BUS312A/612A
Financial Reporting I
Homework 9.10.2014 & 9.15.2014
The Accounting Cycle – Review
Chapter 3
E3-1 (Transaction Analysis-Service Company) During the first month of operations of her
business (a sole proprietorship), the following events and transactions occurred.
Instructions Journalize the transactions in the general journal.
April
2 Invested $32,000 cash and equipment valued at $14,000 in the business.
2 Hired a secretary-receptionist at a salary of $290 per week payable monthly.
3 Purchased supplies on account $700. (Debit an asset account.)
7 Paid office rent of $600 for the month.
11 Completed a tax assignment and billed client $1,100 for services rendered. (Use Service Rev)
E3-1 (Transaction Analysis-Service Company) During the first month of operations of her business
(a sole proprietorship), the following events and transactions occurred.
April
12 Received $3,200 advance on a management consulting engagement.
17 Received cash of $2,300 for services completed for Ferengi Co.
21 Paid insurance expense $110.
30 Paid secretary-receptionist $1,160 for the month.
30 A count of supplies indicated that $120 of supplies had been used.
30 Purchased a new computer for $6,100 with personal funds. (The computer will be used exclusively
for business purposes.)
E3-17 March transactions:
March 1
Invested $50,000 cash for common stock
3
Purchased real estate for $38,000 cash (land $10,000, building 22,000, equipment 6,000)
5
Paid $1,600 to advertise the driving range & golf course
6
Paid $1,480 for a one-year insurance policy
10
Purchased golf equipment for $2,500 from Singh Company, payable in 30 days
E3-17 March transactions:
March18
Received golf fees of $1,200 in cash
25
Declared and paid a $500 cash dividend
30
Paid wages of $900
30
Paid Singh Company in full
31
Received $750 in cash for golf fees.
Adjusting & Reversing Entries: 4 Kinds
Adjusting & Reversing Entries: 4 Kinds
E3-6 (Adjusting Entries) Karen Weller, D.D.S., opened a dental practice on January 1, 2014.
During the first month of operations the following transactions occurred.
Instructions Prepare the adjusting entries on January 31. Account titles are: Accumulated Depreciation-Dental
Equipment; Depreciation Expense; Service Revenue; Accounts Receivable; Insurance Expense; Interest Expense;
Interest Payable; Prepaid Insurance; Supplies; Supplies Expense; Utilities Expense; and Utilities Payable.
1.
Performed services for patients who had dental plan insurance. At January 31, $750 of such services was
earned but not yet billed to the insurance companies.
2.
Utility expenses incurred but not paid prior to January 31 totaled $520.
3.
Purchased dental equipment on January 1 for $80,000, paying $20,000 in cash and signing a $60,000, 3year note payable. The equipment depreciates $400 per month. Interest is $500 per month.
E3-6 (Adjusting Entries) Karen Weller, D.D.S., opened a dental practice on January 1, 2014.
During the first month of operations the following transactions occurred.
Instructions Prepare the adjusting entries on January 31. Account titles are: Accumulated Depreciation-Dental
Equipment; Depreciation Expense; Service Revenue; Accounts Receivable; Insurance Expense; Interest Expense;
Interest Payable; Prepaid Insurance; Supplies; Supplies Expense; Utilities Expense; and Utilities Payable.
4. Purchased a one-year malpractice insurance policy on January 1 for $12,000.
5. Purchased $1,600 of dental supplies. On January 31, determined that $500 of supplies were on hand.
E3-10 (Adjusting Entries) Greco Resort opened for business on June 1 with eight air-conditioned units. Its
trial balance on August 31 is as follows.
Cash
$ 19,600
Prepaid Insurance
4,500
Supplies
2,600
Land
Buildings
Equipment
Adjusting entries:
1.
The balance in prepaid insurance is a one-year
premium paid on June 1, 2014.
20,000
3.
Annual depreciation rates are cottages (4%) and
furniture (10%). Salvage value is estimated to
be 10% of cost.
4.
Unearned Rent Revenue of $3,800 was earned
prior to August 31.
5.
Salaries of $375 were unpaid at August 31.
6.
Rentals of $800 were due from tenants at
August 31.
7.
The mortgage interest rate is 8% per year.
16,000
$ 4,500
Unearned Rent Revenue
4,600
Mortgage Payable
60,000
Common Stock
91,000
Retained Earnings
9,000
5,000
Rent Revenue
Salaries and Wages Expense
An inventory count on August 31 shows $450 of
supplies on hand.
120,000
Accounts Payable
Dividends
2.
76,200
44,800
Utilities Expenses
9,200
Maintenance and Repairs Expense
3,600
$245,300
$245,300
Adjusted Trial Balance-Greco Resorts--WORKSHEET
Cash
$ 19,600
Prepaid Insurance
4,500
Supplies
2,600
Land
Buildings
Equipment
20,000
120,000
16,000
Accounts Payable
$ 4,500
Unearned Rent Revenue
4,600
Mortgage Payable
60,000
Common Stock
91,000
Retained Earnings
Dividends
9,000
5,000
Rent Revenue
Salaries and Wages Expense
76,200
44,800
Utilities Expenses
9,200
Maintenance and Repairs Expense
3,600
Insurance Expense
Supplies Expense
Depreciation Expense-Building
Depreciation Expense-Equipment
Interest Expense
$245,300
$245,300
4 Closing Entries: Income Statement and Dividend Accounts
2 Closing Entries: Income Statement and Dividend Accounts
E3-16 Closing Entries for a Corporation
Ending Inventory
$60,000
Common Stock
75,000
Retained Earnings
45,000
Dividends
18,000
Sales Returns &
Allowances
12,000
Sales Discounts
15,000
Sales Revenue
410,000
Cost of Goods Sold
225,700
Selling Expenses
16,000
Administrative Expenses
38,000
Income Tax Expense
30,000