solutions to ch4 exercises

BRIEF EXERCISE 4-4

Dec. 31 Service Revenue............................................... 50,000Income Summary...................................... 50,000

31 Income Summary.............................................. 34,000Salaries and Wages Expense.................. 27,000Supplies Expense..................................... 7,000

31 Income Summary.............................................. 16,000Owner’s Capital......................................... 16,000

31 Owner’s Capital................................................. 2,000Owner’s Drawings..................................... 2,000

BRIEF EXERCISE 4-5

Salaries and Wages Expense Income Summary Service Revenue

Bal. 27,000 (2) 27,000 (2) 34,000 (1) 50,000 (1) 50,000 Bal. 50,000(3) 16,000

50,000 50,000

Supplies Expense Owner’s Capital Owner’s DrawingsBal. 7,000 (2) 7,000 (4) 2,000 Bal. 30,000 Bal. 2,000 (4) 2,000

(3) 16,000Bal. 44,000

Copyright © 2011 John Wiley & Sons, Inc. Weygandt, Accounting Principles, 10/e, Solutions Manual (For Instructor Use Only) 4-1

SOLUTIONS TO EXERCISES

EXERCISE 4-1

TINOISAMOA COMPANYWorksheet

For the Month Ended June 30, 2012

Account Titles Trial Balance Adjustments Adj. Trial Balance Income Statement Balance Sheet

Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr.

Cash 2,320 2,320 2,320

Accounts

Receivable 2,440 2,440 2,440

Supplies 1,880 (a) 1,380 500 500

Accounts Payable 1,120 1,120 1,120

Unearned Service

Revenue 240 (b) 140 100 100

Owner’s Capital 3,600 3,600 3,600

Service Revenue 2,400 (b) 140 2,540 2,540

Salaries and

Wages Expense 560 (c) 210 770 770

Miscellaneous

Expense 160 160 160

Totals 7,360 7,360

Supplies Expense

(a)

1,380 1,380 1,380

Salaries and

Wages Payable (c) 210 210 210

Totals 1,730 1,730 7,570 7,570 2,310 2,540 5,260 5,030

Net Income 230 230

Totals 2,540 2,540 5,260 5,260


EXERCISE 4-2

PISA COMPANY(Partial) Worksheet

For the Month Ended April 30, 2012

Adjusted Trial Balance

Income Statement Balance Sheet

Account Titles Dr. Cr. Dr. Cr. Dr. Cr.Cash 10,000 10,000Accounts Receivable 7,840 7,840Prepaid Rent 2,280 2,280Equipment 23,050 23,050Accum. Depreciation Equipment 4,921 4,921Notes Payable 5,700 5,700Accounts Payable 4,920 4,920Owner’s Capital 27,960 27,960Owner’s Drawings 3,650 3,650Service Revenue 15,590 15,590Salaries and Wages Expense 10,840 10,840Rent Expense 760 760Depreciation Expense 671 671Interest Expense 57 57Interest Payable 57 57

Totals 59,148 59,148 12,328 15,590 46,820 43,558Net Income 3,262 3,262

Totals 15,590 15,590 46,820 46,820


EXERCISE 4-3

PISA COMPANYIncome Statement


RevenuesService revenue......................................................... $15,590

ExpensesSalaries and wages expense.................................... $10,840Rent expense............................................................. 760Depreciation expense............................................... 671Interest expense........................................................ 57

Total expenses.................................................. 12,328Net income........................................................................ $ 3,262

PISA COMPANYOwner’s Equity Statement


Owner’s Capital, April 1............................................................. $27,960Add: Net income....................................................................... 3,262

31,222Less: Drawings.......................................................................... 3,650Owner’s Capital, April 30........................................................... $27,572

PISA COMPANYBalance SheetApril 30, 2012

AssetsCurrent assets

Cash........................................................................... $10,000Accounts receivable................................................. 7,840Prepaid rent............................................................... 2,280

Total current assets.......................................... $20,120Property, plant, and equipment

Equipment.................................................................. 23,050Less: Accumulated depreciation—equipment...... 4,921 18,129


Total assets........................................................ $38,249


EXERCISE 4-3 (Continued)PISA COMPANY

Balance Sheet (Continued)April 30, 2012

Liabilities and Owner’s EquityCurrent liabilities

Notes payable............................................................ $5,700Accounts payable..................................................... 4,920Interest payable......................................................... 57

Total current liabilities...................................... $10,677Owner’s equity

Owner’s capital.......................................................... 27,572Total liabilities and owner’s equity.................. $38,249


EXERCISE 4-7

(a) Service Revenue..................................................... 4,300Income Summary.............................................. 4,300

