Grand Canyon acc370 week 2 assignment

E3-1 (Transaction Analysis—Service Company)Beverly Crusher is a licensed CPA. During the first month of operations of her business (a sole proprietorship), the following events and transactions occurred.

April 2 Invested $32,000 cash and equipment valued at $14,000 in the business.

2 Hired a secretary-receptionist at a salary of $290 per week payable monthly.

3 Purchased supplies on account $700. (Debit an asset account.)

7 Paid office rent of $600 for the month.

11 Completed a tax assignment and billed client $1,100 for services rendered. (Use Service Revenue account.)

12 Received $3,200 advance on a management consulting engagement.

17 Received cash of $2,300 for services completed for Ferengi Co.

21 Paid insurance expense $110.

30 Paid secretary-receptionist $1,160 for the month.

30 A count of supplies indicated that $120 of supplies had been used.

30 Purchased a new computer for $6,100 with personal funds. (The computer will be used exclusively for business purposes.)

Instructions

Journalize the transactions in the general journal. (Omit explanations.)

E3-2 (Corrected Trial Balance)The trial balance of Wanda Landowska Company (shown on the next page) does not balance. Your review of the ledger reveals the following. (a) Each account had a normal balance. (b) The debit footings in Prepaid Insurance, Accounts Payable, and Property Tax Expense were each understated $100. (c) A transposition error was made in Accounts Receivable and Service Revenue; the correct balances for Accounts Receivable and Service Revenue are $2,750 and $6,690, respectively. (d) A debit posting to Advertising Expense of $300 was omitted. (e) A $1,500 cash drawing by the owner was debited to Owner’s Capital and credited to Cash.

WANDA LANDOWSKA COMPANY

TRIALBALANCE

APRIL30, 2014

Debit Credit

Cash $ 4,800

Accounts Receivable 2,570

Prepaid Insurance 700

Equipment $ 8,000

Accounts Payable 4,500

Property Taxes Payable 560

Owner’s Capital 11,200

Service Revenue 6,960

Salaries and Wages Expense 4,200

Advertising Expense 1,100

Property Tax Expense 800

$ 20,890 $ 24,500

Instructions

Prepare a correct trial balance.

E3-6 (Adjusting Entries)Karen Weller, D.D.S., opened a dental practice on January 1, 2014. During the first month of operations, the following transactions occurred.

1.Performed services for patients who had dental plan insurance. At January 31, $750 of such services was performed but not yet billed to the insurance companies.

2.Utility expenses incurred but not paid prior to January 31 totaled $520.

3.Purchased dental equipment on January 1 for $80,000, paying $20,000 in cash and signing a $60,000, 3-year note payable. The equipment depreciates $400 per month. Interest is $500 per month.

4.Purchased a one-year malpractice insurance policy on January 1 for $12,000.

5.Purchased $1,600 of dental supplies. On January 31, determined that $500 of supplies were on hand.

Instructions

Prepare the adjusting entries on January 31. (Omit explanations.) Account titles are Accumulated Depreciation—Equipment, Depreciation Expense, Service Revenue, Accounts Receivable, Insurance Expense, Interest Expense, Interest Payable, Prepaid Insurance, Supplies, Supplies Expense, Utilities Expense, and Accounts Payable.

E3-12 (Prepare Financial Statements)Santo Design Agency was founded by Thomas Grant in January

2008. Presented below is the adjusted trial balance as of December 31, 2014.

SANTO DESIGN AGENCY

ADJUSTEDTRIALBALANCE

DECEMBER31, 2014

Dr. Cr.

