Acct 615.DL.Spring 2015 ‐ Assignment 1 April 2, 2015*
Accounting Principles by Weygandt, Kieso and Kimmel 11th edition
Thomas J. Burke NJIT Student ID# 312‐47‐125
*revised to include problems BYP3‐1, BYP3‐2 & E17‐10
Acct 615.DL.Spring 2015 ‐ Assignment 1 Accounting Principles by Weygandt, Kieso and Kimmel 11th edition
Thomas J. Burke NJIT Student ID# 312‐47‐125
E1‐6)
1
2
3
4
5
6
7
8
9
assets increase, owner's equity increase
assets decrease, owner's equity decrease
assets increase, liabilities increase
assets increase, owner's equity increase
assets decrease, owner's equity decrease
assets cash increase, accounts receivable decrease
assets increase, owner's equity increase
assets increase, liabilities increase
assets increase, owner's equity increase
1
2
3
4
5
6
7
8
c
d
a
b
d
b
e
f
E1‐7)
Acct 615.DL.Spring 2015 ‐ Assignment 1 Accounting Principles by Weygandt, Kieso and Kimmel 11th edition
Thomas J. Burke NJIT Student ID# 312‐47‐125
P1‐2A)
(a)
initial
1
2
3
4
5
6
7
8
Assets
Cash
+
$ 5,000.00
$ 1,200.00
$ (2,800.00)
$ 3,000.00
$ (400.00)
$ (2,500.00)
$ (900.00)
$ (400.00)
$ (700.00)
$ 2,000.00
$ 3,500.00 +
Accounts Receivable
+
$ 1,500.00
$ (1,200.00)
Supplies
$ 500.00
Liabilities
+
Equipment
$ 6,000.00
=
Notes Payable
+
Accounts Payable
$ 4,200.00
Owner's Equity
+ Owner's Capital ‐
$ 8,800.00
Owner's Drawings
+
Revenues
‐
Expenses
$ (2,800.00)
$ 4,500.00
$ 7,500.00
$ 2,000.00
$ 1,600.00
$ (2,500.00) salaries
$ (900.00) Aug. rent
$ (400.00) adv. exp.
$ (700.00)
$ 2,000.00
$ 4,800.00 +
$ 500.00 +
Assets
=
$ 16,800.00 =
$ 8,000.00 =
$ 2,000.00 +
$ 270.00
$ 3,270.00 +
Liabilities
+
$ 5,270.00 +
$ 8,800.00 ‐
Owner's Equity
$ 11,530.00
(b)
Sue Kojima Law Office
Income Statement
For the Month Ended August 31, 2014
Revenue
Service Revenue
Expenses
Salaries and wages expense
Rent expense
Advertising expense
Utilities expense
Total expenses
Net Income
$ 7,500
$ 2,500
900
400
270
4,070
$ 3,430
$ (700.00) +
$ 7,500.00 ‐
$ (270.00) utility exp.
$ (4,070.00)
Acct 615.DL.Spring 2015 ‐ Assignment 1 Accounting Principles by Weygandt, Kieso and Kimmel 11th edition
Thomas J. Burke NJIT Student ID# 312‐47‐125
P1‐2A)
(b) continued
Sue Kojima Law Office
Owner's Equity Statement
For the Month Ended August 31, 2014
Owner's capital, August 1
Add:
Net income
$ 3,430
Less:
Drawings
Owner's capital, August 31
$ 8,800
3,430
$ 12,230
700
$ 11,530
Sue Kojima Law Office
Balance Sheet
August 31, 2014
Assets
Cash
Accounts receivable
Supplies
Equipment
Total assets
$ 3,500
4,800
500
8,000
$ 16,800
Liabilities and Owner's Equity
Liabilities
Notes payable
Accounts payable
Total Liabilities
Owner's equity
Owner's capital
Total liabilities and owner's equity
$ 2,000
3,270
5,270
11,530
$ 16,800
Acct 615.DL.Spring 2015 ‐ Assignment 1 Accounting Principles by Weygandt, Kieso and Kimmel 11th edition
Thomas J. Burke NJIT Student ID# 312‐47‐125
P1‐3A)
(a)
Crazy Creations Co.
Income Statement
For the Month Ended June 30, 2014
Revenue
Service Revenue
Expenses
Advertising expense
Rent expense
Gasoline expense
Utilities expense
Total expenses
Net Income
$ 6,700
$ 500
1,600
200
150
2,450
$ 4,250
Crazy Creations Co.
Owner's Equity Statement
For the Month Ended June 30, 2014
Owner's capital, June 1
Add:
Investments
Net income
Less:
Drawings
Owner's capital, August 31
‐0‐
$ 12,000
$ 4,250
16,250
$ 16,250
1,300
$ 14,950
Acct 615.DL.Spring 2015 ‐ Assignment 1 Accounting Principles by Weygandt, Kieso and Kimmel 11th edition
Thomas J. Burke NJIT Student ID# 312‐47‐125
P1‐3A)
(a) continued
Crazy Creations Co.
Balance Sheet
June 30, 2014
Assets
Cash
Accounts receivable
Supplies
Equipment
Total assets
$ 10,150
3,000
2,000
10,000
$ 25,150
Liabilities and Owner's Equity
Liabilities
Notes payable
Accounts payable
Owner's equity
Owner's capital
Total liabilities and owner's equity
$ 9,000
1,200
14,950
$ 25,150
(b)
Crazy Creations Co.
Income Statement
For the Month Ended June 30, 2014
Revenue
Service Revenue
Expenses
Advertising expense
Rent expense
Gasoline expense
Utilities expense
Total expenses
Net Income
$ 7,600
$ 500
1,600
350
150
2,600
$ 5,000
Acct 615.DL.Spring 2015 ‐ Assignment 1 Accounting Principles by Weygandt, Kieso and Kimmel 11th edition
Thomas J. Burke NJIT Student ID# 312‐47‐125
P1‐3A)
(b) continued
Crazy Creations Co.
Owner's Equity Statement
For the Month Ended June 30, 2014
Owner's capital, June 1
Add:
Investments
Net income
Less:
Drawings
Owner's capital, August 31
‐0‐
$ 12,000
$ 5,000
17,000
$ 17,000
1,300
$ 15,700
Acct 615.DL.Spring 2015 ‐ Assignment 1 Accounting Principles by Weygandt, Kieso and Kimmel 11th edition
Thomas J. Burke NJIT Student ID# 312‐47‐125
P1‐4A)
(a)
Date (2014)
1‐May
2‐May
3‐May
5‐May
9‐May
12‐May
15‐May
17‐May
20‐May
23‐May
26‐May
29‐May
30‐May
Assets
Cash
+
$ 7,000.00
$ (900.00)
Accounts Receivable
+
Supplies
Liabilities
+
Equipment
=
Notes Payable
+
Accounts Payable
Owner's Equity
+ Owner's Capital ‐
$ 7,000.00
Owner's Drawings
+
Revenues
‐
Expenses
$ (900.00) rent exp
$ 600.00
$ 600.00
$ (125.00)
$ 4,000.00
$ (1,000.00)