Income Summary.................................................... 3,500Salaries and Wages Expense.......................... 1,344Miscellaneous Expense................................... 256Supplies Expense............................................. 1,900

Income Summary.................................................... 800Owner’s Capital................................................. 800

Owner’s Capital....................................................... 628Owner’s Drawings............................................ 628

(b) WILLOW TURENNE COMPANYPost-Closing Trial Balance

For the Month Ended June 30, 2012

Account Titles Debit Credit Cash......................................................................... $3,712Accounts Receivable.............................................. 3,904Supplies................................................................... 480Accounts Payable................................................... $1,556Salaries and Wages Payable.................................. 448Unearned Service Revenue.................................... 160Owner’s Capital....................................................... 5,932

$8,096 $8,096

(a) OMER ASIK, P.I.Worksheet

For the Quarter Ended March 31, 2012

Account Titles Trial Balance AdjustmentsAdjusted

Trial BalanceIncome

Statement Balance Sheet


CashAccounts ReceivableSuppliesPrepaid InsuranceEquipmentNotes PayableAccounts PayableOwner’s CapitalOwner’s DrawingsService RevenueSalaries and Wages ExpenseTravel ExpenseRent ExpenseMiscellaneous Expense

TotalsSupplies ExpenseDepreciation ExpenseAccumulated Depreciation—EquipmentInterest ExpenseInterest PayableInsurance Expense

TotalsNet Income

Totals

11,400 5,620 1,050 2,40030,000

600

2,200 1,300 1,200 20055,970

10,00012,35020,000

13,620

55,970

(e) 1,030

(a) 570(b) 800

(c) 300

(d) 6003,300

(a) 570(d) 600

(e) 1,030

(b) 800

(c) 300 3,300

11,400 6,650 480 1,80030,000

600

2,200 1,300 1,200 200

570 800

300

60058,100

10,00012,35020,000

14,650

800

300 58,100

2,200 1,300 1,200 200

570 800

300

600 7,170 7,48014,650

14,650

14,650 14,650

11,400 6,650 480 1,80030,000

600

50,930 50,930

10,00012,35020,000

800

300 43,450 7,48050,930

Key: (a) Supplies Used; (b) Depreciation Expensed; (c) Accrued Interest on note; (d) Insurance Expired; (e) Service Revenue Earned but unbilled.

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PROBLEM 4-1A (Continued)

(b) OMER ASIK, P.I.Income Statement


RevenuesService revenue............................................... $14,650

ExpensesSalaries and wages expense.......................... $2,200Travel expense................................................. 1,300Rent expense.................................................... 1,200Depreciation expense...................................... 800Insurance expense........................................... 600Supplies expense............................................. 570Interest expense............................................... 300Miscellaneous expense................................... 200

Total expenses......................................... 7,170Net income............................................................... $ 7,480

OMER ASIK, P.I.Owner’s Equity Statement


Owner’s Capital, January 1..................................... $ 0Add: Investment by owner.................................... $20,000

Net income.................................................... 7,480 27,48027,480

Less: Drawings....................................................... 600Owner’s Capital, March 31...................................... $26,880



OMER ASIK, P.I.Balance SheetMarch 31, 2012


Cash................................................................. $11,400Accounts receivable...................................... 6,650Supplies.......................................................... 480Prepaid insurance.......................................... 1,800

Total current assets................................ $20,330Property, plant, and equipment

Equipment....................................................... 30,000Less: Accumulated depreciation—

equipment............................................ 800 29,200Total assets............................................. $49,530


Notes payable................................................. $10,000Accounts payable........................................... 12,350Interest payable.............................................. 300

Total current liabilities........................... $22,650Owner’s equity

Owner’s capital............................................... 26,880Total liabilities and owner’s equity................................................... $49,530

(c) Mar. 31 Supplies Expense................................. 570Supplies......................................... 570

31 Depreciation Expense........................... 800Accumulated Depreciation— Equipment................................... 800

31 Interest Expense................................... 300Interest Payable............................. 300

31 Insurance Expense............................... 600Prepaid Insurance......................... 600



Mar. 31 Accounts Receivable................................. 1,030Service Revenue................................ 1,030

(d) Mar. 31 Service Revenue....................................... 14,650Income Summary............................... 14,650

31 Income Summary...................................... 7,170Travel Expense.................................. 1,300Salaries and Wages Expense........... 2,200Rent Expense..................................... 1,200Insurance Expense............................ 600Depreciation Expense....................... 800Supplies Expense.............................. 570Interest Expense................................ 300Miscellaneous Expense.................... 200

31 Income Summary...................................... 7,480Owner’s Capital................................. 7,480

31 Owner’s Capital......................................... 600Owner’s Drawings............................. 600


PROBLEM 4-2A

(a) BOOZER COMPANYPartial Worksheet

For the Year Ended December 31, 2012

AccountAdjusted

Trial BalanceIncome

StatementBalance

Sheet

No. Titles Dr. Cr. Dr. Cr. Dr. Cr.

