Exercise 3-5 Determine the amount of net income [LO1]
During the course of your examination of the financial statements of Trojan Corporation for the year ended
December 31, 2012, you come across several items needing
...
Exercise 3-5 Determine the amount of net income [LO1]
During the course of your examination of the financial statements of Trojan Corporation for the year ended
December 31, 2012, you come across several items needing further consideration. Currently, net income is
$100,000.
a. An insurance policy covering 12 months was purchased on October 1, 2012, for $18,000. The entire
amount was debited to Prepaid Insurance and no adjusting entry was made for this item in 2012.
b. During 2012, the company received a $2,300 cash advance from a customer for services to be performed
in 2013. The $2,300 was incorrectly credited to Service Revenue.
c. There were no supplies listed in the balance sheet under assets. However, you discover that supplies
costing $2,000 were on hand at December 31, 2012.
d. Trojan borrowed $60,000 from a local bank on September 1, 2012. Principal and interest at 12% will be
paid on August 31, 2013. No accrual was made for interest in 2012.
Required:
Using the information in a. through d. above, determine the proper amount of net income as of December
31, 2012. (Omit the "$" sign in your response.)
Net income $ 92,800
Worksheet
Exercise 3-5 Determine the amount of net
income [LO1]
Learning Objective: 03-01 Record revenues
using the revenue recognition principle and
expenses using the matching principle.
Exercise 3-5 Determine the amount of net income [LO1]
During the course of your examination of the financial statements of Trojan Corporation for the year ended
December 31, 2012, you come across several items needing further consideration. Currently, net income is
$100,000.
a. An insurance policy covering 12 months was purchased on October 1, 2012, for $18,000. The entire
amount was debited to Prepaid Insurance and no adjusting entry was made for this item in 2012.
b. During 2012, the company received a $2,300 cash advance from a customer for services to be performed
in 2013. The $2,300 was incorrectly credited to Service Revenue.
c. There were no supplies listed in the balance sheet under assets. However, you discover that supplies
costing $2,000 were on hand at December 31, 2012.
d. Trojan borrowed $60,000 from a local bank on September 1, 2012. Principal and interest at 12% will be
paid on August 31, 2013. No accrual was made for interest in 2012.
Required:
Using the information in a. through d. above, determine the proper amount of net income as of December
31, 2012. (Omit the "$" sign in your response.)
Net income
$ 92,800 ± 0.05%
Explanation:
Net income (unadjusted) $100,000
a. Record insurance expense of $1,500 per month (4,500)
b. Reclassify service revenue as unearned revenue (liability) (2,300)
c. Reclassify supplies expense as supplies (asset) 2,000
d. Record interest expense of $600 per month (1.00% of $60,000) (2,400)
Net income (adjusted) $ 92,800
2.
aw ard:
4 out of
4 points
Exercise 3-7 Record adjusting entries [LO3]
Golden Eagle Company prepares monthly financial statements for its bank. The November 30 and
December 31 adjusted trial balances include the following account information:
November 30 December 31
Debit Credit Debit Credit
Supplies 2,000 4,000
Prepaid insurance 5,000 4,000
Salaries payable 13,000 17,500
Unearned rent revenue 2,000 1,000
The following information also is known:
a. Purchases of supplies in December total $4,600.
b. No insurance payments are made in December.
c. $13,000 is paid to employees during December for November salaries.
d. On November 1, a tenant pays Golden Eagle $3,000 in advance rent for the period November through
January. Unearned Revenue is credited.
Required:
Show the adjusting entries that were made for supplies, prepaid insurance, salaries payable, and unearned
revenue on December 31. (Omit the "$" sign in your response.)
Event General Journal Debit Credit
a. Supplies expense 2,600
Supplies 2,600
b. Insurance expense 1,000
Prepaid insurance 1,000
c. Salaries expense 17,500
Salaries payable 17,500
d. Unearned revenue 1,000
Service revenue 1,000
Worksheet Exercise 3-7 Record adjusting entries [LO3]
Learning Objective: 03-03 Demonstrate the
purposes and recording of adjusting entries.