$ (125.00) adv exp
$ 4,000.00
$ (1,000.00)
$ 5,400.00
$ (2,500.00)
$ (600.00)
$ 4,000.00
$ 5,000.00
$ 5,400.00
$ (2,500.00) salary exp
$ (600.00)
$ (4,000.00)
$ 5,000.00
$ 4,200.00
$ (275.00)
$ 14,600.00 +
$ 1,400.00 +
Assets
$ 600.00 +
=
$ 20,800.00 =
$ 4,200.00 =
$ 4,200.00
$ 5,000.00 +
Liabilities
$ 4,200.00 +
$ 7,000.00 ‐
$ 9,400.00 ‐
$ (275.00) util expense
$ (3,800.00)
+
Owner's Equity
liabilities + Owner's Equity
$ 9,200.00 +
$ 11,600.00
$ 20,800.00
P1‐4A)
( b )
Menge Consulting
Income Statement
For the Month Ended May 31, 2014
Revenue
Service Revenue
Expenses
Advertising expense
Rent expense
Salary expense
Utilities expense
Total expenses
Net Income
$ (1,000.00) +
$ 9,400
$ 125
900
2,500
275
3,800
$ 5,600
Acct 615.DL.Spring 2015 ‐ Assignment 1 Accounting Principles by Weygandt, Kieso and Kimmel 11th edition
Thomas J. Burke NJIT Student ID# 312‐47‐125
P1‐4A)
( c ) Menge Consulting
Balance Sheet
May 31, 2014
Assets
Cash
Accounts receivable
Supplies
Equipment
Total assets
$ 14,600
1,400
600
4,200
$ 20,800
Liabilities and Owner's Equity
Liabilities
Notes payable
Accounts payable
Owner's equity
Owner's capital
Total liabilities and owner's equity
$ 5,000
4,200
11,600
$ 20,800
Acct 615.DL.Spring 2015 ‐ Assignment 1 Accounting Principles by Weygandt, Kieso and Kimmel 11th edition
Thomas J. Burke NJIT Student ID# 312‐47‐125
BYP1‐1
( a ) millions
$ 116,371
$ 75,183
source
balance sheet
( b )
Apple cash (& cash equiv) September 24, 2011: $ 9,815
balance sheet
( c )
Apple accounts payable September 24, 2011:
Apple accounts payable September 25, 2010:
$ 14,632
$ 12,015
balance sheet
( d )
Apple's net sales in 2009:
Apple's net sales in 2010:
Apple's net sales in 2011:
$ 42,905
$ 65,225
$ 108,249
statement of operations
( e )
Apple's total assets September 24, 2011:
Apple's total assets September 25, 2010:
Apple's net income change from 2010 to 2011: $ 11,909
BYP1‐2
( a ) ( 1 ) December 31, 2011 total assets ‐ PepsiCo:
Coca‐Cola:
( b )
2011 ‐ 25922
millions
$ 72,882
$ 79,974
source
balance sheet
2010 =
14013 11909
( 2 ) December 31, 2011 total
accounts (notes) receivable ‐
PepsiCo:
Coca‐Cola:
$ 6,912
$ 4,920
balance sheet
( 3 ) 2011 year ended net revenue ‐
PepsiCo:
Coca‐Cola:
$ 66,504
$ 46,542
income statement
( 4 ) 2011 year ended net income ‐
PepsiCo:
Coca‐Cola:
$ 6,443
$ 8,572
income statement
Comparative Analysis Conclusions:
Both companies appear to be similar with Coca‐Cola generating greater income.
Acct 615.DL.Spring 2015 ‐ Assignment 1 Accounting Principles by Weygandt, Kieso and Kimmel 11th edition
Thomas J. Burke NJIT Student ID# 312‐47‐125
P2‐2A.
(a)
General Journal
Date
Account Titles and Explanation
2014
April 1 Cash
Owner's Capital
April 2
April 3
April 10 April 11
April 20
April 30
April 30
(Owner's investment of cash in business)
Rent Expense
Cash
(Paid April rent)
Supplies
Accounts Payable
(Purchased supplies on account from Smile Company)
Accounts Receivable
Service Revenue
(Performed dental services and billed ins. companies)
Cash
Unearned Service Revenue
(received cash advance from Heather Greene for an implant)
Cash
Service Revenue
(received cash from James Chang for serviced performed)
Salaries and Wage Expense
Cash
(paid secretary‐receptionist salary)
Accounts Payable
Cash
(paid Smile Company bill)
P2‐2A. Continued
Ref.
Debit
PAGE J1
Credit
101 20,000
301
20,000
729 1,100
101
1,100
126 4,000
201
4,000
112 5,100
400
5,100
101 1,000
209 1,000
101 2,100
400
2,100
726 2,800
101
2,800
201 2,400
101
2,400
Acct 615.DL.Spring 2015 ‐ Assignment 1 Accounting Principles by Weygandt, Kieso and Kimmel 11th edition
Thomas J. Burke NJIT Student ID# 312‐47‐125
(b)
General Ledger
Cash
Date
2014
April 1
April 2
April 11
April 20
April 30
April 30
Explanation
Date
2014
April 10
Explanation
Date
2014
April 3
Explanation
Date
2014
April 3
April 30
Explanation
Date
2014
April 11
Explanation
Date
2014
April 1
Explanation
Date
2014
April 10
April 20
P2‐2A.
Explanation
Ref.
Debit
J1
J1
J1
J1
J1
J1
20,000
Ref.
Debit
J1
5,100
Ref.
Debit
J1
4,000
Ref.
Debit
J1
J1
2,400
Ref.
Debit
Credit
2,800
2,400
20,000
18,900
19,900
22,000
19,200
16,800
Credit
No. 112
Balance
1,100
1,000
2,100
Accounts Receivable
5,100
Supplies
Credit
Credit
4,000
Unearned Service Revenue
Credit
1,000
Owner's Capital
Ref.
Debit
J1
J1
J1
Debit
No. 201
Balance
4,000
1,600
No. 209
Balance
1,000
Credit
No. 301
Balance
20,000
20,000
Credit
No. 400
Balance
Service Revenue
Ref.
No. 126
Balance
4,000
Accounts Payable
J1
No. 101
Balance
5,100
2,100
5,100
7,200
Acct 615.DL.Spring 2015 ‐ Assignment 1 Accounting Principles by Weygandt, Kieso and Kimmel 11th edition
Thomas J. Burke NJIT Student ID# 312‐47‐125
(b) Continued
General Ledger
Salaries and Wages Expense
Date
2014
April 30
Explanation
Date
2014
April 2
Explanation
Ref.
Debit
J1
2,800
Ref.
Debit
J1
1,100
Credit
2,800
Rent Expense
Credit
Bridgette Keyes DDS
Trial Balance
April 30, 2014
Debit
$ 16,800
5,100
4,000
No. 729
Balance
1,100
P2‐2A. Continued
( c )
Cash
Accounts Receivable
Supplies
Accounts Payable