101 Cash 18,800 18,800112 Accounts Receivable 16,200 16,200126 Supplies 2,300 2,300130 Prepaid Insurance 4,400 4,400151 Equipment 46,000 46,000152 Acc. Depr.—Equip. 20,000 20,000200 Notes Payable 20,000 20,000201 Accounts Payable 8,000 8,000212 Salaries and Wages

Payable 2,600 2,600230 Interest Payable 1,000 1,000301 Owner’s Capital 26,000 26,000306 Owner’s Drawings 12,000 12,000400 Service Revenue 87,800 87,800610 Advertising Expense 10,000 10,000631 Supplies Expense 3,700 3,700711 Depreciation Expense 8,000 8,000722 Insurance Expense 4,000 4,000726 Salaries and Wages

Expense 39,000 39,000905 Interest Expense 1,000 1,000

Totals 165,400 165,400 65,700 87,800 99,700 77,600Net Income 22,100 22,100

Totals 87,800 87,800 99,700 99,700



(b) BOOZER COMPANYIncome Statement


RevenuesService revenue.............................................. $87,800

ExpensesSalaries and wages expense......................... $39,000Advertising expense...................................... 10,000Depreciation expense.................................... 8,000Insurance expense......................................... 4,000Supplies expense........................................... 3,700Interest expense............................................. 1,000

Total expenses........................................ 65,700Net income.............................................................. $22,100

BOOZER COMPANYOwner’s Equity Statement


Owner’s Capital, January 1...................................................... $26,000Add: Net income..................................................................... 22,100

48,100Less: Drawings........................................................................ 12,000Owner’s Capital, December 31................................................ $36,100



BOOZER COMPANYBalance Sheet

December 31, 2012


Cash................................................................. $18,800Accounts receivable...................................... 16,200Supplies.......................................................... 2,300Prepaid insurance.......................................... 4,400

Total current assets................................ $41,700Property, plant, and equipment

Equipment....................................................... 46,000Less: Accumulated depreciation—

equipment............................................ 20,000 26,000Total assets............................................. $67,700


Notes payable................................................. $5,000Accounts payable........................................... 8,000Salaries and wages payable.......................... 2,600Interest payable.............................................. 1,000

Total current liabilities........................... $16,600Long-term liabilities

Notes payable................................................. 15,000Total liabilities......................................... 31,600

Owner’s equityOwner’s capital............................................... 36,100

Total liabilities and owner’s equity.................................................... $67,700



(c)General Journal J14

Date Account Titles and Explanation Ref. Debit CreditDec. 31 Service Revenue.................................. 400 87,800

Income Summary........................ 350 87,800

31 Income Summary................................. 350 65,700Advertising Expense.................. 610 10,000Supplies Expense....................... 631 3,700Depreciation Expense................ 711 8,000Insurance Expense..................... 722 4,000Salaries and Wages Expense.... 726 39,000Interest Expense......................... 905 1,000

31 Income Summary................................ 350 22,100Owner’s Capital........................... 301 22,100

31 Owner’s Capital.................................... 301 12,000Owner’s Drawings...................... 306 12,000

(d)

Owner’s Capital No. 301Date Explanation Ref. Debit Credit BalanceJan. 31 Balance 26,000 26,000Dec. 31 Closing entry J14 22,100 48,100

31 Closing entry J14 12,000 36,100

Owner’s Drawings No. 306Date Explanation Ref. Debit Credit BalanceDec. 31 Balance 12,000 12,000

31 Closing entry J14 12,000 0



Income Summary No. 350Date Explanation Ref. Debit Credit BalanceDec. 31 Closing entry J14 87,800 87,800

31 Closing entry J14 65,700 22,10031 Closing entry J14 22,100 0

Service Revenue No. 400

Date Explanation Ref. Debit Credit BalanceDec. 31 Balance 87,800 87,800


Advertising Expense No. 610



Supplies Expense No. 631



Depreciation Expense No. 711



Insurance Expense No. 722





Salaries and Wages Expense No. 726



Interest Expense No. 905



(e) BOOZER COMPANY Post-Closing Trial Balance

December 31, 2012

Debit CreditCash...................................................................... $18,800Accounts Receivable.......................................... 16,200Supplies................................................................ 2,300Prepaid Insurance............................................... 4,400Equipment............................................................ 46,000Accumulated Depreciation— Equipment........................................................ $20,000Notes Payable...................................................... 20,000Accounts Payable................................................ 8,000Salaries and Wages Payable.............................. 2,600Interest Payable................................................... 1,000Owner’s Capital................................................... 36,100

