Chapter 3 (Part 2) - AP3-10 a Closing entries September 30...

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Unformatted text preview: AP3-10 a. Closing entries, September 30: Sales Revenue 488,000 Interest Revenue 2,000 Income Summary 490,000 Income Summaryr 455,000 lCost of Goods Sold 318,000 Wages Expense ?0,000 Rent Expense 28,000 Depreciation Expense 43,000 Income Summaryr 35,000 Retained Eamings 35,000 Retained Eamings 18,000 Dividends Declared 18,000 b. Closing balance of Retained Eamings, September 30: Retained eamings, opening balance $T0,000 Add: net income 35,000 Less: dividends declared t 18,000} Retained eamings, closing balance §8T,000 AP3-13 a. Hughes Tools Company: Joumal Entries 1. Cash 175,000 Common Shares 175,000 2. Cash 225,000 Notes Payable 225,000 3. Rent Expense 60,000 Prepaid Rent 15,000 Cash 75,000 4. Equipment 220,000 Cash 220,000 5. Inventory 90,000 Cash 90,000 6. Inventory 570,000 Accounts Payable 570,000 7. Cash 60,000 Accounts Receivable 720,000 Sales Revenue 800,000 8. Cash 650,000 Accounts Receivable 650,000 9. Accounts Payable 510,000 Cash 510,000 10. Cost of Goods Sold 560,000 Inventory 560,000 11. Selling and Admin- istrative Expenses 66,500 Cash 62,500 Accounts Payable 4,000 12. Interest Expense 22,500 Notes Payable 25,000 |Cash 47,500 ($225,000 X 10% = $22,500) 13. Depreciation Expense 20,000 Accumulated Depreciation, Equipment 20,000 [($220,000 — $20,000) + 10 years = $20,000] 14. Dividends Declared 7,000 lCash 7,000 0. Hughes chls Ccmpany: T-Acccunts Cash Acccunts Receivable (1} 175,000 75,000 (3} (7) 720,000 550,000 (5) (2} 225,000 220,000 {4) {7} 00,000 90,000 {5) 70,000 {5} 550,000 510,000 {9} 52,500 (11} 47,500 (12} 7,000 (14) 98,000 lnventc Pre aid Rent 0 0 {5} 90,000 (3) 15,000 (5} 570,000 550,000 (10) 15,000 100,000 Equipment Accumulated Depreciation, Equip. 0 0 {4} 220,000 20,000 (13) 220,000 20,000 Acccunts Pa able lnccme Summa 0 800,000 {CE} (9} 510,000 570,00015} (CE) 749,000 4,000 {11} (CE! 51,000 04,000 0 Notes Pa able {12} 25,000 225,000 (2} 200,000 Cemmen Shares 0 125,000 (1} 176,000 Dividends Declared 0 (14} 7,000 ?,000{CE) 0 Cast of Geeds Sold (10} 530,000 530,000 (CE) 0 De reciatien Ex ense (13} 20,000 20,000 {CE} 0 Sellin 8. Administrative Ex enses (11} 33,500 33,500 (CE) Retained Eamin 5 {CE} 2,000 51,000 (GE) {GE} 300,000 300,000 (7} (3} 30,000 30,000 {CE} EHEE (12} 22,500 22,500 (CE) Hughes Tools Company Adjusted Tn'al Balance September 30, 2016 Debit Cash $ 98,000 Accounts receivable ?0,000 Inventory 100,000 Prepaid rent 15,000 Equipment 220,000 Accumulated depreciation, equipment Accounts payable Notes payable Common shares Retained eamings Dividends declared T,000 Sales revenue Cost of goods sold 560,000 Rent expense 60,000 Depreciation expense 20,000 Interest expense 22,500 Selling 8. administrative expenses 86,500 §1 ,259,000 d. Closing Entn'es {CE} Sales Revenue 800,000 Income Summary Income Summary T49,000 lCost of Goods Sold Rent Expense Depreciation Expense Interest Expense Selling and Administrative Expenses Income Summary 51,000 Retained Eamings Retained Eamings 7,000 Dividends Declared Credit $ 20,000 64,000 200,000 1?5,000 -0- 800,000 §1 I259,000 800,000 560,000 60,000 20,000 22,500 86,500 51 ,000 7,000 AP3-21 a. Perfect Pizza: Journal Entries 1. Inventory Accounts Payable 2. Cash Accounts Receivable Sales Revenue 3. Wages Expense Wages Payable Cash Utilities Expense Cash 4. Accounts Payable Cash 5. Cash Accounts Receivable 6. |Cost of Goods Sold Inventory 7". Dividends Declared Cash b. Adjusting entries 8. Rent Expense Prepaid Rent 9. Wages Expense Wages Payable 10. Depreciation Expense Accumulated Depreciation, 230,000 510,000 40,000 103,000 2,000 25,000 220,000 50,000 225,000 15,000 1,500 2,500 7,500 230,000 550,000 105,000 25,000 220,000 50,000 225,000 15,000 1,500 2,500 Equipment T,500 {$30,000 - $0} I 3 = $?,500} 11 . Depreciation Expense 12,000 Accumulated Depreciation, Vehicles 12,000 {$30,000 — $3,000}! 