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Intermediate Accounting (2nd Edition)
2nd Edition
ISBN: 9780134730370
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
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Textbook Question
Chapter 4, Problem 4.3P
Sons’ Law Offices opened on January 1, 2018 During the first year of business, the company had the following transactions
- January 2: The owners invested $250,000 (the par value of the stock) into the business and acquired 25,000 shares of common stock in return.
- January 15: Herman and Sons’ bought an office building in the amount of $80,000. The company took out a long-term note from the bank to finance the purchase.
- February 12: Herman and Sons’ billed clients for $60,000 of services performed.
- March 1: Herman and Sons’ took out a two-year insurance policy, which it paid cash for in the amount of $22,000.
- March 10: Herman collected $20,000 from clients toward the outstanding
accounts receivable balance. - May 13: Herman received cash payments totaling $210,000 for legal services—$40,000 was for services previously billed to customers on February 12 and the remainder was for services provided in May not yet recorded.
- June 10: Herman purchased office supplies in the amount of $35,000, all on credit.
- July 15: Herman paid wages of $16,000 in cash to office staff workers.
- August 8: Herman paid off the $35,000 balance owed to a supplier for the purchase made on June 10.
- September 3: Herman and Sons’ purchased $25,000 of office supplies in cash.
- September 20: The company paid $11,000 cash for utilities.
- October 1: Herman and Sons’ paid wages in the amount of $24,000 to office workers.
- December 1: Herman and Sons’ received cash payments from clients in the amount of $320,000 for services to be performed in the upcoming months.
- December 31: Herman declared and paid a $10,000 dividend.
The chart of accounts used by Herman and Son’s Law Office is as follows:
Chart of Accounts | ||
Group | Account # | Account Title |
100: Assets | 101 | Cash |
102 | Accounts Receivable | |
103 | Office Supplies | |
104 | Prepaid Insurance | |
110 | Building | |
112 | Accumulated Depreciation—Building |
Chart of Accounts | ||
Group | Account # | Account Title |
200: Liabilities | 201 | Accounts Payable |
202 | Unearned Service Revenue | |
203 | Wages Payable | |
210 | Interest Payable | |
220 | Notes Payable | |
300: Stockholders’ Equity | 301 | Common Stock |
310 | ||
320 | Dividends | |
400: Revenues | 401 | Service Revenue |
500: Expenses | 501 | Wage Expense |
502 | Utilities Expense | |
503 | Selling Expense | |
504 | Administrative Expense | |
505 | Insurance Expense | |
506 | Supplies Expense | |
510 | Depreciation Expense—Building | |
520 | Interest Expense | |
600: Other | 601 | Income Summary |
Required
- a. Journalize the transactions for the year. Omit explanations.
- b. Post the journal entries to the general ledger.
- c. Prepare an unadjusted trial balance as of December 31.
Expert Solution & Answer
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Chapter 4 Solutions
Intermediate Accounting (2nd Edition)
Ch. 4 - Prob. 4.1QCh. 4 - ShoeBuy uses reversing entries for events such as...Ch. 4 - What is equity? What are the three components of...Ch. 4 - Prob. 4.4QCh. 4 - Will all transactions have a dual effect on the...Ch. 4 - Prob. 4.6QCh. 4 - What is meant by the term normal balance? Provide...Ch. 4 - Why is the general journal referred to as the book...Ch. 4 - Are account balances found in the general ledger?...Ch. 4 - What is the purpose of an unadjusted trial...