$87,700 $87,700


PROBLEM 4-3A

(a) CARLOS COMPANYIncome Statement

For the Year Ended December 31, 2012 Revenues

Service revenue........................................... $46,000Expenses

Salaries and wages expense...................... $35,200Maintenance and repairs expense............. 4,400Utilities expense.......................................... 4,000Depreciation expense.................................. 2,800Insurance expense...................................... 1,200

Total expenses..................................... 47,600Net loss................................................................. $ (1,600 )

CARLOS COMPANYOwner’s Equity Statement

For the Year Ended December 31, 2012 Owner’s Capital, January 1................................. $30,000Add: Additional investment by owner............. 4,000

34,000Less: Net loss..................................................... $1,600

Drawings................................................... 7,200 8,800Owner’s Capital, December 31........................... $25,200

CARLOS COMPANYBalance Sheet

December 31, 2012


Cash.............................................................. $6,200Accounts receivable.................................... 7,500Prepaid insurance........................................ 1,800

Total current assets............................. $15,500Property, plant, and equipment

Equipment.................................................... 33,000Less: Accumulated depreciation—


equipment......................................... 8,600 24,400Total assets.......................................... $39,900



CARLOS COMPANYBalance Sheet (Continued)

December 31, 2012


Accounts payable........................................ $11,700Salaries and wages payable....................... 3,000

Total current liabilities......................... $14,700Owner’s equity

Owner’s capital............................................ 25,200Total liabilities and owner’s equity................................................. $39,900

(b)General Journal

Date Account Titles Ref. Debit Credit

Dec. 31

Service Revenue..................................Income Summary........................

400350

46,00046,000

31 Income Summary............................... Maintenance and Repairs Expense....................................Depreciation Expense................Insurance Expense.....................Salaries and Wages Expense....Utilities Expense.........................

350

622711722726732

47,600

4,4002,8001,200

35,2004,000

31 Owner’s Capital...................................Income Summary.......................

301350

1,6001,600

31 Owner’s Capital...................................Owner’s Drawings......................

301306

7,2007,200



(c)Owner’s Capital No. 301

12/31 1,600 12/31 Bal. 34,00012/31 7,200

12/31 Bal. 25,200

Owner’s Drawings No. 30612/31 Bal. 7,200 12/31 7,200

Income Summary No. 35012/31 47,600 12/31 46,000

12/31 1,60047,600 47,600

Service Revenue No. 40012/31 46,000 12/31 Bal. 46,000

Maintenance and Repairs Expense No. 622

12/31 Bal. 4,400 12/31 4,400

Depreciation Expense No. 71112/31 Bal. 2,800 12/31 2,800

Insurance Expense No. 72212/31 Bal. 1,200 12/31 1,200

Salaries and Wages Expense No. 72612/31 Bal. 35,200 12/31 35,200

Utilities Expense No. 73212/31 Bal. 4,000 12/31 4,000

(d) CARLOS COMPANYPost-Closing Trial Balance

December 31, 2012

Debit CreditCash...................................................................... $ 6,200Accounts Receivable.......................................... 7,500Prepaid Insurance............................................... 1,800Equipment............................................................ 33,000Accumulated Depreciation—Equipment........... $ 8,600Accounts Payable................................................ 11,700Salaries and Wages Payable.............................. 3,000Owner’s Capital................................................... 25,200

Totals............................................................ $48,500 $48,500


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(a) NOAH AMUSEMENT PARKWorksheet

For the Year Ended September 30, 2012


Trial BalanceIncome



CashSuppliesPrepaid InsuranceLandEquipmentAccumulated Depreciation—EquipmentAccounts PayableUnearned Ticket RevenueMortgage PayableOwner’s CapitalOwner’s DrawingsTicket RevenueSalaries and Wages ExpenseMaintenance and Repairs ExpenseAdvertising ExpenseUtilities ExpenseProperty Tax ExpenseInterest Expense

TotalsInsurance ExpenseSupplies ExpenseInterest PayableDepreciation ExpenseProperty Taxes Payable

