CHAPTER 4 PROBLEMS: SET B Michael Pevnick began operations as a private investigator on January 1, 2017. The trial balance columns of the worksheet for Michael Pevnick, P evnick, P.I., P.I., at March 31 are as follows. P4-1B
MICHAEL PEVNICK, P.I.
Prepare worksheet, �nancial statements, and adjusting and closing entries.
(LO 1, 2, 4)
Worksheet For the Quarter Ended March 31, 2017
Trial Balance Account Titles
Dr.
Cash Accounts Receivable Supplies Prepaid Insurance Equipment Notes Payable Accounts Payable Owner’s Capital Owner’s Drawings Service Revenue Salaries and Wages Expense Travel Expense Rent Expense Miscellaneouss Expense Miscellaneou
11,400 5,620 1,050 2,400 30,000
Cr.
10,000 12,350 20,000 600 13,620 2,200 1,300 1,200 200 55,970
55,970
Other data: 1. 2. 3. 4. 5.
Supplies on hand total $480. $480. Depreciation is $800 per quarter. Interest accrued on 6-month note payable, issued January 1, $300. Insurance expires at the rate of $200 per month. Services performed performed but unbilled at March 31 total $1,030.
Instructions
(a) Enter the trial balance on a worksheet and complete the worksheet. (b) Prepare an income statement and owner’s equity statement for the quarter and a classi�ed balance sheet at March 31. M. Pevnick did not make any additional investments in the business during the quarter ended ended March 31, 2017. (c) Journalize the adjusting entries from the adjustments columns of the worksheet. (d) Journalize the closing entries from the �nancial statement columns of the worksheet.
(a) Adjusted trial balance $58,100 (b) Net income $7,480 Total assets $49,530
The adjusted trial balance columns of the worksheet for Greenwood Company are as follows.
Complete worksheet; prepare �nancial statements, closing entries, and post-closing trial balance.
P4-2B
GREENWOOD COMPANY
(LO 1, 2, 4)
Worksheet For the Year Ended December 31, 2017
Adjusted Trial Balance
Account No.
Account Titles
Dr.
101 112 126 130 157 158 200 201
Cash Accounts Receivable Accounts Supplies Prepaid Insurance Equipment Accumulated Accumulate d Depreciat Depreciation—Equipment ion—Equipment Notes Payable Accounts Payable
18,800 16,200 2,300 4,400 46,000
Cr.
20,000 20,000 8,000
2
4 Completing the Accounting Cycle
Adjusted Trial Balance
Account No. 212 230 301 306 400 610 631 711 722 726 905
Account Titles
Dr.
Salaries and Wages Payable Interest Payable Owner’s Capital Owner’s Drawings Service Revenue Advertising Advertisin g Expense Supplies Expense Depreciation Expense Depreciation Insurance Expense Salaries and Wages Expense Interest Expense
Cr. 2,600 1,000 26,000
12,000 87,800 10,000 3,700 8,000 4,000 39,000 1,000
Totals Totals
165,400
165,400
Instructions
(a) Net income income $22,100 $22,100 (b) Current assets $41,700 Current liabilities $16,600
(e) Post-closing trial balance $87,700
Prepare �nancial statements, closing entries, and post closing trial balance.
(a) Complete the worksheet by extending the balances to the �nancial statement columns. (b) Prepare an income statement, owner’s equity statement, and a classi�ed balance sheet. Note: $5,000 ( Note: $5,000 of the notes payable become due in 2018.) T. Greenwood did not make any additional investments in the business during 2017. (c) Prepare the closing entries. Use J14 for the journal page. (d) Post the closing entries. Use the three-column form of account. Income Summary is account No. 350. (e) Prepare a post-closing trial balance.
The completed �nancial statement statement columns of the worksheet for Niho Company are shown below. P4-3B
NIHO COMPANY
(LO 1, 2, 4)
Worksheet For the Year Ended December 31, 2017
Account No.
Account Titles
101 112 130 157 158 201 212 301 306 400 622 711 722 726 732
Cash Accounts Receivable Prepaid Insurance Equipment Accumulated Accumulat ed Depreciation Depreciation—Equip. —Equip. Accounts Payable Salaries and Wages Payable Owner’s Capital Owner’s Drawings Service Revenue Maintenance and Repairs Expense Depreciation Expense Depreciation Insurance Expense Salaries and Wages Expense Utilities Expense Totals Net Loss
Income State Income Statement ment Dr. Cr.