Unearned Service Revenue
Owner's Capital
Service Revenue
Salaries and Wages Expense
Rent Expense
No. 726
Balance
Credit
$ 1,600
1,000
20,000
7,200
2,800
1,100
$ 29,800 $ 29,800
Acct 615.DL.Spring 2015 ‐ Assignment 1 Accounting Principles by Weygandt, Kieso and Kimmel 11th edition
Thomas J. Burke NJIT Student ID# 312‐47‐125
P2‐3A
(a)
General Journal
Date
Account Titles and Explanation
2014
May 1 Cash
Owner's Capital
1 Rent Expense
Cash
1 Furniture and Equipment
Cash
Accounts Payable
1 Prepaid Insurance
Cash
May 6 Supplies
Cash
May 7 Supplies
Accounts Payable
May 8 Cash
Accounts Receivable
Service Revenue
May 9 Accounts Payable
Cash
May 10 Cash
Accounts Receivable
May 11 Utilities Expense
Accounts Payable
May 12 Salary Expense
Cash
P2‐3A
(b)
Cash
+
40,000
101
301
729
101
130
101
201
140
101
126
101
126
201
101
112
400
201
101
101
101
730
201
726
101
Owner's Capital
‐
Rent Expense
+
24,000
Ref.
‐
‐
+
40,000
May 1, $40k capital investment
Cash
+
‐
40,000 24,000
May 1, paid 1st year rent
Debit
PAGE J1
Credit
40,000
40,000
24,000
24,000
30,000
10,000
20,000
1,800
1,800
500
500
1,500
1,500
8,000
12,000
20,000
400
400
3,000
3,000
350
350
6,100
6,100
Acct 615.DL.Spring 2015 ‐ Assignment 1 Accounting Principles by Weygandt, Kieso and Kimmel 11th edition
Thomas J. Burke NJIT Student ID# 312‐47‐125
P2‐3A
(b) continued
Furniture and Equipment
+
30,000
‐
Cash
+
‐
40,000 24,000
10,000
Prepaid Insurance
+
1800
‐
‐
Supplies
+
500
1,500
P2‐3A
‐
‐
+
20,000
May 1, $30k furn. & equip
$10k cash $20k on account
Cash
+
‐
40,000 24,000
10,000
1,800
Supplies
+
500
Accounts Payable
May 1, $1,800 cash for insurance
Cash
+
‐
40,000 24,000
10,000
1,800
500
May 6, Supplies $500 cash
Accounts Payable
‐
+
20,000
1,500
May 7, Supplies $1,500 on account
Acct 615.DL.Spring 2015 ‐ Assignment 1 Accounting Principles by Weygandt, Kieso and Kimmel 11th edition
Thomas J. Burke NJIT Student ID# 312‐47‐125
(b) continued
Accounts Receivable
+
12,000
‐
Accounts Payable
‐
+
20,000
1,500
400
Cash
+
‐
40,000 24,000
8,000 10,000
3,000 1,800
500
400
P2‐3A
(b) continued
Cash
+
‐
40,000 24,000
8,000 10,000
1,800
500
Service Revenue
‐
+
20,000
May 8, Revenue $20k
cash $8k
acc. $12k
Cash
+
‐
40,000 24,000
8,000 10,000
1,800
500
400
May 9, paid $400 cash to suppliers
via accounts payable
Accounts Receivable
+
‐
12,000 3,000
May 10, rcvd $3k cash via accounts
receivable
Acct 615.DL.Spring 2015 ‐ Assignment 1 Accounting Principles by Weygandt, Kieso and Kimmel 11th edition
Thomas J. Burke NJIT Student ID# 312‐47‐125
Utilities Expense
Accounts Payable
+
350
‐
‐
Salary
Expense
+
6,100
‐
+
20,000
1,500
400
350
May 11, rcvd $350 utility expense,
pay on account Cash
+
‐
40,000 24,000
8,000 10,000
3,000 1,800
500
400
6,100
May 12, paid $6,100 cash to salaries
P2‐3A. Continued
( c )
Santa Ana Services
Trial Balance
May 31, 2014
Cash
Accounts Receivable
Supplies
Furniture and Equipment
Supplies
Accounts Payable
Owner's Capital
Service Revenue
Salaries Expense
Rent Expense
Utilities Expense
Debit
$ 8,200
9,000
2,000
30,000
1,800
Credit
$ 21,450
40,000
20,000
6,100
24,000
350
$ 81,450 $ 81,450
Acct 615.DL.Spring 2015 ‐ Assignment 1 Accounting Principles by Weygandt, Kieso and Kimmel 11th edition
Thomas J. Burke NJIT Student ID# 312‐47‐125
BYP2‐2
(a)
Amazon
1. Interest Expense
2. Cash and Cash Equivalents
3. Accounts Payable
(millions)
$ 65
$ 5,269
$ 11,145
Wal‐Mart
1. Net Sales Revenues
2. Inventories
3. Cost of Sales
(millions)
$ 443,854
$ 40,714
$ 335,127
(b)
(1)
(2)
(3)
(4)
BYP2‐3
( a)
( b)
( c)
( d)
( e)
( f)
( g)
service revenue is increased
cash is decreased
cash is decreased
cash is increased
Application Software
$
38.82 B
$
10.90 B
International Business Machines Corporation
Microsoft Corporation
SAP SE
Adobe Systems Incorporated
IBM
sales $ 92.79 B
net income
$ 15.75 B
IBM is larger in sales and reported higher net income (revenues)
Acct 615.DL.Spring 2015 ‐ Assignment 1 Accounting Principles by Weygandt, Kieso and Kimmel 11th edition
Thomas J. Burke NJIT Student ID# 312‐47‐125
P3‐1A
(a)
General Journal
Date
Account Titles and Explanation
2014
Adjusting Entries
May 31 Supplies Expense
Supplies
(record supplies used)
May 31 Utiliies Expense
Accounts Payable
(record utility expenses on account)
May 31 Insurance Expense
Prepaid Insurance
(record Insurance expired)
May 31 Unearned Service Revenue
Service Revenue
Ref.
Debit
PAGE J4
Credit
631 900
126
900
732 250
201
250
722 150
130
150
209 400
400
400
726 540
212
540
717 190
150 190
112 1,700
400
1,700
(record revenue for services performed)
May 31 Salary and Wages Expense
Salary and Wages Payable
(record accrued salaries and wages)
May 31 Depreciation Expense
Accumulated Depreciation ‐ Equipment
(record monthly depreciation)
May 31 Accounts Receivable
Service Revenue
(record revenue for services performed)
Acct 615.DL.Spring 2015 ‐ Assignment 1 Accounting Principles by Weygandt, Kieso and Kimmel 11th edition
Thomas J. Burke NJIT Student ID# 312‐47‐125
P3‐1A
(b)
General Ledger
Cash
Date
Explanation
2014
May 31 Balance
Ref.
Debit

