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Unformatted text preview: Homework Session 6 Spring 2010 E41. Darius Consultants, Inc. Unadjusted Trial Balance At September 30, 2010 Debit Credit Cash $ 163,000 Accounts receivable 225,400 Supplies 12,200 Prepaid expenses 10,200 Investments 145,000 Building and equipment 323,040 Accumulated depreciation $ 18,100 Land 60,000 Accounts payable 86,830 Accrued expenses payable 25,650 Unearned consulting fees 32,500 Income taxes payable 2,030 Notes payable 160,000 Contributed capital 223,370 Retained earnings * 145,510 Consulting fees revenue 2,564,200 Investment income 10,800 Wages and benefits expense 1,590,000 Utilities expense 25,230 Travel expense 23,990 Rent expense 152,080 Professional development expense 18,600 Interest expense 17,200 Other operating expenses 188,000 General and administrative expenses 320,050 Gain on sale of land 5,000 Totals $3,273,990 $3,273,990 * Since debits are supposed to equal credits in a trial balance, the balance in Retained Earnings is determined as the amount in the credit column necessary to make debits equal credits (a plugged figure). E43. Req. 1 The annual reporting period for this company is January 1 through December 31, 2010. Req. 2 (Adjusting entries) Both transactions are accruals because revenue has been earned and expenses incurred but no cash has yet been received or paid. ( a ) 1. Type: Accrued Expense 2. Amount: Given 3. Adjusting entry: December 31, 2010 Wage expense (+E, - SE) 6,000 Wages payable (+L) 6,000 To record wages earned by employees during 2010, but not yet paid by the company. This entry records the (a) 2010 expense, and (b) 2010 liability, which is necessary to conform to accrual accounting and the matching principle. ( b ) 1. Type: Accrued Revenue 2. Amount: Given 3. Adjusting entry: December 31, 2010 Interest receivable (+A) 3,000 Interest revenue (+R, +SE) 3,000 To record interest revenue earned during 2010, but not yet collected. This entry records the (a) 2010 revenue, and (b) 2010 receivable, which is necessary to conform to accrual accounting and the revenue principle.necessary to conform to accrual accounting and the revenue principle....
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This note was uploaded on 04/25/2010 for the course HADM 1121 taught by Professor Dittman during the Spring '07 term at Cornell University (Engineering School).
- Spring '07