Reference no: EM13848881
Problem 1.a
Batman Company prepares monthly financial statements. Below are listed some selected accounts and their balances in the September 30 trial balance before any adjustments have been made for the month of September.
BATMAN COMPANY
Trial Balance (Selected Accounts)
September 30, 2014
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Account Balances
Office Supplies $ 2,700
Office Equipment 16,200
Accumulated Depreciation-Office Equipment 1,000
Unearned Revenue 1,200
Notes Payable 5,000
An analysis of the account balances by the company's accountant provided the following additional information:
1. A physical count of office supplies revealed $900 on hand on September 30
2. Interest accrued on Notes Payable is $100 per month.
3. Depreciation on the office equipment for the month is $600.
4. On September 1, 2014 Batman collected $1,200 for services to be performed from September 1, 2014 through to February 28, 2015. Service performed in September was $400.
Instructions
Using the above additional information, prepare the monthly adjusting entries that should be made by Batman Company on September 30 in the space provided on the next page and show any necessary calculations.
Date Account/Description Debit Credit
Adjusting Entries
Problem 1.b
The adjusted account balances of the Fitness Center at July 31 are as follows:
Accounts Account Balances
Cash $11,000
Supplies Expense 9,000
Accounts Receivable 15,000
Service Revenue 80,000
Supplies 4,000
Interest Revenue 8,000
Insurance Expense 6,000
Prepaid Insurance 8,000
Depreciation Expense 20,000
Buildings 300,000
Accumulated Depreciation-
Buildings 120,000
Accounts Payable 19,000
Weber, Capital 195,000
Weber, Drawing 10,000
Utilities Expense 12,000
Salary Expense 23,000
Instructions
Prepare the closing journal entries for the Fitness Center. Use the space provided below.
Date Account/Description Debit Credit
Adjusting Entries
Problem 2.a
The following items are taken from the financial statements of Tailor Company For the Year Ended
December 31, 2014.
Accounts
Cash 30,000
Accounts Receivable 6,000
Supplies 5,500
Prepaid Insurance 7,000
Insurance Expense 5,000
Equipment 50,000
Service Revenue 25,400
Accumulated Depreciation 4,800
Peters, Drawing 4,200
Patents 7,500
Accounts Payable 28,500
Bonds Payable (due 2014) 19,000
Depreciation Expense 4,800
Peters, Capital 51,000
Salaries Expense 5,200
Interest Expense 3,500
Instructions
Prepare a classified balance sheet for Tailor Company. Use the space provided below.
Note: for the equity section of the Balance Sheet, will have to first find net income, then add it to Capital and
then less Drawing. PROBLEMS
Show working beneath the problems.
Problem 1
Clarke Company uses the periodic inventory method and had the following inventory information available:
Units Unit Cost Total Cost
1/1 Beginning Inventory 100 $4 $ 400
rchase 400 $5 2,000
7/25 Purchase 200 $7 1,400
10/20 Purchase 300 $8 2,400
1,000 $6,200
A physical count of inventory on December 31 revealed that there were 400 units on hand, so 600 units were sold.
Compute the Cost of Goods Sold and Ending Inventory under FIFO, LIFO and Average Methods
Show Computation and solutions in space below:
TAILOR COMPANY
BALANCE SHEET
DECEMBER 31, 2014
Problem 2.b
Baker Company uses the periodic inventory method and had the following inventory information available:
Units Unit Cost Total Cost
1/1 Beginning Inventory 100 $5 $ 500
1/20 Purchase 400 $7 2,800
7/25 Purchase 200 $8 1,600
10/20 Purchase 300 $9 2,700
1,000 $7,600
A physical count of inventory on December 31 revealed that there were 400 units on hand, so 600 units were sold.
Compute the Cost of Goods Sold and Ending Inventory under FIFO, LIFO and Average Methods.
Show Computation and solutions in space below: