Everett Co. was organized on July 1, 2014. Quarterly financial statements are prepared. The… 2 answers below »

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Everett Co. was organized on July 1, 2014. Quarterly financial statements are prepared. The unadjusted and adjusted trial balances as of September 30 are shown below. EVERETT CO. Trial Balance September 30, 2014

Cash

Accounts Receivable Supplies

Prepaid Rent

Equipment

Unadjusted

Adjusted

$ 8,700 10,400 1,500 2,200 18,000

$ 8,700
11,500
650
1,200
18,000

Accumulated Depreciation-Equipment

$ -0-

$ 700

Notes Payable

10,000

10,000

Accounts Payable

2,500

2,500

Salaries and Wages Payable

-0-

725

Interest Payable

-0-

100

Unearned Rent Revenue

1,900

1,050

Owner's Capital

22,000

22,000

Owner's Drawings

1,600

1,600

Service Revenue

16,000

17,100

Rent Revenue

1,410

2,260

Salaries and Wages Expense

8,000

8,725

Rent Expense

1,900

2,900

Depreciation Expense

700

Supplies Expense

850

Utilities Expense

1,510

1,510

Interest Expense

100

$53,810

$53,810

$56,435

$56,43 5

Instructions

(a) Journalize the adjusting entries that were made.

(b) Prepare an income statement and an owner's equity statement for the 3 months ending September 30 and a balance sheet at September 30.

(c) If the note bears interest at 12%, how many months has it been outstanding?

Prepare the adjusting entries at December 31, 2014. 1 answer below »

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A review of the ledger of Carmel Company at December 31, 2014, produces the following data pertaining to the preparation of annual adjusting entries.

1. Prepaid Insurance $10,440. The company has separate insurance policies on its buildings and its motor vehicles. Policy B4564 on the building was purchased on April 1, 2013, for $7,920. The policy has a term of 3 years. Policy A2958 on the vehicles was purchased on January 1, 2014, for $4,500. This policy has a term of 2 years.

2. Unearned Rent Revenue $429,000. The company began subleasing office space in its new building on November 1. At December 31, the company had the following rental contracts that are paid in full for the entire term of the lease.

Date

Term(in months)

Monthly Rent

No. of Leases

Nov.1

9

$5,000

5

Dec.1

6

$8,500

4

3. Notes Payable $120,000. This balance consists of a note for 9 months at an annual interest rate of 9%, dated November 1.

4. Salaries and Wages Payable $0. There are eight salaried employees. Salaries are paid every Friday for the current week. Five employees receive a salary of $700 each per week, and three employees earn $500 each per week. Assume December 31 is a Tuesday. Employees do not work weekends. All employees worked the last 2 days of December.

Instructions

Prepare the adjusting entries at December 31, 2014.

Prepare an income statement and an owner’s equity statement for November and a balance sheet at…

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On November 1, 2014, the account balances of Schilling Equipment Repair were as follows.

Cash

Debit

Credit

101

$ 2,400

154 Accumulated Depreciation—Equipment $ 2,000

112

Accounts Receivable

4,250

201 Accounts Payable

2,600

126

Supplies

1,800

209 Unearned Service Revenue

1,200

153

Equipment

12,000

212 Salaries and Wages Payable

700

301 Owner's Capital

13,950

$20,450

$20,450

During November, the following summary transactions were completed.

8

Paid $1,700 for salaries due employees, of which $700 is for October salaries.

10

Received $3,420 cash from customers on account.

12

Received $3,100 cash for services performed in November.

15

Purchased equipment on account $2,000.

17

Purchased supplies on account $700.

20

Paid creditors on account $2,700.

22

Paid November rent $400.

25

Paid salaries $1,700.

27

Performed services on account and billed customers for services provided $1,900.

29

Received $600 from customers for future service.

Adjustment data consist of:

1. Supplies on hand $1,400.

2. Accrued salaries payable $350.

3. Depreciation for the month is $200.

4. Services related to unearned service revenue of $1,250 were performed.

Instructions

(a) Enter the November 1 balances in the ledger accounts.

