CHAPTER 4
Completing the Accounting Cycle
WEYGANDT FINANCIAL ACCOUNTING IFRS 4E
ANSWERS TO QUESTIONS
1.
No. A worksheet is not a permanent accounting record. The use of a worksheet is an optional
step in the accounting cycle.
2.
The worksheet is merely a device used to make it easier to prepare adjusting entries and the
financial statements.
3.
The amount shown in the adjusted trial balance column for an account equals the account
balance in the ledger after adjusting entries have been journalized and posted.
4.
The net income of ¥12,000 will appear in the income statement debit column and the statement
of financial position credit column. A net loss will appear in the income statement credit column
and the statement of financial position debit column.
5.
Formal financial statements are needed because the columnar data are not properly arranged
and classified for statement purposes. For example, a drawing account is listed with assets.
6.
(1)
(2)
(3)
(4)
7.
Income Summary is a temporary account that is used in the closing process. The account is
debited for expenses and credited for revenues. The difference, either net income or net loss, is
then closed to the Retained Earnings account.
8.
The post-closing trial balance contains only statement of financial position accounts. Its purpose
is to prove the equality of the permanent account balances that are carried forward into the next
accounting period.
9.
The accounts that will not appear in the post-closing trial balance are Depreciation Expense;
Dividends; and Service Revenue.
10.
A reversing entry is the exact opposite, both in amount and in account titles, of an adjusting entry
and is made at the beginning of the new accounting period. Reversing entries are an optional
step in the accounting cycle.
11.
The steps that involve journalizing are: (1) journalize the transactions, (2) journalize the adjusting
entries, and (3) journalize the closing entries.
12.
The three trial balances are the: (1) trial balance, (2) adjusted trial balance, and (3) post-closing
trial balance.
(Dr) Individual revenue accounts and (Cr) Income Summary.
(Dr) Income Summary and (Cr) Individual expense accounts.
(Dr) Income Summary and (Cr) Retained Earnings (for net income).
(Dr) Retained Earnings and (Cr) Dividends.
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13.
Correcting entries differ from adjusting entries because they: (1) are not a required part of the
accounting cycle, (2) may be made at any time, and (3) may affect any combination of accounts.
Questions Chapter 4 (Continued)
*14. The standard classifications in a statement of financial position are:
Assets
Intangible Assets
Property, Plant, and Equipment
Long-term Investments
Current Assets
Equity and Liabilities
Equity
Non-current Liabilities
Current Liabilities
*15. The operating cycle of a company is the average time that it takes to purchase inventory, sell it on
account, and then collect cash from customers.
*16. Current assets are assets that a company expects to convert to cash or use up in one year. Some
companies use a period longer than one year to classify assets and liabilities as current because they
have an operating cycle longer than one year. Companies usually list current assets in the
reverse order in which they expect to convert them into cash.
*17. Long-term investments are generally investments in shares and bonds of other companies that
are normally held for many years. Property, plant, and equipment are assets with relatively long
useful lives that a company is currently using in operating the business.
*18. (a) The equity section for a corporation is called shareholders’ equity.
(b) The two accounts and the purpose of each are: (1) Share capital is used to record investments of assets in the business by the owners (shareholders). (2) Retained earnings is used
to record net income retained in the business.
*19.. TSMC’s current liabilities at December 31, 2016 and December 31, 2015 were NT$318,239,273
and NT$212,228,594 respectively. TSMC’s current liabilities were significantly lower than its current
assets in both years.
*20. After reversing entries have been made, the balances will be Interest Payable, zero balance;
Interest Expense, a credit balance.
*21. (a) Jan. 10 Salaries and Wages Expense ...................................................
Cash ................................................................................
8,000
8,000
Because of the January 1 reversing entry that credited Salaries and Wages Expense for
€3,500, Salaries and Wages Expense will have a debit balance of €4,500 which equals the
expense for the current period.
(b) Jan. 10 Salaries and Wages Payable ....................................................
Salaries and Wages Expense ...................................................
Cash ................................................................................
3,500
4,500
8,000
Note that Salaries and Wages Expense will again have a debit balance of €4,500.
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SOLUTIONS TO BRIEF EXERCISES
BRIEF EXERCISE 4.1
The steps in using a worksheet are performed in the following sequence:
(1) prepare a trial balance on the worksheet, (2) enter adjustment data,
(3) enter adjusted balances, (4) extend adjusted balances to appropriate
statement columns and (5) total the statement columns, compute net
income (loss), and complete the worksheet. Filling in the blanks, the
answers are 1, 3, 4, 5, 2.
The solution to BRIEF EXERCISE 4.2 is on page 4.9.
BRIEF EXERCISE 4.3
Account
Accumulated Depreciation
Depreciation Expense
Share Capital—Ordinary
Dividends
Service Revenue
Supplies
Accounts Payable
Income Statement
Dr.
Cr.
Statement of
Financial
Position
Dr.
Cr.
X
X
X
X
X
X
X
BRIEF EXERCISE 4.4
Dec. 31
31
31
31
Service Revenue .............................................
Income Summary ....................................
58,000
Income Summary ............................................
Salaries and Wages Expense .................
Supplies Expense ....................................
46,000
Income Summary ............................................
Retained Earnings ...................................
12,000
Retained Earnings...........................................
Dividends .................................................
2,000
58,000
39,000
7,000
12,000
2,000
BRIEF EXERCISE 4.2
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WALTERS REPAIR SHOP
Worksheet
Trial Balance
Account Titles
Prepaid Insurance
Service Revenue
Salaries and Wages
Expense
Accounts Receivable
Salaries and Wages
Payable
Insurance Expense
Dr.
3,000
Cr.
Dr.
60,000
25,000
Adjusted
Trial Balance
Adjustments
Cr.
(a) 1,800
(b) 1,100
(c) 900
(b) 1,100
Cr.
Dr.
61,100
25,900
1,100
(c)
(a) 1,800
Dr.
1,200
Income
Statement
900
61,100
25,900
1,100
900
1,800
Cr.
Statement of
Financial
Position
Dr.
Cr.
1,200
900
1,800
(For Instructor Use Only)
4-9
BRIEF EXERCISE 4.5
Salaries and Wages
Expense
Bal. 39,000 (2) 39,000
Supplies Expense
Bal. 7,000 (2) 7,000
Income Summary
(2) 46,000 (1) 58,000
(3) 12,000
58,000
58,000
Service Revenue
(1) 58,000 Bal. 58,000
Retained Earnings
(4)
2,000 Bal. 30,000
(3) 12,000
Bal. 40,000
Dividends
Bal. 2,000 (4) 2,000
BRIEF EXERCISE 4.6
July 31
31
Date
7/31
7/31
Date
7/31
7/31
Service Revenue ..............................................
Income Summary .....................................
17,800
Income Summary .............................................
Salaries and Wages Expense ..................
Maintenance and Repairs Expense .........
12,100
Explanation
Balance
Closing entry
Explanation
Balance
Closing entry
Service Revenue
Ref.
Debit
17,800
9,600
2,500
Credit
17,800
Balance
17,800
0
Credit
Balance
9,600
0
17,800
Salaries and Wages Expense
Ref.
Debit
9,600
9,600
BRIEF EXERCISE 4.6 (Continued)
Date
7/31
7/31
Maintenance and Repairs Expense
Explanation
Ref.
Debit
Credit
Balance
2,500
Closing entry
2,500
Balance
2,500
0
BRIEF EXERCISE 4.7
The accounts that will appear in the post-closing trial balance are:
Accumulated Depreciation
Share Capital—Ordinary
Supplies
Accounts Payable
BRIEF EXERCISE 4.8
The proper sequencing of the required steps in the accounting cycle is as
follows:
1.
2.
3.
4.
5.
6.
7.
8.
9.
Analyze business transactions.
Journalize the transactions.
Post to ledger accounts.
Prepare a trial balance.
Journalize and post adjusting entries.
Prepare an adjusted trial balance.
Prepare financial statements.
Journalize and post closing entries.
Prepare a post-closing trial balance.
Filling in the blanks, the answers are 4, 2, 8, 7, 5, 3, 9, 6, 1.
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4-7
BRIEF EXERCISE 4.9
1.
2.
Service Revenue ................................................................
Accounts Receivable..................................................
870
Supplies (£1,150 – £1,510) .................................................
Accounts Payable .......................................................
360
870
360
BRIEF EXERCISE 4.10
JOLIE COMPANY
Partial Statement of Financial Position
Current assets
Prepaid insurance ...................................................................
Supplies ...................................................................................
Accounts receivable ...............................................................
Debt investments ....................................................................
Cash .........................................................................................
Total current assets.........................................................
$ 4,500
5,200
12,500
7,600
4,100
$33,900
BRIEF EXERCISE 4.11
CL
CA
PPE
PPE
CA
IA
Accounts payable
Accounts receivable
Accum. depreciation—buildings
Buildings
Cash
Copyrights
CL
LTI
PPE
CA
IA
CA
Income taxes payable
Debt investments (long-term)
Land
Inventory
Patents
Supplies
*BRIEF EXERCISE 4.12
Nov. 1
Salaries and Wages Payable .....................................
Salaries and Wages Expense ............................
3,300
3,300
The balances after posting the reversing entry are Salaries and Wages
Expense (Cr.) €3,300 and Salaries and Wages Payable €0.
SOLUTIONS FOR DO IT! EXERCISES
DO IT! 4.1
Income statement debit column—Utilities Expense
Income statement credit column—Service Revenue
Statement of financial position debit column—Accounts Receivable
Statement of financial position credit column—Notes Payable;
Statement of financial position credit column—Accumulated Depreciation;
Statement of financial position credit column—Share Capital—Ordinary
DO IT! 4.2
Dec. 31
Dec. 31
Dec. 31
Dec. 31
Service Revenue ..........................................
Income Summary ..................................
108,000
Income Summary.........................................
Supplies Expense ..................................
Salaries and Wages Expense ...............
Utilities Expense ....................................
Rent Expense.........................................
72,000
Income Summary.........................................
Retained Earnings .................................
36,000
Retained Earnings .......................................
Dividends ...............................................
22,000
108,000
6,000
40,000
8,000
18,000
36,000
22,000
DO IT! 4.3
1.
2.
3.
Supplies ........................................................
Equipment ................................................
Cash..........................................................
650
Cash ..............................................................
Dividends ......................................................
Salaries & Wages Expense .....................
400
500
Accounts Payable ........................................
Cash..........................................................
540
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210
440
900
540
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4-9
DO IT! 4.4
NA
CL
CL
CA
NCL
IA
Interest revenue
Utilities payable
Accounts payable
Supplies
Bonds payable
Goodwill
E
PPE
PPE
NA
LTI
CL
Share capital—ordinary
Accumulated depreciation—equipment
Equipment
Salaries and wages expense
Debt investments (long-term)
Unearned rent revenue
SOLUTIONS TO EXERCISES
EXERCISE 4.1
LIM ACUPUNCTURE
Worksheet
For the Month Ended June 30, 2020
Statement of
Financial
Account Titles
Cash
Trial Balance
Adjustments
Dr.
Dr.
Cr.
Cr.
Adj. Trial Balance
Dr.
Cr.
Income Statement
Dr.
Cr.
Position
Dr.
2,320
2,320
2,320
2,440
2,440
2,440
Cr.
Accounts
Receivable
Supplies
1,880
Accounts Payable
(a) 1,380
500
1,120
500
1,120
1,120
100
100
3,600
3,600
Unearned Service
Revenue
240 (b)
140
Share Capital—
Ordinary
3,600
Service Revenue
2,400
(b)
140
2,540
2,540
Salaries and
Wages Expense
560
(c)
210
770
770
160
160
1,380
1,380
Miscellaneous
Expense
Totals
Supplies Expense
160
7,360
7,360
(a) 1,380
Salaries and
Wages Payable
Totals
(c)
1,730
210
1,730
210
7,570
7,570
Net Income
2,540
5,260
5,030
2,540
5,260
5,260
230
Totals
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2,310
2,540
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EXERCISE 4.2
TAI INTERIORS
(Partial) Worksheet
For the Month Ended April 30, 2020
Adjusted
Trial Balance
Account Titles
Cash
Accounts Receivable
Prepaid Rent
Equipment
Accum. Depreciation—
Equipment
Notes Payable
Accounts Payable
Share Capital—
Ordinary
Dividends
Service Revenue
Salaries and
Wages Expense
Rent Expense
Depreciation Expense
Interest Expense
Interest Payable
Totals
Net Income
Totals
Dr.
10,000
7,840
2,280
23,050
Cr.
Income
Statement
Dr.
Cr.
Dr.
10,000
7,840
2,280
23,050
Cr.
4,900
5,700
4,920
4,900
5,700
4,920
25,960
25,960
3,650
3,650
17,590
10,840
760
650
57
59,127
Statement of
Financial
Position
17,590
10,840
760
650
57
57
59,127
12,307
5,283
17,590
17,590
46,820
17,590
46,820
57
41,537
5,283
46,820
EXERCISE 4.3
TAI INTERIORS
Income Statement
For the Month Ended April 30, 2020
Revenues
Service revenue .......................................................
NT$17,590
Expenses
Salaries and wages expense .................................. NT$10,840
Rent expense ...........................................................
760
Depreciation expense ..............................................
650
Interest expense ......................................................
57
Total expenses .................................................
12,307
Net income .......................................................................
NT$ 5,283
TAI INTERIORS
Retained Earnings Statement
For the Month Ended April 30, 2020
Retained earnings, April 1 .......................................................
Add: Net income .....................................................................
Less: Dividends .......................................................................
Retained earnings, April 30 .....................................................
