL ACCOUNTING - Eighth Edition

Solutions Manual

Solution:

DATE

Journal
ACCOUNT TITLES AND EXPLANATION

Chapter 3: Accrual Accounting and Income

DEBIT

CREDIT

Page 2 of 2