TotalsNet Income

Totals

41,400 18,600 31,900 80,000120,000

14,000

105,000

30,500 9,400 16,900 18,000 6,000491,700

36,200 14,600 3,700 50,000109,700

277,500

491,700

(d) 2,700

(e) 3,000(f) 4,000

(b) 21,000(a) 16,400

(c) 6,000 53,100

(a) 16,400(b) 21,000

(c) 6,000

(d) 2,700

(f) 4,000

(e) 3,00053,100

41,400 2,200 10,900 80,000120,000

14,000

105,000

30,500 9,400 16,900 21,000 10,000

21,000 16,400

6,000 504,700

42,200 14,600 1,000 50,000109,700

280,200

4,000

3,000504,700

105,000

30,500 9,400 16,900 21,000 10,000

21,000 16,400

6,000 236,200 44,000280,200

280,200

280,200 280,200

41,400 2,200 10,900 80,000120,000

14,000

268,500 268,500

42,200 14,600 1,00050,000

109,700

4,000

3,000224,500 44,000268,500

Key: (a) Supplies Used; (b) Expired Insurance; (c) Depreciation Expensed; (d) Admissions Revenue Earned; (e) Accrued Property Taxes;(f) Accrued Interest Payable.


(b) NOAH AMUSEMENT PARKBalance Sheet

September 30, 2012


Cash.............................................. $41,400Supplies........................................ 2,200Prepaid insurance........................ 10,900

Total current assets............. $ 54,500Property, plant, and equipment

Land.............................................. 80,000Equipment.................................... $120,000Less: Accum. depreciation—

equipment......................... 42,200 77,800 157,800Total assets.......................... $212,300


Mortgage payable (due in 2013)............... $15,000Accounts payable........................ 14,600Interest payable............................ 4,000Property taxes payable................ 3,000Unearned ticket revenue..................................... 1,000

Total current liabilities......... $ 37,600Long-term liabilities

Mortgage payable........................ 35,000Total liabilities...................... 72,600

Owner’s equityOwner’s capital ($109,700 + $44,000 – $14,000)....... 139,700

Total liabilities and owner’s equity.................. $212,300



(c) Sept. 30 Supplies Expense................................. 16,400Supplies......................................... 16,400

30 Insurance Expense............................... 21,000Prepaid Insurance......................... 21,000

30 Depreciation Expense.......................... 6,000Accumulated Depreciation— Equipment.................................. 6,000

30 Unearned Ticket Revenue.................... 2,700Ticket Revenue.............................. 2,700

30 Property Tax Expense.......................... 3,000Property Taxes Payable............... 3,000

30 Interest Expense................................... 4,000Interest Payable............................ 4,000

(d) Sept. 30 Ticket Revenue..................................... 280,200Income Summary.......................... 280,200

30 Income Summary.................................. 236,200Salaries and Wages Expense...... 105,000Maintenance and Repairs Expense...................................... 30,500Insurance Expense....................... 21,000Property Tax Expense.................. 21,000Supplies Expense......................... 16,400Utilities Expense........................... 16,900Interest Expense........................... 10,000Advertising Expense.................... 9,400Depreciation Expense.................. 6,000

30 Income Summary.................................. 44,000Owner’s Capital............................. 44,000

30 Owner’s Capital.................................... 14,000Owner’s Drawings......................... 14,000



(e) NOAH AMUSEMENT PARKPost-Closing Trial Balance

September 30, 2012

Debit CreditCash...................................................................... $ 41,400Supplies................................................................ 2,200Prepaid Insurance............................................... 10,900Land...................................................................... 80,000Equipment............................................................ 120,000Accumulated Depreciation—Equipment........... $ 42,200Accounts Payable................................................ 14,600Interest Payable................................................... 4,000Property Taxes Payable...................................... 3,000Unearned Ticket Revenue................................... 1,000Mortgage Payable................................................ 50,000Owner’s Capital................................................... 139,700

$254,500 $254,500


PROBLEM 4-5A

(a)General Journal J1

Date Account Titles and Explanation Ref. Debit CreditMar. 1 Cash..................................................... 101 10,000

Owner’s Capital.......................... 301 10,000

1 Equipment........................................... 157 6,000Cash............................................ 101 3,000Accounts Payable...................... 201 3,000

3 Supplies............................................... 128 1,200Accounts Payable...................... 201 1,200

5 Prepaid Insurance....................................................................................

130 1,200

Cash............................................ 101 1,200

14 Accounts Receivable.......................... 112 4,800Service Revenue........................ 400 4,800

18 Accounts Payable............................... 201 2,000Cash............................................ 101 2,000

20 Salaries and Wages Expense............ 726 1,800Cash............................................ 101 1,800

21 Cash..................................................... 101 1,400Accounts Receivable................. 112 1,400

28 Accounts Receivable.......................... 112 2,500Service Revenue........................ 400 2,500

31 Gasoline Expense............................... 633 200Cash............................................ 101 200

31 Owner’s Drawings............................... 306 700Cash............................................ 101 700


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(b)&(c) DEVINE’S CARPET CLEANERSWorksheet