Cash $ 11,000

Accounts Receivable 21,500

Supplies 5,000

Prepaid Insurance 2,500

Equipment 60,000

Accumulated Depreciation—Equipment $ 35,000

Accounts Payable 5,000

Interest Payable 150

Notes Payable 5,000

Unearned Service Revenue 5,600

Salaries and Wages Payable 1,300

Common Stock 10,000

Retained Earnings 3,500

Service Revenue 61,500

Salaries and Wages Expense 11,300

Insurance Expense 850

Interest Expense 500

Depreciation Expense 7,000

Supplies Expense 3,400

Rent Expense 4,000

$ 127,050 $ 127,050

Instructions

(a)Prepare an income statement and a statement of retained earnings for the year ending December 31, 2014, and an unclassified balance sheet at December 31.

(b)Answer the following questions.

(1)If the note has been outstanding 6 months, what is the annual interest rate on that note?

(2)If the company paid $17,500 in salaries in 2014, what was the balance in Salaries and Wages Payable on December 31, 2013?

P3-4 (Financial Statements, Adjusting and Closing Entries)The trial balance of Bellemy Fashion Center contained the following accounts at November 30, the end of the company’s fiscal year.

BELLEMY FASHION CENTER

TRIALBALANCE

NOVEMBER30, 2014

Debit Credit

Cash $ 28,700

Accounts Receivable 33,700

Inventory 45,000

Supplies 5,500

Equipment 133,000

Accumulated Depreciation—Equipment $ 24,000

Notes Payable 51,000

Accounts Payable 48,500

Common Stock 90,000

Retained Earnings 8,000

Sales Revenue 757,200

Sales Returns and Allowances 4,200

Cost of Goods Sold 495,400

Salaries and Wages Expense 140,000

Advertising Expense 26,400

Utilities Expenses 14,000

Maintenance and Repairs Expense 12,100

Delivery Expense 16,700

Rent Expense 24,000

$ 978,700 $ 978,700

Adjustment data:

1.Supplies on hand totaled $1,500.

2.Depreciation is $15,000 on the equipment.

3.Interest of $11,000 is accrued on notes payable at November 30.

Other data:

1.Salaries expense is 70% selling and 30% administrative.

2.Rent expense and utilities expenses are 80% selling and 20% administrative.

3.$30,000 of notes payable are due for payment next year.

4.Maintenance and repairs expense is 100% administrative.

Instructions

(a)Journalize the adjusting entries.

(b)Prepare an adjusted trial balance.

(c)Prepare a multiple-step income statement and retained earnings statement for the year and a classified balance sheet as of November 30, 2014.

(d)Journalize the closing entries.

(e)Prepare a post-closing trial balance.

P3-9 (Adjusting and Closing)Presented below is the trial balance of the Crestwood Golf Club, Inc. as of

December 31. The books are closed annually on December 31.

CRESTWOOD GOLF CLUB, INC.

TRIALBALANCE

DECEMBER31

Debit Credit

Cash $ 15,000

Accounts Receivable 13,000

Allowance for Doubtful Accounts $ 1,100

Prepaid Insurance 9,000

Land 350,000

Buildings 120,000

Accumulated Depreciation—Buildings 38,400

Equipment 150,000

Accumulated Depreciation—Equipment 70,000

Common Stock 400,000

Retained Earnings 82,000

Dues Revenue 200,000

Green Fees Revenue 5,900

Rent Revenue 17,600

Utilities Expenses 54,000

Salaries and Wages Expense 80,000

Maintenance and Repairs Expense 24,000

$ 815,000 $ 815,000

Instructions

(a)Enter the balances in ledger accounts. Allow five lines for each account.

(b)From the trial balance and the information given below, prepare annual adjusting entries and post to the ledger accounts. (Omit explanations.)

(1)The buildings have an estimated life of 30 years with no salvage value (straight-line method).

(2)The equipment is depreciated at 10% per year.

(3)Insurance expired during the year $3,500.

(4)The rent revenue represents the amount received for 11 months for dining facilities. The December rent has not yet been received.

(5)It is estimated that 12% of the accounts receivable will be uncollectible.

(6)Salaries and wages earned but not paid by December 31, $3,600.

(7)Dues received in advance from members $8,900.

(c)Prepare an adjusted trial balance.

(d)Prepare closing entries and post.