(b) Journalize the November transactions.

(c) Post to the ledger accounts. Use J1 for the posting reference. Use the following additional accounts: No. 407 Service Revenue, No. 615 Depreciation Expense, No. 631 Supplies Expense, No. 726 Salaries and Wages Expense, and No. 729 Rent Expense.

(d) Prepare a trial balance at November 30.

(e) Journalize and post adjusting entries.

(f) Prepare an adjusted trial balance.

(g) Prepare an income statement and an owner's equity statement for November and a balance sheet at November 30.

Prepare an income statement and owner’s equity statement for the 6 months ended June 30 and a…

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Sommer Graphics Company was organized on January 1, 2014, by Krystal Sommer. At the end of the first 6 months of operations, the trial balance contained the accounts shown below.

Debit

Credit

Cash

$ 8,600

Notes Payable

$ 20,000

Accounts Receivable

14,000

Accounts Payable

9,000

Equipment

45,000

Owner's Capital

22,000

Insurance Expense

2,700

Sales Revenue

52,100

Salaries and Wages Expense

30,000

Service Revenue

6,000

Supplies Expense

3,700

Advertising Expense

1,900

Rent Expense

1,500

Utilities Expense

1,700

$109,100

$109,100

Analysis reveals the following additional data.

1. The $3,700 balance in Supplies Expense represents supplies purchased in January. At June 30, $1,500 of supplies are on hand.

2. The note payable was issued on February 1. It is a 9%, 6-month note.

3. The balance in Insurance Expense is the premium on a one-year policy, dated March 1, 2014.

4. Service revenues are credited to revenue when received. At June 30, services revenue of $1,300 are unearned.

5. Revenue for services performed but unrecorded at June 30 totals $2,000.

6. Depreciation is $2,250 per year.

Instructions

(a) Journalize the adjusting entries at June 30. (Assume adjustments are recorded every 6 months.)

(b) Prepare an adjusted trial balance.

(c) Prepare an income statement and owner's equity statement for the 6 months ended June 30 and a balance sheet at June 30.

Prepare the adjusting entries for the month of June. Use J3 as the page number for your journal. 1 answer below »

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Jason Elsner started his own consulting firm, Elsner Company, on June 1, 2014. The trial balance at June 30 is shown below. ELSNER COMPANY Trial Balance June 30, 2014

Account Number

Debit

Credit

101

Cash

$ 7,150

112

Accounts Receivable

6,000

126

Supplies

2,000

130

Prepaid Insurance

3,000

157

Equipment

15,000

201

Accounts Payable

$ 4,500

209

Unearned Service Revenue

4,000

301

Owner's Capital

21,750

400

Service Revenue

7,900

726

Salaries and Wages Expense

4,000

729

Rent Expense

1,000

$38,150

$38,150

In addition to those accounts listed on the trial balance, the chart of accounts for Elsner Company also contains the following accounts and account numbers: No. 158 Accumulated Depreciation—Equipment, No. 212 Salaries and Wages Payable, No. 631 Supplies Expense, No. 711 Depreciation Expense, No. 722 Insurance Expense, and No. 732 Utilities Expense.

1. Supplies on hand at June 30 are $750.

2. A utility bill for $150 has not been recorded and will not be paid until next month.

3. The insurance policy is for a year.

4. $2,800 of unearned service revenue is recognized for services performed during the month.

5. Salaries of $1,900 are accrued at June 30.

6. The equipment has a 5-year life with no salvage value. It is being depreciated at $250 per month for 60 months.

7. Invoices representing $1,200 of services performed during the month have not been recorded as of June 30.

Instructions

(a) Prepare the adjusting entries for the month of June. Use J3 as the page number for your journal.

(b) Post the adjusting entries to the ledger accounts. Enter the totals from the trial balance as beginning account balances and place a check mark in the posting reference column.

(c) Prepare an adjusted trial balance at June 30, 2014.

