DOC

# Chapter 4 B Solutions

By Tim Olson,2014-05-25 16:47
7 views 0
Chapter 4 B SolutionsChap

PROBLEM SET B

Problem 4-1B (15 minutes)

1. A 6. E 11. Z 16. F

2. E 7. Z 12. A 17. D

3. E 8. A 13. B 18. E

4. G 9. C 14. A 19. C

5. A 10. Z 15. C 20. C

Problem 4-2B (90 minutes)

INSTRUCTOR NOTE: Ledger accounts (as prepared per Part 1) are shown after Part 7 as

they would appear after all entries are posted.

Part 2

Transactions for July

July 1 Cash ............................................................... 101 34,000

Buildings ....................................................... 173 175,000

C. Park, Capital...................................... 301 209,000

2 Rent Expense ................................................ 640 1,500

Cash ....................................................... 101 1,500

Paid one month’s rent.

5 Office Supplies ............................................. 124 1,300

Cash ....................................................... 101 1,300

Acquired office supplies.

10 Prepaid Insurance ........................................ 128 3,600

Cash ....................................................... 101 3,600

14 Salaries Expense .......................................... 622 1,280

?McGraw-Hill Companies, 2009

1 Solutions Manual, Chapter 4

Cash ....................................................... 101 1,280

Paid two weeks’ salary.

24 Cash ............................................................... 101 11,500

Storage Fees Earned ............................ 401 11,500

Collected fees from customers.

28 Salaries Expense .......................................... 622 1,320

Cash ....................................................... 101 1,320

Paid two weeks’ salary.

29 Repairs Expense .......................................... 684 250

Cash ....................................................... 101 250

Repaired the roof.

30 Telephone Expense ...................................... 688 850

Cash ....................................................... 101 850

Paid the telephone bill.

31 C. Park, Withdrawals .................................... 302 2,400

Cash ....................................................... 101 2,400

Owner withdrew cash for personal use.

Part 3

SAFE STORAGE CO.

July 31, 2009

No. Account Title Debit Credit 101 Cash ..................................................................... \$ 33,000 106 Accounts receivable .......................................... 0 124 Office supplies .................................................... 1,300 128 Prepaid insurance .............................................. 3,600 173 Buildings ............................................................. 175,000 174 Accum. depreciationBuildings........................ \$ 0

209 Salaries payable ................................................. 0 301 C. Park, Capital ................................................... 209,000 302 C. Park, Withdrawals .......................................... 2,400 401 Storage fees earned ........................................... 11,500 606 Depreciation expenseBuildings ...................... 0

622 Salaries expense ................................................ 2,600

?McGraw-Hill Companies, 2009

2 Solutions Manual, Chapter 4

637 Insurance expense ............................................. 0 640 Rent expense ...................................................... 1,500 650 Office supplies expense .................................... 0 684 Repairs expense ................................................. 250 688 Telephone expense ............................................ 850

Totals ................................................................... \$220,500 \$220,500

Part 4

July 31 Insurance Expense ...........................................637 200

Prepaid Insurance ....................................128 200

To record expired insurance (2/3 x

\$3,600/12 per month).

31 Office Supplies Expense ..................................650 500

Office Supplies .........................................124 500

To record the cost of consumed

supplies (\$1,300 - \$800).

31 Depreciation ExpenseBuildings ...................606 1,750

Accum. DepreciationBuildings ...........174 1,750

To record depreciation.

31 Salaries Expense ...............................................622 570

Salaries Payable ......................................209 570

To record accrued salaries.

31 Accounts Receivable ........................................106 2,350

Storage Fees Earned ...............................401 2,350

To record accrued storage fees.

?McGraw-Hill Companies, 2009

3 Solutions Manual, Chapter 4

Part 5

SAFE STORAGE CO.

Income Statement

For Month Ended July 31, 2009

Storage fees earned ................................... \$13,850 Expenses

Depreciation expenseBuildings ............ \$1,750

Salaries expense ...................................... 3,170

Insurance expense ................................... 200

Rent expense ............................................ 1,500

Office supplies expense .......................... 500

Repairs expense ....................................... 250

Telephone expense .................................. 850

Total expenses ......................................... 8,220

Net income .................................................. \$ 5,630

?McGraw-Hill Companies, 2009

4 Solutions Manual, Chapter 4

Problem 4-2B (Continued)

SAFE STORAGE CO.

Statement of Owner’s Equity

For Month Ended July 31, 2009

C. Park, Capital, July 1, 2009 ..................... \$ 0 Add: Owner’s investment ........................\$209,000

Net income ....................................... 5,630

214,630

Less: Withdrawals ..................................... (2,400)

C. Park, Capital, July 31, 2009 ................... \$212,230

SAFE STORAGE CO.

Balance Sheet

July 31, 2009

Assets

Cash ............................................................. \$ 33,000 Accounts receivable .................................. 2,350 Office supplies ............................................ 800 Prepaid insurance ...................................... 3,400 Buildings ..................................................... \$175,000 Accumulated depreciation--Buildings...... (1,750) 173,250

Total assets ................................................. \$212,800

Liabilities

Salaries payable ......................................... \$ 570

Equity

C. Park, Capital ........................................... 212,230

Total liabilities and equity ......................... \$212,800

?McGraw-Hill Companies, 2009

5 Solutions Manual, Chapter 4

Problem 4-2B (Continued)

Part 6

Closing entries

July 31 Storage Fees Earned ................................. 401 13,850

Income Summary .................................. 901 13,850

To close the revenue account.

