P4-1B The following data are taken from the comparative balance sheets of EverGreen Club, which prepares its financial statements using the accrual…

P4-1B The following data are taken from the comparative balance sheets of EverGreenClub, which prepares its financial statements using the accrual basis of accounting.December 31 2007 2006Accounts receivable for member fees $20,000 $ 6,000Unearned fees revenue 17,000 18,000Fees are billed to members based upon their use of the club’s facilities. Unearned feesarise from the sale of gift certificates, which members can apply to their future use ofclub facilities. The 2007 income statement for the club showed that fee revenue of$157,000 was earned during the year.Instructions(Hint: You will find it helpful to use T accounts to analyze these data.)(a) Prepare journal entries for each of the following events that took place during 2007.1. Fees receivable from 2006 were all collected during 2007.2. Gift certificates outstanding at the end of 2006 were all redeemed during 2007.3. An additional $30,000 worth of gift certificates were sold during 2007; a portionof these were used by the recipients during the year; the remainder were still outstandingat the end of 2007.4. Fees for 2007 were billed to members.5. Fees receivable for 2007 (i.e., those billed in item (4) above) were partially collected.(b) Determine the amount of cash received by the club with respect to fees during 2007.P4-2B Jessica Naboo started her own consulting firm, Naboo Consulting, on May 1,2007. The trial balance at May 31 is as shown on page 205.204 CHAPTER 4 Accrual Accounting Concepts(f) Cash $ 3,600(g) Tot. assets $19,530Record transactions onaccrual basis; convertrevenue to cash receipts.(SO 2, 4)(b) Cash received $142,000Prepare adjusting entries,post to ledger accounts, andprepare an adjusted trialbalance.(SO 4, 5, 6)1395T_c04_156-215.qxd 9/20/05 8:55 PM Page 204PDFGLSProblems: Set B 205NABOO CONSULTINGTrial BalanceMay 31, 2007Debit CreditCash $ 7,500Accounts Receivable 3,000Prepaid Insurance 3,600Supplies 2,500Office Furniture 12,000Accounts Payable $ 3,500Unearned Service Revenue 4,000Common Stock 19,100Service Revenue 7,500Salaries Expense 4,000Rent Expense 1,500$34,100 $34,100In addition to those accounts listed on the trial balance, the chart of accounts for NabooConsulting also contains the following accounts: Accumulated Depreciation—OfficeFurniture, Travel Payable, Salaries Payable, Depreciation Expense, Insurance Expense,Travel Expense, and Supplies Expense.Other data:1. $500 of supplies have been used during the month.2. Travel costs incurred but not paid are $260.3. The insurance policy is for 2 years.4. $1,000 of the balance in the Unearned Service Revenue account remains unearnedat the end of the month.5. May 31 is a Wednesday and employees are paid on Fridays. Naboo Consulting hastwo employees that are paid $600 each for a 5-day work week.6. The office furniture has a 5-year life with no salvage value and is being depreciatedat $200 per month for 60 months.7. Invoices representing $1,400 of services performed during the month have not beenrecorded as of May 31.Instructions(a) Prepare the adjusting entries for the month of May.(b) Post the adjusting entries to the ledger accounts. Enter the totals from the trial balanceas beginning account balances. Use T accounts.(c) Prepare an adjusted trial balance at May 31, 2007.P4-3B Happy Trails Resort opened for business on June 1 with eight air-conditionedunits. Its trial balance before adjustment on August 31 is presented here.HAPPY TRAILS RESORTTrial BalanceAugust 31, 2007Debit CreditCash $ 24,600Prepaid Insurance 5,400Supplies 4,300Land 40,000Cottages 132,000Furniture 36,000Accounts Payable $ 6,500Unearned Rent Revenue 6,800(c) Tot. trialbalance $36,680Prepare adjusting entries,adjusted trial balance, andfinancial statements.(SO 4, 5, 6, 7)1395T_c04_156-215.qxd 9/20/05 8:56 PM Page 205PDFGLSDebit CreditMortgage Payable 120,000Common Stock 100,000Dividends 5,000Rent Revenue 80,000Salaries Expense 53,000Utilities Expense 9,400Repair Expense 3,600$313,300 $313,300Other data:1. Insurance expires at the rate of $450 per month.2. An inventory count on August 31 shows $1,200 of supplies on hand.3. Annual depreciation is $4,800 on cottages and $4,000 on furniture.4. Unearned rent of $5,000 was earned prior to August 31.5. Salaries of $600 were unpaid at August 31.6. Rentals of $1,200 were due from tenants at August 31. (Use Accounts Receivable.)7. The mortgage interest rate is 7% per year. (The mortgage was taken out August 1.)Instructions(a) Journalize the adjusting entries on August 31 for the 3-month period June 1–August 31.(b) Prepare a ledger using T accounts. Enter the trial balance amounts and post theadjusting entries.