Insurance expires at the rate of $300 per month. 3 answers below »

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Maquoketa River Resort opened for business on June 1 with eight air-conditioned units. Its trial balance before adjustment on August 31 is as follows. MAQUOKETA RIVER RESORT Trial Balance August 31, 2014

Account Number

Debit

Credit

101

Cash

$ 19,600

126

Supplies

3,300

130

Prepaid Insurance

6,000

140

Land

25,000

143

Buildings

125,000

149

Equipment

26,000

201

Accounts Payable

$ 6,500

208

Unearned Rent Revenue

7,400

275

Mortgage Payable

80,000

301

Owner's Capital

100,000

306

Owner's Drawings

5,000

429

Rent Revenue

80,000

622

Maintenance and Repairs Expense

3,600

726

Salaries and Wages Expense

51,000

732

Utilities Expense

9,400

$273,900

$273,900

In addition to those accounts listed on the trial balance, the chart of accounts for Maquoketa River Resort also contains the following accounts and account numbers: No. 112 Accounts Receivable, No. 144 Accumulated Depreciation—Buildings, No. 150 Accumulated Depreciation—Equipment, No. 212 Salaries and Wages Payable, No. 230 Interest Payable, No. 620 Depreciation Expense, No. 631 Supplies Expense, No. 718 Interest Expense, and No. 722 Insurance Expense.

1. Insurance expires at the rate of $300 per month.

2. A count on August 31 shows $800 of supplies on hand.

3. Annual depreciation is $6,000 on buildings and $2,400 on equipment.

4. Unearned rent revenue of $4,800 was earned prior to August 31.

5. Salaries of $400 were unpaid at August 31.

6. Rentals of $4,000 were due from tenants at August 31. (Use Accounts Receivable.)

7. The mortgage interest rate is 9% per year. (The mortgage was taken out on 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 the three-column form of account. Enter the trial balance amounts and post the adjusting entries. (Use J1 as the posting reference.)

(c) Prepare an adjusted trial balance on August 31.

(d) Prepare an income statement and an owner's equity statement for the 3 months ending August 31 and a balance sheet as of August 31.

Delgado Advertising Agency was founded by Maria Delgado in January of 2013. Presented below are both… 1 answer below »

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Delgado Advertising Agency was founded by Maria Delgado in January of 2013. Presented below are both the adjusted and unadjusted trial balances as of December 31, 2014. DELGADO ADVERTISING AGENCY Trial Balance December 31, 2014

Cash

Accounts Receivable Supplies

Prepaid Insurance Equipment

Unadjusted

Adjusted

$ 11,000 20,000 8,600 3,350 60,000

$ 11,000 21,500 4,800 2,500 60,000

Accumulated Depreciation-Equipment

$ 28,000

$ 34,000

Accounts Payable

5,000

5,000

Interest Payable

-0-

150

Notes Payable

5,000

5,000

Unearned Service Revenue

7,200

5,900

Salaries and Wages Payable

-0-

2,100

Owner's Capital

25,500

25,500

Owner's Drawings

12,000

12,000

Service Revenue

58,600

61,400

Salaries and Wages Expense

10,000

12,100

Insurance Expense

850

Interest Expense

350

500

Depreciation Expense

6,000

Supplies Expense

3,800

Rent Expense

4,000

4,000

$129,300

$129,300

$139,050

$139,050

Instructions

(a) Journalize the annual adjusting entries that were made.

(b) Prepare an income statement and an owner's equity statement for the year ending December 31, 2014, and a balance sheet at December 31.

(c) Answer the following questions.

(1) If the note has been outstanding 6 months, what is the annual interest rate on that note?

(2) If the company paid $12,500 in salaries in 2014, what was the balance in Salaries and Wages Payable on December 31, 2013?

Prepare the adjusting entries at December 31, 2014. (Show all computations.)

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A review of the ledger of Almquist Company at December 31, 2014, produces the following data pertaining to the preparation of annual adjusting entries.

1. Salaries and Wages Payable $0. There are eight salaried employees. Salaries are paid every Friday for the current week. Five employees receive a salary of $900 each per week, and three employees earn $700 each per week. Assume December 31 is a Tuesday. Employees do not work weekends. All employees worked the last 2 days of December.

