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Concept explainers
Concept Introduction:
6-Column Worksheet:
6-column worksheet consists of detailed financial information during an accounting period regarding unadjusted
Requirement 1:
To Prepare:
Complete the six-column table of trial balance.
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Answer to Problem 6APSA
Particulars | Totals |
Adjustment | $40,075 |
Adjusted trial balance | $239,625 |
Explanation of Solution
HAWKEYE RANGESSix-Column Worksheet
December 31. | ||||||
Unadjusted | Adjustments | Adjusted Trial Balance | ||||
Account Title | Dr. | Cr. | Dr. | Cr. | Dr. | Cr. |
Cash | $14,000 | $14,000 | ||||
0 | $9,300 | 9,300 | ||||
Supplies | 6,500 | $3,500 | 3,000 | |||
Equipment | 135,000 | 135,000 | ||||
$30,000 | 15,000 | $45,000 | ||||
Interest Payable | 0 | 1,875 | 1,875 | |||
Salaries Payable | 0 | 1,200 | 1,200 | |||
Unearned Member Fees | 15,000 | 9,200 | 5,800 | |||
Notes Payable | 75,000 | 75,000 | ||||
P. Hawkye, Capital | 50,250 | 50,250 | ||||
P. Hawkeye, Withdrawals | 21,125 | 21,125 | ||||
Members Fees Earned | 42,000 | 18,500 | 60,500 | |||
Depreciation Expense − Equipment | 0 | 15,000 | 15,000 | |||
Salaries Expense | 30,000 | 1,200 | 31,200 | |||
Interest Expense | 5,625 | 1,875 | 7,500 | |||
Supplies Expense | 0 | 3,500 | 3,500 | |||
Total | $212,250 | $212,250 | $40,075 | $40,075 | $239,625 | $239,625 |
Concept Introduction:
Requirement 2:
Adjusting entries for the adjustment entered in the six-column table.
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Answer to Problem 6APSA
Account Title | Balance |
Cash | $14,000 |
Accounts Receivable | 9,300 |
Supplies | 3,000 |
Equipment | 135,000 |
Accumulated | 45,000 |
Interest Payable | 1,875 |
Salaries Payable | 1,200 |
Unearned Member Fees | 5,800 |
Notes Payable | 75,000 |
P. Hawkye, Capital | 50,250 |
P. Hawkeye, Withdrawals | 21,125 |
Members Fees Earned | 60,500 |
Depreciation Expense − Equipment | 15,000 |
Salaries Expense | 31,200 |
Interest Expense | 7,500 |
Supplies Expense | 3,500 |
Explanation of Solution
Adjusting Entries
Date | Accounts | Debit | Credit |
Dec. 31 | |||
a. | Salaries Expense | $1,200 | |
Salaries Payable | $1,200 | ||
b. | Supplies Expense | 3,500 | |
Supplies | 3,500 | ||
c. | Interest Expense | 1,875 | |
Interest Payable | 1,875 | ||
d. | Unearned Member Fees | 9,200 | |
Member Fees Earned | 9,200 | ||
e. | Accounts Receivable | 9,300 | |
Member Fees Earned | 9,300 | ||
f. | Depreciation Expense − Equipment | 15,000 | |
Accumulated Depreciation - Equipment | 15,000 | ||
Concept Introduction:
Reversing Entry:The
Requirement 3:
Journal entries to reverse the effects of the adjusting entries
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Answer to Problem 6APSA
Account Title | Balance |
Cash | $14,000 |
Accounts Receivable | 0 |
Supplies | 3,000 |
Equipment | 135,000 |
Accumulated Depreciation − Equipment | 45,000 |
Interest Payable | 0 |
Salaries Payable | 0 |
Unearned Member Fees | 5,800 |
Notes Payable | 75,000 |
P. Hawkye, Capital | 50,250 |
P. Hawkeye, Withdrawals | 0 |
Members Fees Earned | (9,300) |
Depreciation Expense − Equipment | 0 |
Salaries Expense | (1,200) |
Interest Expense | (1,875) |
Supplies Expense | 0 |
Explanation of Solution
Reversing Entries for Accruals
Date | Accounts | Debit | Credit |
Jan. 1 | |||
a. | Salaries Payable | $1,200 | |
Salaries Expense | $1,200 | ||
c. | Interest Payable | 1,875 | |
Interest Expense | 1,875 | ||
e. | Member Fees Earned | 9,300 | |
Accounts Receivable | 9,300 | ||
Concept Introduction:
Reversing Entry:The journal entry which neutralizes the effects of the adjusting entry is called reversing entries. Reversing entry are prepare at the beginning of an accounting period. The main purpose behind journalizing the reversing entry is to avoid any complication at the time of collection or payment of revenues or expenses.
Requirement 4:
Recording of collections and payments in January
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Answer to Problem 6APSA
Date | Accounts | Debit | Credit |
Jan. | |||
4 | Salaries Expense | $1,500* | |
Cash | $1,500 | ||
15 | Interest Expense | 2,250& | |
Cash | 2,250 | ||
31 | Cash | 19,300 | |
Member Fees Earned | 19,300 | ||
Explanation of Solution
*The total amount of $1,500 is to be paid on January 4 as salaries expense which includes the salary expense of December.
**The due amount on interest expense as of January 15 is $2,250 which is inclusive of interest expense in December.
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Chapter 4 Solutions
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