(c) Prepare an adjusted trial balance on August 31.(d) Prepare an income statement and a retained earnings statement for the 3 monthsended August 31 and a classified balance sheet as of August 31.(e) Identify which accounts should be closed on August 31.P4-4B Khanna Advertising Agency was founded by Matt Khanna in January 2002.Presented here are both the adjusted and unadjusted trial balances as of December31, 2007.KHANNA ADVERTISING AGENCYTrial BalanceDecember 31, 2007Unadjusted AdjustedDr. Cr. Dr. Cr.Cash $ 11,000 $ 11,000Accounts Receivable 16,000 19,500Art Supplies 8,400 6,000Prepaid Insurance 3,350 1,790Printing Equipment 60,000 60,000Accumulated Depreciation $ 25,000 $ 30,000Accounts Payable 2,000 2,000Interest Payable 0 320Notes Payable 8,000 8,000Unearned Advertising Revenue 4,000 3,600Salaries Payable 0 1,300Common Stock 20,000 20,000Retained Earnings 5,500 5,500Dividends 10,000 10,000Advertising Revenue 57,600 61,500Salaries Expense 9,000 10,300Insurance Expense 1,560Interest Expense 320206 CHAPTER 4 Accrual Accounting Concepts(c) Tot. trialbalance $318,000(d) Net income $ 12,250Prepare adjusting entries andfinancial statements; identifyaccounts to be closed.(SO 4, 5, 6, 7)1395T_c04_156-215.qxd 9/20/05 8:56 PM Page 206PDFProblems: Set B 207Unadjusted AdjustedDr. Cr. Dr. Cr.Depreciation Expense 5,000Art Supplies Expense 2,400Rent Expense 4,350 4,350$122,100 $122,100 $132,220 $132,220Instructions(a) Journalize the annual adjusting entries that were made.(b) Prepare an income statement and a retained earnings statement for the year endedDecember 31, and a classified balance sheet at December 31.(c) Identify which accounts should be closed on December 31.(d) If the note has been outstanding 6 months, what is the annual interest rate on thatnote?(e) If the company paid $10,500 in salaries in 2007, what was the balance in SalariesPayable on December 31, 2006?P4-5B A review of the ledger of Ordman Company at December 31, 2007, produces thefollowing data pertaining to the preparation of annual adjusting entries.1. Salaries Payable $0: There are eight salaried employees. Salaries are paid everyFriday for the current week. Six employees receive a salary of $800 each per week,and two employees earn $600 each per week. December 31 is a Wednesday.Employees do not work weekends. All employees worked the last 3 days ofDecember.2. Unearned Rent Revenue $369,000: The company began subleasing office space in itsnew building on November 1. Each tenant is required to make a $5,000 security depositthat is not refundable until occupancy is terminated. At December 31 the companyhad the following rental contracts that are paid in full for the entire term ofthe lease.Term Monthly NumberDate (in months) Rent of LeasesNov. 1 6 $4,000 5Dec. 1 6 8,500 43. Prepaid Advertising $13,200: This balance consists of payments on two advertisingcontracts. The contracts provide for monthly advertising in two trade magazines. Theterms of the contracts are as follows.Number ofMagazineContract Date Amount IssuesA650 May 1 $6,000 12B974 Sept. 1 7,200 18The first advertisement runs in the month in which the contract is signed.4. Notes Payable $80,000: This balance consists of a note for 1 year at an annual interestrate of 7%, dated October 1, 2007.InstructionsPrepare the adjusting entries at December 31, 2007. Show all computations.P4-6B The Fly Right Travel Agency was organized on January 1, 2005, by Sam Cheney.Sam is a good manager but a poor accountant. From the trial balance prepared by a parttimebookkeeper, Sam prepared the income statement on page 208 for the quarter thatended March 31, 2007.(b) Net income $37,570Tot. assets $68,290Prepare adjusting entries.(SO 4, 5)Prepare adjusting entriesand a corrected incomestatement.(SO 4, 5)1395T_c04_156-215.qxd 9/20/05 8:56 PM Page 207PDFGLSFLY RIGHT TRAVEL AGENCYIncome StatementFor the Quarter Ended March 31, 2007RevenuesTravel service revenue $50,000Operating expensesAdvertising $2,600Depreciation 400Income tax 1,500Salaries 6,000Utilities 400 10,900Net income $39,100Sam knew that something was wrong with the statement because net income hadnever exceeded $5,000 in any one quarter. Knowing that you are an experienced accountant,he asks you to review the income statement and other data.You first look at the trial balance. In addition to the account balances reported abovein the income statement, the trial balance contains the following additional selected balancesat March 31, 2007.Supplies $ 2,900Prepaid insurance 1,200Note payable 10,000You then make inquiries and discover the following:1. Travel service revenue includes advance payments for cruises, $30,000.2. There were $800 of supplies on hand at March 31.3. Prepaid insurance resulted from the payment of a one-year policy on March 1, 2007.4. The mail on April 1, 2007, brought the utility bill for the month of March’s heat, light,and power, $210.5. There are three employees who receive salaries of $75 each per day. At March 31,three days’ salaries have been incurred but not paid.6. The note payable is a 6-month, 8% note dated January 1, 2007.Instructions(a) Prepare any adjusting journal entries required as at March 31, 2007.