Bala nce Shee Balance Sheett Dr. Cr. 6,200 7,500 1,800 33,000 8,600 11,700 3,000 34,000 7,200
46,000 46,0 00 4,400 2,800 1,200 35,200 4,000 47,600
46,0 00 46,000 1,600
55,700 1,600
57,300
47,600
47,600
57,300
57,300
Instructions
(a) Net loss $1,600 Ending capital $25,200 Total assets $39,900 (d) Post-closing trial balance $48,500
(a) Prepare an income statement, owner’s equity statement, and a classi�ed balance sheet. S. Niho made an additional investment in the business of $4,000 during 2017. (b) Prepare the closing entries. (c) Post the closing entries and underline and balance the accounts. (Use T-accounts.) Income Summary is account No. 350. (d) Prepare a post-closi post-closing ng trial balance.
Problems: Set B
Avalon Amusement Park has a �scal year ending on September 30. Selected data from the September 30 worksheet are presented below. P4-4B
AVALON AMUSEMENT PARK
(LO 1, 2, 4)
Worksheet For the Year Ended September 30, 2017
Trial Balance Dr. Cash Supplies Prepaid Insurance Land Equipment Accumulated Accumulate d Depreciat Depreciation—Equip. ion—Equip. Accounts Payable Unearned Ticket Revenue Mortgage Payable Owner’s Capital Owner’s Drawings Ticket Revenue Salaries and Wages Expense Maintenance and Repairs Expense Advertising Advertisin g Expense Utilities Expense Property Tax Expense Interest Expense Totals
41,400 18,600 31,900 80,000 120,000
Totals
Adjusted Trial Balance Dr.
Cr.
41,400 2,200 10,900 80,000 120,000 36,200 14,600 3,700 50,000 109,700
14,000
42,200 14,600 1,000 50,000 109,700 14,000
277,500 105,000 30,500 9,400 16,900 18,000 6,000 491,700
Insurance Expense Supplies Expense Interest Payable Depreciation Depreciat ion Expense Property Taxes Payable
Cr.
Complete worksheet; prepare classi�ed balance sheet, entries, and post-closing trial balance.
280,200 105,000 30,500 9,400 16,900 21,000 10,000
491,700 21,000 16,400 4,000 6,000 3,000 504,700
504,700
Instructions
(a) Prepare a complete worksheet. (b) Prepare a classi�ed balance sheet. ( Note: ( Note: $15,000 $15,000 of the mortgage note payable is due for payment in the next �scal year.) (c) Journalize the adjusting adjusting entries using the worksheet worksheet as a basis. (d) Journalize the closing entries using the worksheet worksheet as a basis. (e) Prepare a post-closing post-closing trial balance. balance.
(a) Net income $44,000 (b) Total current assets $54,500
Gillian Shaw opened Shaw’s Carpet Cleaners on March 1. During March, the following transactions were completed.
Complete all steps in accounting cycle.
P4-5B
Mar.. 1 Mar 1 3 5 14 18 20 21 28 31 31
Invested $10,000 cash in the business. Purchased used truck for $6,000, paying $3,000 cash and the balance on account. Purchased cleaning supplies for $1,200 on account. Paid $1,200 cash on a 1-year insurance policy effective March 1. Billed customers $4,800 for cleaning services services.. Paid $1,500 cash on amount owed on truck and $500 on amount owed on cleaning supplies. Paid $1,800 cash for employee salaries. Collected $1,400 cash from customers billed on March 14. Billed customers $2,500 for cleaning services services.. Paid $200 for the monthly gasoline bill for the truck. Withdrew Withdr ew $700 cash for personal use.
(e) Post-closing trial balance $254,500
(LO 1, 2, 3, 4)
3
4
4 Completing the Accounting Cycle
The chart of accounts for Shaw’s Carpet Cleaners contains the following accounts: No. 101 Cash, No. 112 Accounts Receivable, No. 126 Supplies, No. 130 Prepaid Insurance, No. 157 Equipment, No. 158 Accumulat Accumulated ed Depreciation—Equipment, Depreciation—Equipment, No. 201 Accounts Payable, No. 212 Salaries and Wages Payable, No. 301 Owner’s Capital, No. 306 Owner’s Drawings, No. 350 Income Summary, No. 400 Service Revenue, No. 631 Supplies Expense, No. 633 Gasoline Expense, No. 711 Depreciation Expense, No. 722 Insurance Expense, and No. 726 Salaries and Wages Expense. Instructions
(b) Trial balance $19,500 (c) Adjusted trial balance $20,850
(a) Journalize and post the March transactions. Use page J1 for the journal and the three-column form of account. (b) Prepare a trial balance at March 31 on a worksheet. (c) Enter the following adjustments on the worksheet and complete complete the worksheet. (1) Unbilled revenue for services performed at March 31 was $500. (2) Depreciat Depreciation ion on equipment for the month was $300.
