REVISION OF PREVIOUS FIVE TOPICS
Tutorial 6
Solutions to Revision Questions
PROBLEM 2-8 (p93)
(a) & (c)
Cash
Date
Mar. 1
2
9
10
12
20
20
31
31
31
Explanation
Balance
Film Rental Expense
Admission Revenue
Accounts Payable
Advertising Expense
Admission Revenue
Film Rental Expense
Salaries Expense
Concession Revenue
Admission Revenue
Debit
J1
J1
J1
J1
J1
J1
J1
J1
J1
Accounts Receivable
Date
Explanation
Mar. 31
Concession Revenue
Land
Date
Mar. 1
Buildings
Date
Mar. 1
Explanation
Balance
Explanation
Balance
Equipment
Date
Explanation
Mar. 1
Balance
Accounts Payable
Date
Explanation
Mar. 1
Balance
2
Film Rental Expense
10
Cash
3,000
6,500
9,000
800
7,200
3,000
4,800
400
12,00
0
Debit
400
Credit
No. 112
Balance
400
Debit
Credit
No. 140
Balance
42,000
Debit
Credit
No. 145
Balance
18,000
Debit
Credit
Debit
Credit
No. 157
J1
J1
A. Russo, Capital
Date
Explanation
Mar. 1
Balance
Admission Revenue
Date
Explanation
Mar. 9
Cash
Principles of Accounting and Finance
5-1
No. 101
Balance
16,000
13,000
19,500
10,500
9,700
16,900
13,900
9,100
9,500
21,500
Credit
J1
6,000
9,000
Debit
Credit
Debit
Credit
6,500
Balance
16,000
No. 201
Balance
12,000
18,000
9,000
No. 301
Balance
80,000
No. 405
Balance
6,500
Accuracy checked
20
31
Cash
Cash
J1
7,200
12,000
13,700
25,700
Concession Revenue
Date
No. 406
Explanation
Ref.
Debit
Credit
Mar. 31
Cash / A/c Receivable
J1
Advertising Expense
No. 610
Date
Explanation
Ref.
Mar. 12
Cash
J1
Film Rental Expense
800
Debit
800
Explanation
Ref.
Debit
Mar. 2
20
Cash / A/c Payable
Cash
J1
J1
9,000
3,000
Explanation
Ref.
Debit
Mar. 31
Cash
J1
4,800
(b)
Date
Account Titles and Explanation
Mar. 2
Film Rental Expense
Accounts Payable
Cash
(Rented films for cash and on
account)
No entry.
Cash
Admission Revenue
10
(Received cash for services
provided)
Accounts Payable ($6000,+ $3000)
Cash
11
12
Balance
800
Credit
Balance
9,000
12,000
No. 726
Date
3
9
800
No. 632
Date
Salaries Expense
Credit
Balance
(Paid creditors on account)
No entry.
Advertising Expense
Cash
Credit
Balance
4,800
Re
f.
63
2
20
1
10
1
Debit
10
1
40
5
6,500
20
1
10
1
9,000
61
0
10
1
800
10
1
40
5
7,200
J1
Credit
9,000
6,000
3,000
6,500
9,000
800
(Paid advertising expense)
20
Cash
Admission Revenue
7,200
Principles of Accounting and Finance
5-2
Accuracy checked
(Received cash for services
provided)
Film Rental Expense
20
Cash
(Paid film rental)
Salaries Expense
31
Cash
63
2
10
1
3,000
72
6
10
1
4,800
10
1
11
2
40
6
400
10
1
40
5
12,000
3,000
4,800
(Paid salaries expense)
31
Cash
Accounts Receivable
Concession Revenue
(10% $8000)
(Received cash and balance on
account for concession revenue)
Cash
31
Admission Revenue
400
800
12,000
(Received cash for services
provided)
PROBLEM 2-8 (continued)
(d)
RUSSO THEATRE
Trial Balance
as at 31 March 2010
Cash
Accounts Receivable
Land
Buildings
Equipment
Accounts Payable
A. Russo, Capital
Admission Revenue
Concession Revenue
Advertising Expense
Film Rental Expense
Salaries Expense
Debit
$ 21,500
400
42,000
18,000
16,000
Credit
800
12,000
4,800
$115,500
9,000
80,000
25,700
800
______
$115,500
PROBLEM 4-1 (p166)
(a)
Date
2010
May 31
Account Titles and Explanation
Ref.