31 Income Summary ....................................... 901 8,220

Depreciation ExpBuildings .............. 606 1,750

Salaries Expense .................................. 622 3,170

Insurance Expense... ............................ 637 200

Rent Expense ........................................ 640 1,500

Office Supplies Expense ...................... 650 500

Repairs Expense ................................... 684 250

Telephone Expense .............................. 688 850

To close the expense accounts.

31 Income Summary ....................................... 901 5,630

C. Park, Capital...................................... 301 5,630

To close the Income Summary.

31 C. Park, Capital .......................................... 301 2,400

C. Park, Withdrawals ............................ 302 2,400

To close the withdrawals account.

Part 7

SAFE STORAGE CO.

Post-Closing Trial Balance

July 31, 2009

Debit Credit

Cash ............................................................. \$ 33,000

Accounts receivable .................................. 2,350

Office supplies ............................................ 800

Prepaid insurance ...................................... 3,400

Buildings ..................................................... 175,000

Accumulated depreciationBuildings ...... \$ 1,750

Salaries payable ......................................... 570

L. Plume, Capital ........................................ 212,230

Totals ........................................................... \$214,550 \$214,550

?McGraw-Hill Companies, 2009

6 Solutions Manual, Chapter 4

Problem 4-2B (Continued)

Ledger as of July 31

Cash Acct. No. 101

Date Explanation PR Debit Credit Balance July 1 34,000 34,000

2 1,500 32,500

5 1,300 31,200

10 3,600 27,600

14 1,280 26,320

24 11,500 37,820

28 1,320 36,500

29 250 36,250

30 850 35,400

31 2,400 33,000

Accounts Receivable Acct. No. 106

Date Explanation PR Debit Credit Balance July 31 Adjusting 2,350 2,350

Office Supplies Acct. No. 124

Date Explanation PR Debit Credit Balance July 5 1,300 1,300

Prepaid Insurance Acct. No. 128

Date Explanation PR Debit Credit Balance July 10 3,600 3,600

Buildings Acct. No. 173

Date Explanation PR Debit Credit Balance July 1 175,000 175,000

Accumulated DepreciationBuildings Acct. No. 174

Date Explanation PR Debit Credit Balance July 31 Adjusting 1,750 1,750

Salaries Payable Acct. No. 209

Date Explanation PR Debit Credit Balance July 31 Adjusting 570 570

?McGraw-Hill Companies, 2009

7 Solutions Manual, Chapter 4

Problem 4-2B (Continued)

C. Park, Capital Acct. No. 301

Date Explanation PR Debit Credit Balance July 1 209,000 209,000

July 31 Closing 5,630 214,630

31 Closing 2,400 212,230

C. Park, Withdrawals Acct. No. 302

Date Explanation PR Debit Credit Balance July 31 2,400 2,400

31 Closing 2,400 0

Storage Fees Earned Acct.No. 401

Date Explanation PR Debit Credit Balance July 24 11,500 11,500

31 Closing 13,850 0

Depreciation ExpenseBuildings Acct. No. 606

Date Explanation PR Debit Credit Balance July 31 Adjusting 1,750 1,750

31 Closing 1,750 0

Salaries Expense Acct. No. 622

Date Explanation PR Debit Credit Balance July 14 1,280 1,280

28 1,320 2,600

31 Closing 3,170 0

Insurance Expense Acct. No. 637

Date Explanation PR Debit Credit Balance July 31 Adjusting 200 200

31 Closing 200 0

Rent Expense Acct. No. 640

Date Explanation PR Debit Credit Balance July 2 1,500 1,500

31 Closing 1,500 0

?McGraw-Hill Companies, 2009 8 Solutions Manual, Chapter 4

Problem 4-2B (Concluded)

Office Supplies Expense Acct. No. 650

Date Explanation PR Debit Credit Balance July 31 Adjusting 500 500

31 Closing 500 0

Repairs Expense Acct. No. 684

Date Explanation PR Debit Credit Balance July 29 250 250

31 Closing 250 0

Telephone Expense Acct. No. 688

Date Explanation PR Debit Credit Balance July 30 850 850

31 Closing 850 0

Income Summary Acct. No. 901

Date Explanation PR Debit Credit Balance July 31 Closing 13,850 13,850

31 Closing 8,220 5,630

31 Closing 5,630 0

?McGraw-Hill Companies, 2009

9 Solutions Manual, Chapter 4

Problem 4-3B (90 minutes)

Part 1

GOLDSMITH COMPANY

Income Statement

For Year Ended December 31, 2009

Repair fees earned ..................................... \$91,500 Expenses

Depreciation expenseEquipment ........ \$ 8,500

Wages expense ........................................ 41,500

Insurance expense ................................... 1,000

Rent expense ............................................ 11,400

Store supplies expense ........................... 4,400

Utilities expense ....................................... 3,000

Total expenses ......................................... 69,800

Net income .................................................. \$21,700

GOLDSMITH COMPANY

Statement of Owner’s Equity

For Year Ended December 31, 2009

N. Goldsmith, Capital, December 31, 2008 ... \$33,400 Add: Net income ............................................ 21,700

55,100

Less: Withdrawals .......................................... (16,500)

N. Goldsmith, Capital, December 31, 2009 ... \$38,600

?McGraw-Hill Companies, 2009

10 Solutions Manual, Chapter 4

Report this document

For any questions or suggestions please email
cust-service@docsford.com