Question 1 Suppose you have been given a job as an Accounting Clerk in a retail store and have been asked by the manager for advice on an accounting issue. You were told that most of the companies customers pay immediately for services rendered while a few pay sometime later. As at December 31st, 2013 the company collected $30,000 from its cash customers, while $25,000 is owed by other customers for services rendered within the same period. Advice the manager how much should be recorded as service revenue under the cash basis and accrual basis of accounting for the period in question.
Question 1
Suppose you have been given a job as an Accounting Clerk in a retail store and have been asked by the manager for advice on an accounting issue. You were told that most of the companies customers pay immediately for services rendered while a few pay sometime later. As at December 31st, 2013 the company collected $30,000 from its cash customers, while $25,000 is owed by other customers for services rendered within the same period. Advice the manager how much should be recorded as service revenue under the cash basis and accrual basis of accounting for the period in question.
Question 2
Complete the missing information in the various columns of the worksheet below:
|
Unadjusted |
Adjustment |
Adjusted Trial Balance |
|||
Account title |
Debit |
Credit |
Debit |
Credit |
Debit |
Credit |
Cash |
2,065 |
|
|
|
|
|
|
2,220 |
|
500 |
|
|
|
Supplies |
2,000 |
|
|
|
760 |
|
Furniture |
14,200 |
|
|
|
14,200 |
|
Prepaid Insurance |
985 |
|
|
100 |
|
|
Accounts payable |
|
1,260 |
|
|
|
1,260 |
Salary payable |
|
4,000 |
|
|
|
|
Owner, Capital |
|
11,000 |
|
|
|
11,000 |
Owner, Withdrawal |
|
2,000 |
|
|
|
|
Service revenue |
|
14,340 |
|
|
|
14,840 |
Salary expense |
8,275 |
|
|
|
|
|
Supplies Expense |
1,600 |
|
1,240 |
|
|
|
Insurance expense |
800 |
|
|
|
900 |
|
Utilities Expense |
455 |
- |
|
|
|
|
|
32,600 |
32,600 |
|
|
|
|
Accumulated DepreciationFurniture |
|
|
|
|
|
360 |
Depreciation Expense |
|
|
360 |
|
|
|
|
|
|
2,200 |
- |
- |
33,460 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Question 3
Blum Services has the following unadjusted balances at year-end.
Cash |
$12,900 |
Prepaid insurance |
2,000 |
Office supplies |
1,300 |
Office equipment |
10,500 |
|
3,500 |
Accounts payable |
2,900 |
Salaries payable |
-0- |
Unearned service revenue |
4,500 |
A.L.Blum, capital |
11,750 |
A.L.Blum, drawing |
5,600 |
Service revenue |
13,350 |
Salary expense |
3,700 |
Depreciation expense |
-0- |
Supplies expense |
-0- |
Insurance expense |
-0- |
The following information is available to use in making
- Office supplies on hand at year-end: $250
- Prepaid insurance expired during the year: $325
- Unearned revenue remaining at year-end: $2,500
- Depreciation expense for the year: $1,800
- Accrued salaries at year-end: $900
From the above information prepare the adjusted trial balance for the company (NB. Worksheet must include unadjusted trial balance, adjustments, and the adjusted trial balance.
Question 4
Prepare an income statement, balance sheet and statement of owner’s equity for the year ended December 31, 2012 from the following adjusted trial balance:
Deavours Photography
Adjusted Trial Balance
December 31, 2012
Accounts |
Debit |
Credit |
|
Cash |
$2,000 |
|
|
Prepaid insurance |
2,000 |
|
|
Office supplies |
600 |
|
|
Office equipment |
16,000 |
|
|
Accumulated depreciation |
|
|
$3,000 |
Accounts payable |
|
|
5,000 |
Salaries payable |
|
|
900 |
Unearned service revenue |
|
|
2,500 |
C. Devours, capital |
|
|
7,450 |
C. Devours, drawing |
5,600 |
|
|
Service revenue |
|
|
15,350 |
Salaries expense |
4,600 |
|
|
Depreciation expense |
1,000 |
|
|
Supplies expense |
400 |
|
|
Insurance expense |
2,000 |
|
|
Totals |
$34,200 |
|
$34,200 |
Question 5
Selected accounts of Noteworthy Communications at December 31, 20X6, follow:
Accounts payable |
$15,100 |
Lori Stone, capital |
$67,100 |
Accounts receivable |
6,600 |
Note payable, long-term |
27,800 |
Accumulated depreciation - equipment |
37,800 |
Other assets |
3,600 |
Accumulated depreciation- computers |
11,600 |
Other current liabilities |
4,700 |
Equipment |
114,400 |
Prepaid insurance |
1,100 |
Cash |
16,500 |
Prepaid rent |
6,600 |
Service revenue |
93,500 |
Salary expense |
24,600 |
Computers |
22,700 |
Salary payable |
3,900 |
Interest payable |
600 |
Supplies |
2,500 |
|
|
Unearned service revenue |
5,400 |
Required:
- i) Prepare Noteworthy’s classified balance sheet in report form as at
December 31, 20X6. Show totals for total assets, total liabilities and owner’s equity.
Question 6
The trial balance of Lane’s Interiors at May 31, 20X8, follows.
Lane’s Interiors Trial
Balance May 31, 20X8
Cash |
$ 4,300 |
|
Notes Receivable |
10,300 |
|
Interest Receivable |
|
|
Supplies |
500 |
|
Prepaid Insurance |
1,700 |
|
Furniture |
27,400 |
|
Accumulated Depreciation: Furniture |
|
1,400 |
Building |
53,900 |
|
Accumulated Depreciation: Building |
|
34,500 |
Land |
18,700 |
|
Accounts Payable |
|
14,700 |
Interest Payable |
|
|
Salary Payable |
|
|
Unearned Service Revenue |
|
8,800 |
Note Payable, Long-Term |
|
18,700 |
K. Lane, Capital |
|
29,900 |
K. Lane, Withdrawals |
3,800 |
|
Service Revenue |
|
16,800 |
Interest Revenue |
|
|
Salary Expense |
2,100 |
|
Insurance Expense |
|
|
Interest Expense |
|
|
Utilities Expense |
1,100 |
|
Advertising Expense |
1,000 |
|
Supplies Expense |
|
|
Depreciation Expense – Furniture |
|
|
Depreciation Expense – Building |
|
|
Total |
$124,800 |
$124,800 |
Additional data at May 31, 20X8:
- Depreciation: furniture, $500; building, $400.
- Accrued salary expense, $600
- Supplies on hand, $400.
- Prepaid insurance expired, $300.
- Accrued interest expense, $200.
Unearned service revenue earned during May, $4,400. g.
- Accrued advertising expense, $100 (credit Accounts Payable).
Accrued interest revenue, $200.
Required:
Complete the Lane’s accounting work sheet for May 31, 20X8 (Note that the worksheet should show the following columns unadjusted trial balance the, adjustments, and the adjusted trail balance.
![](/static/compass_v2/shared-icons/check-mark.png)
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)