4,500
Credit
4,500
Accounts Receivable
Date
Explanation
2014
May 31 Balance
31 Adjusting
Ref.
Debit

J4
6,000
1,700
Credit
Ref.
Debit

J4
1,900
Ref.
Debit

J4
3,600
Credit
900
Prepaid Insurance
Date
Explanation
2014
May 31 Balance
31 Adjusting
Credit
150
Equipment
Date
Explanation
2014
May 31 Balance
Ref.
Debit

11,400
Ref.
Debit
Credit
J4
Credit
190
Accounts Payable
Date
Explanation
2014
May 31 Balance
31 Adjusting
Ref.

J4
Debit
No. 126
Balance
1,900
1,000
No. 130
Balance
3,600
3,450
No. 149
Balance
11,400
Accumulated Depreciation‐Equipment
Date
Explanation
2014
May 31 Adjusting
No. 112
Balance
6,000
7,700
Supplies
Date
Explanation
2014
May 31 Balance
31 Adjusting
No. 101
Balance
Credit
4,500
250
No. 150
Balance
190
No. 201
Balance
4,500
4,750
Acct 615.DL.Spring 2015 ‐ Assignment 1 Accounting Principles by Weygandt, Kieso and Kimmel 11th edition
Thomas J. Burke NJIT Student ID# 312‐47‐125
Unearned Service Revenue
Date
Explanation
2014
May 31 Balance
31 Adjusting
Ref.

J4
Debit
Credit
2,000
400
Salaries and Wages Payable
Date
Explanation
2014
May 31 Adjusting
Ref.
Debit
J4
Credit
540
Owner's Capital
Date
Explanation
2014
May 31 Balance
Ref.
Debit

Ref.
Debit

J4
J4
17,700
Credit
No. 400
Balance
7,500
400
1,700
Ref.
Debit
Credit
J4
900
Ref.
Debit
Credit
J4
190
Ref.
Debit
J4
150
7,500
7,900
9,600
No. 631
Balance
900
No. 717
Balance
190
Insurance Expense
Date
Explanation
2014
May 31 Adjusting
540
17,700
Depreciation Expense
Date
Explanation
2014
May 31 Adjusting
No. 212
Balance
Credit
Supplies Expense
Date
Explanation
2014
May 31 Adjusting
2,000
1,600
No. 301
Balance
Service Revenue
Date
Explanation
2014
May 31 Balance
31 Adjusting
31 Adjusting
No. 209
Balance
Credit
No. 722
Balance
150
Acct 615.DL.Spring 2015 ‐ Assignment 1 Accounting Principles by Weygandt, Kieso and Kimmel 11th edition
Thomas J. Burke NJIT Student ID# 312‐47‐125
P3‐1A
(b) Continued
General Ledger
Salaries and Wages Expense
Date
Explanation
2014
May 31 Balance
31 Adjusting
Ref.
Debit

J4
3,400
540
Credit
3,400
3,940
Rent Expense
Date
Explanation
2014
May 31 Balance
Ref.
Debit