Exercise 3-7 Record adjusting entries [LO3]
Golden Eagle Company prepares monthly financial statements for its bank. The November 30 and
December 31 adjusted trial balances include the following account information:
November 30 December 31
Debit Credit Debit Credit
Supplies 2,000 4,000
Prepaid insurance 5,000 4,000
Salaries payable 13,000 17,500
Unearned rent revenue 2,000 1,000
The following information also is known:
a. Purchases of supplies in December total $4,600.
b. No insurance payments are made in December.
c. $13,000 is paid to employees during December for November salaries.
d. On November 1, a tenant pays Golden Eagle $3,000 in advance rent for the period November through
January. Unearned Revenue is credited.
Required:
Show the adjusting entries that were made for supplies, prepaid insurance, salaries payable, and unearned
revenue on December 31. (Omit the "$" sign in your response.)
Event General Journal Debit Credit
a. Supplies expense 2,600
Supplies
3.
aw ard:
4 out of
4 points
aw ard:
Supplies 2,600
b. Insurance expense 1,000
Prepaid insurance 1,000
c. Salaries expense 17,500
Salaries payable 17,500
d. Unearned revenue 1,000
Service revenue 1,000
Exercise 3-8 Record year-end adjusting entries [LO3]
Consider the following transactions for Huskies Insurance Company:
a. Equipment costing $43,000 is purchased at the beginning of the year for cash. Depreciation on the
equipment is $6,500 per year.
b. On June 30, the company lends its chief financial officer $45,000; principal and interest at 7% are due in
one year.
c. On October 1, the company receives $15,000 from a customer for a one-year property insurance policy.
Unearned Revenue is credited.
Required:
For each item, record the necessary adjusting entry for Huskies Insurance at its year-end of December 31.
No adjusting entries were made during the year. (Do not round your intermediate calculations. Omit
the "$" sign in your response.)
Event General Journal Debit Credit
a. Depreciation expense 6,500
Accumulated depreciation 6,500
b. Interest receivable 1,575
Interest revenue 1,575
c. Unearned revenue 3,750
Service revenue 3,750
Worksheet
Exercise 3-8 Record year-end adjusting entries
[LO3]
Learning Objective: 03-03 Demonstrate the
purposes and recording of adjusting entries.
Exercise 3-8 Record year-end adjusting entries [LO3]
Consider the following transactions for Huskies Insurance Company:
a. Equipment costing $43,000 is purchased at the beginning of the year for cash. Depreciation on the
equipment is $6,500 per year.
b. On June 30, the company lends its chief financial officer $45,000; principal and interest at 7% are due in
one year.
c. On October 1, the company receives $15,000 from a customer for a one-year property insurance policy.
Unearned Revenue is credited.
Required:
For each item, record the necessary adjusting entry for Huskies Insurance at its year-end of December 31.
No adjusting entries were made during the year. (Do not round your intermediate calculations. Omit
the "$" sign in your response.)
Event General Journal Debit Credit
a. Depreciation expense 6,500
Accumulated depreciation 6,500
b. Interest receivable 1,575
Interest revenue 1,575
c. Unearned revenue 3,750
Service revenue 3,750
4.
aw ard:
4 out of
4 points
5.
aw ard:
3 out of
3 points
Exercise 3-9 Calculate the effects of adjusting entries on net income [LO3]
Consider the following transactions for Huskies Insurance Company:
a. Equipment costing $46,000 is purchased at the beginning of the year for cash. Depreciation on the
equipment is $6,500 per year.
b. On June 30, the company lends its chief financial officer $45,000; principal and interest at 6% are due in
one year.
c. On October 1, the company receives $12,000 from a customer for a one-year property insurance policy.
Unearned Revenue is credited.
Required:
Indicate by how much net income in the income statement is higher or lower if the adjustment is not
recorded. (Do not round your intermediate calculations. Input all amounts as positive values. Omit
the "$" sign in your response.)
