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Material Type: Assignment; Professor: Brown; Class: FINANCIAL ACCOUNTING; Subject: College of Business; University: James Madison University; Term: Unknown 1989;
Typology: Assignments
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COB 241 Molly Brown Chapter 4 Exercise Solutions PROBLEM 4-29A a. Laura’s Salon General Journal, 2008 Event Account Titles Debit Credit
Prepaid Rent 5,
Service Revenue 1,
PROBLEM 4-29A (cont.) c. Laura’s Salon Trial Balance December 31, 2008 Account Titles Debit Credit Cash $53, Accounts Receivable 6, Prepaid Rent 1, Accounts Payable $ 3, Salaries Payable 2, Unearned Revenue 3, Common Stock 50, Service Revenue 67, Operating Expenses 31, Salaries Expense 28, Rent Expense 5, Totals $126,200 $126,
PROBLEM 4-29A (cont.) d. Laura’s Salon Financial Statements For the Year Ended December 31, 2008 Income Statement Service Revenue $67, Expenses Operating Expenses $31, Salaries Expense 28, Rent Expense 5, Total Expenses (64,600) Net Income $ 2, Statement of Changes in Stockholders’ Equity Beginning Common Stock $ -0- Plus: Stock Issued 50, Ending Common Stock $50, Beginning Retained Earnings
Plus: Net Income 2, Ending Retained Earnings 2, Total Stockholders’ Equity
Inflow from Stock Issue 50, Net Cash Flow from Financing Activities
Net Change in Cash 53, Plus: Beginning Cash Balance -0- Ending Cash Balance $53, 0
PROBLEM 4-29A (cont.) e. Date Account Titles Debit Credit Closing Entries Dec. 31 Service Revenue 67, Retained Earnings 67, Dec. 31 Retained Earnings 64, Operating Expenses 31, Salaries Expense 28, Rent Expense 5, Laura’s Salon T-Accounts for Closing Entries, 2008 Assets = Liabilities + Stockholders’ Equity Cash Accounts Payable Common Stock Bal. 53, Bal. 3, Bal. 50, Salaries Payable Retained Earnings Accounts Rec. Bal. 2, cl 64,600 cl 67, Bal. 6,800 Bal. 2, Unearned Revenue Prepaid Rent Bal. 3, Service Revenue Bal. 1,000 cl 67,000 Bal. 67, Bal. -0- Operating Expenses Bal. 31, cl 31, Bal. -0-
PROBLEM 4-29A (cont.) f. Laura’s Salon After-Closing Trial Balance December 31, 2008 Account Titles Debit Credit Cash $53, Accounts Receivable 6, Prepaid Rent 1, Accounts Payable $ 3, Salaries Payable 2, Unearned Revenue 3, Common Stock 50, Retained Earnings 2, Totals $61,600 $61,
g.
PROBLEM 4-29A g. (cont.) Laura’s Salon T-Accounts, 2009 Assets = Liabilities + Stockholders’ Equity Cash Accounts Payable Common Stock Bal. 53, Bal. 3, Bal. 50,
41, Bal. 2, Bal. 2 ,
Bal. 41, Rent Expense
1, Bal. 1,
PROBLEM 4-29A g. (cont.) Laura’s Salon Financial Statements For the Year Ended December 31, 2009 Income Statement Service Revenue $132, Expenses Operating Expenses $47, Salaries Expense 41, Rent Expense 6, Interest Expense 1, Total Expenses (96,000) Net Income $36, Statement of Changes in Stockholders’ Equity Beginning Common Stock $50, Plus: Stock Issued -0- Ending Common Stock $50, Beginning Retained Earnings
Plus: Net Income 36, Less: Dividends (5,000) Ending Retained Earnings 33, Total Stockholders’ Equity
PROBLEM 4-29A g. (cont.) Laura’s Salon Balance Sheet As of December 31, 2009 Assets Cash $71, 0 Accounts Receivable 12, Prepaid Rent 1, Land 25, Total Assets $110, 0 Liabilities Accounts Payable $ 5, Interest Payable 1, Notes Payable 20, Total Liabilities $26, Stockholders’ Equity Common Stock 50, Retained Earnings 33, Total Stockholders’ Equity 83, Total Liabilities and Stockholders’ Equity
PROBLEM 4-29A g. (cont.) Date Account Titles Debit Credit Closing Entries Dec. 31 Service Revenue 132, Retained Earnings 132, Dec. 31 Retained Earnings 96, Operating Expenses 47,
Interest Expense 1, Dec. 31 Retained Earnings 5,
PROBLEM 4-29A g. (cont.) Laura’s Salon T-Accounts for Closing Entries, 2009 Assets = Liabilities + Stockholders’ Equity Cash Accounts Payable Common Stock Bal. 71, Bal. 5, Bal. 50, Interest Payable Retained Earnings Accounts Rec. Bal. 1, cl 96,000 Bal. 2,4 00 Bal. 12, cl 5,000 cl 132, Bal. 33, Notes Payable Prepaid Rent Bal. 20, Dividends Bal. 1,000 Bal. 5,000 cl 5, Bal. -0- Land Service Revenue Bal. 25, cl 132, Bal. 132, Bal. -0- Operating Expenses Bal. 47, cl 47, Bal. -0- Salaries Expense Bal. 41, cl 41, Bal. -0- Rent Expense Bal. 6,000 cl 6,