Accrue depreciation expense 335 Accumulate d Depreciatio n 335 Retained

Accrue depreciation expense 335 accumulate d

This preview shows page 72 - 76 out of 104 pages.

3. Accrue depreciation expense.- 4. Accrue wages payable. - = +560 Wages Payable -560 Retained Earnings - +560 Wages Expense = -560 5. Recognize utilities expense. - = +390 Account s Payable -390 Retained Earnings - +390 Utilities Expense = -390 6. Recognize service revenue. - = -500 Unearne d Service Revenue +500 Retained Earnings +500 Service Revenue - = +500 DATE 2014 DESCRIPTION DEBIT CREDIT Mar. 31 Rent expense (+E, -SE) 795 Prepaid rent (-A) 795 To record March rent expense ($4,770/6 months = $795). 31 Supplies expense (+E, -SE) 1,980 Supplies (-A) 1,980 To record March supplies expense ($3,700 $1,720 = $1,980). 31 Depreciation expense—Equipment (+E, -SE) 335 Accumulated depreciation—Equipment (+XA, -A) 335 To record March depreciation ($36,180/108 months = $335). 31 Wages expense (+E, -SE) 560 Wages payable (+L) 560 To record unpaid wages at March 31. 31 Utilities expense (+E, -SE) 390 Accounts payable (+L) 390 To record estimated March utilities expense. 31 Unearned service revenue (-L) 500 Service revenue (+R, +SE) 500 To record revenue received in advance that was earned in March. continued next page ©Cambridge Business Publishers, 2014 3-72 Financial Accounting, 4 th Edition
Image of page 72
P3-49. continued b. Not all the T-accounts given are needed to enter the adjustments required. Also, the closing entries required in part d are referenced by 1c, 2c etc. - Accounts Payable (L) + + Prepaid Rent (A) - 2,510 Bal. Bal. 4,770 795 1. 390 5. Bal. 3,975 2,900 Bal. + Supplies (A) - Bal. 3,700 1,980 2. Bal. 1,720 - Acc Depreciation - Equipment (XA) + - Unearned Service Revenue (L) + 335 3. 6. 500 1,000 Bal. 500 Bal. -Service Revenue(R) + + Rent Expense (E) - 6c. 12,860 12,360 Bal. 1. 795 795 1c. 500 6. + Supplies Expense (E) - 2. 1,980 1,980 2c. +Depreciation Expense (E) - +Wages Expense (E) - 3. 335 335 3c. Bal. 3,900 4. 560 4,460 4c. + Utilities Expense (E) - - Wages Payable (L) + 5. 390 390 5c. 560 4. - Retained Earnings (SE) + 1c. 795 2c. 1,980 3c. 335 4c. 4,460 5c. 390 12,860 6c. 4,900 7c. continued next page ©Cambridge Business Publishers, 2014 Solutions Manual, Chapter 3 3-73
Image of page 73
P3-49. continued c. WHEEL PLACE COMPANY Income Statement For Month Ended March 31, 2014 Service revenue………………………………………. ……... $12,860 Expenses: Utilities expense…………….…………………..………… $390 Supplies expense…………..……………………………… 1,980 Wages expense……………..…………………………..… 4,460 Depreciation expense………………………………….… 335 Rent expense……………………………………………... 795 7,960 Net income …………………………………………………... $4,900 WHEEL PLACE COMPANY B ALANCE S HEET March 31, 2014 Assets Liabilities Cash $ 1,900 Accounts payable $ 2,900 Accounts receivable 3,820 Wages payable 560 Supplies 1,720 Unearned service revenue 500 Prepaid rent 3,975 Total Liabilities 3,960 Equipment $ 36,180 Less:Accumulated depreciation 335 35,845 Owners’ Equity Common stock 38,400 Retained earnings 4,900 Total Assets $47,260 Total Liabilities and Owners’ Equity $47,260 continued next page ©Cambridge Business Publishers, 2014 3-74 Financial Accounting, 4 th Edition
Image of page 74
P3-49. concluded d.
Image of page 75
Image of page 76

You've reached the end of your free preview.

Want to read all 104 pages?

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes