Acc 290 Week 4 Problems and Exercises

University of Phoenix
BE4-1
(a) Purchased $100 of supplies for cash.
(b) Recorded an adjusting entry to record use of $20 of the above supplies.
(c) Made sales of $1,300, all on account.
(d) Received $800 from customers in payment of their accounts.
(e) Purchased equipment for cash, $2,500.
(f) Recorded depreciation of building for period used, $600.
(Cash) (Net income)
A. (-100) (0)
B. (0) (-20)
C. (0) (+1,300)
D. (+800) (0)
E. (-2,500) (0)
F. (0) (-600)
*P4-2A
1. Supplies on hand at June 30 total $720.
2. A utility bill for $180 has not been recorded and will not be paid until next month.
3. The insurance policy is for a year.
4. $4,100 of unearned service revenue has been earned at the end of the month.
5. Salaries of $1,250 are accrued at June 30.
6. The equipment has a 5-year life with no salvage value and is being depreciated at
$250 per month for 60 months.
7. Invoices representing $3,900 of services performed during the month have not been
recorded as of June 30.
(a) Prepare the adjusting entries for the month of June.
(b) Post the adjusting entries to the ledger accounts. Enter the totals from the trial balance
as beginning account balances. Use T accounts.
(c) Prepare an adjusted trial balance at June 30, 2012.

(Date) (Accounts) (Debit) (Credit)

June 30
1. Accounts Rec. (3,900) (3,900)
2. (30) Unearned Service Rev. (4,100) (4,100)
3. (30) Insur. Exp. (240) (240)
4. (30) Utility Exp. (180) (180)
5. (30) Salary Exp. (1,250) (1,250)
6. (30) Depreciation Exp. (250) (250)
7. (30) Supply Exp. (1,280) (1,280) (Cash)
(6/3) (6,850)
Accounts Receivable
(6/30) (7,000)
(6/30) (3,900)
(6/30 (10,900)
|||
|N/A |
|||
|||
|Supplies |
|6/30 2,000 | 6/30 1,280 |
|6/30 720 | |
|Prepaid Insurance |
|6/30 2,880 | 6/30 240 |

|6/30 2,640 | |
|Equipment |
|6/30 15,000 | |
|Accounts Pay. |
| | 6/30 4,230 |
| | 6/30 180 |
| | 6/30 4,410 |
|Salary Pay. |
| | 6/30 1,250 |
| | 6/30 1,250 |
|Unearned Service Rev. |
|6/30 4,100 | 6/30 5,200 |
| | 6/30 1,100 |
|Common Stock |
| | 6/30 22,000 |
|Salary Exp. |
|6/30 4,000 | |
|6/30 1,250 | |
|6/30 5,250 | |
|Rent Exp. |
|6/30 2,000 | |
|Insur. Exp. |
|6/30 240 | |

|6/30 Bal. 240 | |

|Utilities Exp. |
|6/30 180 | |
|6/30 180 | |
|Supply Exp. |
|6/30 1,280 | |
|6/30 1,280 | |
|Accumulated Depreciation |
| | 6/30 250 |
| | 6/30 250 |
|Depreciation Exp. |
|6/30 250 | |
|6/30 250 | |
|Service Rev. |
| | 6/30 8,300 |
| | 6/30 4,100 |
| | 6/30 3,900 |
| | 6/30 16,300 |
Vogel Consult.
Adjusted Trial Balance
| | |Debit | |Credit |
| Accounts Rec. | | 10,900 | | |
|Cash | |6,850 | | |

|Prepaid Insur. | |2,640 | | |

|Supplies | |720 | | |
|Equipment | |15,000 | | |
|Accumulated Depreciation | | | | 250 |
|Accounts Pay. | | | |4,410 |
|Salary Pay. | | | |1,250 |
|Unearned Serv. Rev. | | | |1,100 |
|Common Stock | | | |22,000 |
|Service Rev. | | | |16,300 |
|Salary Exp. | |5,250 | | |
|Rent Exp. | |2,000 | | |
|Depreciation Exp. | | 250 | | |
|Insur. Exp. | | 240 | | |
|Utilities Exp. | | 180 | | |
|Supply Exp. | |1,280 | | |
| | |$45,310 | |$45,310 |
P4-3A
|Cash |
|5/31 2,500 | |
|Prepaid Insur. |
|5/31 1,800 | 5/31 450 |
|5/31 1,350 | |
|Supplies |

