Chapter 4, Problem 4.19E

a.

To determine

To prepare: A four part table by using the given information. Items (a)-(f) are independent of one another.

Explanation of Solution

The four part table is shown below:

(1)	On January 22, 2015, MSM received $24,000 cash from customers for one–year subscriptions to the magazine for February 2015 – January 2016.
(2)	Assets		=	Liabilities			+	Stockholders’ Equity
	Cash        +$24,000			Unearned Revenue  +$24,000
(3)	Account Names								Debit ($)		Credit ($)
	Cash (+A)								24,000
	Unearned Revenue (+R, +SE)										24,000
	(To record the unearned revenue)
(4)	Cash account					Unearned Revenue account
	$24,000									$24,000

b.

To determine

To prepare: A four part table by using the given information. Items (a)-(f) are independent of one another.

Explanation of Solution

The four part table is shown below:

(1)	Company MSM received Utilities services on account at a cost of $3,000.
(2)	Assets		=	Liabilities			+	Stockholders’ Equity
				Accounts payable +$3,000				Utilities expense (+E) -$3,000
(3)	Account Names								Debit ($)		Credit ($)
	Utilities expense(+E, -SE)								3,000
	Accounts payable (+L)										3,000
	(To record the utilities expense)
(4)	Accounts payable account					Utilities expense account
	$3,000									$3,000

c.

To determine

To prepare: A four part table by using the given information. Items (a)-(f) are independent of one another.

Explanation of Solution

The four part table is shown below:

(1)	Company MSM provided $2,000 of subscriptions for which it had been received the payment previously.
(2)	Assets		=	Liabilities			+	Stockholders’ Equity
				Unearned Revenue  -$2,000				Subscription revenue (+R) +$2,000
(3)	Account Names								Debit ($)		Credit ($)
	Unearned revenue (-L)								2,000
	Subscription Revenue (+R, +SE)										2,000
	(To record the subscription revenue)
(4)	Unearned Revenue account					Subscription revenue account
	$2,000									$2,000

d.

To determine

To prepare: A four part table by using the given information. Items (a)-(f) are independent of one another.

Explanation of Solution

The four part table is shown below:

(1)

On March 31, 2015, Company MSM recorded an adjusting entry for the month’s depreciation of $10,000.

(2)

Assets

=

Liabilities

+

Stockholders’ Equity

Accumulated

Depreciation

Depreciation–Equipment (+xA)  –$10,000

Expense (+E)     –$10,000

(3)

Account Names

Debit ($)

Credit ($)

Depreciation Expense (+E, –SE)

10,000

Accumulated Depreciation–Equipment  (+xA, –A)

10,000

(To record accumulated depreciation)

(4)

Accumulated Depreciation–Equipment account

Depreciation Expense account

$10,000

$10,000

e.

To determine

To prepare: A four part table by using the given information. Items (a)-(f) are independent of one another.

Explanation of Solution

The four part table is shown below:

(1)	On April 1, Company MSM paid $5,000 rent in advance of obtaining its benefits.
(2)	Assets			=		Liabilities			+	Stockholders’ Equity
	Cash               –$5,000
	Prepaid Rent   +$5,000
(3)	Account Names							Debit ($)			Credit($)
	Prepaid Rent (+A)							5,000
	Cash (–A)										5,000
	(To record prepaid rent)
(4)	Cash account							Prepaid Rent account
		$5,000						$5,000

f.

To determine

To prepare: A four part table by using the given information. Items (a)-(f) are independent of one another.

Explanation of Solution

The four part table is shown below:

(1)	On April 30, 2015, Company MSM billed customers for $10,000 of advertising services provided on account.
(2)	Assets			=		Liabilities		+	Stockholders’ Equity
	Accounts								Service
	Receivable  +$10,000								Revenue (+R)  +$10,000
(3)	Account Names							Debit ($)		Credit ($)
	Accounts Receivable (+A)							10,000
	Service Revenue (+R, +SE)									10,000
	(To record providing services on account)
(4)	Accounts Receivable account							Service Revenue account
	$10,000									$10,000