EXERCISE 3-10

(a) 1. Aug. 31 Insurance Expense (¥4,500 X 3/12) ......... 1,125

Prepaid Insurance ............................. 1,125

2. Aug. 31 Supplies Expense (¥2,600 – ¥650) ........... 1,950

Supplies ............................................. 1,950

3. Aug. 31 Depreciation Expense .............................. 1,080

Accumulated Depreciation—
Buildings ......................................... 1,080
(¥120,000 – ¥12,000 = ¥108,000;
¥108,000 X 4% = ¥4,320 per year;
¥4,320 X 3/12 = ¥1,080)

Aug. 31 Depreciation Expense .............................. 360

Accumulated Depreciation—
Equipment....................................... 360
(¥16,000 – ¥1,600 = ¥14,400;
¥14,400 X 10% = ¥1,440;
¥1,440 X 3/12 = ¥360)

4. Aug. 31 Unearned Rent Revenue .......................... 3,800

Rent Revenue .................................... 3,800

5. Aug. 31 Salaries and Wages Expense .................. 375

Salaries and Wages Payable ............ 375

6. Aug. 31 Accounts Receivable ............................... 800

Rent Revenue .................................... 800

7. Aug. 31 Interest Expense ....................................... 1,000

Interest Payable
[(¥50,000 X 8%) X 3/12] .................. 1,000
EXERCISE 3-10 (Continued)

(b) UHURA RESORT

Adjusted Trial Balance
August 31, 2015

Debit Credit
Cash .................................................................... ¥ 19,600
Accounts Receivable.......................................... 800
Prepaid Insurance (¥4,500 – ¥1,125).................. 3,375
Supplies (¥2,600 – ¥1,950) ................................. 650
Land ..................................................................... 20,000
Buildings ............................................................. 120,000
Accumulated Depreciation—Buildings ............. ¥ 1,080
Equipment ........................................................... 16,000
Accumulated Depreciation—Equipment ........... 360
Accounts Payable ............................................... 4,500
Unearned Rent Revenue (¥4,600 – ¥3,800) ....... 800
Salaries and Wages Payable.............................. 375
Interest Payable .................................................. 1,000
Mortgage Payable ............................................... 50,000
Share Capital—Ordinary .................................... 100,000
Retained Earnings ..............................................
Dividends ............................................................ 5,000
Rent Revenue (¥86,200 + ¥3,800 + ¥800) ........... 90,800
Salaries and Wages Expense (¥44,800 + ¥375) 45,175
Utilities Expense ................................................. 9,200
Maintenance and Repairs Expense ................... 3,600
Insurance Expense ............................................. 1,125
Supplies Expense ............................................... 1,950
Depreciation Expense—(Buildings) .................. 1,080
Depreciation Expense—(Equipment) ................ 360
Interest Expense ................................................. 1,000
¥248,915 ¥248,915

EXERCISE 7-9
(a) Bad Debt Expense ............................................ 4,950
Allowance for Doubtful Accounts
($80,000 X 4%) + $1,750 = $4,950........ 4,950

(b) Bad Debt Expense ............................................ 5,800

Allowance for Doubtful Accounts
$580,000 X 1% = $5,800 ....................... 5,800

EXERCISE 9-8

(a) Biological Assets – Shearing Alpaca

($7,700 – $975) ...................................................... 6,725
Unrealized Holding Gain or Loss – Income .... 6,725

(b) Wool Inventory ........................................................ 13,000

Unrealized Holding Gain or Loss – Income .... 13,000

(c) Cash ......................................................................... 14,500

Cost of Goods Sold ................................................. 13,000
Wool Inventory ................................................. 13,000
Sales Revenue .................................................. 14,500

(d) (1) The birth of a baby Alpaca may result in a gain on the initial
recognition of the biological asset.

(2) Losses may result as the fair value of the older Alpaca will

likely decrease because the shearing is more limited than

with the other Alpacas.

EXERCISE 11-27
(a) January 1, 2014
Equipment ............................................................. 12,000
Cash ............................................................... 12,0
00

December 31, 2014

Depreciation Expense ........................................... 2,000
Accumulated Depreciation—
Equipment ..................................................................... 2,00
0

(b) December 31, 2015

Depreciation Expense ........................................... 2,000
Accumulated Depreciation—
Equipment ..................................................................... 2,00
0

Accumulated Depreciation—Equipment ............. 4,000

Loss on Impairment .............................................. 1,000
Equipment (€12,000 –
€7,000) ....................................................................... 5,000

(c) Depreciation expense—2016: (€12,000 – €5,000) ÷ 4 = €1,750