For the Month Ended March 31, 2012


Trial BalanceIncome



CashAccounts ReceivableSuppliesPrepaid InsuranceEquipmentAccounts PayableOwner’s CapitalOwner’s DrawingsService RevenueGasoline ExpenseSalaries and Wages Expense

TotalsDepreciation ExpenseAccum. Depr.—EquipmentInsurance ExpenseSupplies ExpenseSalaries and Wages Payable

TotalsNet Income

Totals

2,500 5,900 1,200 1,200 6,000

700

200 1,80019,500

2,20010,000

7,300

19,500

(a) 500

(e) 550

(b) 300

(c) 100(d) 950

2,400

(d) 950(c) 100

(a) 500

(b) 300

(e) 5502,400

2,500 6,400 250 1,100 6,000

700

200 2,350

300

100 950 20,850

2,20010,000

7,800

300

55020,850

2002,350

300

100 950 3,9003,9007,800

7,800

7,800 7,800

2,500 6,400 250 1,100 6,000

700

16,950 16,950

2,20010,000

300

55013,050 3,90016,950

Key: (a) Service Revenue Earned; (b) Depreciation Expensed; (c) Insurance Expired; (d) Cleaning Supplies Used; (e) Unpaid Salaries.

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Cash No. 101

Date Explanation Ref. Debit Credit BalanceMar. 1 J1 10,000 10,000

1 J1 3,000 7,0005 J1 1,200 5,800

18 J1 2,000 3,80020 J1 1,800 2,00021 J1 1,400 3,40031 J1 200 3,20031 J1 700 2,500

Accounts Receivable No. 112


21 J1 1,400 3,40028 J1 2,500 5,90031 Adjusting J2 500 6,400

Supplies No. 128


31 Adjusting J2 950 250

Prepaid Insurance No. 130


31 Adjusting J2 100 1,100

Equipment No. 157




Accumulated Depreciation—Equipment No. 158

Date Explanation Ref. Debit Credit BalanceMar.

31Adjusting J2 300 300

Accounts Payable No. 201


3 J1 1,200 4,20018 J1 2,000 2,200

Salaries and Wages Payable No. 212



Owner’s Capital No. 301


31 Closing J3 3,900 13,90031 Closing J3 700 13,200

Owner’s Drawings No. 306


31J1 700 700

31 Closing J3 700 0

Income Summary No. 350

Date Explanation Ref. Debit Credit BalanceMar. 31 Closing J3 7,800 7,800

31 Closing J3 3,900 3,900


31 Closing J3 3,900 0





28 J1 2,500 7,30031 Adjusting J2 500 7,80031 Closing J3 7,800 0

Gasoline Expense No. 633

Date Explanation Ref. Debit Credit BalanceMar. 31 J1 200 200

31 Closing J3 200 0


Date Explanation Ref. Debit Credit BalanceMar. 31 Adjusting J2 950 950

31 Closing J3 950 0



31 Closing J3 300 0



31 Closing J3 100 0



31 Adjusting J2 550 2,35031 Closing J3 2,350 0



(d) DEVINE’S CARPET CLEANERSIncome Statement


RevenuesService revenue.............................................. $7,800

ExpensesSalaries and wages expense......................... $2,350Supplies expense........................................... 950Depreciation expense.................................... 300Gasoline expense........................................... 200Insurance expense......................................... 100

Total expenses........................................ 3,900Net income.............................................................. $3,900

DEVINE’S CARPET CLEANERSOwner’s Equity Statement


Owner’s Capital, March 1...................................... $ 0Add: Investments................................................. $10,000

Net income.................................................. 3,900 13,90013,900

Less: Drawings...................................................... 700Owner’s Capital, March 31.................................... $13,200

DEVINE’S CARPET CLEANERSBalance SheetMarch 31, 2012


Cash................................................................. $2,500Accounts receivable...................................... 6,400Supplies.......................................................... 250Prepaid insurance.......................................... 1,100

Total current assets................................ $10,250 Copyright © 2011 John Wiley & Sons, Inc. Weygandt, Accounting Principles, 10/e, Solutions Manual (For Instructor Use Only) 4-33


DEVINE’S CARPET CLEANERSBalance Sheet (Continued)

March 31, 2012

Assets (Continued)Property, plant, and equipment

Equipment........................................................ $6,000Less: Accumulated depreciation—

equipment............................................. 300 5,700Total assets.............................................. $15,950


Accounts payable............................................ $2,200Salaries and wages payable........................... 550