NT$
0
5,283
5,283
3,650
NT$1,633
TAI INTERIORS
Statement of Financial Position
April 30, 2020
Assets
Property, plant, and equipment
Equipment .................................................................... NT$23,050
Less: Accumulated depreciation—equipment ........
4,900 NT$18,150
Current assets
Prepaid rent ..................................................................
2,280
Accounts receivable....................................................
7,840
Cash ..............................................................................
10,000
20,120
Total assets ..........................................................
NT$38,270
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EXERCISE 4.3 (Continued)
TAI INTERIORS
Statement of Financial Position (Continued)
April 30, 2020
Equity and Liabilities
Equity
Share capital—ordinary ..................................... NT$25,960
Retained earnings .............................................
1,633 NT$27,593
Current liabilities
Notes payable ....................................................
5,700
Accounts payable .............................................
4,920
Interest payable .................................................
57
10,677
Total equity and liabilities ........................
NT$38,270
EXERCISE 4.4
(a) Apr. 30
30
30
30
Service Revenue ......................................
Income Summary .............................
17,590
Income Summary .....................................
Salaries and Wages Expense ..........
Rent Expense....................................
Depreciation Expense ......................
Interest Expense ...............................
12,307
Income Summary .....................................
Retained Earnings ............................
5,283
Retained Earnings....................................
Dividends ..........................................
3,650
17,590
10,840
760
650
57
5,283
3,650
(b)
(2)
(3)
Income Summary
12,307 (1)
17,590
5,283
17,590
17,590
(4)
Retained Earnings
3,650 Bal.
0
(3)
5,283
Bal.
1,633
EXERCISE 4.4 (Continued)
(c)
TAI INTERIORS
Post-Closing Trial Balance
April 30, 2020
Cash.....................................................................
Accounts Receivable ..........................................
Prepaid Rent .......................................................
Equipment ...........................................................
Accumulated Depreciation—Equipment ...........
Notes Payable .....................................................
Accounts Payable ...............................................
Interest Payable ..................................................
Share Capital—Ordinary ......................................
Retained Earnings ..............................................
Debit
NT$10,000
7,840
2,280
23,050
Credit
NT$ 4,900
5,700
4,920
57
25,960
1,633
NT$43,170NTNT$43,170
EXERCISE 4.5
(a) Accounts Receivable ..........................................
Service Revenue .........................................
1,100
Insurance Expense .............................................
Prepaid Insurance .......................................
300
Depreciation Expense ........................................
Accumulated Depreciation—Equipment ...
900
Salaries and Wages Expense ............................
Salaries and Wages Payable ......................
500
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300
900
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500
4-15
EXERCISE 4.5 (Continued)
(b)
Income Statement
Dr.
Accounts Receivable
Prepaid Insurance
Accum. Depreciation—Equip.
Salaries and Wages Payable
Service Revenue
Salaries and Wages Expense
Insurance Expense
Depreciation Expense
Cr.
Statement of
Financial Position
Dr.
Cr.
X
X
X
X
X
X
X
X
EXERCISE 4.6
(a) Accounts Receivable—¥25,000 (¥34,000 – ¥9,000).
Supplies—¥2,500 (¥7,000 – ¥4,500).
Accumulated Depreciation—Equipment—¥22,000 (¥12,000 + ¥10,000).
Salaries and Wages Payable—¥0 No liability recorded until adjustments
are made.
Insurance Expense—¥6,000 (¥26,000 – ¥20,000).
Salaries and Wages Expense—¥43,400 (¥49,000 – ¥5,600).
(b) Accounts Receivable ................................................
Service Revenue ................................................
9,000
Insurance Expense ...................................................
Prepaid Insurance .............................................
6,000
Supplies Expense .....................................................
Supplies .............................................................
4,500
Depreciation Expense ...............................................
Accumulated Depreciation—Equipment ..........
10,000
Salaries and Wages Expense ...................................
Salaries and Wages Payable .............................
5,600
9,000
6,000
4,500
10,000
5,600
EXERCISE 4.7
(a) Service Revenue ....................................................
Income Summary .............................................
4,300
Income Summary ...................................................
Salaries and Wages Expense .........................
Miscellaneous Expense ..................................
Supplies Expense ............................................
3,416
Income Summary ...................................................
Retained Earnings ...........................................
884
Retained Earnings .................................................
Dividends .........................................................
550
(b)
4,300
1,260
256
1,900
884
550
JEJU CONSULTANTS
Post-Closing Trial Balance
June 30, 2020
Account Titles
Cash........................................................................
Accounts Receivable .............................................
Supplies .................................................................
Accounts Payable ..................................................
Salaries and Wages Payable .................................
Unearned Service Revenue ...................................
Share Capital—Ordinary .......................................
Retained Earnings .................................................
Debit
₩3,712
3,904
480
₩8,096
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Credit
₩1,382
460
160
4,100
1,994
₩8,096
4-17
EXERCISE 4.8
(a)
General Journal
Date
Account Titles
July 31 Service Revenue .................................
Rent Revenue......................................
Income Summary.......................
Ref.
400
429
350
Debit
64,000
6,500
31 Income Summary ................................
Salaries and Wages Expense ...
Utilities Expense ........................
Depreciation Expense ...............
350
726
732
711
78,600
31 Retained Earnings ..............................
Income Summary.......................
320
350
8,100
31 Retained Earnings ..............................
Dividends ...................................
320
332
16,000
J15
Credit
70,500
55,700
14,900
8,000
8,100
16,000
(b)
Retained Earnings
Date
Explanation
Ref.
Debit
July 31 Balance
✓
31 Close net loss
J15
8,100
31 Close dividends
J15
16,000
Income Summary
Date
Explanation
Ref.
Debit
July 31 Close revenue
J15
31 Close expenses
J15
78,600
31 Close net loss
J15
Credit
Credit
70,500
8,100
No. 320
Balance
25,200
17,100
1,100
No. 350
Balance
70,500
(8,100)
0
EXERCISE 4.8 (Continued)
(c)
HUANG AUTOMOTIVE
Post-Closing Trial Balance
July 31, 2020
Cash.....................................................................
Accounts Receivable ..........................................
Equipment ...........................................................
Accumulated Depreciation—Equipment ...........
Accounts Payable ...............................................
Unearned Rent Revenue ....................................
Share Capital—Ordinary ....................................
Retained Earnings ..............................................
Debit
NT$9,840
8,780
15,900
Credit
NT$ 7,400
4,220
1,800
20,000
1,100
NT$34,520 NT$34,520
EXERCISE 4.9
(a)
HUANG AUTOMOTIVE
Income Statement
For the Year Ended July 31, 2020
Revenues
Service revenue........................................... NT$64,000
Rent revenue ............................................... __ 6,500
Total revenues .....................................
NT$70,500
Expenses
Salaries and wages expense ......................
55,700
Utilities expense ..........................................
14,900
Depreciation expense ................................. __ 8,000
Total expenses.....................................
__ _78,600
Net loss ...............................................................
(NT$ 8,100)
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EXERCISE 4.9 (Continued)
HUANG AUTOMOTIVE
Retained Earnings Statement
For the Year Ended July 31, 2020
Retained earnings, August 1, 2019 ...................
NT$25,200
Less: Net loss .................................................... NT$ 8,100
Dividends .................................................
16,000 __ _24,100
Retained earnings, July 31, 2020 ......................
NT$1,100
(b)
HUANG AUTOMOTIVE
Statement of Financial Position
July 31, 2020
Assets
Property, plant, and equipment
Equipment ...................................................... NT$15,900
Less: Accumulated depreciation .................
7,400 NT$8,500
Current assets
Accounts receivable ......................................
8,780
Cash................................................................
9,840
18,620
Total assets ............................................
NT$27,120
Equity and Liabilities
Equity
Share capital—ordinary ................................ NT$20,000
Retained earnings..........................................
1,100 NT$21,100
Current liabilities
Accounts payable ..........................................
4,220
Unearned rent revenue ..................................
1,800
6,020
Total equity and liabilities .....................
NT$27,120
EXERCISE 4.10
1.
False “Analyze business transactions” is the first step in the accounting
cycle.
2.
False. Reversing entries are an optional step in the accounting cycle.
3.
True.
4.
True.
5.
True.
6.
False. Steps 1–3 may occur daily in the accounting cycle. Steps 4–7 are
performed on a periodic basis. Steps 8 and 9 are usually prepared only
at the end of a company’s annual accounting period.
7.
False. The step of “journalize the transactions” occurs before the step
of “post to the ledger accounts.”
8.
False. Closing entries are prepared after financial statements are prepared.
EXERCISE 4.11
(a) June 30
30
30
30
Service Revenue ...................................
Income Summary ...........................
18,100
Income Summary ..................................
Salaries and Wages Expense .......
Rent Expense .................................
Supplies Expense ..........................
13,100
Income Summary ..................................
Retained Earnings .........................
5,000
Retained Earnings .................................
Dividends .......................................
2,500
18,100
8,800
3,000
1,300
5,000
2,500
(b)
Income Summary
June 30 13,100 June 30 18,100
June 30
5,000
18,100
18,100
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Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
(For Instructor Use Only)
4-21
EXERCISE 4.12
(a) 1.
2.
3.
(b) 1.
2.
3.
Cash .................................................................
Equipment ...............................................
700
Salaries and Wages Expense .........................
Cash .........................................................
700
Service Revenue..............................................
Cash .........................................................
150
Cash .................................................................
Accounts Receivable ..............................
1,500
Accounts Payable ...........................................
Equipment ...............................................
760
Equipment .......................................................
Accounts Payable ...................................
670
Salaries and Wages Expense .........................
Equipment ...............................................
700
Service Revenue..............................................
Cash .................................................................
Accounts Receivable ..............................
150
1,350
Accounts Payable ...........................................
Equipment ...............................................
90
700
700
150
1,500
760
670
700
1,500
90
EXERCISE 4.13
1.
2.
3.
Accounts Payable ($750 – $570) .............................
Cash ..................................................................
180
Supplies ...................................................................
Equipment ........................................................
Accounts Payable ............................................
560
Dividends .................................................................
Salaries and Wages Expense ..........................
500
180
56
504
500
EXERCISE 4.14
(a)
TSAI BOWLING ALLEY
Statement of Financial Position
December 31, 2020
Assets
Property, plant, and equipment
Land .............................................
Buildings......................................
Less: Acc. depr.—buildings ......
Equipment ...................................
Less: Acc. depr.—equipment ....
Current assets
Prepaid insurance .......................
Accounts receivable ...................
Cash .............................................
Total assets ......................
Copyright © 2019 WILEY
¥65,000
¥128,800
42,600
62,400
18,720
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
86,200
43,680
4,680
14,520
18,040
(For Instructor Use Only)
¥194,880
37,240
¥232,120
4-23
EXERCISE 4.14 (Continued)
TSAI BOWLING ALLEY
Statement of Financial Position (Continued)
December 31, 2020
Equity and Liabilities
Equity
Share capital—ordinary .................................. ¥100,000
Retained earnings (¥13,000 + ¥5,240*) ...........
18,240
Non-current liabilities
Notes payable ..................................................
67,780
Current liabilities
Notes payable(due 2021) ..................... ¥30,000
Accounts payable .................................. 12,300
Interest payable ................................... 3,800 ¥46,100
Total liabilities ..........................................
Total equity and liabilities ...................
¥118,240
113,880
¥232,120
*Net income = ¥17,180 – ¥780 – ¥7,360 – ¥3,800 = ¥5,240
(b) Current assets are less than current liabilities by ¥8,860 (¥37,240 –
¥46,100). However, approximately 50% of current assets are in the form
of cash. The company’s liquidity appears to be somewhat weak, so
some caution is needed.
EXERCISE 4.15
CL Accounts payable
CA Accounts receivable
CA Cash
E Share capital—ordinary
IA
CL
CA
CA
Patents
Salaries and wages payable
Inventory
Share investments (to be
sold in 7 months)
EXERCISE 4.16
PPE Accumulated depreciation–
equipment
PPE Buildings
PPE Land
NCL Notes payable (due in
2 years)
CA Supplies
PPE Equipment
CA Prepaid expenses
J. KUNG ENTERPRISES
Statement of Financial Position
December 31, 2020
(in thousands)
Assets
Property, plant, and equipment
Equipment ..................................................
Less: Accumulated depreciation—
equipment ........................................
Long-term investments .....................................
Current assets
Prepaid insurance ......................................
Inventory .....................................................
Accounts receivable ..................................
Short-term investments .............................
Cash ............................................................
Total assets .....................................
HK$11,500
(5,655)
650
1,256
1,696
3,690
2,668
5,845
264
9,960
HK$16,069
Equity and Liabilities
Equity
Share capital—ordinary ............................. HK$11,455
Retained earnings .......................................
1,500HK$12,955
Non-current liabilities
Long-term debt ...............................
1,000
Notes payable .................................
400
1,400
Current liabilities
Notes payable (due in 2021) ..........
500
Accounts payable ..........................
1,214
1,714
Total liabilities.....................................
3,114
Total equity and liabilities ..............
HK$16,069
Copyright © 2019 WILEY
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
(For Instructor Use Only)
4-25
EXERCISE 4.17
(a)
BASTEN TAX SERVICES
Income Statement
For the Year Ended July 31, 2020
Revenues
Service revenue .......................................
Rent revenue ............................................
Total revenues ..................................
Expenses
Salaries and wages expense ..................
Utilities expense ......................................
Depreciation expense ..............................
Total expense ...................................
Net loss ............................................................
£63,000
8,500
£71,500
48,700
22,600
4,000
75,300
£ (3,800)
BASTEN TAX SERVICES
Retained Earnings Statement
For the Year Ended July 31, 2020
Retained earnings, August 1, 2019 ................
Less: Net loss .................................................