900
Credit
Ref.
Debit
J4
250
No. 729
Balance
900
Utilities Expense
Date
Explanation
2014
May 31 Adjusting
No. 726
Balance
Credit
No. 732
Balance
250
Acct 615.DL.Spring 2015 ‐ Assignment 1 Accounting Principles by Weygandt, Kieso and Kimmel 11th edition
Thomas J. Burke NJIT Student ID# 312‐47‐125
P3‐1A
( c) Nardelli Consulting
Adjusted Trial Balance
May 31, 2014
Cash
Accounts Receivable
Supplies
Prepaid Insurance
Equipment
Accumulated Depreciation‐Equipment
Accounts Payable
Unearned Service Revenue
Salary and Wages Payable
Owner's Capital
Service Revenue
Supplies Expense
Depreciation Expense
Insurance Expense
Salaries and Wages Expense
Rent Expense
Utilities Expense
Debit
$ 4,500
7,700
1,000
3,450
11,400
Credit
$ 190
4750
1,600
540
17,700
9,600
900
190
150
3,940
900
250
$ 34,380 $ 34,380
Acct 615.DL.Spring 2015 ‐ Assignment 1 Accounting Principles by Weygandt, Kieso and Kimmel 11th edition
Thomas J. Burke NJIT Student ID# 312‐47‐125
P3‐2A
( a) General Journal
Date
Account Titles and Explanation
2014
Adjusting Entries
May 31 Insurance Expense
Prepaid Insurance
(record Insurance expired)
May 31 Supplies Expense
Supplies
(record supplies used)
May 31 Depreciation Expense
Accumulated Depreciation ‐ Buildings
(record monthly building depreciation)
May 31 Depreciation Expense
Accumulated Depreciation ‐ Equipment
(record monthly equipment depreciation)
May 31 Interest Expense
Interest Payable
(record monthly interest owed on mortage payable)
May 31 Unearned Rent Revenue
Rent Revenue
(record earned rent revenue)
May 31 Salary and Wages Expense
Salary and Wages Payable
(record accrued salaries and wages)
Ref.
Debit
PAGE J1
Credit
722 200
130
200
631 1,330
126
1,330
619 250
142 250
619 125
150 125
718 400
150 400
208 2,200
429
2,200
726 750
212 750
Acct 615.DL.Spring 2015 ‐ Assignment 1 Accounting Principles by Weygandt, Kieso and Kimmel 11th edition
Thomas J. Burke NJIT Student ID# 312‐47‐125
P3‐2A
(b)
General Ledger
Cash
Date
Explanation
2014
May 31 Balance
Ref.
Debit
Credit

3,500
Supplies
Date
Explanation
2014
May 31 Balance
31 Adjusting
Ref.
Debit

J1
Credit
1,330
Prepaid Insurance
Date
Explanation
2014
May 31 Balance
31 Adjusting
Ref.
Debit

J1
Credit
200
Land
Date
Explanation
2014
May 31 Balance
Ref.
Debit
Credit

Ref.
Debit
Credit

Ref.
Debit
J1
Credit
250
Equipment
Date
Explanation
2014
May 31 Balance
Ref.

2,080
750
No. 130
Balance
2,400
2,200
No. 140
Balance
No. 141
Balance
60,000
Acumulated Depreciation ‐ Buildings
Date
Explanation
2014
May 31 Adjusting
No. 126
Balance
12,000
Buildings
Date
Explanation
2014
May 31 Balance
No. 101
Balance
Debit
Credit
No. 142
Balance
250
No. 149
Balance
15,000
Acct 615.DL.Spring 2015 ‐ Assignment 1 Accounting Principles by Weygandt, Kieso and Kimmel 11th edition
Thomas J. Burke NJIT Student ID# 312‐47‐125
P3‐2A
(b) continued
General Ledger
Accumulated Depreciation‐Equipment
Date
Explanation
2014
May 31 Adjusting
Ref.
Debit
J1
Credit
125
Accounts Payable
Date
Explanation
2014
May 31 Balance
Ref.
Debit
Credit

Ref.

J1
Debit
Credit
Ref.
2,200
Debit
J1
Credit
750
Interest Payable
Date
Explanation
2014
May 31 Adjusting
Ref.
Debit
J1
Credit
400
Mortgage Payable
Date
Explanation
2014
May 31 Balance
Ref.
Debit
Credit

Ref.
Debit
Credit

Ref.

J1
No. 212
Balance
750
No. 230
Balance
400
No. 275
Balance
No. 301
Balance
41,380
Rent Revenue
Date
Explanation
2014
May 31 Balance
31 Adjusting
No. 208
Balance
40,000
Owner's Capital
Date
Explanation
2014
May 31 Balance
No. 201
Balance
3,300
1,100
Salaries and Wages Payable
Date
Explanation
2014
May 31 Adjusting
125
4,800
Unearned Rent Revenue
Date
Explanation
2014
May 31 Balance
31 Adjusting
No. 150
Balance
Debit
Credit
No. 429
Balance
2,200
10,300
12,500
Acct 615.DL.Spring 2015 ‐ Assignment 1 Accounting Principles by Weygandt, Kieso and Kimmel 11th edition
Thomas J. Burke NJIT Student ID# 312‐47‐125
P3‐2A
(b) continued
General Ledger
Advertising Expense
Date
Explanation
2014
May 31 Balance
Ref.
Debit
Credit

600
Depreciation Expense
Date
Explanation
2014
May 31 Adjusting
31 Adjusting
Ref.
Debit
J1
J1
250
125
Credit
Ref.
Debit
Credit
J1
1,330
Interest Expense
Date
Explanation
2014
May 31 Adjusting
Ref.
Debit
J1
400
Credit
Ref.
Debit
J1
200
Credit
Ref.
Debit

J1
3,300
750
Credit
Ref.
Debit

900
No. 718
Balance
No. 722
Balance
No. 726
Balance
3,300
4,050
Utilities Expense
Date
Explanation
2014
May 31 Balance
1,330
200
Salaries and Wages Expense
Date
Explanation
2014
May 31 Balance
31 Adjusting
No. 631
Balance
400
Insurance Expense
Date
Explanation
2014
May 31 Adjusting
No. 619
Balance
250
375
Supplies Expense
Date
Explanation
2014
May 31 Adjusting
No. 610
Balance
Credit
No. 732
Balance
900
Acct 615.DL.Spring 2015 ‐ Assignment 1 Accounting Principles by Weygandt, Kieso and Kimmel 11th edition
Thomas J. Burke NJIT Student ID# 312‐47‐125
P3‐2A
( c) SKYLINE MOTEL
Adjusted Trial Balance
May 31, 2014
Cash
Supplies
Prepaid Insurance
Land
Buildings
Accumulated Depreciation‐Buildings
Equipment
Accumulated Depreciation‐Equipment
Accounts Payable
Unearned Rent Revenue
Salary and Wages Payable
Interest Payable
Mortgage Payable
Owner's Capital
Rent Revenue
Advertising Expense
Depreciation Expense
Supplies Expense
Interest Expense
Insurance Expense
Salaries and Wages Expense
Utilities Expense
Debit
$ 3,500
750
2,200
12,000
60,000
Credit
$ 250
15,000
$ 125
4800
1,100
750
400
40,000
41,380
12,500
600
375
1,330
400
200
4,050
900
$ 101,305 $ 101,305
Acct 615.DL.Spring 2015 ‐ Assignment 1 Accounting Principles by Weygandt, Kieso and Kimmel 11th edition
Thomas J. Burke NJIT Student ID# 312‐47‐125
P3‐2A
( d) SKYLINE MOTEL
Income Statement
For the Month Ended May 31, 2014
Revenue
Rent Revenue
Expenses
Advertising expense
Depreciation expense
Supplies expense
Interest expense
Insurance expense
Salaries and Wages expense
Utilities expense
Total expenses
Net Income
$ 12,500
$ 600
375
1,330
400
200
4,050
900
7,855
$ 4,645
SKYLINE MOTEL
Owner's Equity Statement
For the Month Ended May 31, 2014
Owner's capital, May 1
Add:
Less:
Owner's capital, May 31
$ 41,380
Investments
‐0‐
Net income $ 4,645
Drawings
4,645
46,025
‐0‐
$ 46,025
Acct 615.DL.Spring 2015 ‐ Assignment 1 Accounting Principles by Weygandt, Kieso and Kimmel 11th edition
Thomas J. Burke NJIT Student ID# 312‐47‐125
P3‐2A)
(d) continued
SKYLINE MOTEL
Balance Sheet
May 31, 2014
Assets
Current assetts
Cash
Supplies
Prepaid Insurance
$ 3,500
750
2,200
Total current assets
Property, plant and equipment
Land
Buildings
12,000
60,000
Less: Accumulated depreciation ‐ buildings 250
Equipment
Less: Accumulated depreciation ‐ equipment
6,450
59750
15,000
125
14,875
Total assets
Liabilities and Owner's Equity
Current Liabilities
Accounts Payable
Unearned Rent Revenue
Salary and Wages Payable
Interest Payable
Total current liabilities
Long‐term Liabilities
Mortgage Payable
Total long‐term liabilities
Total liabilities
Owner's equity
Owner's capital
Total liabilities and owner's equity
86,625
$ 93,075
4,800
1,100
750
400
$ 7,050
40,000
40,000
47,050
46,025
46,025
$ 93,075
Acct 615.DL.Spring 2015 ‐ Assignment 1 Accounting Principles by Weygandt, Kieso and Kimmel 11th edition
Thomas J. Burke NJIT Student ID# 312‐47‐125
P3‐3A)
(a)
General Journal
Date
Account Titles and Explanation
2014
Adjusting Entries ‐ EVERETT CO.
Sept 30 Accounts Receivable
Service Revenue
Sept 30 Supplies Expense
Supplies
Sept 30 Rent Expense
Prepaid Rent
Sept 30 Depreciation Expense
Accumulated Depreciation ‐ Equipment
Sept 30 Salary and Wages Expense
Salary and Wages Payable
Sept 30 Interest Expense
Interest Payable
Sept 30 Unearned Rent Revenue
Rent Revenue
Ref.
Debit
PAGE J1
Credit
1,100
1,100
850
850
1,000
700
725
100
850
1,000
700
725
100
850
Acct 615.DL.Spring 2015 ‐ Assignment 1 Accounting Principles by Weygandt, Kieso and Kimmel 11th edition
Thomas J. Burke NJIT Student ID# 312‐47‐125
P3‐3A
( b) EVERETT CO.
Income Statement
For the Three Months Ended September 30, 2014
Revenue
Service Revenue
Rent Revenue
Total Revenue
Expenses
Salaries and Wages expense
Rent expense
Depreciation expense
Supplies expense
Utilities expense
Interest expense
Total expenses
Net Income
$ 17,100
2,260
19,360
$ 8,725
2,900
700
850
1,510
100
14,785
$ 4,575
EVERETT CO.
Owner's Equity Statement
For the Three Months Ended September 30, 2014
Owner's capital, July 1
Add:
Less:
Owner's capital, September 30
$ 22,000
Investments
‐0‐
Net income $ 4,575
Drawings
4,575
26,575
1,600
$ 24,975
Acct 615.DL.Spring 2015 ‐ Assignment 1 Accounting Principles by Weygandt, Kieso and Kimmel 11th edition
Thomas J. Burke NJIT Student ID# 312‐47‐125
P3‐3A)
(b) continued
EVERETT CO.
Balance Sheet
September 30, 2014
Assets
Current assetts
Cash
Accounts Receivable
Supplies
Prepaid Rent
$ 8,700
11,500
650
1,200
Total current assets
Property, plant and equipment
Equipment
Less: Accumulated depreciation ‐ equipment
Total assets
Liabilities and Owner's Equity
Current Liabilities
Accounts Payable
Salary and Wages Payable
Interest Payable
Unearned Rent Revenue
Total current liabilities
Long‐term Liabilities
Notes Payable
Total long‐term liabilities
Total liabilities
Owner's equity
Owner's capital
22,050
18,000
17,300
700
$ 39,350
2,500
725
100
1,050
4,375 $ 4,375
10,000
10,000
14,375
24,975
Total liabilities and owner's equity
P3‐3A)
(c) note value * annual int rate * term (month(s) (time) in terms of 1 year) = interest owed
10000 * 12% * x/12 = 100.00
x = 1 month outstanding
24,975
$ 39,350
Acct 615.DL.Spring 2015 ‐ Assignment 1 Accounting Principles by Weygandt, Kieso and Kimmel 11th edition
Thomas J. Burke NJIT Student ID# 312‐47‐125