Transaction Net Income
(a) $ 6,500 Higher
(b) $ 1,350 Lower
(c) $ 3,000 Lower
Worksheet
Exercise 3-9 Calculate the effects of adjusting
entries on net income [LO3]
Learning Objective: 03-03 Demonstrate the
purposes and recording of adjusting entries.
Exercise 3-9 Calculate the effects of adjusting entries on net income [LO3]
Consider the following transactions for Huskies Insurance Company:
a. Equipment costing $46,000 is purchased at the beginning of the year for cash. Depreciation on the
equipment is $6,500 per year.
b. On June 30, the company lends its chief financial officer $45,000; principal and interest at 6% are due in
one year.
c. On October 1, the company receives $12,000 from a customer for a one-year property insurance policy.
Unearned Revenue is credited.
Required:
Indicate by how much net income in the income statement is higher or lower if the adjustment is not
recorded. (Do not round your intermediate calculations. Input all amounts as positive values. Omit
the "$" sign in your response.)
Transaction Net Income
(a) $ 6,500 Higher
(b) $ 1,350 Lower
(c) $ 3,000 Lower
Explanation:
If the adjusting entry is NOT made:
Revenues − Expenses = Net Income
(a) $ 0 − −$ 6,500 = +$6,500
(b) − 1,350 − 0 = −1,350
(c) − 3,000 − 0 = −3,000
Total +$2,150
Exercise 3-11 Calculate the effects of adjusting entries on the accounting equation [LO3, 4]
Consider the following situations for Shocker:
a. On November 28, 2012, Shocker receives a $3,300 payment from a customer for services to be rendered
evenly over the next three months. Unearned Revenue is credited.
b. On December 1, 2012, the company pays a local radio station $2,700 for 30 radio ads that were to be
c aired, 10 per month, throughout December, January, and February. Prepaid Advertising is debited. . Employee salaries for the month of December totaling $7,530 will be paid on January 7, 2013.
6.
aw ard:
3 out of
3 points
c. Employee salaries for the month of December totaling $7,530 will be paid on January 7, 2013.
d. On August 31, 2012, Shocker borrows $59,100 from a local bank. A note is signed with principal and 8%
interest to be paid on August 31, 2013.
Required:
For each of the adjustments recorded indicate by how much the assets, liabilities, and stockholders' equity
in the December 31, 2012, balance sheet is higher or lower if the adjustment is not recorded. (Do not
round your intermediate calculations. Input all amounts as positive values. Leave no cells blank -
be certain to enter "0" wherever required. Omit the "$" sign in your response.)
Assets = Liabilities + Stockholders' Equity
a. $ 0 None $ 1,100 Higher $ 1,100 Lower
b. 900 Higher 0 None 900 Higher
c. 0 None 7,530 Lower 7,530 Higher
d. 0 None 1,576 Lower 1,576 Higher
Total $ 900 Higher $ 8,006 Lower $ 8,906 Higher
rev: 03-10-2011
Worksheet
Learning Objective: 03-03 Demonstrate the
purposes and recording of adjusting entries.
Exercise 3-11 Calculate the effects of adjusting
entries on the accounting equation [LO3, 4]
Learning Objective: 03-04 Post adjusting
entries and prepare an adjusted trial balance.
Exercise 3-11 Calculate the effects of adjusting entries on the accounting equation [LO3, 4]
Consider the following situations for Shocker:
a. On November 28, 2012, Shocker receives a $3,300 payment from a customer for services to be rendered
evenly over the next three months. Unearned Revenue is credited.
b. On December 1, 2012, the company pays a local radio station $2,700 for 30 radio ads that were to be
aired, 10 per month, throughout December, January, and February. Prepaid Advertising is debited.
c. Employee salaries for the month of December totaling $7,530 will be paid on January 7, 2013.
d. On August 31, 2012, Shocker borrows $59,100 from a local bank. A note is signed with principal and 8%
interest to be paid on August 31, 2013.