Dividends ..............................................
Retained earnings, July 31, 2020 ...................
£31,200
£3,800
3,000
6,800
£24,400
EXERCISE 4.17 (Continued)
(b)
BASTEN TAX SERVICES
Statement of Financial Position
July 31, 2020
Assets
Property, plant, and equipment
Equipment ......................................................
Less: Accumulated depreciation—
equipment ............................................
Current assets
Accounts receivable ......................................
Cash ................................................................
Total assets ........................................
£34,400
6,000
9,780
14,200
£28,400
23,980
£52,380
Equity and Liabilities
Equity
Share capital—ordinary .................................
Retained earnings ..........................................
Non-current liabilities
Notes payable .................................................
Current liabilities
Accounts payable .................................. £4,100
Salaries and wages payable .................. 2,080
Total liabilities.........................................
Total equity and liabilities .................
Copyright © 2019 WILEY
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
£20,000
24,400 £44,400
1,800
6,180
(For Instructor Use Only)
7,980
£52,380
4-27
*EXERCISE 4.18
(a) Dec. 31
Jan. 6
(b) Dec. 31
Jan. 1
Jan. 6
Salaries and Wages Expense
($12,000 X 2/5) ......................................
Salaries and Wages Payable ..........
4,800
4,800
Salaries and Wages Payable ..................
Salaries and Wages Expense
($12,000 X 3/5) ......................................
Cash .................................................
4,800
Salaries and Wages Expense.................
Salaries and Wages Payable ..........
4,800
Salaries and Wages Payable ..................
Salaries and Wages Expense .........
4,800
Salaries and Wages Expense................
Cash .................................................
12,000
7,200
12,000
4,800
4,800
12,000
*EXERCISE 4.19
(a) Dec. 31
31
(b) Jan. 1
1
Service Revenue .....................................
Income Summary ............................
92,500
Income Summary ....................................
Interest Expense .............................
7,700
Service Revenue .....................................
Accounts Receivable ......................
5,000
Interest Payable ......................................
Interest Expense .............................
2,200
92,500
7,700
5,000
2,200
*EXERCISE 4.19 (Continued)
(c) & (e)
Accounts Receivable
Dec. 31 Balance
*19,500
31 Adjusting
5,000
24,500
Jan. 1 Reversing
5,000
*(NT$24,500 – NT$5,000)
Dec. 31 Closing
Jan. 1
Reversing
Service Revenue
92,500 Dec. 31 Balance
31 Adjusting
92,500
5,000 Jan. 10
87,500*
5,000
92,500
5,000
*(NT$92,500 – NT$5,000)
Jan. 1
Reversing
Dec. 31 Balance
31 Adjusting
Jan. 15
Interest Payable
Dec. 31 Adjusting
2,200
Interest Expense
*5,500 Dec. 31 Closing
2,200
7,700
3,000 Jan. 1 Reversing
2,200
7,700
.
7,700
2,200
*(NT$7,700 – NT$2,200)
(d)
Jan. 10
15
Copyright © 2019 WILEY
(1)
Cash ..............................................................
Service Revenue ...................................
5,000
(2)
Interest Expense ..........................................
Cash.......................................................
3,000
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
5,000
(For Instructor Use Only)
3,000
4-29
4-34
(a)
Copyright © 2019 WILEY
WANG ROOFING
Worksheet
For the Month Ended March 31, 2020
Account Titles
Trial Balance
Dr.
Dr.
Cr.
4,500
3,200
2,000
11,000
(a) 1,520
1,250
2,500
550
12,900
(c)
(b)
250
(c)
290
Cr.
Dr.
Cr.
4,500
3,200
480
11,000
(d)
Dr.
Cr.
4,500
3,200
480
11,000
1,500
2,500
260
12,900
1,100
6,300
Statement of
Financial
Position
1,500
2,500
260
12,900
290
1,100
1,300
400
23,500
Dr.
Income
Statement
1,100
6,590
6,590
700
2,000
400
2,000
400
(a) 1,520
(b)
250
1,520
250
1,520
250
23,500
(d)
2,760
700
2,760
24,450
700
24,450
(For Instructor Use Only)
4,170
2,420
6,590
Key: (a) Supplies Used; (b) Depreciation Expensed; (c) Service Revenue Recognized; (d) Salaries Accrued.
6,590
20,280
6,590
20,280
700
17,860
2,420
20,280
PROBLEM 4.1
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
Cash
Accounts Receivable
Supplies
Equipment
Accumulated Depreciatio
n—Equipment
Accounts Payable
Unearned Service Revenue
Share Capital—Ordinary
Dividends
Service Revenue
Salaries and Wages
Expense
Miscellaneous Expense
Totals
Supplies Expense
Depreciation Expense
Salaries and Wages
Payable
Totals
Net Income
Totals
Cr.
Adjusted
Trial Balance
Adjustments
PROBLEM 4.1 (Continued)
(b)
WANG ROOFING
Income Statement
For the Month Ended March 31, 2020
Revenues
Service revenue..................................................
Expenses
Salaries and wages expense .............................
Supplies expense ...............................................
Miscellaneous expense .....................................
Depreciation expense ........................................
Total expenses............................................
Net income .................................................................
¥6,590
¥2,000
1,520
400
250
4,170
¥2,420
WANG ROOFING
Retained Earnings Statement
For the Month Ended March 31, 2020
Retained earnings, March 1 ...................................
Add: Net income ...................................................
¥
0
2,420
2,420
1,100
¥1,320
Less: Dividends .....................................................
Retained earnings, March 31 .................................
WANG ROOFING
Statement of Financial Position
March 31, 2020
Assets
Property, plant, and equipment
Equipment ..........................................................
Less: Accum. depreciation—equipment .........
Current assets
Supplies ..............................................................
Accounts receivable ..........................................
Cash ....................................................................
Total assets.................................................
Copyright © 2019 WILEY
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
¥11,000
1,500
480
3,200
4,500
(For Instructor Use Only)
¥9,500
8,180
¥17,680
4-31
PROBLEM 4.1 (Continued)
WANG ROOFING
Statement of Financial Position (Continued)
March 31, 2020
Equity and Liabilities
Equity
Share capital—ordinary ....................................... ¥12,900
Retained earnings ................................................
1,320
Current liabilities
Accounts payable.................................................
2,500
Salaries and wages payable ................................
700
Unearned service revenue ...................................
260
Total equity and liabilities ...........................
(c) Mar. 31
31
31
31
(d) Mar. 31
31
31
31
4-32
Supplies Expense .......................................
Supplies ...............................................
1,520
Depreciation Expense ................................
Accumulated Depreciation—
Equipment ........................................
250
Unearned Service Revenue ........................
Service Revenue .................................
290
Salaries and Wages Expense ....................
Salaries and Wages Payable ..............
700
Service Revenue .........................................
Income Summary ................................
6,590
Income Summary ........................................
Salaries and Wages Expense .............
Supplies Expense ...............................
Depreciation Expense .........................
Miscellaneous Expense ......................
4,170
Income Summary ........................................
Retained Earnings ...............................
2,420
Retained Earnings ......................................
Dividends .............................................
1,100
Copyright © 2019 WILEY
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
¥14,220
3,460
¥17,680
1,520
250
290
700
6,590
2,000
1,520
250
400
2,420
(For Instructor Use Only)
1,100
PROBLEM 4.2
(a)
NGUYEN COMPANY
Partial Worksheet
For the Year Ended December 31, 2020
Adjusted
Trial Balance
Account
No.
101
112
126
130
157
158
200
201
212
230
311
320
332
400
610
631
711
722
726
905
Titles
Cash
Accounts Receivable
Supplies
Prepaid Insurance
Equipment
Acc. Depr.—Equip.
Notes Payable
Accounts Payable
Salaries and
Wages Payable
Interest Payable
Share Capital—
Ordinary
Retained Earnings
Dividends
Service Revenue
Advertising Expense
Supplies Expense
Depreciation Expense
Insurance Expense
Salaries and
Wages Expense
Interest Expense
Totals
Net Income
Totals
Copyright © 2019 WILEY
Dr.
5,300
10,800
1,500
2,000
27,000
Cr.
Income
Statement
Dr.
Cr.
Statement of
Financial
Position
Dr.
5,300
10,800
1,500
2,000
27,000
Cr.
5,600
15,000
6,100
5,600
15,000
6,100
3,600
600
11,000
3,600
600
11,000
2,000
2,000
7,600
7,600
61,000
61,000
9,000
4,000
5,600
3,500
9,000
4,000
5,600
3,500
28,000
600
104,900
28,000
600
50,700
10,300
61,000
104,900
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
61,000
54,200
61,000
54,200
(For Instructor Use Only)
43,900
10,300
54,200
4-33
PROBLEM 4.2 (Continued)
(b)
NGUYEN COMPANY
Income Statement
For the Year Ended December 31, 2020
Revenues
Service revenue .............................................
Expenses
Salaries and wages expense ........................
Advertising expense .....................................
Depreciation expense ...................................
Supplies expense ..........................................
Insurance expense ........................................
Interest expense ............................................
Total expenses .......................................
Net income ............................................................
$61,000
$28,000
9,000
5,600
4,000
3,500
600
50,700
$10,300
NGUYEN COMPANY
Retained Earnings Statement
For the Year Ended December 31, 2020
Retained earnings, January 1 ................................................
Add: Net income ...................................................................
Less: Dividends .....................................................................
Retained earnings, December 31 ...........................................
4-34
Copyright © 2019 WILEY
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
$2,000
10,300
12,300
7,600
$4,700
(For Instructor Use Only)
PROBLEM 4.2 (Continued)
NGUYEN COMPANY
Statement of Financial Position
December 31, 2020
Assets
Property, plant, and equipment
Equipment .....................................................
Less: Accumulated depreciation—
equipment ..........................................
Current assets
Prepaid insurance .........................................
Supplies .........................................................
Accounts receivable .....................................
Cash ...............................................................
Total assets ........................................
$27,000
5,600
2,000
1,500
10,800
5,300
$21,400
19,600
$41,000
Equity and Liabilities
Equity
Share capital—ordinary ................................
Retained earnings .........................................
Non-current liabilities
Notes payable ................................................
Current liabilities
Notes payable ..................................... $4,000
Accounts payable ………………….
6,100
Salaries and wages payable ……..
3,600
Interest payable ……………………
600
Total liabilities........................................
Total equity and liabilities .................
Copyright © 2019 WILEY
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
$11,000
4,700
$15,700
11,000
14,300
(For Instructor Use Only)
25,300
$41,000
4-35
PROBLEM 4.2 (Continued)
(c)
General Journal
Date
Account Titles and Explanation
Dec. 31 Service Revenue..................................
Income Summary .......................
Ref.
400
350
Debit
61,000
31 Income Summary ................................
Advertising Expense ..................
Supplies Expense ......................
Depreciation Expense ................
Insurance Expense ....................
Salaries and Wages Expense ....
Interest Expense ........................
350
610
631
711
722
726
905
50,700
31 Income Summary ................................
Retained Earnings ......................
350
320
10,300
31 Retained Earnings ...............................
Dividends ....................................
320
332
7,600
J14
Credit
61,000
9,000
4,000
5,600
3,500
28,000
600
10,300
7,600
(d)
Date
Jan. 1
Dec. 31
31
Date
Explanation
Balance
Closing entry
Closing entry
Explanation
Dec. 31 Balance
31 Closing entry
4-36
Copyright © 2019 WILEY
Retained Earnings
Ref.
Debit

J14
J14
7,600
Dividends
Ref.

J14
Debit
Credit
2,000
10,300
No. 320
Balance
2,000
12,300
4,700
Credit
No. 332
Balance
7,600
7,600
0
7,600
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
(For Instructor Use Only)
PROBLEM 4.2 (Continued)
Explanation
Closing entry
Closing entry
Closing entry
Income Summary
Ref.
Debit
J14
J14
50,700
J14
10,300
Date
Dec. 31
31
Explanation
Balance
Closing entry
Service Revenue
Ref.
Debit

J14 61,000
Date
Dec. 31
31
Advertising Expense
Explanation
Ref.
Debit
Balance
 9,000
Closing entry
J14
Date
Dec. 31
31
Explanation
Balance
Closing entry
Supplies Expense
Ref.
Debit

4,000
J14
Date
Dec. 31
31
Depreciation Expense
Explanation
Ref.
Debit
Balance
 5,600
Closing entry
J14
Date
Dec. 31
31
Insurance Expense
Ref.
Debit

3,500
J14
Date
Dec. 31
31
31
Explanation
Balance
Closing entry
Copyright © 2019 WILEY
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
Credit
61,000
No. 350
Balance
61,000
10,300
0
Credit
61,000
No. 400
Balance
61,000
0
Credit
No. 610
Balance
9,000
0
9,000
Credit
4,000
Credit
5,600
Credit
3,500
(For Instructor Use Only)
No. 631
Balance
4,000
0
No. 711
Balance
5,600
0
No. 722
Balance
3,500
0
4-37
PROBLEM 4.2 (Continued)
Date
Dec. 31
31
Salaries and Wages Expense
Explanation
Ref.
Debit
Balance

28,000
Closing entry
J14
Date
Dec. 31
31
Interest Expense
Ref.
Debit

600
J14
Explanation
Balance
Closing entry
(e)
28,000
Credit
600
No. 905
Balance
600
0
NGUYEN COMPANY
Post-Closing Trial Balance
December 31, 2020
Cash ....................................................................
Accounts Receivable .........................................
Supplies ..............................................................
Prepaid Insurance ..............................................
Equipment ..........................................................
Accumulated Depreciation—
Equipment ......................................................
Notes Payable ....................................................
Accounts Payable ..............................................
Salaries and Wages Payable .............................
