George Gorham

Intro to Accounting

P3-41B
1.)
Date

Adjusting Journal Entries

Accounts and Explanation

Dec.3 Unearned Revenue

1
Service Revenue
31 Rent Expense
Prepaid Rent
31 Supplies Expense
Office Supplies
31 Depreciation Expense Equipment
Accumulated Depreciation - Equipment
31 Advertising Expense
Accounts Payable
31 Salaries Expense
Salaries Payable
31 Accounts Receivable
Service Revenue

2.)

Beg.
Bal.
Bal.

Beg
.
Bal.
Bal.

Pos
t
Debit
Credit
Ref.
a.
1,800
1,800
b.
1,100
1,100
c.
400
400
d.
700
700
e.
400
400
f.
1,200
1,200
g.
1,530
1,530

T-accounts

Cash
7,200
7,200
Office Supplies
1,600 c.
400
1,200

Accounts Receivable
19,400
g. 11,530
Bal.
20,930Equipment
Beg
20,000
.

Beg.
Bal.

Bal.
Bal.

Beg.
Bal.
Bal.

Prepaid Rent
2,200 b. 1,100
1,100
Acc. Dpr. - Equipment
Beg
3,700
.
Bal.

20,000

d.
Bal.

Accounts Payable
Beg
3,400
.

Salaries Payable
f.
1,200

1,700
4,400

Unearned Revenue
a.
1,800
2,600

George Gorham

Intro to Accounting

Bal.

e.
Bal.

Bal
.

3,400
3,800

Canton, Capital
Beg
39,000
.
Bal.
Bal.

Beg
.
Bal.
Bal.

39,000

Bal
.

1,200

Canton, Withdrawals
9,600

Service Revenue
15,900

9,600

a.
g.
Bal
.

Beg
.
Bal.

f.
Bal.

Beg
.
Bal.

e.
Bal.

Salaries Expense
3,300

Bal
.

1,200
4,500

Advertising Expense
1,300
1,400
1,700

3.)

b.

Rent Expense
1,100
1,100

1,800
11,530
19,230

Dpr. Expense - Equipment

d.
700
Bal
.

700

Supplies Expense
c.
400
Bal.

2,800

400

Adjusted Trial Balance

CANTON AIR PURIFICATION SYSTEM
Adjusted Trial Balance
December 31, 2014
Balance

George Gorham

Intro to Accounting

Account Title
Cash
Accounts Receivable
Prepaid Rent
Offices Supplies
Equipment
Accumulated Depreciation Equipment
Accounts Payable
Salaries Payable
Unearned Revenue
Canton, Capital
Canton, Withdrawals
Service Revenue
Salaries Expense
Rent Expense
Depreciation Expense Equipment
Advertising Expense
Supplies Expense
Total
4.)

3
Debit
$ 7,200
20,930
1,100
1,200
20,000

Credit

4,400
3,800
1,200
800
39,000

9,600
19,230
4,500
1,100
700
1,700
400
$ 68,430

$ 68,430

How can Canton Air Purifi cation use the adjusted trial
balance?
The adjusted trial balance is used to create the financial statements. Revenue and expense
accounts are recorded from the trial balance to create the income statement. Assets,
liabilities, and equity accounts are recorded to create the balance sheet. Lastly, the
changes in the accounts from the previous period are used to create the statement of cash
flows.

P4-34B
1.)

Income Statement
BROWNIE IRRIGATION SYSTEM
Income Statement
Year Ended December 31, 2014

Revenue:
Service Revenue
Expenses:
Insurance Expense
Salaries Expense
Supplies Expense
Interest Expense

$
$

500
17,700
1,600
100

40,000

George Gorham

Intro to Accounting

Depreciation Expense Equipment

Depreciation Expense Building
Total Expenses
Net Loss

2.)

5,000
20,000
$

Statement of Owners Equity

BROWNIE IRRIGATION SYSTEM
Statement of Owners Equity
Year Ended December 31, 2014
Brownie, Capital, December 1, 2014
Net loss for the year

$ 87,000
4,900
82,100
1115,000
$ 77,100

Brownie, Withdrawal
Owners equity, December 30, 2014

3.)

44,900
4,900

Classifi ed Balance Sheet in Report Form

BROWNIE IRRIGATION SYSTEM
Balance Sheet
December 31, 2014

Assets
Current assets:
Cash
Accounts receivable
Office supplies
Prepaid Insurance
Total current assets
Long-term assets:
Equipment
Less: Accumulated depreciation equipment
Building

6,500
43,600
3,300
4,800
$ 58,200

$ 23,000
6,900
58,200

16,100

George Gorham

Intro to Accounting

Less: Accumulated depreciation building

Total long-term assets
Total assets

5
24,200

34,000
50,100
$108,300

Liabilities
Current liabilities:
Accounts payable
Interest payable
Salaries payable
Unearned revenue
Total current liabilities
Long-term liabilities:
Notes payable
Total liabilities

$ 22,300
100
2,800
1,800
27,000
4,200
31,200

Stockholders Equity
Brownie, capital
Total liabilities and stockholders equity

4.)

77,100
$108,300

Closing Entries

Date
Accounts
Dec. 31 Service Revenue
Income Summary

Debit

Credit
40,000
40,000

George Gorham

Intro to Accounting

31 Income Summary
Insurance Expense
Salaries Expense
Supplies Expense
Interest Expense
Depreciation Expense Equipment
Depreciation Expense Building
31 Retained Loss
Income Summary

5.)

44,900
500
17,700
1,600
100
5,000
20,000
4,900
4,900

Current Ratio
Current
ratio

Total current assets

Total current liabilities

58,200

27,000

2.16

There was a 0.04 (2.20 2.16) decrease in the companys current ratio for the year
ended December 2014. This means that the companys ability to pay debt has
deteriorated.

E5-20

George Gorham
1.)

Intro to Accounting

Journal Entries

Date Accounts
Feb. 3 Merchandise Inventory
Accounts Payable
7 Accounts Payable
Merchandise Inventory
9 Merchandise Inventory
Cash
10 Accounts Receivable
Sales Revenue
10 Cost of Goods Sold
Merchandise Inventory
12 Accounts Payable
Cash
Sales Discounts
16 Sales Returns and Allowances
Accounts Receivable
23 Cash
Sales Discounts
Accounts Receivable

Debit

Credit
2,700
2,700
400
400
100
100
4,350
4,350
2,300
2,300
2,300
2,231
69
500
500
3,773
77
3,850

George Gorham

Intro to Accounting

P5-40B
1.)

Multi-Step Income Statement

DADDYS MUSIC COMPANY
Income Statement
Year Ended April 30, 2015

Sales Revenue
Less: Sales Returns and Allowance
Sales Discounts
Net Sales Revenue
Cost of Goods Sold
Gross Profit
Operating Expenses:
Selling Expense
Administrative Expense
Operating Income
Other Expenses:
Interest Expense
Net Income

$180,000
$6,500
1,500

19,200
14,000

8,000
$172,000
81,800
90,200
33,200
57,000
1,200
55,800