Total current liabilities............................. $ 2,750Owner’s equity

Owner’s capital................................................ 13,200Total liabilities and owner’s equity......... $15,950

(e)General Journal J2

Date Account Titles and Explanation Ref. Debit CreditMar. 31 Accounts Receivable......................... 112 500

Service Revenue........................ 400 500

31 Depreciation Expense........................ 711 300Accumulated Depreciation— Equipment.............................. 158 300

31 Insurance Expense............................. 722 100Prepaid Insurance..................... 130 100

31 Supplies Expense............................... 634 950Supplies...................................... 128 950

31 Salaries and Wages Expense............ 726 550Salaries and Wages Payable.... 212 550



(f)General Journal J3

Date Account Titles and Explanation Ref. Debit CreditMar. 31 Service Revenue................................. 400 7,800

Income Summary....................... 350 7,800

31 Income Summary................................ 350 3,900Salaries and Wages Expense.... 726 2,350Depreciation Expense................ 711 300Insurance Expense.................... 722 100Supplies Expense...................... 634 950Gasoline Expense...................... 633 200

31 Income Summary................................ 350 3,900Owner’s Capital.......................... 301 3,900

31 Owner’s Capital................................... 301 700Owner’s Drawings...................... 306 700

(g) DEVINE’S CARPET CLEANERSPost-Closing Trial Balance

March 31, 2012

Debit CreditCash...................................................................... $ 2,500Accounts Receivable.......................................... 6,400Supplies................................................................ 250Prepaid Insurance............................................... 1,100Equipment............................................................ 6,000Accumulated Depreciation—Equipment........... $ 300Accounts Payable................................................ 2,200Salaries and Wages Payable.............................. 550Owner’s Capital................................................... 13,200

000,000 $16,250 $16,250


COMPREHENSIVE PROBLEM: CHAPTERS 2 TO 4

(a)General Journal J1

Date Account Titles and Explanation Ref. Debit CreditJuly 1 Cash...................................................... 101 14,000

Owner’s Capital......................... 301 14,000

1 Equipment............................................ 157 10,000Cash............................................ 101 3,000Accounts Payable...................... 201 7,000

3 Supplies................................................ 128 800Accounts Payable...................... 201 800

5 Prepaid Insurance................................ 130 1,800Cash............................................ 101 1,800

12 Accounts Receivable........................... 112 3,800Service Revenue........................ 400 3,800

18 Accounts Payable................................ 201 1,400Cash............................................ 101 1,400

20 Salaries and Wages Expense............. 726 1,600Cash............................................ 101 1,600

21 Cash.....................................................................................................................

101 1,400

Accounts Receivable................ 112 1,400

25 Accounts Receivable........................... 112 1,500Service Revenue........................ 400 1,500

31 Gasoline Expense................................ 633 400Cash............................................ 101 400

31 Owner’s Drawings............................... 306 600Cash............................................ 101 600


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(b) & (c) JULIE’S MAIDS CLEANING SERVICEWorksheet

For the Month Ended July 31, 2012


Trial BalanceIncome



CashAccounts ReceivableSuppliesPrepaid InsuranceEquipmentAccounts PayableOwner’s CapitalOwner’s DrawingsService RevenueGasoline ExpenseSalaries and Wages Expense

TotalDepreciation ExpenseAccum. Depr.—EquipmentInsurance ExpenseSupplies ExpenseSalaries and Wages Payable

TotalsNet Income

Totals

6,600 3,900 800 1,80010,000

600

400 1,60025,700

6,40014,000

5,300

25,700

(a) 1,300

(e) 500

(b) 200

(c) 150(d) 700

2,850

(d) 700(c) 150

(a) 1,300

(b) 200

(e) 5002,850

6,600 5,200 100 1,65010,000

600

400 2,100

200

150 700

27,700

6,40014,000

6,600

200

50027,700

4002,100

200

150 700 3,5503,0506,600

6,600

6,600

6,600

6,600 5,200 100

1,65010,000

600

24,150 24,150

6,40014,000

200

50021,100 3,05024,150

Key: (a) Service Revenue; (b) Depreciation Expense; (c) Insurance Expired; (d) Cleaning Supplies Used; (e) Unpaid Salaries.