Interest Payable .................................................
Share Capital—Ordinary....................................
Retained Earnings .............................................
Totals ..........................................................
4-38
Credit
No. 726
Balance
28,000
0
Copyright © 2019 WILEY
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
Debit
$ 5,300
10,800
1,500
2,000
27,000
$46,600
Credit
$ 5,600
15,000
6,100
3,600
600
11,000
4,700
$46,600
(For Instructor Use Only)
PROBLEM 4.3
(a)
BRAY MUSIC
Income Statement
For the Year Ended December 31, 2020
Revenues
Service revenue.............................................
NT$60,000
Expenses
Salaries and wages expense ........................ NT$30,000
Depreciation expense ...................................
2,800
Insurance expense ........................................
1,800
Maintenance and repairs expense ...............
1,700
Utilities expense ............................................
1,400
Total expenses.......................................
37,700
Net income ............................................................
NT$22,300
BRAY MUSIC
Retained Earnings Statement
For the Year Ended December 31, 2020
Retained earnings, January 1 ..........................................
Add: Net income .............................................................
Less: Dividends ...............................................................
Retained earnings, December 31.....................................
NT$ 4,500
22,300
26,800
11,000
NT$15,800
BRAY MUSIC
Statement of Financial Position
December 31, 2020
Assets
Property, plant, and equipment
Equipment ..................................................... NT$24,000
Less: Accumulated depreciation—
equipment ..........................................
4,200 NT$19,800
Current assets
Prepaid insurance .........................................
2,800
Accounts receivable .....................................
10,800
Cash ...............................................................
8,800
22,400
Total assets............................................
NT$42,200
Copyright © 2019 WILEY
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
(For Instructor Use Only)
4-39
PROBLEM 4.3 (Continued)
BRAY MUSIC
Statement of Financial Position(Continued)
December 31, 2020
Equity and Liabilities
Equity
Share capital—ordinary ................................. NT$15,000
Retained earnings ..........................................
15,800 NT$30,800
Current liabilities
Accounts payable...........................................
9,000
Salaries and wages payable ..........................
2,400
11,400
Total equity and liabilities .....................
NT$42,200
(b)
Date
Dec. 31
31
31
31
4-40
General Journal
Account Titles and Explanation
Service Revenue ..................................
Income Summary........................
Ref.
400
350
Debit
60,000
Income Summary ................................
Maintenance and Repairs
Expense....................................
Depreciation Expense ................
Insurance Expense .....................
Salaries and Wages Expense ....
Utilities Expense .........................
350
37,700
Income Summary ................................
Retained Earnings ......................
350
320
22,300
Retained Earnings ..............................
Dividends ....................................
320
332
11,000
Copyright © 2019 WILEY
60,000
622
711
722
726
732
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
Credit
1,700
2,800
1,800
30,000
1,400
22,300
11,000
(For Instructor Use Only)
PROBLEM 4.3 (Continued)
(c)
12/31
Share Capital—Ordinary No. 311
1/1 Bal.
15,000
12/31 Bal. 15,000
Maintenance and Repairs
Expense
No. 622
12/31 Bal.
1,700 12/31
1,700
Retained Earnings
No. 320
11,000 1/1 Bal.
4,500
12/31
22,300
12/31 Bal. 15,800
Depreciation Expense No. 711
12/31 Bal.
2,800 12/31
2,800
12/31 Bal.
12/31
12/31
Dividends
11,000 12/31
Income Summary
37,700 12/31
22,300
60,000
No. 332
11,000
No. 350
60,000
Insurance Expense
1,800 12/31
No. 722
1,800
Salaries and Wages
Expense
12/31 Bal. 30,000 12/31
No. 726
30,000
12/31 Bal.
60,000
12/31 Bal.
12/31
Utilities Expense
1,400 12/31
No. 732
1,400
Service Revenue
No. 400
60,000 12/31 Bal. 60,000
(d)
BRAY MUSIC
Post-Closing Trial Balance
December 31, 2020
Debit
NT$8,800
10,800
2,800
24,000
Credit
Cash.....................................................................
Accounts Receivable ..........................................
Prepaid Insurance...............................................
Equipment ...........................................................
Accumulated Depreciation—Equipment ...........
NT$ 4,200
Accounts Payable ...............................................
9,000
Salaries and Wages Payable ..............................
2,400
Share Capital—Ordinary ....................................
15,000
Retained Earnings ..............................................
15,800
Totals ........................................................... NT$46,400 NT$46,400
Copyright © 2019 WILEY
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
(For Instructor Use Only)
4-41
4-74
4-46
RUSTHE MANAGEMENT SERVICES
Worksheet
For the Year Ended December 31, 2020
Account Titles
Trial Balance
Dr.
(For Instructor Use Only)
Cash
Accounts Receivable
Prepaid Insurance
Land
Buildings
Equipment
Accounts Payable
Unearned Rent Revenue
Mortgage Payable
Share Capital—Ordinary
Retained Earnings
Dividends
Service Revenue
Rent Revenue
Salaries and Wages
Expense
Advertising Expense
Utilities Expense
Totals
Insurance Expense
Depr. Expense
Accum. Depr.—Buildings
Accum. Depr.—Equipment
Interest Expense
Interest Payable
Totals
Net Income
Totals
Adjustments
Cr.
Dr.
13,800
28,300
3,600
67,000
127,000
59,000
Cr.
(a) 1,500
12,500
6,000
120,000
130,000
14,000
(c)
Dr.
Cr.
Income
Statement
Dr.
Cr.
13,800
28,300
2,100
67,000
127,000
59,000
Dr.
12,500
1,000
120,000
130,000
14,000
22,000
90,700
34,000
(c) 5,000
Cr.
13,800
28,300
2,100
67,000
127,000
59,000
22,000
90,700
29,000
Statement of
Financial Position
12,500
1,000
120,000
130,000
14,000
5,000
22,000
42,000
20,500
19,000
402,200
Adjusted
Trial Balance
90,700
34,000
42,000
20,500
19,000
42,000
20,500
19,000
1,500
6,600
1,500
6,600
402,200
(a)
(b)
1,500
6,600
(b) 3,000
(b) 3,600
(d) 10,000
23,100
3,000
3,600
10,000
(d) 10,000
23,100
418,800
3,000
3,600
10,000
10,000
418,800
99,600
25,100
124,700
124,700
319,200
124,700
319,200
10,000
294,100
25,100
319,200
Key: (a) Expired Insurance; (b) Depreciation Expense—Building and Equipment; (c) Rent Revenue Recognized; (d) Accrued Interest Payable.
PROBLEM 4.4
Sons, Inc. Weygandt,
John ©Wiley
Principles,
Copyright © 2011
Weygandt,
Accounting
2019&WILEY
Copyright
Financial
Accounting,
IFRS10/e,
4/e, Solutions Manual
(a)
PROBLEM 4.4 (Continued)
(b)
RUSTHE MANAGEMENT SERVICES
Statement of Financial Position
December 31, 2020
Assets
Property, plant, and equipment
Land ...........................................
Buildings....................................
Less: Accumulated
depreciation—buildings .......
Equipment .................................
Less: Accumulated
depreciation—equipment .....
Current assets
Prepaid insurance .....................
Accounts receivable .................
Cash ...........................................
Total assets ....................
$67,000
$127,000
3,000
59,000
124,000
3,600
55,400
2,100
28,300
13,800
$246,400
44,200
$290,600
Equity and Liabilities
Equity
Share capital—ordinary.................................
$130,000
Retained Earnings ........................................
17,100
($14,000 + $25,100 – $22,000) .....................
Non-current liabilities
Mortgage payable.........................................
75,000
Current liabilities
Mortgage payable (due in 2021) ….. $45,000
Accounts payable …………………...
12,500
Interest payable ……………………..
10,000
Unearned rent revenue …………….
1,000 68,500
Total liabilities.......................................
Total equity and liabilities ................
Copyright © 2019 WILEY
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
(For Instructor Use Only)
$147,100
143,500
$290,600
4-43
PROBLEM 4.4 (Continued)
(c) Dec. 31
31
31
31
(d) Dec. 31
31
31
31
4-44
Insurance Expense ...............................
Prepaid Insurance .........................
1,500
Depreciation Expense ..........................
Accumulated Depreciation—
Buildings ...................................
Accumulated Depreciation—
Equipment .................................
6,600
Unearned Rent Revenue ......................
Rent Revenue ................................
5,000
Interest Expense ...................................
Interest Payable ............................
10,000
Service Revenue ...................................
Rent Revenue .......................................
Income Summary ..........................
90,700
34,000
Income Summary .................................
Salaries and Wages Expense .......
Advertising Expense ....................
Utilities Expense ...........................
Interest Expense ...........................
Depreciation Expense ..................
Insurance Expense .......................
99,600
Income Summary .................................
Retained Earnings ........................
25,100
Retained Earnings ................................
Dividends ......................................
22,000
Copyright © 2019 WILEY
1,500
3,000
3,600
5,000
10,000
124,700
42,000
20,500
19,000
10,000
6,600
1,500
25,100
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
22,000
(For Instructor Use Only)
PROBLEM 4.4 (Continued)
(e)
RUSTHE MANAGEMENT SERVICES
Post-Closing Trial Balance
December 31, 2020
Cash.................................................................
Accounts Receivable ......................................
Prepaid Insurance...........................................
Land .................................................................
Buildings .........................................................
Accumulated Depreciation—Buildings .........
Equipment .......................................................
Accumulated Depreciation—Equipment .......
Accounts Payable ...........................................
Interest Payable ..............................................
Unearned Rent Revenue ................................
Mortgage Payable ...........................................
Share Capital—Ordinary ................................
Retained Earnings ..........................................
Debit
$ 13,800
28,300
2,100
67,000
127,000
$
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
3,000
59,000
$297,200
Copyright © 2019 WILEY
Credit
(For Instructor Use Only)
3,600
12,500
10,000
1,000
120,000
130,000
17,100
$297,200
4-45
PROBLEM 4.5
(a)
Date
July 1
1
3
5
12
18
20
21
25
31
31
4-46
General Journal
Account Titles and Explanation
Cash ....................................................
Share Capital—Ordinary ...........
Ref.
101
311
Equipment ..........................................
Cash ...........................................
Accounts Payable .....................
157
101
201
12,000
Supplies ..............................................
Accounts Payable .....................
126
201
2,100
Prepaid Insurance ..............................
Cash ...........................................
130
101
1,800
Accounts Receivable .........................
Service Revenue .......................
112
400
4,500
Accounts Payable ..............................
Cash ...........................................
201
101
2,900
Salaries and Wages Expense ............
Cash ...........................................
726
101
2,800
Cash ....................................................
Accounts Receivable ................
101
112
3,400
Accounts Receivable .........................
Service Revenue .......................
112
400
6,000
Gasoline Expense ..............................
Cash ...........................................
633
101
350
Dividends ............................................
Cash ...........................................
322
101
5,600
Copyright © 2019 WILEY
Debit
20,000
J1
Credit
20,000
4,000
8,000
2,100
1,800
4,500
2,900
2,800
3,400
6,000
350
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
5,600
(For Instructor Use Only)
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
Account Titles
Trial Balance
Dr.
(For Instructor Use Only)
Cash
Accounts Receivable
Supplies
Prepaid Insurance
Equipment
Accounts Payable
Share Capital—Ordinary
Dividends
Service Revenue
Gasoline Expense
Salaries and Wages Expense
Totals
Depreciation Expense
Accum. Depr.—Equipment
Insurance Expense
Supplies Expense
Salaries and Wages Payable
Totals
Net Income
Totals
Adjustments
Cr.
5,950
7,100
2,100
1,800
12,000
Adjusted
Trial Balance
Dr.
Cr.
(a) 2,700
(d) 1,500
(c)
150
Dr.
Dr.
Cr.
5,950
9,800
600
1,650
12,000
7,200
20,000
Statement of
Financial
Position
Dr.
7,200
20,000
5,600
10,500
(a) 2,700
5,600
13,200
350
3,800
(e) 1,000
Cr.
5,950
9,800
600
1,650
12,000
7,200
20,000
5,600
350
2,800
37,700
Cr.
Income
Statement
13,200
350
3,800
37,700
(b)
500
500
(b)
500
(c)
150
(d) 1,500
5,850
500
500
150
1,500
(e) 1,000
5,850
41,900
500
150
1,500
1,000
41,900
6,300
6,900
13,200
13,200
35,600
13,200
35,600
1,000
28,700
6,900
35,600
Key: (a) Service Revenue Accrued; (b) Depreciation Expense; (c) Insurance Expired; (d) Cleaning Supplies Used; (e) Unpaid Salaries.
PROBLEM 4.5 (Continued)
Copyright © 2019 WILEY
ANYA’S CLEANING SERVICE
Worksheet
For the Month Ended July 31, 2020
(b) & (c)
4-51
PROBLEM 4.5 (Continued)
(a), (e) & (f)
Date
Explanation
July 1
1
5
18
20
21
31
31
Date
Explanation
July 12
21
25
31 Adjusting
Date
July 3
31
Explanation
Adjusting
Date
Explanation
July 5
31 Adjusting
Date
July 1
4-48
Explanation
Copyright © 2019 WILEY
Cash
Ref.
J1
J1
J1
J1
J1
J1
J1
J1
Debit
20,000
4,000
1,800
2,900
2,800
3,400
350
5,600
Accounts Receivable
Ref.
Debit
J1
4,500
J1
J1
6,000
J2
2,700
Supplies
Ref.
J1
J2
Debit
2,100
Credit
3,400
Credit
1,500
Prepaid Insurance
Ref.
Debit
J1
1,800
J2
Equipment
Ref.