Ch. 4 - Explain the difference between the accrual basis...Ch. 4 - Under the accrual basis of accounting when do...Ch. 4 - Why are adjusting journal entries made? When do...Ch. 4 - What is a deferred revenue? When will the full...Ch. 4 - What is the purpose of the adjusted trial...Ch. 4 - Which statements can be prepared from the adjusted...Ch. 4 - Prob. 4.17QCh. 4 - Jefferson, CPAs provides accounting services for a...Ch. 4 - Gates Accounting Services (GAS), a sole...Ch. 4 - Prob. 4.3MCCh. 4 - State University sold all of its basketball...Ch. 4 - Prob. 4.5MCCh. 4 - Sampson Manufacturing Company (SMC) has an empty...Ch. 4 - On July 15, Year 1, Southeastern University hired...Ch. 4 - Embree Corp. purchased a four-year insurance...Ch. 4 - The Cougars football team sells season tickets in...Ch. 4 - Prob. 4.10MCCh. 4 - Prob. 4.1BECh. 4 - Transaction Analysis. Florences Floral...Ch. 4 - Journal Entries. Using the information provided in...Ch. 4 - Transaction Analysis; Journal Entries. Cals...Ch. 4 - Transaction Analysis; Journal Entries. Using the...Ch. 4 - Journal Entries; T-accounts. Using the information...Ch. 4 - Retained Earnings. In its first year of...Ch. 4 - Retained Earnings. Using the information provided...Ch. 4 - Prob. 4.9BECh. 4 - Prob. 4.10BECh. 4 - Adjusting Journal Entries. Barnard and Associates...Ch. 4 - Prob. 4.12BECh. 4 - Prob. 4.13BECh. 4 - Prob. 4.14BECh. 4 - Prob. 4.15BECh. 4 - Closing Entries. Using the information provided in...Ch. 4 - Closing Entries. At year-end Nelsons Nursery, Inc...Ch. 4 - Closing Entries. Readers, Inc., an online...Ch. 4 - Adjusting Journal Entries. Barnard and Associates...Ch. 4 - Prob. 4.20BECh. 4 - Adjusting Journal Entries. Gerhard News collects...Ch. 4 - Prob. 4.22BECh. 4 - Prob. 4.23BECh. 4 - Prob. 4.24BECh. 4 - Transaction Analysis. The following transactions...Ch. 4 - Prob. 4.2ECh. 4 - Transaction Analysis; Journal Entries. Master Mind...Ch. 4 - Prob. 4.4ECh. 4 - Prob. 4.5ECh. 4 - Posting to the General Ledger. Using the...Ch. 4 - Preparing Journal Entries in the General Journal....Ch. 4 - Preparing the T-accounts. Using the information...Ch. 4 - Transaction Analysis: Journal Entries and Posting...Ch. 4 - Transaction Analysis: Journal Entries and Posting...Ch. 4 - Prob. 4.11ECh. 4 - Adjusting Journal Entries: T-accounts. Fanatical...Ch. 4 - Prob. 4.13ECh. 4 - Prob. 4.14ECh. 4 - Prob. 4.15ECh. 4 - Prob. 4.16ECh. 4 - Prob. 4.17ECh. 4 - Adjusting Journal Entries; Adjusted Trial Balance....Ch. 4 - Preparing Financial Statements. Using the adjusted...Ch. 4 - Prob. 4.20ECh. 4 - Prob. 4.21ECh. 4 - Closing Entries. Diane s Dairy Sales Delivery...Ch. 4 - Prob. 4.23ECh. 4 - Prob. 4.24ECh. 4 - Transaction Analysis; Journal Entries; Adjusting...Ch. 4 - Transaction Analysis; Journal Entries; Adjusting...Ch. 4 - Journal Entries; Post to the General Ledger;...Ch. 4 - Prob. 4.4PCh. 4 - Prob. 4.5PCh. 4 - Journal Entries; Post to the General Ledger;...Ch. 4 - Preparing the Trial Balance; Adjusting Journal...Ch. 4 - Transaction Analysis; Journal Entries; Adjusting...Ch. 4 - Closing Process. Using the information in P4-6 and...Ch. 4 - Closing Process. Sherlock Locksmiths, Inc has the...Ch. 4 - Transaction Analysis; Journal Entries, Posting,...Ch. 4 - Transaction Analysis; Journal Entries, Posting,...
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