Financial Accounting: An Integrated Statements Approach, 2nd Edition

Chapter 4 Accounting Information Systems 199

The data needed to determine year-end adjustments are as follows:

a. Accrued fees revenue at April 30 are $2,800.

b. Insurance expired during the year is $450.

c. Supplies on hand at April 30 are $650.

d. Depreciation of building for the year is $1,620.

e. Depreciation of equipment for the year is $3,500.

f. Accrued salaries and wages at April 30 are $1,800.

g. Unearned rent at April 30 is $1,500.

Instructions

1. Prepare the adjusting entries.


2. Based upon (1), prepare an adjusted trial balance.


3. Prepare an income statement for the year ended April 30, 2006.


4. Prepare a retained earnings statement for the year ended April 30, 2006.


5. Prepare a classified balance sheet as of April 30, 2006.


6. Prepare the closing entries.


7. Prepare a post-closing trial balance.

ALTERNATE ACCOUNTING APPLICATION PROBLEMS

On January 2, 2006, Lela Peterson established Acadia Realty, which completed the following

transactions during the month:

a. Lela Peterson transferred cash from a personal bank account to an account to be used for

the business in exchange for capital stock, $9,000.

b. Paid rent on office and equipment for the month, $2,000.

c. Purchased supplies on account, $700.

d. Paid creditor on account, $290.

e. Earned sales commissions, receiving cash, $10,750.

f. Paid automobile expenses (including rental charge) for month, $1,400, and miscellaneous

expenses, $480.

g. Paid office salaries, $2,500.

h. Determined that the cost of supplies used was $575.

i. Paid dividends, $1,000.

Instructions

1. Journalize entries for transactions (a) through (i), using the following accounts: Cash;
   Supplies; Accounts Payable; Capital Stock; Dividends; Sales Commissions Earned; Rent
   Expense; Office Salaries Expense; Automobile Expense; Supplies Expense; Miscellaneous
   Expense. Show the effects of each transaction on the financial statements using the margin
   notation illustrated in this chapter.


2. Post the journal entries to T accounts, placing the appropriate letter to the left of each
   amount to identify the transactions. Determine the account balances, after all posting is
   complete.


3. Prepare a trial balance as of January 31, 2006.


4. Determine the following:
   a.Amount of total revenue recorded in the ledger.
   b.Amount of total expenses recorded in the ledger.
   c. Assuming that no adjustments are necessary, what is the amount of net income for
   January?

Alternate Problem
4-1B

Journal entries and trial
balance

Goal 3

3. Total debit column, $20,160

GENERAL LEDGER