U.C. Berkeley
Haas School of Business
Chapter 3
April 28, 20001
Spring 2001
BA 230-B
Solutions to S&W
3.35
(Miscellaneous transactions and adjusting entries.)
a.
(1)
(2)
b.
(1)
(2)
c.
(1)
(2)
d.
(1)
(2)
e.
(1)
(2)
f.
(1)
(2)
(3)
Accounts Payable (L) .....................................
Notes Payable (L) .......................................
6,000
Interest Expense (SE) ....................................
Interest Payable (L) ...................................
50
Cash (A) ..........................................................
Advances from Customers (L) ...................
18,000
Advances from Customers (L) .......................
Insurance Revenue (SE) ............................
3,000
Equipment (A) ................................................
Cash (A) ......................................................
40,000
Depreciation Expense (SE)
........................
Accumulated Depreciation (XA)
............
2,250
Automobile (A)
Cash (A)
6,000
50
18,000
3,000
40,000
2,250
........................................
.............................................
24,000
Depreciation Expense (SE)
........................
Accumulated Depreciation (XA)
............
.5 X [($24,000 – $3,000)/3] = $3,500.
3,500
Prepaid Rent (A)
.....................................
Cash (A)
.............................................
12,000
Rent Expense (SE)
Prepaid Rent (A)
24,000
3,500
12,000
...................................
..................................
4,000
Office Supplies Inventory (A)
....................
Accounts Payable (L)
............................
7,000
Accounts Payable (L)
...............................
Cash (A)
.............................................
5,000
Office Supplies Expense (SE)
Office Supplies Inventory (A)
($7,000 – $1,500) = $5,500.
5,500
Prepared by Gavin Cassar
.....................
.................
4,000
7,000
5,000
5,500
Page 1
U.C. Berkeley
Haas School of Business
3.41
Chapter 3
April 28, 20001
Spring 2001
BA 230-B
(Rybowiak's Building Supplies; preparation of journal entries, T-accounts,
adjusted trial balance, income statement, and balance sheet.)
a.
(T): Transaction Entry
(A): Adjusting Entry
(1) Accounts Receivable
................................
(T)
Sales Revenue
......................................
85,000
(2) Merchandise Inventory
............................
(T)
Accounts Payable
.................................
46,300
(3) Rent Expense
..........................................
(T)
Cash
...................................................
11,750
(4) Salaries Payable
......................................
(T) Salaries Expense
.....................................
Cash
...................................................
1,250
19,350
(5) Cash
......................................................
(T)
Accounts Receivable
.............................
34,150
(6) Accounts Payable
....................................
(T)
Cash
...................................................
38,950
(7) Miscellaneous Expenses
..........................
(T)
Cash
...................................................
3,200
(8) Insurance Expense
(A)
Prepaid Insurance
$400/8 months.
85,000
46,300
11,750
20,600
34,150
38,950
3,200
.................................
...............................
50
(9) Depreciation Expense
..............................
(A)
Accumulated Depreciation
....................
1,750
(10) Salaries Expense
(A)
Salaries Payable
.....................................
...................................
1,600
(11) Interest Expense
.....................................
(A)
Interest Payable
...................................
$5,000 X .12 X 30/360.
50
(12) Cost of Goods Sold
....................................
(A)
Merchandise Inventory
........................
$68,150 + $46,300 – $77,950.
36,500
Prepared by Gavin Cassar
50
1,750
1,600
50
36,500
Page 2
U.C. Berkeley
Haas School of Business
Chapter 3
April 28, 20001
Spring 2001
BA 230-B
b. and e.
Cash
44,200
11,750
34,150
20,600
38,950
3,200
3,850
Bal.
(5)
Bal.
Bal.
(2)
Bal.
(3)
(4)
(6)
(7)
Bal.
Merchandise Inventory
68,150
36,500
(12)
46,300
77,950
Bal.
Equipment
210,000
Bal.
210,000
(6)
(4)
Bal.
(2)
Bal.
Salaries Payable
1,250
1,250
1,600
1,600
Bal.
(10)
Bal.
