Chapter 4, Problem 6APSA

To determine

Concept Introduction:

6-Column Worksheet:

6-column worksheet consists of detailed financial information during an accounting period regarding unadjusted trial balance, adjustments, and adjusted trial balance.

Requirement 1:

To Prepare:

Complete the six-column table of trial balance.

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
Accounts Receivable	0		$9,300		9,300
Supplies	6,500			$3,500	3,000
Equipment	135,000				135,000
Accumulated Depreciation - Equipment		$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

To determine

Concept Introduction:

Adjusting Entries:The journal entries which are prepare with an intention show the all the accrued expenses and revenue in the financial statements is called adjusting entries.

Requirement 2:

Adjusting entries for the adjustment entered in the six-column table.

Answer to Problem 6APSA

Account Title	Balance
Cash	$14,000
Accounts Receivable	9,300
Supplies	3,000
Equipment	135,000
Accumulated Depreciation − Equipment	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

To determine

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 3:

Journal entries to reverse the effects of the adjusting entries

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

To determine

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

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.