Required:
For each of the adjustments recorded indicate by how much the assets, liabilities, and stockholders' equity
in the December 31, 2012, balance sheet is higher or lower if the adjustment is not recorded. (Do not
round your intermediate calculations. Input all amounts as positive values. Leave no cells blank -
be certain to enter "0" wherever required. Omit the "$" sign in your response.)
Assets = Liabilities + Stockholders' Equity
a. $ 0 None $ 1,100 Higher $ 1,100 Lower
b. 900 Higher 0 None 900 Higher
c. 0 None 7,530 Lower 7,530 Higher
d. 0 None 1,576 Lower 1,576 Higher
Total $ 900 Higher $ 8,006 Lower $ 8,906 Higher
rev: 03-10-2011
Exercise 3-12 Record year-end adjusting entries [LO3]
Below are transactions for Wolverine Company during 2012.
a. On December 1, 2012, Wolverine receives $2,400 cash from a company that is renting office space from
Wolverine. The payment, representing rent for December and January, is credited to Unearned Revenue.
b. Wolverine purchases a one-year property insurance policy on July 1, 2012, for $11,000. The payment is
debited to Prepaid Insurance for the entire amount.
c. Employee salaries of $2,000 for the month of December will be paid in early January 2013.
d. On November 1, 2012, the company borrows $9,000 from a bank. The loan requires principal and interest
at 12% to be paid on October 30, 2013.
e. Office supplies at the beginning of 2012 total $960. On August 15, Wolverine purchases an additional
$2,000 of office supplies, debiting the Supplies account. By the end of the year, $500 of office supplies
remains.
Required:
7.
aw ard:
3 out of
3 points
Required:
Record the necessary adjusting entries at December 31, 2012, for Wolverine Company. You do not need to
record transactions made during the year. Assume that no financial statements were prepared during the
year and no adjusting entries were recorded. (Do not round your intermediate calculations. Round
your answers to the nearest dollar amount. Omit the "$" sign in your response.)
Event General Journal Debit Credit
a. Unearned revenue 1,200
Service revenue 1,200
b. Insurance expense 5,500
Prepaid insurance 5,500
c. Salaries expense 2,000
Salaries payable 2,000
d. Interest expense 180
Interest payable 180
e. Supplies expense 2,460
Supplies 2,460
Worksheet
Exercise 3-12 Record year-end adjusting
entries [LO3]
Learning Objective: 03-03 Demonstrate the
purposes and recording of adjusting entries.
Exercise 3-12 Record year-end adjusting entries [LO3]
Below are transactions for Wolverine Company during 2012.
a. On December 1, 2012, Wolverine receives $2,400 cash from a company that is renting office space from
Wolverine. The payment, representing rent for December and January, is credited to Unearned Revenue.
b. Wolverine purchases a one-year property insurance policy on July 1, 2012, for $11,000. The payment is
debited to Prepaid Insurance for the entire amount.
c. Employee salaries of $2,000 for the month of December will be paid in early January 2013.
d. On November 1, 2012, the company borrows $9,000 from a bank. The loan requires principal and interest
at 12% to be paid on October 30, 2013.
e. Office supplies at the beginning of 2012 total $960. On August 15, Wolverine purchases an additional
$2,000 of office supplies, debiting the Supplies account. By the end of the year, $500 of office supplies
remains.
Required:
Record the necessary adjusting entries at December 31, 2012, for Wolverine Company. You do not need to
record transactions made during the year. Assume that no financial statements were prepared during the
year and no adjusting entries were recorded. (Do not round your intermediate calculations. Round
your answers to the nearest dollar amount. Omit the "$" sign in your response.)
