Journalize the annual adjusting entries

Reference no: EM13913158

P1-3B Shaws Garden was started on May 1 with an investment of $45,000 cash. Following are the assets, liabilities, and common stock of the company on May 31, 2014, and the revenues and expenses for the month of May, its first month of operations.

Accounts receivable $ 8,400 Notes payable $26,000

Service revenue 10,400 Salaries and wages expense 1,900

Advertising expense 1,800 Equipment 58,800

Accounts payable 4,400 Maintenance and repairs expense 2,100

Cash 10,800 Insurance expense 400

Common stock 45,000

No additional common stock was issued in May, but a dividend of $1,600 in cash was paid.

Instructions

(a) Prepare an income statement and a retained earnings statement for the month of May and a balance sheet at May 31, 2014.

(b) Briefly discuss whether the company first month of operations was a success.

P3-4B Bee? eaters RV Park was started on April 1 by Sarah Rhodes. These selected events and transactions occurred during April.

Apr. 1 Stockholders invested $100,000 cash in the business in exchange ?or common stock.

4 Purchased land costing $250,000 ?or cash.

8 Purchased advertising in local newspaper ?or $1,200 on account.

11 Paid salaries to employees $3,000.

12 Hired park manager at a salary o? $3,600 per month, e??ective May 1.

13 Paid $7,200 ?or a 1-year insurance policy.

17 Paid $600 cash dividends.

20 Received $6,000 in cash ?rom customers ?or admission ?ees.

25 Sold 100 coupon books ?or $90 each. Each book contains ten coupons that

entitle the holder to one admission to the park. (Hint: The revenue should not be recognized until the coupons are used.)

30 Received $7,900 in cash ?rom customers ?or admission ?ees.

30 Paid $400 o? the balance owed ?or the advertising purchased on account on

April 8.

The company uses the ?ollowing accounts: Cash, Prepaid Insurance, Land, Accounts Payable, Unearned Service Revenue, Common Stock, Dividends, Service Revenue, Advertising Expense, and Salaries and Wages Expense.

Instructions

Journalize the April transactions, including explanations. (Note: Bee?eaters RV Park records admission revenue as service revenue.)

P4-4B AbDulla Advertising Agency was founded by Miriam AbDulla in January 2009. Presented here are both the adjusted and unadjusted trial balances as of December 31, 2014.

ABDULLA ADVERTISING AGENCY

Trial Balance

December 31, 2014

Unadjusted Adjusted

Dr. Cr. Dr. Cr.

Cash $ 11,000 $ 11,000

Accounts Receivable 16,000 19,000

Supplies 9,400 7,000

Prepaid Insurance 3,350 1,790

Equipment 60,000 60,000

Accumulated Depreciation

Equipment $ 25,000 $ 30,000

Notes Payable 8,000 8,000

Accounts Payable 2,000 2,000

Interest Payable 0 560

Unearned Service Revenue 5,000 3,100

Salaries and Wages Payable 0 820

Common Stock 20,000 20,000

Retained Earnings 5,500 5,500

Dividends 10,000 10,000

Service Revenue 57,600 62,500

Salaries and Wages Expense 9,000 9,820

Insurance Expense 1,560

Interest Expense 560

Depreciation Expense 5,000

Supplies Expense 2,400

Rent Expense 4,350 4,350

$123,100 $123,100 $132,480 $132,480

Instructions

(a) Journalize the annual adjusting entries that were made.

(b) Prepare an income statement and a retained earnings statement for the year ended

December 31, and a classified balance sheet at December 31.

(d) If the note has been outstanding 10 months, what is the annual interest rate on that ote?

(e) If the company paid $10,000 in salaries in 2014, what was the balance in Salaries and

Wages Payable on December 31, 2013?

Reference no: EM13913158

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