(3)
Prepared by Gavin Cassar
Rent Expense
11,750
11,750
Bal.
Bal.
Accounts Receivable
27,250
34,150
85,000
(5)
78,100
Prepaid Insurance
400
50
(8)
350
Accumulated Depreciation
84,000 Bal.
1,750
(9)
85,750 Bal.
Accounts Payable
33,100
38,950
46,300
40,450
Retained Earnings
76,650
10,750
87,400
Bal.
(1)
Bal.
(15)
Bal.
(14)
(13)
(4)
(10)
Note Payable
5,000
Bal.
5,000
Bal.
Common Stock
150,000
Bal.
150,000
Bal.
Sales Revenue
85,000
85,000
(1)
Salaries Expense
19,350
1,600
20,950
20,950
Page 3
(14)
U.C. Berkeley
Haas School of Business
(7)
(9)
Chapter 3
April 28, 20001
Miscellaneous Expenses
3,200
3,200
(14)
Depreciation Expense
1,750
1,750
Interest Payable
50
50
Income Summary
74,250
85,000
10,750
85,000
(14)
(15)
c.
(14)
(11)
Bal.
Spring 2001
BA 230-B
(8)
Insurance Expense
50
50
(14)
(11)
Interest Expense
50
50
(14)
(12)
Cost of Goods Sold
36,500
36,500
(14)
(13)
RYBOWIAK’S BUILDING SUPPLIES
Adjusted Preclosing Trial Balance
July 31, Year 9
Cash
.....................................................
Accounts Receivable
..............................
Merchandise Inventory
...........................
Prepaid Insurance
.................................
Equipment
.............................................
Accumulated Depreciation
......................
Accounts Payable
...................................
Note Payable
..........................................
Salaries Payable
.....................................
Common Stock
.......................................
Retained Earnings (September 30) ............
Sales Revenue
........................................
Rent Expense
.........................................
Salaries Expense
....................................
Miscellaneous Expenses
.........................
Insurance Expense
................................
Depreciation Expense
.............................
Interest Expense
....................................
Interest Payable
.....................................
Cost of Goods Sold
...................................
Totals
................................................
Prepared by Gavin Cassar
$
3,850
78,100
77,950
350
210,000
$ 85,750
40,450
5,000
1,600
150,000
76,650
85,000
11,750
20,950
3,200
50
1,750
50
50
36,500
$444,500
$444,500
Page 4
U.C. Berkeley
Haas School of Business
d.
Chapter 3
April 28, 20001
Spring 2001
BA 230-B
RYBOWIAK’S BUILDING SUPPLIES
Income Statement
For the Month of July, Year 9
Sales Revenue
........................................
Less Expenses:
Cost of Goods Sold
...............................
Salaries Expense
.................................
Rent Expense
......................................
Depreciation Expense
..........................
Insurance Expense
.............................
Interest Expense
.................................
Miscellaneous Expenses
......................
Net Income
...........................................
f.
$ 85,000
$ 36,500
20,950
11,750
1,750
50
50
3,200
(74,250)
$ 10,750
RYBOWIAK’S BUILDING SUPPLIES
Balance Sheet
July 31, Year 9
Assets
Current Assets:
Cash
..................................................
Accounts Receivable
............................
Merchandise Inventory
.......................
Prepaid Insurance
..............................
Total Current Assets
........................
Noncurrent Assets:
Equipment—at Cost
............................
Less Accumulated Depreciation
Total Noncurrent Assets
..................
Total Assets
....................................
$
3,850
78,100
77,950
350
$160,250
$210,000
(85,750)
Liabilities and Shareholders' Equity
Current Liabilities:
Accounts Payable
................................
Note Payable
.......................................
Salaries Payable
..................................
Interest Payable
..................................
Total Current Liabilities ...................
Shareholders' Equity:
Common Stock
....................................
Retained Earnings
..............................
Total Shareholders' Equity ................
Total Liabilities and Shareholders'
Equity
.........................................
Prepared by Gavin Cassar
124,250
$284,500
$ 40,450
5,000
1,600
50
$ 47,100
$150,000
87,400
$237,400
$284,500
Page 5