Docsity
Docsity

Prepare for your exams
Prepare for your exams

Study with the several resources on Docsity


Earn points to download
Earn points to download

Earn points by helping other students or get them with a premium plan


Guidelines and tips
Guidelines and tips

4 Exercise Solutions - The Double-Entry Accounting system | COB 241, Assignments of Financial Accounting

Material Type: Assignment; Professor: Brown; Class: FINANCIAL ACCOUNTING; Subject: College of Business; University: James Madison University; Term: Unknown 1989;

Typology: Assignments

Pre 2010

Uploaded on 02/25/2009

koofers-user-rpe
koofers-user-rpe 🇺🇸

10 documents

1 / 22

Toggle sidebar

This page cannot be seen from the preview

Don't miss anything!

bg1
Chapter 04 The Double-Entry Accounting System
COB 241 Molly Brown Chapter 4 Exercise Solutions
PROBLEM 4-29A
a.
Laura’s Salon
General Journal, 2008
Event Account Titles Debit Credit
1. Cash 50,000
Common Stock 50,000
2. Prepaid Rent 6,000
Cash 6,000
3. Cash 5,400
Unearned Revenue 5,400
4. Accounts Receivable 65,200
Service Revenue 65,200
5. Operating Expenses 31,500
Accounts Payable 31,500
6. Cash 58,400
Accounts Receivable 58,400
7. Salaries Expense 26,000
Cash 26,000
8. Accounts Payable 28,000
Cash 28,000
Adjusting Entries
9. Rent Expense ($6,000 x
10/12)
5,000
Prepaid Rent 5,000
10. Unearned Revenue ($5,400 x
4/12)
1,800
Service Revenue 1,800
11. Salaries Expense 2,100
4-1
pf3
pf4
pf5
pf8
pf9
pfa
pfd
pfe
pff
pf12
pf13
pf14
pf15
pf16

Partial preview of the text

Download 4 Exercise Solutions - The Double-Entry Accounting system | COB 241 and more Assignments Financial Accounting in PDF only on Docsity!

COB 241 Molly Brown Chapter 4 Exercise Solutions PROBLEM 4-29A a. Laura’s Salon General Journal, 2008 Event Account Titles Debit Credit

  1. Cash 50, Common Stock 50,
  2. Prepaid Rent 6, Cash 6,
  3. Cash 5, Unearned Revenue 5,
  4. Accounts Receivable 65, Service Revenue 65,
  5. Operating Expenses 31, Accounts Payable 31,
  6. Cash 58, Accounts Receivable 58,
  7. Salaries Expense 26, Cash 26,
  8. Accounts Payable 28, Cash 28, Adjusting Entries
  9. Rent Expense ($6,000 x 10/12)

Prepaid Rent 5,

  1. Unearned Revenue ($5,400 x 4/12)

Service Revenue 1,

  1. Salaries Expense 2,

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,

PROBLEM 4-29A (cont.)

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,

  1. 46,500 1. 2,100 9. 46,000 7. 47,
  2. 20,000 4. 25,000 Bal. 5,0 00
  3. 76,300 5. 6,
    1. 46,000 Salaries Payable Retained Earnings
    41, Bal. 2, Bal. 2 , 
    1. 5,000 1. 2, Bal. 71,5 00 Bal. -0- Dividends
      1. 5, Accounts Rec. Unearned Revenue Bal. 5, Bal. 6,8 00 Bal. 3,
  4. 82,000 8. 76,300 12. 3,600 Service Revenue Bal. 12, Bal. -0- 2. 46, 6. 82, Prepaid Rent Interest Payable 12. 3, Bal. 1,000 14. 1,500 Bal. 132,
  5. 6,00 0 13. 6,000 Bal. 1, Bal. 1,000 Operating Expenses
  6. 47, Land Notes Payable Bal. 47,
  7. 25,000 3. 20, Bal. 25, Bal. 20, Salaries Expense

Bal. 41, Rent Expense

  1. 6 , Bal. 6, Interest 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,

Salaries Expense 41,

Rent Expense 6,

Interest Expense 1, Dec. 31 Retained Earnings 5,

Dividends 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,