6 = $12,000 c. Perfect Pizza: T-Accounts Cash Accounts Receivable Bal. 33,000 Bal. 15,000 {2} 510,000 (2) 40,000 50,000 (5) {5} 50,000105,000 {3} 25,000 {3} 5,000 220,000 {4} 15,000 (T) 228,000 lnvento Pre aid Rent Bal. 1 10,000 230 000 225 000 S Bal. 15,000 Equipment Accumulated Depreciation, Equipment Bal. 60,000 30,000 331. ?,500 (10} 60,000 3?,500 Vehicles Accumulated Depreciation, Vehicles Bal. 30,000 33,000 Bal. 12,000 11 30,000 43,000 Accounts Payable 7'000 Bel. 230,000 (1} 220,000 (4} 17,000 110000 Bal. 10000 Bal. 110,000 16,000 (CE) 15,00 1?3,500 (CE) 1?4,500 Dividends Declared Bal. 0 (7} 15,000 15,000 {CE} Income Summa Bel. 0 550,000 {CE} {CE} 375,500 1?3,500 (CE) 1?3,500 Bal. 550,000 (2) 550,000 225,000 {CE} 550,000 225,000 {CE} 0 0 Wages Exgense Utilities Ex ense Bal. 0 Bal. 0 (3} 103,000 (3} 25,000 103,000 25,000 (9} 2,500 25 000 CE 105,500 0 105,500(CE) 0 Rent Ex ense DE reciatinn Ex ense Hal. 0 Hal. 0 (3} 1 ,500 (10) 1500 (11} 12,000 1,500 1,500 {CE} 19,500 19,500(CE) Perfect Pizza Adjusted Trial Balance December 31, 2016 Debit Cash $ 228,000 Accounts receivable 5,000 Inventorv 15,000 Prepaid rent 1,500 Equipment 80,000 Accumulated depreciation, equipment Vehicles 80,000 Accumulated depreciation, vehicles Accounts payable Wages pavable Common shares Retained earnings Dividends declared 15,000 Sales revenue |Cost of goods sold 225,000 Wages expense 105,500 Utilities expense 25,000 Rent expense 1,500 Depreciation expense 18,500 §?81 ,000 $ Credit 3?,500 48,000 1?,000 2,500 110,000 16,000 550,000 §?81 ,000 Perfect Pizza Statement of Income For the year ended December 31, 2016 Sales revenue $550,000 Expenses |Cost of goods sold $225,000 Wages expense 105,500 Utilities expense 25,000 Rent expense 1,500 Depreciation expense 19,500 Total expenses 3?6,500 Net income §1T3,500 Closing entries (CE) 1. Sales Revenue 550,000 Income Summaryr 550,000 Income Summarv 375,500 |Cost of Goods Sold 225,000 1l.r"'-.lages Expense 105,500 Utilities Expense 25,000 Rent Expense 1,500 Depreciation Expense 19,500 Income Summaryr 1?3,500 Retained Earnings 1?3,500 ij. Retained Earnings 15,000 Dividends Declared 15,000 Perfect Pizza Statement of Financial Position As at December 31, 2016 Assets Current assets Cash $ 223,000 Accounts reoeiyable 5,000 Inyentory 15,000 Prepaid rent 1,500 Total current assets 249,500 Equipment $60,000 Less accumulated depreciation t3?,500§ 22,500 Vehicles 80,000 Less accumulated depreciation {48,0001 32,000 Total non-current assets 54,500 Total assets $304,000 Liabilities Accounts payable $17,000 1*J'y’ages payable 2,500 Total liabilities (current) 19,500 Shareholders’ equity Common shares $110,000 Retained eamings” 1?4,500 Total shareholders’ equity 284 500 Total liabilities 8. shareholders’ equity $304,000 *$1B,000 + $173,500 — $15,000 = $1 T4,500 AP3-31 Commerce Company Statement of Income For the Year Ended December 31, 2016 Operating revenues: Sales revenue $1 T9300 Service revenue 93,100 Total revenue Operating expenses: |Cost of goods sold 110,000 Utilities expense 2,400 Wages expense 60,000 Supplies expense 2,200 Selling expenses 2?,000 Insurance expense 1,400 Interest expense 1,?00 Miscellaneous expense 13,000 Depreciation expense 4 500 Total expenses Income before income taxes Income tax expense Net income {A formal statement of income was not required.) b. Beginning retained eamings $31,500 Net income 42,?00 Dividends declared £12,400: Ending retained eamings §61,800 $2?2,900 222,200 50,700 8,000 § 42,?00 Commerce Company Statement of Financial Position As at December 31, 201 6 Assets Current assets: Cash $ 24,000 Accounts receivable 6T,000 Prepaid expenses 500 Inventory 30,000 Supplies 800 Total current assets $122,300 Capital assets: Building 72,000 Less: Accumulated depreciation (20,000) Land 70,000 Net capital assets 122,000 Other long-ten'n assets: Investments 12,000 Total assets $256,300 biomass Current Liabilities: Accounts payable $ 36,000 Wages payable 3,000 Dividends payable 4,000 Income tax payable 2,000 Uneamed revenue 1,200 Notes payable 15,000 W payable 300 Total current liabilities $61,500 Long-ten'n liabilities: Mortgage payable 48,000 Total liabilities $109,500 Shareholders’ Equity Common shares $85,000 Retained eamings 61,800 Total shareholders’ equity 146,800 Total liabilities and shareholders” equity $256,300 ...
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