(b) Prepare a correct income statement for the quarter ended March 31, 2007.(c) Explain to Sam the generally accepted accounting principles that he did not recognizein preparing his income statement and their effect on his results.P4-7B On September 1, 2007, the following were the account balances of Tech KnowEquipment Repair.Debits CreditsCash $ 4,880 Accumulated Depreciation $ 1,600Accounts Receivable 3,820 Accounts Payable 3,100Supplies 800 Unearned Service Revenue 400Store Equipment 15,000 Salaries Payable 700$24,500 Common Stock 10,000Retained Earnings 8,700$24,500During September the following summary transactions were completed.Sept. 8 Paid $1,100 for salaries due employees, of which $400 is for Septemberand $700 is for August salaries payable.10 Received $1,500 cash from customers in payment of account.12 Received $3,400 cash for services performed in September.15 Purchased store equipment on account $3,000.208 CHAPTER 4 Accrual Accounting Concepts(b) Net income $5,815Journalize transactions andfollow through accountingcycle to preparation offinancial statements.(SO 4, 5, 6)1395T_c04_156-215.qxd 9/20/05 8:56 PM Page 208PDFGLSProblems: Set B 209Sept. 17 Purchased supplies on account $1,500.20 Paid creditors $4,500 of accounts payable due.22 Paid September rent $400.25 Paid salaries $1,200.27 Performed services on account and billed customers for services provided$850.29 Received $650 from customers for services to be provided in the future.Adjustment data:1. Supplies on hand $1,800.2. Accrued salaries payable $400.3. Depreciation $200 per month.4. Unearned service revenue of $350 earned.Instructions(a) Enter the September 1 balances in the ledger T accounts.(b) Journalize the September transactions.(c) Post to the ledger T accounts. Use Service Revenue, Depreciation Expense, SuppliesExpense, Salaries Expense, and Rent Expense.(d) Prepare a trial balance at September 30.(e) Journalize and post adjusting entries.(f) Prepare an adjusted trial balance.(g) Prepare an income statement and a retained earnings statement for September anda classified balance sheet at September 30.P4-8B Julie Molony opened Valet Cleaners on March 1, 2007. During March, the followingtransactions were completed.Mar. 1 Issued 10,000 shares of common stock for $15,000 cash.1 Purchased used truck for $8,000, paying $5,000 cash and the balance onaccount.3 Purchased cleaning supplies for $1,200 on account.5 Paid $1,800 cash on 1-year insurance policy effective March 1.14 Billed customers $3,200 for cleaning services.18 Paid $1,500 cash on amount owed on truck and $500 on amount owed oncleaning supplies.20 Paid $1,750 cash for employee salaries.21 Collected $1,600 cash from customers billed on March 14.28 Billed customers $4,200 for cleaning services.31 Paid $350 for gas and oil used in truck during month.31 Declared and paid a $900 cash dividend.The chart of accounts for Valet Cleaners contains the following accounts: Cash, AccountsReceivable, Cleaning Supplies, Prepaid Insurance, Equipment, Accumulated Depreciation—Equipment, Accounts Payable, Salaries Payable, Common Stock, Retained Earnings,Dividends, Income Summary, Service Revenue, Gas & Oil Expense, Cleaning SuppliesExpense, Depreciation Expense, Insurance Expense, Salaries Expense.Instructions(a) Journalize the March transactions.(b) Post to the ledger accounts. (Use T accounts.)(c) Prepare a trial balance at March 31.(d) Journalize the following adjustments.1. Earned but unbilled revenue at March 31 was $600.2. Depreciation on equipment for the month was $250.3. One-twelfth of the insurance expired.4. An inventory count shows $280 of cleaning supplies on hand at March 31.5. Accrued but unpaid employee salaries were $830.(e) Post adjusting entries to the T accounts.(f) Prepare an adjusted trial balance.(g) Prepare the income statement and a retained earnings statement for March and aclassified balance sheet at March 31.(h) Journalize and post closing entries and complete the closing process.(i) Prepare a post-closing trial balance at March 31.

Order the answer to view it

Place this order or similar order and get an amazing discount. USE Discount code “GET20” for 20% discount

Use discount code GET20 for 20% discount

Posted in Uncategorized