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1)
PS Enterprises Income Statement For the Years Ended Dec. 31, 2014 and 2013 2014 % 2013 Fees Earned $674350 100 $520,600 Operating Exp. 472,045 70 338,390 Operating Inc. 202,305 30 182210 Ans. C- No, decreased by 5%
% 100 65 35
2) Answer A-debit to salary expense of $16,000 3) Answer B-Net income is overstated by $2,300 4) A) Cash - Dr. $18000 Unearned fees- Cr. $18,000 B) Unearned fees- Dr. $18000 Fees Earned-Cr. $18,000 5) Unearned fees- Dr. $7,125 Fees Earned- Cr. $7,125 6) Garrys Tree Service Unadjusted Trial Balance Cash Supplies Accounts Payable Garry Ryan, Capital Wage Expense Machinery Wages Payable Service Revenue Rent Expense Unearned Revenue Accumulated Depreciation-Machinery Prepaid Rent Garry Ryan, Drawing Dr. $25,000 1,000 Cr.
$7,000 32,910 2,000 18,350 3600 21,000 11,500 1,500 7,340 12,200 3,300
Total 7) a) $300 b) $3,300 c) $750 D) $17,250 8) a) Revenues were understated by $19,100. b)Expenses were understated by $7,000. c)Net income was understated by $12,100.
$73,350 $73,350
9) Depreciation Expense-Office Equip. : Dr. $1,400 Accumulated Depreciation-Office Equip: Cr. $1,400 Depreciation Expense- Production Equip: Dr. $2,650 Accumulated Expense-Production Equip:Cr. $2,650
10) Supplies Exp. Dr. $4,900 Supplies Cr. $4,900 11) Date 31 Dec. Description Insurance Exp. Prepaid Ins. Post Ref. Debit $875 Credit $875
12) 1. Accrued Revenue- Dr. $6,300 Service Revenue-Cr. $6,300 2. Supplies Expense-Dr. $3,790 Supplies-Cr. $3,790 3. Wage Expense-Dr. $2,700 Wage Payable- Cr. $2,700 4. Dep. Expense-Dr. $1,650 Accumulated Dep.-Cr. $1,650 5. Rent Expense- Dr. $10,800 Prepaid Rent-Cr. $10,800
13) a) Supplies Expense: Dr. $637 Supplies: Cr. $637 b)Interest Exp: Dr. $170 Interest Payable: Cr. $170 c)Salaries Exp: Dr. $3,270 ($2,750+520) Salaries Payable: Cr. $3,270 d)Unearned Revenue: Dr. $27,600 Earned Revenue:Cr. $27,600 e)Accts. Receivable: Dr. $5,700 Revenue:Cr. $5,700
14) a) 15th Nov. Cash-Dr. $2,700 Unearned Fees-Cr. $2,700 st 31 Dec. Unearned Fees- Dr. $2,700 Earned Fees- Cr. $2,700 b) I prepared these journal entries to recognize that in November I received a cash payment for $2,700 for services not yet performed. While I may have received the cash for these services, I have not officially earned this money until the advertising campaign actually runs in December. When the campaign actually runs, and I have earned the money, I then post it to my earned fees account. 15) Nadia Company Nadia Company Income Statement Statement of Owners Equity Dec. 31, 2014 Dec. 31, 2014 Fees Earned: $10,930 Nadia Porter, Capital Begin. : $10,000 Additional Investment: $3,000 Net Income: $2,980 Less Withdrawals: $700 Nadia Porter, Capital, Dec. 31st: $15,280
Wages Expense: $ 2450 Rent Expense: $ 1900 Uti. Expense: $ 1475 Dep. Expense: $ 1150 Misc. Expense: $975 Net Income: $2,980
Nadia Company Balance Sheet Dec.31, 2014 Assets Cash: $5130 Acct. Rec.: $ 3,300 Liabilities Acct. Payable: $700 Note Payable: $3,070
Prepaid. Exp.:$420 Equipment: $ 12400 Accumulated Depr.: -$2,200 Total Assets: $19,050
Owners Equity Capital: $15,280 Total Liabilities and Owners Equity: $19,050
16) a) 1. On Tuesday: Salary Exp. Dr. $8,800 Salaries Payable Cr. $8,800 2. on Wednesday: Salary Exp. Dr. $13,200 Salaries Payable Cr. $13,200 b) Insurance exp: Dr. $15,300 Prepaid Insurance: Cr. $15,300 c) License Tax Exp: Dr. $4,500 Prepaid Taxes: Cr. $4,500 Property Tax Exp: Dr. $4,800 Property Tax Payable: Cr. $4,800 d) Depr. Expense: Dr. $32,000 Accum. Depr. : Cr. $32,000