2. Unearned Rent Revenue $354,000. The company began subleasing office space in its new building on November 1. At December 31, the company had the following rental contracts that are paid in full for the entire term of the lease.

Date

Term(in months)

Monthly Rent

No. of Leases

Nov.1

6

$5,000

5

Dec.1

6

$8,500

4

3. Prepaid Advertising $15,600. This balance consists of payments on two advertising contracts. The contracts provide for monthly advertising in two trade magazines. The terms of the contracts are as follows.

Contract

Date

Amount

Number of Magazine Issues

A650

May 1

$6,000

12

B974

Oct. 1

9,600

24

The first advertisement runs in the month in which the contract is signed.

4. Notes Payable $120,000. This balance consists of a note for one year at an annual interest rate of 9%, dated June 1.

Instructions

Prepare the adjusting entries at December 31, 2014. (Show all computations.)

Journalize the September transactions. 1 answer below »

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On September 1, 2014, the account balances of Percy Equipment Repair were as follows.

Cash

Debit

Credit

101

$ 4,880

154 Accumulated Depreciation—Equipment $ 1,500

112

Accounts Receivable

3,520

201 Accounts Payable

3,400

126

Supplies

2,000

209 Unearned Service Revenue

1,400

153

Equipment

15,000

212 Salaries and Wages Payable

500

301 Owner's Capital

18,600

$25,400

$25,400

During September, the following summary transactions were completed.

8

Paid $1,400 for salaries due employees, of which $900 is for September.

10

Received $1,200 cash from customers on account.

12

Received $3,400 cash for services performed in September.

15

Purchased store equipment on account $3,000.

17

Purchased supplies on account $1,200.

20

Paid creditors $4,500 on account.

22

Paid September rent $500.

25

Paid salaries $1,250.

27

Performed services on account and billed customers $2,100 for these services.

29

Received $650 from customers for future service.

Adjustment data consist of:

1. Supplies on hand $1,300.

2. Accrued salaries payable $300.

3. Depreciation is $100 per month.

4. Services related to unearned service revenue of $1,450 were performed.

Instructions

(a) Enter the September 1 balances in the ledger accounts.

(b) Journalize the September transactions.

(c) Post to the ledger accounts. Use J1 for the posting reference. Use the following additional accounts: No. 407 Service Revenue, No. 615 Depreciation Expense, No. 631 Supplies Expense, No. 726 Salaries and Wages Expense, and No. 729 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 an owner's equity statement for September and a balance sheet at September 30.

Using the adjusted trial balance, calculate Cookie Creations’ net income or net loss for the month…

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It is the end of November and Natalie has been in touch with her grandmother. Her grandmother asked Natalie how well things went in her first month of business. Natalie, too, would like to know if she has been profitable or not during November. Natalie realizes that in order to determine Cookie Creations’ income, she must first make adjustments.

Natalie puts together the following additional information.

1. A count reveals that $35 of baking supplies were used during November.

2. Natalie estimates that all of her baking equipment will have a useful life of 5 years or 60 months. (Assume Natalie decides to record a full month's worth of depreciation, regardless of when the equipment was obtained by the business.)

3. Natalie's grandmother has decided to charge interest of 6% on the note payable extended on November 16. The loan plus interest is to be repaid in 24 months. (Assume that half a month of interest accrued during November.)

4. On November 30, a friend of Natalie's asks her to teach a class at the neighborhood school. Natalie agrees and teaches a group of 35 first-grade students how to make gingerbread cookies. The next day, Natalie prepares an invoice for $300 and leaves it with the school principal. The principal says that he will pass the invoice along to the head office, and it will be paid sometime in December.

5. Natalie receives a utilities bill for $45. The bill is for utilities consumed by Natalie's business during November and is due December 15.

Instructions

Using the information that you have gathered through and based on the new information above, do the following.

(a) Prepare and post the adjusting journal entries.

(b) Prepare an adjusted trial balance.

(c) Using the adjusted trial balance, calculate Cookie Creations’ net income or net loss for the month of November. Do not prepare an income statement.