|5/31 2,600 | 5/31 1,550 |

|5/31 1,050 | |
|Land |
|5/31 15,000 | |
Mortgage Pay.
|Building |
|5/31 70,000 | |
|Accumulated Depreciation |
| | 5/31 300 |
| | 5/31 300 |
|Equipment |
|5/31 16,800 | |
|Accumulated Depreciation |
| | 5/31 250 |
| | 5/31 250 |
|Accounts Pay. |
| | 5/31 4,700 |
|Unearned Rent Rev. |
|5/31 2,500 | 5/31 3,300 |
| | 5/31 800 |
|Salary Pay. |
| | 5/31 900 |
| | 5/31 900 |

|Interest Pay. |
| | 5/31 180 |
| | 5/31 180 |
||
| | 5/31 36,000 |
|Common Stock |
| | 5/31 60,000 |
|Rent Revenue |
| | 5/31 9,000 |
| | 5/31 2,500 |
| | 5/31 11,500 |
|Salary Exp. |
|5/31 3,000 | |
|5/31 900 | |
|5/31 3,900 | |
|Utilities Exp. |
|5/31 800 | |
|Advertising Exp. |
|5/31 500 | |
|Interest Exp. |
|5/31 180 | |
|5/31 180 | |
|Insurance Exp. |

|5/31 450 | |
|5/31 450 | |
|Supplies Exp. |
|5/31 1,550 | |
|5/31 1,550 | |
|Depreciation Exp. |
|5/31 300 | |
|5/31 250 | |
|5/31 550 | |
Vang Hotel
Adjusted Trial Balance
| | |Debit | |Credit |
| Cash | | 2,500 | | |
|Prepaid Insurance | |1,350 | | |
|Supplies | |1,050 | | |
|Land | |15,000 | | |
|Building | |70,000 | | |
|Accumulated Depreciation | | | | 300 |
|Equipment | |16,800 | | |
|Accumulated Depreciation | | | | 250 |
|Accounts Payable | | | |4,700 |
|Unearned Rent Revenue | | | |800 |
|Salary Payable | | | | 900 |

|Interest Payable | | | | 180 |

|Mortgage Payable | | | |36,000 |
|Common Stock | | | |60,000 |
|Rent Revenue | | | |11,500 |
|Salary Expense | |3,900 | | |
|Utilities Expense | | 800 | | |
|Advertising Expense | | 500 | | |
|Interest Expense | | 180 | | |
|Insurance Expense | | 450 | | |
|Supplies Expense | |1,550 | | |
|Depreciation Expense | | 550 | | |
| | |$114,630 | |$114,630 |
Vang Hotel
Income Statement
Rent revenue 11,500
Salary expense

3,900

Supply expense

1,550

Utilities expense

800

Depreciation expense
Advertising expense 500
Insurance expense

450

Interest expense

180

Total expenses

7,930

550

Net income

3,570

Vang Hotel
Retained Earnings Statement
Retained earnings, May 1
Net income

3,570

Retained earnings, May 31 $3,570

Vang Hotel
Balance Sheet
Cash 2,500
Supplies

1,050

Prepaid insurance

1,350

Current assets

4,900

Land 15,000
Building

70,000

300 69,700
Equipment

16,800

250 16,550 101,250

Total assets

106,150

Accounts payable

4,700

Salaries and wages payable 900

Unearned rent revenue
Interest payable

800

180

Total current liabilities

6,580

Mortgage payable

36,000

Total liabilities

42,580

Common stock

60,000

Retained earnings

3,570

Total equity shareholders 63,570

Total liabilities and equity shareholders

106,150

Accounts closed:
Rent revenue, salary expense, utilities expense, advertising expense, interest expense,
insurance expense, supply expense, and depreciation expense.
Answer the following summary question: Commercial accounting and generally accepted
accounting principles, generally prescribe the accrual basis of accounting over the cash
basis. Describe both bases of accounting and explain the differences.
Accrual accounting is where revenues are recognized when they are earned, not when
they are received. In accrual accounting, cash does not need to change hands before the
revenue is recognized. Under the cash basis method of accounting, income is not counted
until cash is actually received, and expenses are not counted until they are actually paid.
----------------------1.

May

31

Insur. Exp.

450

31

Supplies Exp. 1,550

31

Depreciation Exp. 300

450
2.
1,550
3.

300
31
250

Depreciation Exp. 250

4.

31

Interest Exp. 180

180

5.

31

Unearned Rent Rev. 2,500

31

Salary Exp. 900

2,500
6.
900