J1
Credit
Debit
12,000
Credit
150
Credit
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
No. 101
Balance
20,000
16,000
14,200
11,300
8,500
11,900
11,550
5,950
No. 112
Balance
4,500
1,100
7,100
9,800
No. 126
Balance
2,100
600
No. 130
Balance
1,800
1,650
No. 157
Balance
12,000
(For Instructor Use Only)
PROBLEM 4.5 (Continued)
Date
July 31
Date
July 1
3
18
Date
July 31
Date
July 1
Date
31
31
Date
July 31
31
Date
July 31
31
31
Accumulated Depreciation—Equipment
Explanation
Ref.
Debit
Credit
Adjusting
J2
500
Explanation
Accounts Payable
Ref.
Debit
J1
J1
J1
2,900
Salaries and Wages Payable
Explanation
Ref.
Debit
Adjusting
J2
Explanation
Explanation
Closing
Closing
Explanation
Closing
Explanation
Closing
Closing
Closing
Copyright © 2019 WILEY
Share Capital—Ordinary
Ref.
Debit
J1
Retained Earnings
Ref.
Debit
J3
J3
5,600
Dividends
Ref.
J1
J3
Debit
5,600
No. 201
Balance
8,000
10,100
7,200
Credit
1,000
No. 212
Balance
1,000
Credit
20,000
No. 311
Balance
20,000
Credit
6,900
No. 320
Balance
6,900
1,300
Credit
No. 322
Balance
5,600
0
5,600
Income Summary
Ref.
Debit
J3
J3
6,300
J3
6,900
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
Credit
8,000
2,100
No. 158
Balance
500
Credit
13,200
(For Instructor Use Only)
No. 350
Balance
13,200
6,900
0
4-49
PROBLEM 4.5 (Continued)
Date
July 12
25
31
31
Date
July 31
31
Date
July 31
31
Adjusting
Closing
Service Revenue
Ref.
Debit
J1
J1
J2
J3
13,200
Explanation
Adjusting
Closing
Supplies Expense
Ref.
Debit
J2
1,500
J3
Explanation
Explanation
Closing
Gasoline Expense
Ref.
Debit
J1
350
J3
Explanation
Adjusting
Closing
Depreciation Expense
Ref.
Debit
J2
500
J3
Date
July 31
31
Explanation
Adjusting
Closing
Insurance Expense
Ref.
Debit
J2
150
J3
Date
July 20
31
31
Salaries and Wages Expense
Explanation
Ref.
Debit
J1
2,800
Adjusting
J2
1,000
Closing
J3
Date
July 31
31
4-50
Copyright © 2019 WILEY
Credit
4,500
6,000
2,700
No. 400
Balance
4,500
10,500
13,200
0
Credit
No. 631
Balance
1,500
0
1,500
Credit
350
Credit
500
Credit
150
Credit
3,800
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
No. 633
Balance
350
0
No. 711
Balance
500
0
No. 722
Balance
150
0
No. 726
Balance
2,800
3,800
0
(For Instructor Use Only)
PROBLEM 4.5 (Continued)
(d)
ANYA’S CLEANING SERVICE
Income Statement
For the Month Ended July 31, 2020
Revenues
Service revenue ..............................................
Expenses
Salaries and wages expense .........................
Supplies expense ...........................................
Depreciation expense ....................................
Gasoline expense ...........................................
Insurance expense .........................................
Total expenses ........................................
Net income .............................................................
€13,200
€3,800
1,500
500
350
150
6,300
€ 6,900
ANYA’S CLEANING SERVICE
Retained Earnings Statement
For the Month Ended July 31, 2020
Retained earnings, July 1 ......................................
Add: Net income ..................................................
Less: Dividends ....................................................
Retained earnings, July 31 ....................................
Copyright © 2019 WILEY
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
(For Instructor Use Only)
€
0
6,900
6,900
5,600
€1,300
4-51
PROBLEM 4.5 (Continued)
ANYA’S CLEANING SERVICE
Statement of Financial Position
July 31, 2020
Assets
Property, plant, and equipment
Equipment .......................................................
Less: Accumulated depreciation—
equipment ............................................
Current assets
Prepaid insurance ..........................................
Supplies ..........................................................
Accounts receivable ......................................
Cash ................................................................
Total assets..............................................
€12,000
500
1,650
600
9,800
5,950
€11,500
18,000
€29,500
Equity and Liabilities
Equity
Share capital—ordinary .................................
Retained earnings ..........................................
Current liabilities
Accounts payable ..........................................
Salaries and wages payable ..........................
Total equity and liabilities .....................
€20,000
1,300
7,200
1,000
€21,300
€ 8,200
€29,500
(e)
4-52
Copyright © 2019 WILEY
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
(For Instructor Use Only)
Date
July 31
31
31
31
31
General Journal
Account Titles and Explanation
Accounts Receivable ........................
Service Revenue ......................
Ref.
112
400
Debit
2,700
Depreciation Expense .......................
Accumulated Depreciation—
Equipment.............................
711
500
Insurance Expense ...........................
Prepaid Insurance ....................
722
130
150
Supplies Expense .............................
Supplies ....................................
631
126
1,500
Salaries and Wages Expense ...........
Salaries and Wages Payable ...
726
212
1,000
Copyright © 2019 WILEY
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
J2
Credit
2,700
158
500
150
1,500
(For Instructor Use Only)
1,000
4-53
PROBLEM 4.5 (Continued)
(f)
General Journal
Date
July 31
31
31
31
(g)
Account Titles and Explanation
Service Revenue.................................
Income Summary ......................
Ref.
400
350
Debit
13,200
Income Summary ...............................
Salaries and Wages Expense ...
Supplies Expense......................
Depreciation Expense ...............
Gasoline Expense .....................
Insurance Expense....................
350
726
631
711
633
722
6,300
Income Summary ...............................
Retained Earnings .....................
350
320
6,900
Retained Earnings ..............................
Dividends ...................................
320
322
5,600
13,200
3,800
1,500
500
350
150
6,900
5,600
ANYA’S CLEANING SERVICE
Post-Closing Trial Balance
July 31, 2020
Cash.....................................................................
Accounts Receivable ..........................................
Supplies ..............................................................
Prepaid Insurance...............................................
Equipment ...........................................................
Accumulated Depreciation—Equipment ...........
Accounts Payable ...............................................
Salaries and Wages Payable ..............................
Share Capital—Ordinary…………………………
Retained Earnings………………………… ...........
Debit
€ 5,950
9,800
600
1,650
12,000
Copyright © 2019 WILEY
Credit
€
€30,000
4-54
J3
Credit
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
500
7,200
1,000
20,000
1,300
€30,000
(For Instructor Use Only)
Copyright © 2019 WILEY
(1) INCORRECT ENTRY
1.
2.
3.
4.
5.
(2) CORRECT ENTRY
Cash ...................................
Accts. Receivable ........
950
Misc. Expense ...................
Cash ..............................
75
Salaries and Wages
Expense ..........................
Cash ..............................
Cash ...................................
Accts. Receivable ........
590
950
Advertising Expense ........
Cash ..............................
75
75
1,900
1,900
(For Instructor Use Only)
Supplies .............................
Accounts Payable .......
310
Equipment .........................
Cash ..............................
69
(3) CORRECTING ENTRY
310
69
Salaries and Wages
Expense ..........................
Salaries and Wages
Payable ...........................
Cash ..............................
Equipment .........................
Accounts Payable ........
Maintenance and Repairs
Expense ..........................
Cash ..............................
590
75
1,200
700
Accounts Receivable ......... 360
Cash ...............................
Advertising Expense .........
Misc. Expense ...............
360
75
75
Salaries and Wages
Payable ............................ 700
Salaries and Wages
Expense ......................
700
Equipment .......................... 310
Supplies .........................
310
1,900
310
310
96
96
Maintenance and Repairs
Expense ...........................
Cash ...............................
Equipment .....................
96
27
69
PROBLEM 4.6
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
(a)
4-59
PROBLEM 4.6 (Continued)
(b)
PULSAR CABLE
Trial Balance
April 30, 2020
Cash (£4,100 – £360 – £27) ...................................
Accounts Receivable (£3,200 + £360) ..................
Supplies (£800 – £310) ..........................................
Equipment (£10,800 + £310 – £69) .......................
Accumulated Depreciation—Equip .....................
Accounts Payable .................................................
Salaries and Wages Payable (£700 – £700) .........
Unearned Service Revenue ..................................
Share Capital—Ordinary.......................................
Retained earnings .................................................
Service Revenue ...................................................
Salaries and Wages Expense (£3,300 – £700) .....
Advertising Expense (£600 + £75) .......................
Miscellaneous Expense (£290 – £75) ...................
Depreciation Expense ..........................................
Maintenance and Repairs Expense .....................
4-56
Copyright © 2019 WILEY
Debit
£ 3,713
3,560
490
11,041
Credit
£ 1,350
2,100
0
890
10,100
2,800
5,650
2,600
675
215
500
96
£22,890
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
£22,890
(For Instructor Use Only)
CR 4.1
ACCOUNTING CYCLE REVIEW
(a)
General Journal
Date
July 1
1
3
5
12
18
20
21
25
31
31
Account Titles
Debit
Cash .................................................................. 12,000
Share Capital—Ordinary...........................
Equipment .........................................................
Accounts Payable .....................................
Cash ...........................................................
8,000
Supplies ............................................................
Accounts Payable .....................................
900
Prepaid Insurance ............................................
Cash ...........................................................
1,800
Accounts Receivable........................................
Service Revenue .......................................
3,700
Accounts Payable .............................................
Cash ...........................................................
1,500
Salaries and Wages Expense ..........................
Cash ...........................................................
2,000
Cash ..................................................................
Accounts Receivable ................................
1,600
Accounts Receivable........................................
Service Revenue .......................................
2,500
Maintenance and Repairs Expense .................
Cash ...........................................................
290
Dividends ..........................................................
Cash ...........................................................
600
Copyright © 2019 WILEY
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
Credit
12,000
6,000
2,000
900
1,800
3,700
1,500
2,000
1,600
2,500
290
(For Instructor Use Only)
600
4-57
ACR 4.1 (Continued)
(b), (e) & (h)
Cash
7/1
12,000 7/1
7/21
1,600 7/5
7/18
7/20
7/31
7/31
7/31 Bal. 5,410
7/18
2,000
1,800
1,500
2,000
290
600
Share Capital—Ordinary
7/1
12,000
7/31 Bal. 12,000
7/31
7/3
7/31 Bal.
Prepaid Insurance
7/5
1,800 7/31
7/31 Bal. 1,650
7/1
7/31 Bal.
7/31
7/31 Bal.
4,300
3,700
Dividends
600
600 7/31
600
150
Equipment
8,000
8,000
Copyright © 2019 WILEY
Retained Earnings
600 7/31
7/31 Bal.
580
Accumulated Depreciation—
Equipment
7/31
180
7/31 Bal.
180
4-58
6,000
900
5,400
Salaries and Wages Payable
7/31
400
7/31 Bal.
400
Accounts Receivable
7/12
3,700 7/21
1,600
7/25
2,500
7/31
1,700
7/31 Bal. 6,300
Supplies
900 7/31
320
Accounts Payable
1,500 7/1
7/3
7/31 Bal.
7/31
Income Summary
3,600 7/31
7,900
7/31
4,300 7/31 Bal
4,300
7/31
Service Revenue
7/12
7/25
7/31
7,900 7/31 Bal.
3,700
2,500
1,700
7,900
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
(For Instructor Use Only)
ACR 4.1 (Continued)
Maintenance and Repairs
Expense
7/31
290
7/31 Bal.
290 7/31
290
Supplies Expense
7/31
580
7/31 Bal.
580 7/31
Depreciation Expense
7/31
180 7/31
7/31 Bal.
0
Copyright © 2019 WILEY
580
Insurance Expense
7/31
150
7/31 Bal.
150 7/31
150
Salaries and Wages Expense
7/20
2,000
7/31
400
7/31 Bal. 2,400 7/31
2,400
180
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
(For Instructor Use Only)
4-59
ACR 4.1 (Continued)
(c) & (f)
KLEENE WINDOW WASHING
Trial Balance
July 31, 2020
Before
Adjustment
Cash
Accounts Receivable ..................................
Supplies .......................................................
Prepaid Insurance .......................................
Equipment....................................................
Accumulated Depreciation—
Equipment................................................
Accounts Payable .......................................
Salaries and Wages Payable ......................
Share Capital—Ordinary .............................
Dividends .....................................................
Service Revenue .........................................
Maintenance and Repairs Expense ...........
Supplies Expense .......................................
Depreciation Expense .................................
Insurance Expense .....................................
Salaries and Wages Expense .....................
4-60
Copyright © 2019 WILEY
Debit
NT$ 5,410
4,600
900
1,800
8,000
After
Adjustment
Credit
Debit
NT$ 5,410
6,300
320
1,650
8,000
Credit
NT$
NT$ 5,400
12,000
600
180
5,400
400
12,000
600
6,200
7,900
290
290
580
180
150
2,000
2,400
NT$23,600 NT$23,600 NT$25,880 NT$25,880
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
(For Instructor Use Only)
ACR 4.1 (Continued)
(d)
General Journal
1.
2.
3.
4.
5.
Date
July 31
31
31
31
31
Account Titles
Accounts Receivable .......................................
Service Revenue ........................................
Debit
1,700
Depreciation Expense .....................................
Accumulated Depreciation—Equipment ....
180
Insurance Expense (NT$1,800 X 1/12) ............
Prepaid Insurance ......................................
150
Supplies Expense (NT$900 – NT$320)............
Supplies......................................................
580
Salaries and Wages Expense..........................
Salaries and Wages Payable .....................