BYP 3‐1
a.
b.
Apple Inc. items that may result in adjusting entries for accruals:
Payable items such as Accounts payable via 'CONSOLIDATED BALANCE SHEETS'
c.
Based on the 'CONSOLIDATED STATEMENTS OF CASH FLOWS', Apple Inc. Net income
is showing a positive growth trend from 2009 to 2011 from $8,235M to $25,922. BYP 3‐2
a
b.
c.
d.
c.
Apple Inc. items that may result in adjusting entries for prepayments:
Cost of sales via 'CONSOLIDATED STATEMENTS OF OPERATIONS'
consisting of chart of accounts items such as supplies and rent
Property, plant and equipment via 'CONSOLIDATED BALANCE SHEETS'
Increase (decrease) from 2010 to 2011
PepsiCo
net property, plant & equip
$ 640
selling, general, & admin exp.
$ 2,331
long‐term debt (obligations)
$ 569
net income
$ 124
cash & cash equivalents
$ (1,876)
Coca‐Cola
$ 212
$ 4,282
$ (385)
$ (3,225)
$ 4,286
Acct 615.DL.Spring 2015 ‐ Assignment 1 Accounting Principles by Weygandt, Kieso and Kimmel 11th edition
Thomas J. Burke NJIT Student ID# 312‐47‐125
E17‐1.
a.
financing activities
b.
noncash investing and financing activities
c.
noncash investing and financing activities
d.
financing activities
e.
investing activities
f.
operating activities
g.
operating activities
E17‐8.
VELO COMPANY
Statement of Cash Flows ‐ Indirect Method
For the Year Ended December 31, 2014
Cash flows from operating activities
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense
Decrease in inventory
Decrease in accounts payable
Increase in accounts receivable
Net cash provided by operating activities
$ 93,000
$ 34,000 19,000 (8,000)
(9,000)
Cash flows from investing activities
Sale of land
Purchase of equipment
Net cash used by investing activities
25,000 (60,000)
Cash flows from financing activities
Issuance of common stock
Payment of cash dividends
Redemption of bonds
Net cash used by financing activities
42,000 (45,000)
(50,000)
Net increase in cash
Cash at beginning of period
Cash at end of period
36,000
129,000
(35,000)
41,000
22,000
$ 63,000
Acct 615.DL.Spring 2015 ‐ Assignment 1 Accounting Principles by Weygandt, Kieso and Kimmel 11th edition
Thomas J. Burke NJIT Student ID# 312‐47‐125
E17‐10. Net cash provided by operating activities for year end December 31, 2014 (Direct Method)
Revenues
Deduct: Increase in accounts receivables
Cash receipts from customers
Operating expenses
Deduct: Increase in accounts payable
Cash payments for operating expenses
Net cash provided by operating activities
E17‐14.
$ 192,000 (60,000)
$ 132,000
78,000 (23,000)
55,000
$ 187,000
Acct 615.DL.Spring 2015 ‐ Assignment 1 Accounting Principles by Weygandt, Kieso and Kimmel 11th edition
Thomas J. Burke NJIT Student ID# 312‐47‐125
E17‐14.
INTERNATIONAL COMPANY Worksheet Statement of Cash Flows For the Year Ended December 31, 2014 Balance Sheet Accounts
Debit balance accounts
Cash
Accounts receivable
Inventories
Land
Equipment
Total
Credit balance accounts
Accumulated depreciation‐equipment
Accounts payable
Bonds payable
Common stock
Retained earnings
Total
Balance 12/31/13
22,000 76,000 189,000 100,000 200,000 587,000 42,000 47,000 200,000 164,000 134,000 $ 587,000 Reconciling Items**
Debit
Credit
51,000
9,000
9,000
25,000
50,000
70,000
Statement of Cash Flow Effects **
Operating activities
Net income
Increase in accounts receivable
Decrease in inventories
Decrease in accounts payable
Depreciation expense
Investing activities
Sale of land
Purchase of equipment
Financing activities
Payment of dividends
Redemption of bonds
Issuance of common stock
Total
Increase in cash
Total
** reconciling items color‐coded to cross‐reference each entry
135,000
9,000
9,000
13,000
24,000
25,000
50,000
70,000
50,000
50,000
243,000
73,000 85,000 180,000 75,000 250,000 663,000
66,000 34,000 150,000 50,000 214,000 135,000 199,000 $ 663,000
24,000
13,000
50,000
Balance 12/31/14
192,000
51,000
$ 243,000 $ 243,000
Acct 615.DL.Spring 2015 ‐ Assignment 1 Accounting Principles by Weygandt, Kieso and Kimmel 11th edition
Thomas J. Burke NJIT Student ID# 312‐47‐125
P17‐1A
Statement of Cash Flow Activity Affected
Cash Inflow, Outflow, or No Effect?
Recorded depreciation expense on the plant assets
Recorded and paid interest expense
operating activity
no effect
operating activity
cash outflow
Recorded cash proceeds from a disposal of plant assets
Acquired land by issuing common stock
Paid a cash dividend to preferred stock holders
Paid a cash dividend to common stock holders
Recorded cash sales
Recorded sales on account
investing activity
cash inflow
no change
no effect
financing activity
cash outflow
financing activity
cash outflow
operating activity
operating activity
cash inflow
no effect
operating activity
cash outflow
operating activity
no effect
Transaction
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
Purchased inventory for cash
Purchased inventory on account
BYP 17‐1
a.
cash generated by operating activities:
2011 ‐ $37,529 2010 ‐ $18,595
(millions)
(millions)
b.
increase/(decrease) cash & cash equivalents:
2011 ‐ ($1,446)
2010 ‐ $5,998
(millions)
(millions)
c.
method of computing net cash provided by operating activities is the indirect method
d.
2011 change in accounts receivable provided cash.
2011 change in inventories provided cash.
2011 change in accounts payable provided cash.
e.
2011 net cash outflow for investing activities was $40,419 million.