4-86C

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Sons, Inc. W




se Only)

COMPREHENSIVE PROBLEM (Continued)

(a), (e) & (f)

Cash No. 101

Date Explanation Ref. Debit Credit BalanceJuly 1 J1 14,000 14,000

1 J1 3,000 11,0005 J1 1,800 9,200

18 J1 1,400 7,80020 J1 1,600 6,20021 J1 1,400 7,60031 J1 400 7,20031 J1 600 6,600

Accounts Receivable No. 112


21 J1 1,400 2,40025 J1 1,500 3,90031 Adjusting J2 1,300 5,200

Supplies No. 128

Date Explanation Ref. Debit Credit BalanceJuly 3 J1 800 800

31 Adjusting J2 700 100

Prepaid Insurance No. 130



Equipment No. 157

Date Explanation Ref. Debit Credit Balance

July 1 J1 10,000 10,000


Accumulated Depreciation—Equipment No. 158

Date Explanation Ref. Debit Credit BalanceJuly


Accounts Payable No. 201


3 J1 800 7,80018 J1 1,400 6,400

Salaries and Wages Payable No. 212

Date Explanation Ref. Debit Credit BalanceJuly 31 Adjusting J2 500 500

Owner’s Capital No. 301


31 Closing J3 3,050 17,05031 Closing J3 600 16,450

Owner’s Drawings No. 306

Date Explanation Ref. Debit Credit BalanceJuly

31J1 600 600

31 Closing J3 600 0

Income Summary No. 350

Date Explanation Ref. Debit Credit Balance

July31

Closing J3 6,600 6,600

31 Closing J3 3,550 3,05031 Closing J3 3,050 0




25 J1 1,500 5,30031 Adjusting J2 1,300 6,60031 Closing J3 6,600 0

Gasoline Expense No. 633

Date Explanation Ref. Debit Credit BalanceJuly 31 J1 400 400

31 Closing J3 400 0



31 Closing J3 700 0



31 Closing J3 200 0



31 Closing J3 150 0




31 Closing J3 2,100 0


(d) JULIE’S MAIDS CLEANING SERVICEIncome Statement


RevenuesService revenue...............................................

$6,600Expenses

Salaries and wages expense.......................... $2,100Supplies expense............................................. 700Gasoline expense............................................ 400Depreciation expense...................................... 200Insurance expense........................................... 150

Total expenses......................................... 3,550

Net income...............................................................$3,050

JULIE’S MAIDS CLEANING SERVICEOwner’s Equity Statement


Owner’s Capital, July 1........................................... $ 0

Add: Investments.................................................. $14,000Net income.................................................... 3,050

17,050

17,050Less: Drawings.......................................................

600Owner’s Capital, July 31.........................................$16,450


JULIE’S MAIDS CLEANING SERVICEBalance SheetJuly 31, 2012


Cash.................................................................. $6,600Accounts receivable........................................ 5,200Supplies............................................................ 100Prepaid insurance............................................ 1,650

Total current assets.................................$13,550Property, plant, and equipment

Equipment........................................................ 10,000Less: Accumulated depreciation— equipment............................................. 200

9,800Total assets..............................................

$23,350


Accounts payable............................................ $6,400Salaries and wages payable........................... 500

Total current liabilities............................. $ 6,900

Owner’s equityOwner’s capital................................................

16,450Total liabilities and owner’s equity.........

$23,350


(e)General Journal J2

Date Account Titles and Explanation Ref. Debit CreditJuly 31 Accounts Receivable......................... 112 1,300

Service Revenue........................ 400 1,300

31 Depreciation Expense........................ 711 200Accumulated Depreciation— Equipment.............................. 158 200

31 Insurance Expense............................. 722 150Prepaid Insurance..................... 130 150

31 Supplies Expense............................... 634 700Supplies...................................... 128 700

31 Salaries and Wages Expense............ 726 500Salaries and Wages Payable.... 212 500

(f)General Journal J3

Date Account Titles and Explanation Ref. Debit CreditJuly 31 Service Revenue................................. 400 6,600

Income Summary....................... 350 6,600

31 Income Summary................................ 350 3,550Salaries and Wages Expense... 726 2,100Depreciation Expense............... 711 200Insurance Expense.................... 722 150Supplies Expense...................... 634 700Gasoline Expense...................... 633 400

31 Income Summary................................ 350 3,050Owner’s Capital......................... 301 3,050

31 Owner’s Capital.................................. 301 600Owner’s Drawings..................... 306 600


(g) JULIE’S MAIDS CLEANING SERVICEPost-Closing Trial Balance

July 31, 2012

Debit CreditCash...................................................................... $ 6,600Accounts Receivable.......................................... 5,200Supplies................................................................ 100Prepaid Insurance............................................... 1,650Equipment............................................................ 10,000Accumulated Depreciation—Equipment........... $ 200Accounts Payable................................................ 6,400Salaries and Wages Payable.............................. 500Owner’s Capital................................................... 16,450

$23,550 $23,550

solutions to ch4 exercises

Documents

owners capital3

owners drawings3

owners capital16

owners capital27

owners drawings2

owners equityowners

income summary4

income summary34