400
(g)
Credit
1,700
180
150
580
400
KLEENE WINDOW WASHING
Income Statement
For the Month Ended July 31, 2020
Revenues
Service revenue................................................
NT$7,900
Expenses
Salaries and wages expense ........................... NT$2,400
Supplies expense .............................................
580
Maintenance and repairs expense ..................
290
Depreciation expense ......................................
180
Insurance expense ...........................................
150
Total expenses..........................................
3,600
Net income ...............................................................
NT$4,300
Copyright © 2019 WILEY
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
(For Instructor Use Only)
4-61
ACR 4.1 (Continued)
(g)
KLEENE WINDOW WASHING
Retained Earnings Statement
For the Month Ended July 31, 2020
Retained earnings, July 1 .................................
Add: Net income ...............................................
Less: Dividends ...................................................
Retained earnings, July 31 ...................................
NT$
0
4,300
4,300
600
NT$3,700
KLEENE WINDOW WASHING
Statement of Financial Position
July 31, 2020
Assets
Property, plant, and equipment
Equipment....................................................... NT$8,000
Less: Accumulated depreciation .................
180 NT$7,820
Current assets
Prepaid insurance ..........................................
1,650
Supplies ..........................................................
320
Accounts receivable ......................................
6,300
Cash ................................................................
5,410
13,680
Total assets .............................................
NT$21,500
Equity and Liabilities
Equity
Share capital—ordinary ................................. NT$12,000
Retained earnings ..........................................
3,700 NT$15,700
Current liabilities
Accounts payable...........................................
5,400
Salaries and wages payable ..........................
400
5,800
Total equity and liabilities ......................
NT$21,500
4-62
Copyright © 2019 WILEY
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
(For Instructor Use Only)
ACR 4.1 (Continued)
(h)
Date
July 31
31
31
31
General Journal
Account Titles and Explanation
Service Revenue .............................................
Income Summary ....................................
Debit
7,900
7,900
Income Summary............................................
Salaries and Wages Expense .................
Supplies Expense ...................................
Maintenance and Repairs Expense .......
Depreciation Expense.............................
Insurance Expense .................................
3,600
Income Summary............................................
Retained Earnings ..................................
4,300
Retained Earnings ..........................................
Dividends .................................................
600
(i)
Credit
2,400
Depreciation
580Expen
290
180
150
4,300
600
KLEENE WINDOW WASHING
Post-Closing Trial Balance
July 31, 2020
Cash ....................................................................
Accounts Receivable .........................................
Supplies ..............................................................
Prepaid Insurance ..............................................
Equipment ..........................................................
Accumulated Depreciation—Equipment ..........
Accounts Payable ..............................................
Salaries and Wages Payable .............................
Share Capital—Ordinary....................................
Retained Earnings .............................................
Copyright © 2019 WILEY
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
Debit
NT$ 5,410
6,300
320
1,650
8,000
Credit
180
5,400
400
12,000
3,700
NT$21,680 NT$21,680
(For Instructor Use Only)
NT$
4-63
ACR 4.2
(a)
General Journal
Date
Mar. 1
1
1
2
3
6
14
18
20
21
28
31
31
4-64
Account Titles
Debit
Cash................................................................... 15,000
Share Capital—Ordinary ...........................
15,000
Cash................................................................... 6,000
Notes Payable............................................
6,000
Equipment ......................................................... 8,000
Cash ...........................................................
8,000
Prepaid Rent ..................................................... 1,500
Cash ...........................................................
1,500
Prepaid Insurance............................................. 2,400
Cash ...........................................................
2,400
Supplies............................................................. 2,000
Accounts Payable .....................................
2,000
Accounts Receivable ........................................ 3,700
Service Revenue .......................................
3,700
Accounts Payable .............................................
Cash ...........................................................
Credit
500
500
Salaries and Wages Expense........................... 1,750
Cash ...........................................................
1,750
Cash................................................................... 1,600
Accounts Receivable ................................
1,600
Accounts Receivable ........................................ 4,200
Service Revenue .......................................
4,200
Maintenance and Repairs Expense .................
Cash ...........................................................
350
Dividends ..........................................................
Cash ...........................................................
900
Copyright © 2019 WILEY
350
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
900
(For Instructor Use Only)
ACR 4.2 (Continued)
(b), (e) & (h)
Cash
3/1
15,000 3/1
3/1
6,000 3/2
3/21
1,600 3/3
3/18
3/20
3/31
3/31
3/31 Bal. 7,200
8,000
1,500
2,400
500
1,750
350
900
Accounts Receivable
3/14
3,700 3/21
1,600
3/28
4,200
3/31
200
3/31 Bal. 6,500
3/6
3/31 Bal.
Supplies
2,000 3/31
280
500
Prepaid Insurance
3/3
2,400 3/31
3/31 Bal. 2,000
400
3/1
3/31 Bal.
Copyright © 2019 WILEY
3/18
Notes Payable
3/1
3/31 Bal.
6,000
6,000
Accounts Payable
500 3/6
3/31 Bal.
2,000
1,500
Salaries and Wages Payable
3/31
1,080
3/31 Bal. 1,080
1,720
Prepaid Rent
3/2
1,500 3/31
3/31 Bal. 1,000
Equipment
8,000
8,000
Accumulated Depreciation—
Equipment
3/31
250
3/31 Bal.
250
Interest Payable
3/31
3/31 Bal.
30
30
Share Capital—Ordinary
3/1
15,000
3/31 Bal. 15,000
3/31
Retained Earnings
900 3/31
3/31 Bal.
3/31
3/31 Bal.
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
Dividends
900 3/31
0
(For Instructor Use Only)
2,020
1,120
900
4-65
ACR 4.2 (Continued)
3/31
3/31
3/31
Income Summary
6,080 3/31
8,100
2,020 3/31 Bal.
Rent Expense
3/31
500
3/31 Bal.
500 3/31
500
2,020
Service Revenue
3/14
3/28
3/31
8,100 3/31 Bal.
3,700
4,200
200
8,100
Interest Expense
3/31
30
3/31 Bal.
3 0 3/31
30
Maintenance and Repairs
Expense
3/31
350
3/31 Bal.
350
3/31
350
Supplies Expense
3/31
1,720
3/31 Bal. 1,720 3/31
1,720
Depreciation Expense
3/31
250 3/31
3/31 Bal.
250 3/31
Insurance Expense
3/31
400
3/31 Bal.
3/31
400
250
250
400
Salaries and Wages Expense
3/20
1,750
3/31
1,080
3/31 Bal. 2,830 3/31
2,830
4-66
Copyright © 2019 WILEY
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
(For Instructor Use Only)
ACR 4.2 (Continued)
(c) & (f)
LARS CLEANERS
Trial Balance
March 31, 2020
Cash .....................................................
Accounts Receivable ..........................
Supplies ...............................................
Prepaid Rent ........................................
Prepaid Insurance ...............................
Equipment ...........................................
Accumulated Depreciation—
Equipment ........................................
Notes Payable .....................................
Accounts Payable ...............................
Salaries and Wages Payable ..............
Interest Payable...................................
Share Capital—Ordinary .....................
Dividends .............................................
Service Revenue .................................
Maintenance and Repairs Expense....
Salaries and Wages Expense .............
Depreciation Expense .........................
Insurance Expense .............................
Supplies Expense ...............................
Rent Expense ......................................
Interest Expense .................................
Copyright © 2019 WILEY
Before
Adjustment
Debit
Credit
€ 7,200
6,300
2,000
1,500
2,400
8,000
After
Adjustment
Debit
Credit
€ 7,200
6,500
280
1,000
2,000
8,000
€
250
6,000
1,500
1,080
30
15,000
€ 6,000
1,500
15,000
900
900
7,900
8,100
350
1,750
350
2,830
250
400
1,720
500
30
€30,400 €30,400 €31,960 €31,960
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
(For Instructor Use Only)
4-67
ACR 4.2 (Continued)
(d)
1.
2.
3.
4.
5.
6.
7.
4-68
Date
March 31
31
31
31
31
31
31
General Journal
Account Titles
Accounts Receivable .............................
Service Revenue.............................
Debit
200
200
Depreciation Expense ...........................
Accumulated Depreciation—
Equipment....................................
250
Insurance Expense ................................
Prepaid Insurance
(€2,400 ÷ 6) ......................................
400
Supplies Expense ..................................
Supplies (€2,000 – €280) ................
1,720
Salaries and Wages Expense ................
Salaries and Wages Payable .........
1,080
Rent Expense .........................................
Prepaid Rent (€1,500 ÷ 3) ...............
500
Interest Expense ....................................
Interest Payable
(€6,000 × .06 × 1/12) .....................
30
Copyright © 2019 WILEY
Credit
250
400
1,720
1,080
500
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
30
(For Instructor Use Only)
ACR 4.2 (Continued)
(g)
LARS CLEANERS
Income Statement
For the Month Ended March 31, 2020
Revenues
Service revenue................................................
Expenses
Salaries and wages expense ...........................
Supplies expense .............................................
Rent expense ....................................................
Insurance expense ...........................................
Maintenance and repairs expense ..................
Depreciation expense ......................................
Interest expense ...............................................
Total expenses..........................................
Net income ...............................................................
€8,100
€2,830
1,720
500
400
350
250
30
6,080
€2,020
LARS CLEANERS
Retained Earnings Statement
For the Month Ended March 31, 2020
Retained earnings, March 1 ...................................
Add: Net income
Less: Dividends ......................................................
Retained earnings, March 31 .................................
Copyright © 2019 WILEY
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
(For Instructor Use Only)
€
0
2,020
2,020
900
€1,120
4-69
ACR 4.2 (Continued)
LARS CLEANERS
Statement of Financial Position
March 31, 2020
Assets
Property, plant, and equipment
Equipment.......................................................
Less: Accumulated depreciation—
equipment........................................
Current assets
Prepaid insurance ..........................................
Prepaid rent ....................................................
Supplies ..........................................................
Accounts receivable ......................................
Cash ................................................................
Total assets .............................................
€ 8,000
250
2,000
1,000
280
6,500
7,200
€ 7,750
16,980
€24,730
Equity and Liabilities
Equity
Share capital—ordinary .................................
Retained earnings ..........................................
Current liabilities
Notes payable .................................................
Accounts payable...........................................
Salaries and wages payable ..........................
Interest payable ..............................................
Total equity and liabilities ......................
4-70
Copyright © 2019 WILEY
€15,000
1,120
6,000
1,500
1,080
30
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
€16,120
8,610
€24,730
(For Instructor Use Only)
ACR 4.2 (Continued)
(h)
Date
Mar. 31
31
31
31
General Journal
Account Titles and Explanation
Debit
Service Revenue ............................................... 8,100
Income Summary ......................................
Credit
8,100
Income Summary.............................................. 6,080
Salaries and Wages Expense ...................
Supplies Expense .....................................
Rent Expense ............................................
Insurance Expense ...................................
Maintenance and Repairs Expense .........
Depreciation Expense...............................
Interest Expense .......................................
2,830
1,720
500
400
350
250
30
Income Summary.............................................. 2,020
Retained Earnings ....................................
2,020
Retained Earnings ............................................
Dividends ...................................................
Copyright © 2019 WILEY
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
900
(For Instructor Use Only)
900
4-71
ACR 4.2 (Continued)
(i)
LARS CLEANERS
Post-Closing Trial Balance
March 31, 2020
Cash .....................................................................
Accounts Receivable ..........................................
Supplies...............................................................
Prepaid Rent .......................................................
Prepaid Insurance...............................................
Equipment ...........................................................
Accumulated Depreciation—Equipment ...........
Notes Payable .....................................................
Accounts Payable ...............................................
Salaries and Wages Payable ..............................
Interest Payable ..................................................
Share Capital—Ordinary ....................................
Retained Earnings ..............................................
Debit
€ 7,200
6,500
280
1,000
2,000
8,000
€
€24,980
4-72
Copyright © 2019 WILEY
Credit
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
250
6,000
1,500
1,080
30
15,000
1,120
€24,980
(For Instructor Use Only)
ACR 4.3
(a), (c) & (e)
8/1 Bal.
8/5
8/12
8/29
8/31 Bal.
Cash
6,040 8/1
1,200 8/3
2,800 8/10
780 8/20
8/25
2,020
400
380
3,120
2,000
2,900
Accounts Receivable
8/1 Bal.
2,910 8/5
1,200
8/27
3,760
8/31 Bal. 5,470
Equipment
8/1 Bal. 10,000
8/15
2,000
8/31 Bal. 12,000
Accumulated Depreciation—
Equipment
8/1 Bal.
600
8/31
320
8/31 Bal.
920
8/20
Notes Receivable
8/1 Bal.
4,000
8/31 Bal. 4,000
Interest Receivable
8/31
20
8/31 Bal.
20
8/1 Bal.
8/22
8/31 Bal.
Supplies
1,030 8/31
800
960
Prepaid Advertising
8/1
400 8/31
8/31 Bal.
200
Copyright © 2019 WILEY
8/31
Accounts Payable
2,000 8/1 Bal.
8/15
8/22
8/31 Bal.
2,300
2,000
800
3,100
Unearned
Service Revenue
800 8/1 Bal.
8/29
8/31 Bal.
1,260
780
1,240
870
Salaries and Wages Payable
8/10
1,420 8/1 Bal.
1,420
8/31
1,540
8/31 Bal. 1,540
200
Share Capital—Ordinary
8/31
8/1 Bal. 16,300
8/31 Bal. 16,300
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
(For Instructor Use Only)
4-73
ACR 4.3 (Continued)
8/31
8/31
Retained Earnings
530 8/1 Bal.
8/31
Income Summary
7,910 8/31
8/31 Bal.
8/31
8/31
530 8/31 Bal.