f.
Income taxes paid ending Sept. 24, 2011 is $3,338 million.
BYP 17‐2
Acct 615.DL.Spring 2015 ‐ Assignment 1 Accounting Principles by Weygandt, Kieso and Kimmel 11th edition
Thomas J. Burke NJIT Student ID# 312‐47‐125
a.
net cash provided operating activities ‐
capital expenditures plant, property and equipment ‐
cash dividends paid =
Free Cash Flow*
Pepsico
Coca‐Cola Company
8,944
9,474
(3,339)
(3,157)
$ 2,448
(2,920)
(4,300)
$ 2,254
*numbers in millions
b.
Conclusions: Both Pepsico & Coca‐Cola are similar and have more than adequate cash‐generating abilities.
Acct 615.DL.Spring 2015 ‐ Assignment 1 Accounting Principles by Weygandt, Kieso and Kimmel 11th edition
Thomas J. Burke NJIT Student ID# 312‐47‐125
P18‐2
2015 ratios PAINTER TOOL COMPANY
a.
earnings per share:
b.
return on common stockholders' equity:
c.
return on assets:
d.
current ratio:
e.
acid‐test ratio:
f.
accounts receivable turnover:
g.
inventory turnover:
h.
times interest earned:
i.
asset turnover:
j.
debt to assets ratio:
P18‐3
a.
($203,000 / 57,000) = $3.56
($203,000 / (($566,700 + $465,000)/2) = 39.3%
($203,000 / (($970,200 + $853,800) / 2) = 22.3%
($369,000 / $203,500) = 1.82:1
($236,900 / $203,500) = 1.16:1
($1,818,500 / (($107,800 + $102,800) / 2) = 17.2
($1,011,500 / (($133,000 + $115,500) / 2) = 8.1
($308,000 / $18,000) = 17.1
($1,818,500 / (($970,200 + $852,000) / 2) = 2.0
($403,500 / $970,200) = 41.6%
2014 & 2015 ratios for LANDWEHR CORPORATION
*1.
*2.
*3.
4.
*5.
*6.
profit margin:
asset turnover:
earnings per share:
price‐earnings ratio:
payout ratio:
debt to asset ratio:
2014
2015
$30/$650 = 4.6%
$45/$700 = 6.4%
$650/$566.5= 1.1 time$700/$620=1.1 times
$30/31=$.97
$45/$32=$1.41
$5/$.97=5.2 times
$8/$1.41=5.7 times
$18/$30=60%
$25/$45=55.6%
$165/$600=27.5%
$155/$640=24.2%
*ratio numerator and denominator in thousands
b.
From a profitability standpoint, Landwehr has improved. Additionally,
their debt to asset ratio indicates improved solvency as the company appears to be buying down debt.
Acct 615.DL.Spring 2015 ‐ Assignment 1 Accounting Principles by Weygandt, Kieso and Kimmel 11th edition
Thomas J. Burke NJIT Student ID# 312‐47‐125
P18‐4 a.
*liquidity:
current ratio:
acid‐test (quick) ratio:
accounts receivable turnover:
inventory turnover:
2014
2015
$343/$182=1.9:1
$374/$198=1.9:1
$185/$182=1.0:1
$220/$198=1.1:1
$790/$84=9.4 times $850/$89=9.6 times
$575/$126.5=4.5 time $620/$130=4.8 times
CHANGE
No change
Increase
Increase
Increase
*profitability:
profit margin:
asset turnover:
return on assets:
EPS:
$42/$790=5.3%
$790/$639=1.2 times
$42/$639=6.6%
$42/20=$2.10
Decrease
Increase
Decrease
Increase
$43/$850=5.1%
$850/$666=1.3 times
$43/$666=6.5%
$43/20=$2.15
*ratio numerator and denominator in thousands
b.
2014
return on common *1. stockholders' equity
*2. debt to total assets
3. price‐earnings ratio
$43/$326=13.2%
$348/$684=50.9%
$9/$2.15=4.2 times
*ratio numerator and denominator in thousands
2015
CHANGE
$50/$451=11.1%
Decrease
$248/$700=35.4%
Decrease
$12.8/$2.5=5.1 times Increase
Acct 615.DL.Spring 2015 ‐ Assignment 1 Accounting Principles by Weygandt, Kieso and Kimmel 11th edition
Thomas J. Burke NJIT Student ID# 312‐47‐125
BYP 18‐1
a.
Apple Inc.
Net Sales and Net Income Trend Analysis
in relation to base period 2009
net sales (millions)
relation to base period
2011
$108,249
252%
net income (millions)
relation to base period
$ 25,922 $ 14,013 $ 8,235
315%
170%
100%
2010
$65,225
152%
2009
$42,905
100%
The three year trend analysis of net sales and net income show that Apple, Inc. is showing dramatic growth for the 3 year period from 2009 thru 2011.
b.
1.
2.
3.
4.
profit margin
asset turnover
return on assets
return on common
stockholders' equity
2011
2010
23.9%
21.5%
1.13 times 1.06 times
27%
22.8%
41.7%
35.3%
Based on the 2011 and 2010 profitability ratios, Apple's management effectiveness, ability to control costs and profitability of assets and corporate investements
indicate the company was very successful in 2011 & 2010.
c.
1.
2.
debt to assets ratio
times interest earned
2011
34.2%
*
2010
36.4%
*
* (net income + tax expense + interest expense)/interest expense
Apple's solvency appears strong with a low percentage of total
assets provided by creditors.
d.
BYP 18‐2
While annual report information provdes a wealth of financial data to measure profitability, liquidity and solvency. Several key issues such as management styles and philosphies, domestic and global social trends and tecnologies are not available in annual reports. Prior to investment, annual reports should be evaluated in conjunction with respected newspapers, journals and magazines.
Acct 615.DL.Spring 2015 ‐ Assignment 1 Accounting Principles by Weygandt, Kieso and Kimmel 11th edition
Thomas J. Burke NJIT Student ID# 312‐47‐125
(a)
PepsiCo
1. (i)
(ii)
2. (i)
(ii)
3.
(b)
Coca‐Cola
% increase in net sales
from 2010 to 2011
66%
32.50%
% increase (decrease) in net income
from 2010 to 2011
85%
(27.2%)
% increase in total assets
from 2010 to 2011
54.90%
9.70%
% increase in total common
stockholders' equity
from 2010 to 2011
60.30%
1.90%
EPS 2011
P‐E ratio 2011
$28.05
2.37 times
$3.75
20.01 times
While PepsiCo has shown significant gain from 2010 to 2011, Coca‐Cola is a
winner with a solid P‐E indicating a 20.01 ratio of market price to earnings per share