posted a question
The following six-column table for Bullseye Ranges includes the unadjusted trial balance as of
December 31, 2005.
Problem 4-6AA
Preparing adjusting, reversing, and
next period entries
P4 BULLSEYE RANGES
December 31, 2005
Unadjusted Adjusted
Trial Trial
Account Title Balance Adjustments Balance
Dr. Cr. Dr. Cr. Dr. Cr.
Cash . . . . . . . . . . . . . . . . . . . . . $ 13,000
Accounts receivable . . . . . . . . . . 0
Supplies . . . . . . . . . . . . . . . . . . 5,500
Equipment . . . . . . . . . . . . . . . . 130,000
Accumulated depreciation—
Equipment . . . . . . . . . . . . . . . $ 25,000
Interest payable . . . . . . . . . . . . . 0
Salaries payable . . . . . . . . . . . . . 0
Unearned member fees . . . . . . . 14,000
Notes payable . . . . . . . . . . . . . . 50,000
T. Allen, Capital . . . . . . . . . . . . . 58,250
T. Allen, Withdrawals . . . . . . . . . 20,000
Member fees earned . . . . . . . . . 53,000
Depreciation expense—
Equipment . . . . . . . . . . . . . . . 0
Salaries expense . . . . . . . . . . . . 28,000
Interest expense . . . . . . . . . . . . 3,750
Supplies expense . . . . . . . . . . . . 0
Totals . . . . . . . . . . . . . . . . . . . . $200,250 $200,250
Required
1. Complete the six-column table by entering adjustments that reflect the following information:
a. As of December 31, 2005, employees had earned $900 of unpaid and unrecorded salaries. The
next payday is January 4, at which time $1,600 of salaries will be paid.
b. The cost of supplies still available at December 31, 2005, is $2,700.
c. The notes payable requires an interest payment to be made every three months. The amount
of unrecorded accrued interest at December 31, 2005, is $1,250. The next interest payment,
at an amount of $1,500, is due on January 15, 2006.
d. Analysis of the unearned member fees account shows $5,600 remaining unearned at December
31, 2005.
e. In addition to the member fees included in the revenue account balance, the company has earned
another $9,100 in unrecorded fees that will be collected on January 31, 2006. The company
is also expected to collect $8,000 on that same day for new fees earned in January 2006.
f. Depreciation expense for the year is $12,500.
2. Use the work sheet to enter the adjusting and closing entries; then journalize them.
3. Prepare the income statement and the statement of owner’s equity for the year ended June 30 and
the classified balance sheet at June 30, 2005.
Analysis Component
4. Analyze the following separate errors and describe how each would affect the 10-column work
sheet. Explain whether the error is likely to be discovered in completing the work sheet and, if
not, the effect of the error on the financial statements.
a. Assume that the adjustment for supplies used consisted of a credit to Supplies for $3,200 and
a debit for $3,200 to Supplies Expense.
b. When the adjusted trial balance in the work sheet is completed, the $17,500 Cash balance is
incorrectly entered in the Credit column.
166 Chapter 4 Completing the Accounting Cycle
Check (3) Total assets, $120,250;
current liabilities, $14,290; Net income,
$39,300
Check (1) Adjusted trial balance
totals, $224,000
2. Prepare journal entries for the adjustments entered in the six-column table for part 1.
3. Prepare journal entries to reverse the effects of the adjusting entries that involve accruals.
4. Prepare journal entries to record the cash payments and cash collections described for January.