Service Revenue
7,360 8/12
8/27
8/31
7,360 8/31 Bal.
Interest Revenue
8/31
8/31 Bal.
20 8/31
4-74
Copyright © 2019 WILEY
2,100
1,570
7,380
Depreciation Expense
8/31
320
8/31 Bal.
320 8/31
320
Supplies Expense
8/31
870
8/31 Bal.
870 8/31
870
530
2,800
3,760
800
7,360
20
20
Salaries and Wages Expense
8/10
1,700
8/25
2,900
8/31
1,540
8/31 Bal. 6,140 8/31
6,140
Rent Expense
8/3
380
8/31 Bal.
380 8/31
380
Advertising Expense
8/31
200
8/31 Bal.
200 8/31
200
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
(For Instructor Use Only)
ACR 4.3 (Continued)
(b)
General Journal
Date
Aug. 1
3
5
10
12
15
20
22
25
27
29
Account Titles
Debit
Prepaid Advertising ......................................... 400
Cash ..........................................................
Rent Expense ...................................................
Cash ..........................................................
Credit
400
380
380
Cash .................................................................. 1,200
Accounts Receivable ...............................
1,200
Salaries and Wages Payable ........................... 1,420
Salaries and Wages Expense .......................... 1,700
Cash ..........................................................
3,120
Cash .................................................................. 2,800
Service Revenue.......................................
2,800
Equipment ........................................................ 2,000
Accounts Payable ....................................
2,000
Accounts Payable ............................................ 2,000
Cash ..........................................................
2,000
Supplies ............................................................
Accounts Payable ....................................
800
800
Salaries and Wages Expense .......................... 2,900
Cash ..........................................................
2,900
Accounts Receivable ....................................... 3,760
Service Revenue .......................................
3,760
Cash ..................................................................
Unearned Service Revenue .....................
Copyright © 2019 WILEY
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
780
(For Instructor Use Only)
780
4-75
ACR 4.3 (Continued)
(d) & (f)
B & B REPAIR SERVICES
Trial Balances
August 31, 2020
Before
Adjustment
Dr.
Cr.
$ 2,020
5,470
4,000
Cash ............................................
Accounts Receivable .................
Notes Receivable .......................
Interest Receivable ....................
Supplies ......................................
1,830
Prepaid Advertising ...................
400
Equipment ..................................
12,000
Accumulated Depr.—
Equipment ...............................
Accounts Payable ......................
Unearned Service Revenue .......
Salaries and Wages Payable .....
Share Capital—Ordinary............
Retained Earnings .....................
Service Revenue ........................
Interest Revenue ........................
4,600
Salaries and Wages Expense ....
380
Rent Expense .............................
Supplies Expense ......................
Depreciation Expense ...............
Advertising Expense ................. $30,700
$
After
Adjustment
Dr.
Cr.
$ 2,020
5,470
4,000
20
960
200
12,000
600
3,100
2,040
$
16,300
2,100
6,560
6,140
380
870
320
200
$32,580
$30,700
4-76
Copyright © 2019 WILEY
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
920
3,100
1,240
1,540
16,300
2,100
7,360
20
$32,580
(For Instructor Use Only)
ACR 4.3 (Continued)
(e)
Aug. 31
31
31
31
31
31
Copyright © 2019 WILEY
1.
Supplies Expense...........................................
Supplies ($1,830 – $960).........................
870
2.
Salaries and Wages Expense ........................
Salaries and Wages Payable ..................
1,540
3.
Depreciation Expense ....................................
Accum. Depr.—Equipment.....................
320
4.
Unearned Service Revenue ...........................
Service Revenue .....................................
800
5.
Advertising Expense ......................................
Prepaid Advertising ................................
200
6.
Interest Receivable.........................................
Interest Revenue ($4,000 × .06 × 1/12) ...
20
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
870
1,540
320
800
(For Instructor Use Only)
200
20
4-77
ACR 4.3 (Continued)
(g)
B & B REPAIR SERVICES
Income Statement
For the Month Ended August 31, 2020
Revenues
Service revenue ..............................................
Interest revenue..............................................
Total revenue ..........................................
Expenses
Salaries and wages expense .........................
Supplies expense ...........................................
Rent expense ..................................................
Depreciation expense ....................................
Advertising expense ......................................
Total expenses ........................................
Net loss...................................................................
($7,360
20
$7,380)
6,140
870
380
320
200
7,910)
($530)
B & B REPAIR SERVICES
Retained Earnings Statement
For the Month Ended August 31, 2020
Retained earnings August 1 ..................................
Less: Net loss .......................................................
Retained earnings August 31 ................................
4-78
Copyright © 2019 WILEY
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
$2,100
530
$1,570
(For Instructor Use Only)
ACR 4.3 (Continued)
B & B REPAIR SERVICES
Statement of Financial Position
August 31, 2020
Assets
Property, plant and equipment
Equipment .....................................................
Less: Accumulated depreciation—
equipment ..........................................
Current assets
Prepaid Advertising ......................................
Supplies .........................................................
Interest receivable.........................................
Notes receivable............................................
Accounts receivable .....................................
Cash ...............................................................
Total assets............................................
$ 12,000
920
200
960
20
4,000
5,470
2,020
$ 11,080
12,670
$23,750
Equity and Liabilities
Equity
Share capital—ordinary ...................................... $ 16,300
Retained earnings ...............................................
1,570
Current liabilities
Accounts payable ...............................................
3,100
Unearned service revenue ..................................
1,240
Salaries and wages payable ...............................
1,540
Total equity and liabilities ...........................
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$17,870
5,880
$23,750
4-79
ACR 4.3 (Continued)
(h)
Date
Aug.
General Journal
Account Titles and Explanation
Debit
31 Service Revenue ............................................... 7,360
Interest Revenue...............................................
20
Income Summary ......................................
Credit
7,380
31 Income Summary.............................................. 7,910
Salaries and Wages Expense ...................
Supplies Expense .....................................
Rent Expense ............................................
Depreciation Expense ..............................
Advertising Expense ................................
31 Retained Earnings ............................................
Income Summary ......................................
(i)
530
530
B & B REPAIR SERVICES
Post-Closing Trial Balance
August 31, 2020
Cash .....................................................................
Accounts Receivable ..........................................
Notes Receivable ................................................
Interest Receivable .............................................
Supplies...............................................................
Prepaid Advertising ............................................
Equipment ...........................................................
Accumulated Depreciation—Equipment ...........
Accounts Payable ...............................................
Unearned Service Revenue ................................
Salaries and Wages Payable ..............................
Share Capital—Ordinary ....................................
Retained Earnings ..............................................
Debit
$ 2,020
5,470
4,000
20
960
200
12,000
Copyright © 2019 WILEY
Credit
$
$24,670
4-80
6,140
870
380
320
200
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
920
3,100
1,240
1,540
16,300
1,570
$24,670
(For Instructor Use Only)
ACR 4.4
(b)
Date
July 1
2
3
3
6
9
10
13
14
16
18
20
Debit
Account Titles
Equipment ................................................................
Cash.................................................................
Notes Payable .................................................
24,000
Cash ........................................................................
Share Capital—Ordinary ................................
50,000
Prepaid Insurance ...................................................
Cash.................................................................
3,600
Prepaid Rent ............................................................
Cash.................................................................
8,000
Supplies ...................................................................
Cash.................................................................
3,800
Credit
4,000
20,000
50,000
3,600
8,000
3,800
No entry required (consulting agreement)
Cash .........................................................................
Accounts Receivable .....................................
1,200
Unearned Service Revenue ....................................
Service Revenue .............................................
1,120
Accounts Payable ...................................................
Cash.................................................................
400
Cash .........................................................................
Unearned Service Revenue ...........................
12,000
Salaries and Wages Expense .................................
Cash.................................................................
11,000
Accounts Receivable .............................................
Service Revenue .............................................
28,000
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1,200
1,120
400
12,000
11,000
(For Instructor Use Only)
28,000
4-81
ACR 4.4 (Continued)
(b) (Continued)
Date
July 20
23
27
Account Titles
Debit
Advertising Expense ..............................................
Accounts Payable ..........................................
2,200
Unearned Service Revenue ....................................
Service Revenue ............................................
10,000
Cash .........................................................................
Accounts Receivable .....................................
15,000
Credit
2,200
10,000
15,000
Adjusting Entries
31
31
31
31
31
31
31
31
4-82
Insurance Expense .................................................
Prepaid Insurance ..........................................
(¥ 3,600 × 1/12)
300
Rent Expense ..........................................................
Prepaid Rent ...................................................
4,000
Supplies Expense ...................................................
Supplies ..........................................................
1,250
Depreciation Expense ............................................
Accumulated Depreciation—Equipment......
(¥ 24,000 ÷ 4 × 1/12)
500
Interest Expense .....................................................
Interest Payable .............................................
(¥ 20,000 × 6% × 1/12)
100
Salaries and Wages Expense ................................
Salaries and Wages Payable .........................
11,000
Utilities Expense .....................................................
Accounts Payable ..........................................
800
Income Tax Expense ..............................................
Income Taxes Payable...................................
1,200
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300
4,000
1,250
500
100
11,000
800
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
1,200
(For Instructor Use Only)
ACR 4.4 (Continued)
(a), (c), (e), and (h)
Cash
July
July
1 Bal.
5,230 July
1
4,000
2
50,000
3
3,600
10
1,200
3
8,000
16
12,000
6
3,800
27
15,000
14
400
18
11,000
31 Bal.
52,630
Accounts Receivable
July
July
1 Bal.
1,200
20
28,000
31 Bal.
13,000
July
10
1,200
27
15,000
31
300
31
1,250
31
4,000
Prepaid Insurance
July
July
3
31 Bal.
3,600
July
3,300
Supplies
July
July
1 Bal.
690
6
3,800
31 Bal.
3,240
July
Prepaid Rent
July
July
3
31 Bal.
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8,000
July
4,000
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4-83
ACR 4.4 (Continued)
(a), (c), (e), and (h) (Continued)
Equipment
July
1
24,000
July
31 Bal.
24,000
Accumulated Depreciation—Equipment
July 31
500
July 31 Bal
500
Accounts Payable
July
14
400 July
1 Bal.
400
20
2,200
31
800
July
31 Bal.
3,000
Interest Payable
July 31
100
July 31 Bal.
100
Salaries and Wages Payable
July 31
11,000
July 31 Bal.
11,000
Income Taxes Payable
4-84
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July 31
1,200
July 31 Bal.
1,200
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ACR 4.4 (Continued)
(a), (c), (e), and (h) (Continued)
Unearned Service Revenue
July 13
1,120
23
10,000
July 1 Bal.
1,120
16
12,000
July 31 Bal.
2,000
Notes Payable
July 1
20,000
July 31 Bal.
20,000
Share Capital—Ordinary
July 1 Bal.
4,000
July 2
50,000
July 31 Bal.
54,000
Retained Earnings
July 1 Bal.
1,600
31
6,770
July 31 Bal.
8,370
Service Revenue
July 31
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July 13
1,120
20
28,000
23
10,000
39,120 July 31 Bal.
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
39,120
(For Instructor Use Only)
4-85
ACR 4.4 (Continued)
(a), (c), (e), and (h) (Continued)
Salaries and Wages Expense
July 18
11,000
July 31
11,000
July 31 Bal.
22,000 July 31
22,000
Rent Expense
July 31
4,000
July 31
July 31 Bal.
4,000 July 31
4,000
4,000
Advertising Expense
July 20
2,200
July 31 Bal.
2,200 July 31
2,200
Supplies Expense
July 31
1,250
July 31 Bal.
1,250 July 31
4-86
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1,250
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ACR 4.4 (Continued)
(a), (c), (e), and (h) (Continued)
Utilities Expense
July 31
800
July31 Bal.
800 July 31
800
Depreciation Expense
July
31
500
July 31 Bal.
500 July 31
500
Insurance Expense
July
31
300
July 31 Bal.
300 July 31
300
Interest Expense
July
31
100
July 31 Bal.
100 July 31
100
Income Tax Expense
July 31
1,200
31
July Bal.
1,200 July 31
1,200
Income Summary
July
31
32,350
July 31
31
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39,120
6,770 July 31 Bal.
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6,770
4-87
ACR 4.4 (Continued)
(d) and (f) (Continued)
GREEN RIVER COMPUTER CONSULTANTS
Trial Balances
July 31, 2020
Before Adjustment
Cash ..............................................................
Accounts receivable ....................................
Prepaid insurance ........................................
Supplies ........................................................
Prepaid rent ...................................................
Equipment ....................................................
Accumulated depreciation—equipment .....
Accounts payable ........................................
Interest payable ............................................
Salaries and wages payable .......................
Income taxes payable ..................................
Unearned service revenue ..........................
Notes payable ...............................................
Share Capital—ordinary ...............................
Retained earnings .........................................
Service revenue ...........................................
Salaries and wages expense ......................
Rent expense ...............................................
Advertising expense ....................................
Supplies expense .........................................
Utilities expense ...........................................
Depreciation expense ..................................
Insurance expense .......................................
Interest expense ...........................................
Income tax expense .....................................
Debit
¥ 52,630
13,000
3,600
4,490
8,000
24,000
Credit
Copyright © 2019 WILEY
Debit
¥ 52,630
13,000
3,300
3,240
4,000
24,000
Credit
¥
¥
2,200
2,000
20,000
54,000
1,600
39,120
11,000
2,200
¥118,920 ¥118,920
4-88
After Adjustment
22,000
4,000
2,200
1,250
800
500
300
100
1,200
¥132,520
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
500
3,000
100
11,000
1,200
2,000
20,000
54,000
1,600
39,120
¥132,520
(For Instructor Use Only)
ACR 4.4 (Continued)
(g)
(1)
GREEN RIVER COMPUTER CONSULTANTS
Income Statement
For the Month Ended July 31, 2020
Revenues
Service revenue ............................................
Expenses
Salaries and wages expense ........................
Rent expense .................................................
Advertising expense .....................................
Supplies expense ..........................................
Utilities expense ............................................
Depreciation expense ...................................
Insurance expense ........................................
Interest expense ............................................
Income tax expense ......................................
Total expenses .....................................
Net income..............................................................
¥39,120
¥22,000
4,000
2,200
1,250
800
500
300
100
1,200
32,350
¥ 6,770
(2)
GREEN RIVER COMPUTER CONSULTANTS
Retained Earnings Statement
For the Month Ended July 31, 2020
Retained earnings, July 1............................................................
Add: Net income .........................................................................
Retained earnings, July 31..........................................................
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¥1,600
6,770
¥8,370
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4-89
ACR 4.4 (Continued)
(g)
(Continued)
(3)
GREEN RIVER COMPUTER CONSULTANTS
Statement of Financial Position
July 31, 2020
Assets
Property, plant, and equipment
Equipment .................................................
Less: Accumulated depreciation ............
Current assets
Supplies ....................................................
Predpaid insurance ..................................
Prepaid rent ..............................................
Accounts receivable.................................
Cash...........................................................
Total assets ......................................
¥24,000
500
Equity and Liabilities
Equity
Share capital—ordinary ...........................
¥
Retained earnings ....................................
Noncurrent liabilities
Notes payable ...........................................
Current liabilities
Accounts payable .....................................
¥ 3,000
Salaries and wages payable ....................
11,000
Interest payable ........................................
100
Income tax payable ..................................
1,200
Unearned service revenue .......................
2,000
Total liabilities.......................................
Total equity and liabilities ....................
4-90
Copyright © 2019 WILEY
3,240
3,300
4,000
13,000
52,630
54,000
8,370
¥23,500
76,170
¥99,670
¥62,370
20,000
17,300
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
37,300
¥99,670
(For Instructor Use Only)
ACR 4.4 (Continued)
(h)
Date
July 31
31
31
Debit
Account Titles
Service Revenue ......................................................
Income Summary ...........................................
39,120
Income Summary ....................................................
Salaries and Wages Expense ........................
Rent Expense ..................................................
Advertising Expense ......................................
Supplies Expense ...........................................
Utilities Expense .............................................
Depreciation Expense ....................................
Insurance Expense .........................................
Interest Expense .............................................
Income Tax Expense ......................................
32,350
Income Summary ....................................................
Retained Earnings ..........................................
6,770
Credit
39,120
22,000
4,000
2,200
1,250
800
500
300
100
1,200
6,770
(i)
GREEN RIVER COMPUTER CONSULTANTS
Post-Closing Trial Balance
July 31, 2020
Debit
Cash ..............................................................
Accounts receivable ....................................
Prepaid insurance ........................................
Supplies ........................................................
Prepaid rent ...................................................
Equipment .....................................................
Accumulated depreciation—equipment ......
Accounts payable .........................................
Interest payable ............................................
Salaries and wages payable ........................
Income taxes payable ..................................
Unearned service revenue ...........................
Notes payable ...............................................
Share capital—ordinary ................................
Retained earnings ........................................
13,000
3,300
3,240
4,000
24,000
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
500
3,000
100
11,000
1,200
2,000
20,000
54,000
8,370
¥ 100,170
¥
¥ 100,170
Copyright © 2019 WILEY
Credit
¥ 52,630
(For Instructor Use Only)
4-91
CT 4.1
FINANCIAL REPORTING PROBLEM
(a)
Total current assets were NT$817,729,126 at December 31, 2016, and
NT$746,743,991 at December 31, 2015.
(b)
No. Current assets are normally listed in reverse order of liquidity.
TSMC’s current assets are listed in order of liquidity.
(c)
The asset classifications are: (1) current assets, and non-current
assets.
(d)
Cash equivalents, for the purpose of meeting short-term cash
commitments, consist of highly liquid time deposits and investments
that are readily convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value.
(e)
Total current liabilities were NT$318,239,273 at December 31, 2016,
and NT$212,228,594 at December 31, 2015.
4-92
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CT 4.2
COMPARATIVE ANALYSIS PROBLEM
(a)
Nestlé
(in millions)
1.
2.
3.
4.
Total current assets
Net property, plant & equipment
Total current liabilities
Total equity
CHF32,042
27,554
37,517
65,981
Delfi Limited
(in thousands)
US$202,671
126,768
118,179
201,292
(b) Current assets are cash and other resources that are reasonably expected to be realized in cash or sold or consumed within one year or
the company’s operating cycle, whichever is longer. Current liabilities
are obligations that are reasonably expected to be paid from existing
current assets or through the creation of other current liabilities.
Nestlé’s current liabilities were 17.1% greater than its current assets,
while Delfi Limited current assets were 71.5% greater than its current
liabilities. From this information, it appears that Delfi Limited is in a
much better liquidity position than Nestlé.
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CT 4.3
REAL–WORLD FOCUS
The solution is dependent upon the companies chosen by the student.
4-94
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CT 4.4
(a)
DECISION–MAKING ACROSS THE ORGANIZATION
WHITEGLOVES JANITORIAL SERVICE, LTD.
Statement of Financial Position
December 31, 2020
Assets
Property, plant, and equipment
Equipment
(£22,000 + £4,000) .......................
Less: Accum. depreciation—
equipment
(£4,000 + £2,000) .................
Delivery trucks (£34,000 + £5,000) ...
Less: Accum. depreciation—
delivery trucks
(£5,000 + £5,000) .................
Current assets
Prepaid insurance (£4,800 X 2/3).......
Supplies
(£5,200 – £2,700) .........................
Accounts receivable
(£9,000 + £3,700) .........................
Cash ................................................
Total assets.............................
£26,000
6,000
39,000
£20,000
10,000
29,000
£49,000
3,200
2,500
12,700
5,500
23,900
£72,900
Equity and Liabilities
Equity
Share capital—ordinary .................................... £41,000
Retained earnings .............................................
3,650 £44,650
Non-current liabilities
Notes payable, due July 1, 2022....................... 15,000
Current liabilities
Notes payable due within one year
£10,000
Accounts payable (£1,500 + £500) ...................
2,000
Interest payable .................................................
1,250* 13,250
Total liabilities ............................................
28,250
Total equity and liabilities ..........................
£72,900
*(£25,000 X 10% X 6/12)
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4-95
CT.4.4 (Continued)
WHITEGLOVES JANITORIAL SERVICE, LTD.
Statement of Financial Position (Continued)
December 31, 2020
*Retained earnings balance as reported ..............
Add: Earned but unbilled fees ...........................
Less: Janitorial supplies used............................
Insurance expired (£4,800 X 1/3) ..............
Depreciation (£2,000 + £5,000) .................
Expenses incurred but unpaid .................
Interest accrued.........................................
Total ....................................................
Retained earnings balance as adjusted ..............
£13,000
3,700
16,700
£2,700
1,600
7,000
500
1,250
13,050
£3,650
(b) Whitegloves Janitorial Service met the terms of the bank loan because
current assets exceed current liabilities by £10,650 (£23,900 – £13,250)
at December 31, 2020.
4-96
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CT 4.5
COMMUNICATION ACTIVITY
MEMO
To:
Accounting Instructor
From:
Student
Re:
Accounting Cycle
The required steps in the accounting cycle, in the order in which they
should be completed, are:
1.
2.
3.
4.
5.
6.
7.
8.
9.
Analyze business transactions.
Journalize the transactions.
Post to ledger accounts.
Prepare a trial balance.
Journalize and post adjusting entries.
Prepare an adjusted trial balance.
Prepare financial statements.
Journalize and post closing entries.
Prepare a post-closing trial balance.
The optional steps in the accounting cycle include preparing a worksheet
and preparing reversing entries. If a worksheet is prepared, it is done after
step 3 above, and it includes steps 4 and 6. The worksheet is a form used
to make it easier to prepare adjusting entries and financial statements. If reversing entries are prepared, they are journalized and posted after step 9,
at the beginning of the next accounting period. A reversing entry is the
exact opposite of a previously recorded adjusting entry and simplifies the
recording of subsequent transactions.
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4-97
CT 4.6
ETHICS CASE
(a) The stakeholders in this case are:
 You, as controller.
 Fabien LaRue, president.
 Users of the company’s financial statements.
(b) The ethical issue is the continued circulation of significantly misstated
financial statements. As controller, you have just issued misleading
financial statements. You have acted ethically by telling the company’s
president. The president has reacted unethically by allowing the misleading financial statements to continue to circulate.
(c) As controller, you should impress upon the president the consequences
of having those misleading financial statements be detected by some
user or securities regulator. Also stress upon him that you have a
professional obligation to correct the statements or to resign.
4-98
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CT 4-7
ALL ABOUT YOU
The following is a personal statement of financial position using the
classified presentation. Note that the earnings from the part-time job as
well as the tuition costs are not listed since neither of those items is an
asset, liability, or equity item.
Assets
Property, plant, and equipment
Automobile ......................................................
Video and stereo equipment ..........................
Home computer ...............................................
€7,000
1,250
800
Current assets
Accounts receivable from brother ..................
Investment .......................................................
Savings account balance ...............................
Cash .................................................................
Total assets..............................................
€ 300
3,000
1,800
1,200
€9,050
6,300
€15,350
Owner’s Equity and Liabilities
Owner’s equity
Owner’s capital (€15,350 – €12,300)...
Noncurrent liabilities
Automobile loan ..................................
Student loan ........................................
Credit card payable .............................
Current liabilities
Current portion of automobile loan ...
Current portion of credit card payable
Total liabilities..............................
Total owner’s equity and liabilities
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€3,050
€4,000
5,000
1,650 €10,650
1,500
150
1,650
12,300
€15,350
(For Instructor Use Only)
4-99
GAAP EXERCISES
GAAP 4.1
The statement of financial position required under IFRS and the balance
sheet prepared under GAAP usually present the same information
regarding a company’s assets, liabilities, and equity at a point in time. IFRS
does not dictate a specific order but most companies list non-current items
before current. Differences in ordering are:
IFRS
GAAP
Statement of Financial
Position presentation
Non-current assets
Current assets
Equity
Non-current liabilities
Current liabilities
Balance Sheet
presentation
Current assets
Long-term investments
Property, plant and equipment
Intangible assets
Current liabilities
Long-term liabilities
Stockholders’ equity
Under GAAP, current assets are usually listed in the order of liquidity.
GAAP 4.2
GAAP uses the term balance sheet rather than statement of financial position.
GAAP 4.3
DIAZ COMPANY
Partial Balance Sheet
Current assets
Cash .........................................................................................
Short-term investments ..........................................................
Accounts receivable ...............................................................
Supplies ...................................................................................
Prepaid insurance ...................................................................
Total .................................................................................
4-100
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$ 15,400
6,700
12,500
5,200
3,600
$43,400
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GAAP 4.4
ZURICH COMPANY
Partial Balance Sheet
December 31, 2020
Current assets
Cash.............................................................
Short-term investments .............................
Accounts receivable ...................................
Inventories ..................................................
Long-term investments
Investments in stock ..................................
Property, plant and equipment
Equipment ...................................................
Less: Accumulated depreciation—
equipment ...............................................
Total assets ........................................................
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$ 13,100
120
4,300
2,700
$20,220
6,500
21,700
5,700
(For Instructor Use Only)
16,000
$42,720
4-101
GAAP 4.5
(a)
REGO BOWLING ALLEY
Balance Sheet
December 31, 2020
Assets
Current assets
Cash ..................................................
Accounts receivable ........................
Prepaid insurance ............................
Property, plant, and equipment
Land ..................................................
Buildings ..........................................
Less: Acc. depr.—buildings ............
Equipment ........................................
Less: Acc. depr.—equipment ..........
Total assets ......................................
$18,040
7,540
4 ,680
$30,260
67,000
$128,000
42,600
62,400
18,720
85,400
43,680
196,080
$226,340
Liabilities and Stockholders’ Equity
Current liabilities
Current portion of notes payable ............. $ 13,900
Accounts payable .....................................
12,300
Interest payable ........................................
2,600 $28,800
Long-term liabilities
Notes payable ..........................................
81,100
Total liabilities ..........................................
$109,900
Stockholders’ equity
Common stock ........................................
112,000
Retained Earnings ...................................
4,440* 116,440
Total liabilities and stockholders’ equity
$226,340
*Net income = $15,180 – $780 – $7,360 – $2,600 = $4,440
GAAP 4.6
It is possible to compare liquidity and solvency for companies using
different currencies. The ratios that are used to do so, such as the current
ratio and debt to total assets, indicate relative amounts of assets and
liabilities rather than absolute monetary values.
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Copyright © 2019 WILEY
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
(For Instructor Use Only)
GAAP FINANCIAL REPORTING PROBLEM
GAAP 4.7
(a)
Total current assets were $106,869 million at September 24, 2016, and
$89,378 million at September 26, 2015.
(b)
Current assets are properly listed in the order of liquidity. As you will
learn in the next chapter, inventory is considered to be less liquid
than accounts receivable. Thus, it is listed below accounts receivable
and before prepaid expenses and other current assets.
(c)
The asset classifications are similar to the text: (1) current assets,
(2) investments, (3) property, plant, and equipment, and (4) intangible assets.
(d)
Total current liabilities were $79,006 million at September 24, 2016,
and $80,610 million at September 26, 2015.
Copyright © 2019 WILEY
Weygandt, Financial Accounting, IFRS 4/e, Solutions Manual
(For Instructor Use Only)
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