Event General Journal Debit Credit
a. Unearned revenue 1,200
Service revenue 1,200
b. Insurance expense 5,500
Prepaid insurance 5,500
c. Salaries expense 2,000
Salaries payable 2,000
d. Interest expense 180
Interest payable 180
e. Supplies expense 2,460
Supplies 2,460
Exercise 3-13 Record year-end adjusting entries [LO3]
Below are transactions for Hurricane Company during 2012.
a. On October 1, 2012, Hurricane lends $6,800 to another company. The other company signs a note
indicating principal and 8% interest will be paid to Hurricane on September 30, 2013.
b. On November 1, 2012, Hurricane pays its landlord $3,900 representing rent for the months of November
b. On November 1, 2012, Hurricane pays its landlord $3,900 representing rent for the months of November
through January. The payment is debited to Prepaid Rent for the entire amount.
c. On August 1, 2012, Hurricane collects $15,600 in advance from another company that is renting a portion
of Hurricane’s factory. The $15,600 represents one year's rent and the entire amount is credited to
Unearned Revenue.
d. Depreciation on machinery is $4,300 for the year.
e. Salaries for the year earned by employees but not paid to them or recorded are $5,000.
f. Hurricane begins the year with $1,100 in supplies. During the year, the company purchases $4,600 in
supplies and debits that amount to Supplies. At year-end, supplies costing $2,000 remain on hand.
Required:
Record the necessary adjusting entries at December 31, 2012, for Hurricane Company for each of the
situations. Assume that no financial statements were prepared during the year and no adjusting entries
were recorded. (Do not round your intermediate calculations. Omit the "$" sign in your response.)
Event General Journal Debit Credit
a. Interest receivable 136
Interest revenue 136
b. Rent expense 2,600
Prepaid rent 2,600
c. Unearned revenue 6,500
Service revenue 6,500
d. Depreciation expense 4,300
Accumulated depreciation 4,300
e. Salaries expense 5,000
Salaries payable 5,000
f. Supplies expense 3,700
Supplies 3,700
Worksheet
Exercise 3-13 Record year-end adjusting
entries [LO3]
Learning Objective: 03-03 Demonstrate the
purposes and recording of adjusting entries.
Exercise 3-13 Record year-end adjusting entries [LO3]
Below are transactions for Hurricane Company during 2012.
a. On October 1, 2012, Hurricane lends $6,800 to another company. The other company signs a note
indicating principal and 8% interest will be paid to Hurricane on September 30, 2013.
b. On November 1, 2012, Hurricane pays its landlord $3,900 representing rent for the months of November
through January. The payment is debited to Prepaid Rent for the entire amount.
c. On August 1, 2012, Hurricane collects $15,600 in advance from another company that is renting a portion
of Hurricane’s factory. The $15,600 represents one year's rent and the entire amount is credited to
Unearned Revenue.
d. Depreciation on machinery is $4,300 for the year.
e. Salaries for the year earned by employees but not paid to them or recorded are $5,000.
f. Hurricane begins the year with $1,100 in supplies. During the year, the company purchases $4,600 in
supplies and debits that amount to Supplies. At year-end, supplies costing $2,000 remain on hand.
Required:
Record the necessary adjusting entries at December 31, 2012, for Hurricane Company for each of the
situations. Assume that no financial statements were prepared during the year and no adjusting entries
were recorded. (Do not round your intermediate calculations. Omit the "$" sign in your response.)
Event General Journal Debit Credit
a. Interest receivable 136
Interest revenue 136
b. Rent expense 2,600
Prepaid rent 2,600
c. Unearned revenue 6,500
Service revenue 6,500
d. Depreciation expense 4,300
Accumulated depreciation 4,300
e. Salaries expense 5,000
Salaries payable
5,000
8.
aw ard:
3 out of
3 points
9.
aw ard:
3 out of
3 points
f. Supplies expense 3,700
Supplies 3,700
Exercise 3-15 Calculate the balance of retained earnings [LO5]
Below are the restated amounts of net income and retained earnings for Volunteers Inc. and Raiders Inc. for
the period 2003−2012. Volunteers began operations in 2004.
Calculate the balance of retained earnings each year for each company. Neither company paid dividends
during this time.(Enter your answers in millions. Amounts in parentheses do not require a minus
sign in front of them. Omit the "$" sign in your response.)
VOLUNTEERS INC.
($ in millions)
RAIDERS INC.
($ in millions)
Year
Net Income
(Loss)
Retained
Earnings
Net Income
(Loss)
Retained
Earnings
2003 — $0 $ 32 $7
2004 $ 20 20 (55) (48 )
2005 (5) 15 69 21
2006 26 41 43 64
2007 130 171 92 156
2008 25 196 127 283
2009 (155) 41 (52) 231
2010 565 606 63 294
2011 349 955 96 390
2012 379 1,334 149 539
Worksheet
Exercise 3-15 Calculate the balance of retained
earnings [LO5]
Learning Objective: 03-05 Prepare financial
statements using the adjusted trial balance.
Exercise 3-15 Calculate the balance of retained earnings [LO5]
Below are the restated amounts of net income and retained earnings for Volunteers Inc. and Raiders Inc. for
the period 2003−2012. Volunteers began operations in 2004.
Calculate the balance of retained earnings each year for each company. Neither company paid dividends
during this time.(Enter your answers in millions. Amounts in parentheses do not require a minus
sign in front of them. Omit the "$" sign in your response.)
VOLUNTEERS INC.
($ in millions)
RAIDERS INC.
($ in millions)
Year
Net Income
(Loss)
Retained
Earnings
Net Income
(Loss)
Retained
Earnings
2003 — $0 $ 32 $7
2004 $ 20 20 (55) ( 48 )
2005 (5) 15 69 21
2006 26 41 43 64
2007 130 171 92 156
2008 25 196 127 283
2009 (155) 41 (52) 231
2010 565 606 63 294
2011 349 955 96 390
2012 379 1,334 149 539
Exercise 3-17 Record closing entries [LO6]
Seminoles Corporation’s fiscal year-end is December 31, 2012. The following is a partial adjusted trial
Seminoles Corporation’s fiscal year-end is December 31, 2012. The following is a partial adjusted trial
balance as of December 31.
Debit Credit
Retained earnings $26,000
Dividends $ 2,300
Service revenue 48,000
Interest revenue 5,900
Salaries expense 12,900
Rent expense 3,100
Advertising expense 1,700
Depreciation expense 9,000
Interest expense 2,400
Required:
Prepare the necessary closing entries. (Omit the "$" sign in your response.)
Date General Journal Debit Credit
Dec. 31, 2012 Service revenue
48,000
Interest revenue
5,900
Retained earnings 53,900
Retained earnings 29,100
Interest expense
2,400
Rent expense
3,100
Salaries expense
12,900
Depreciation expense
9,000
Advertising expense
1,700
Retained earnings 2,300
Dividends 2,300
Worksheet Exercise 3-17 Record closing entries [LO6]
Learning Objective: 03-06 Demonstrate the
purposes and recording of closing entries.
Exercise 3-17 Record closing entries [LO6]
Seminoles Corporation’s fiscal year-end is December 31, 2012. The following is a partial adjusted trial
balance as of December 31.
Debit Credit
Retained earnings $26,000
Dividends $ 2,300
Service revenue 48,000
Interest revenue 5,900
Salaries expense 12,900
Rent expense 3,100
Advertising expense 1,700
Depreciation expense 9,000
Interest expense 2,400
Required:
Prepare the necessary closing entries. (Omit the "$" sign in your response.)
Date General Journal Debit Credit
Dec. 31, 2012 Service revenue 48,000
Interest revenue 5,900
Retained earnings 53,900
Retained earnings 29,100
Salaries expense 12,900
Rent expense 3,100
Advertising expense 1,700
10.
aw ard:
3 out of
3 points
Depreciation expense 9,000
Interest expense 2,400
Retained earnings 2,300
Dividends 2,300
Exercise 3-18 Record closing entries [LO6]
Laker Incorporated's fiscal year-end is December 31, 2012. The following is an adjusted trial balance as of
December 31.
Accounts Debit Credit
Cash $ 14,000
Supplies 39,000
Prepaid rent 25,000
Accounts payable $ 3,500
Notes payable 24,000
Common stock 41,000
Retained earnings 4,000
Dividends 4,000
Service revenue 64,000
Salaries expense 21,500
Advertising expense 15,000
Rent expense 9,500
Utilities expense 8,500
Totals $136,500 $ 136,500
Required:
Prepare the necessary closing entries. (Omit the "$" sign in your response.)
Date General Journal Debit Credit
Dec. 31, 2012 Service revenue 64,000
Retained earnings 64,000
Retained earnings 54,500
Salaries expense
21,500
Advertising expense
15,000
Rent expense
9,500
Utilities expense
8,500
Retained earnings 4,000
Dividends 4,000
Worksheet Exercise 3-18 Record closing entries [LO6]
Learning Objective: 03-06 Demonstrate the
purposes and recording of closing entries.
Exercise 3-18 Record closing entries [LO6]
Laker Incorporated's fiscal year-end is December 31, 2012. The following is an adjusted trial balance as of
December 31.
Accounts Debit Credit
Cash $ 14,000
Supplies 39,000
Prepaid rent 25,000
Accounts payable $ 3,500
Notes payable 24,000
Common stock 41,000
Retained earnings 4,000
Dividends 4,000
11.
aw ard:
3 out of
3 points
Dividends 4,000
Service revenue 64,000
Salaries expense 21,500
Advertising expense 15,000
Rent expense 9,500
Utilities expense 8,500
Totals $136,500 $ 136,500
Required:
Prepare the necessary closing entries. (Omit the "$" sign in your response.)
Date General Journal Debit Credit
Dec. 31, 2012 Service revenue 64,000
Retained earnings 64,000
Retained earnings 54,500
Salaries expense 21,500
Advertising expense 15,000
Rent expense 9,500
Utilities expense 8,500
Retained earnings 4,000
Dividends 4,000
Exercise 3-19 Record closing entries and a post-closing trial balance [LO6, 7]
[The following information applies to the questions displayed below.]
The December 31, 2012, adjusted trial balance for Blue Hens Corporation is presented below.
Accounts Debit Credit
Cash $ 12,900
Accounts receivable 154,000
Prepaid rent 6,700
Supplies 26,300
Equipment 317,000
Accumulated depreciation $117,000
Accounts payable 9,100
Salaries payable 9,200
Interest payable 2,700
Notes payable (due in two years) 29,300
Common stock 170,000
Retained earnings 49,600
Service revenue 470,900
Salaries expense 295,000
Rent expense 13,900
Depreciation expense 28,700
Interest expense 3,300
Totals $857,800 $857,800
Section Break
Exercise 3-19 Record closing entries and a postclosing trial balance [LO6, 7]
Exercise 3-19 Part 1
Required:
1. Record the necessary closing entries at December 31, 2012. (Omit the "$" sign in your response.)
Date General Journal Debit Credit
Dec. 31 Service revenue 470,900
12.
aw ard:
3 out of
3 points
Dec. 31 Service revenue 470,900
Retained earnings 470,900
Retained earnings 340,900
Salaries expense
295,000
Rent expense
13,900
Depreciation expense
28,700
Interest expense
3,300
Worksheet
Learning Objective: 03-06 Demonstrate the
purposes and recording of closing entries.
Exercise 3-19 Part 1
Learning Objective: 03-07 Post closing entries
and prepare a post-closing trial balance.
Exercise 3-19 Part 1
Required:
1. Record the necessary closing entries at December 31, 2012. (Omit the "$" sign in your response.)
Date General Journal Debit Credit
Dec. 31 Service revenue 470,900
Retained earnings 470,900
Retained earnings 340,900
Salaries expense 295,000
Rent expense 13,900
Depreciation expense 28,700
Interest expense 3,300
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