Debit
Supplies Expense
Supplies
560
130
1,00
0
J4
Credit
Principles of Accounting and Finance
5-3
Accuracy checked
1,000
31
31
31
31
31
31
Travel Expense
Travel Payable
550
210
400
Insurance Expense
Prepaid Insurance
($2400 24 months)
540
120
200
Unearned Service Revenue
Service Revenue
($3000 $1,000)
230
400
4,00
0
4,000
Salaries Expense
Salaries Payable
[(3/5 $500) 2 employees]
510
220
1,20
0
1,200
Depreciation Expense
Accumulated Depreciation Office
Furniture
($12,000 60 months)
530
400
Accounts Receivable
Service Revenue
110
400
400
200
136
400
2,00
0
2,000
(b)
Cash
Date
2010
May 31
Explanation
Balance
Accounts Receivable
Date
Explanation
2010
May 31
Balance
31
Adjusting
Prepaid Insurance
Date
Explanation
2010
May 31
Balance
31
Adjusting
Supplies
Date
2010
May 31
31
Explanation
Balance
Adjusting
Office Furniture
Date
Explanation
Ref.
Debit
Credit
No. 101
Balance
15,40
0
Ref.
J4
Ref.
Debit
2,000
8,000
10,000
Debit
No. 120
Balance
J4
Ref.
Credit
4,800
4,600
200
Debit
J4
Ref.
Credit
No. 110
Balance
Credit
No. 130
Balance
3,000
2,000
1,000
Debit
Credit
No. 135
Balance
Principles of Accounting and Finance
5-4
Accuracy checked
2010
May 31
Balance
24,000
Accumulated Depreciation Office Furniture
No. 136
Date
Explanation
Ref.
Debit
2010
May 31
Adjusting
J4
Accounts Payable
Date
Explanation
2010
May 31
Balance
Travel Payable
Date
Explanation
2010
May 31
Adjusting
Salaries Payable
Date
Explanation
2010
May 31
Adjusting
Unearned Service Revenue
Date
Explanation
2010
May 31
Balance
31
Adjusting
M. Griffin, Capital
Date
Explanation
2010
May 31
Balance
Service Revenue
Date
Explanation
2010
May 31
Balance
31
Adjusting
31
Adjusting
Salaries Expense
Date
Explanation
2010
May 31
Balance
31
Adjusting
Rent Expense
Date
Explanation
2010
May 31
Balance
Ref.
Debit
Credit
Balance
400
400
Credit
No. 200
Balance
7,000
Ref.
Debit
J4
Ref.
Credit
No. 210
Balance
400
Debit
J4
Ref.
Debit
J4
4 000
Ref.
Debit
400
Credit
No. 220
Balance
1,200
1,200
Credit
No. 230
Balance
6 000
2,000
Credit
No. 300
Balance
38,200
Ref.
Debit
J4
J4
Ref.
J4
Ref.
Debit
Credit
No. 400
Balance
4 000
2,000
12,000
16,000
18,000
Credit
No. 510
Balance
3,000
3,600
1,200
Debit
Credit
No. 520
Balance
2,000
Depreciation Expense
No. 530
Principles of Accounting and Finance
5-5
Accuracy checked
Date
2010
May 31
Explanation
Adjusting
Insurance Expense
Date
Explanation
2010
May 31
Adjusting
Travel Expense
Date
Explanation
2010
May 31
Adjusting
Supplies Expense
Date
Explanation
2010
May 31
Adjusting
Ref.
Debit
J4
400
Ref.
Debit
J4
200
Ref.
Debit
J4
400
Ref.
Debit
J4
1,000
Credit
Balance
400
Credit
No. 540
Balance
200
Credit
No. 550
Balance
400
Credit
No. 560
Balance
1,000
PROBLEM 4-1 (continued)
(c)
VEKTEK CONSULTING
Adjusted Trial Balance
as at 31 May 2010
Cash
Accounts Receivable
Prepaid Insurance
Supplies
Office Furniture
Accumulated Depreciation Office Furniture................
Accounts Payable
Travel Payable
Salaries Payable
Unearned Service Revenue
L. Griffin, Capital
Service Revenue
Salaries Expense
Rent Expense
Depreciation Expense
Insurance Expense
Travel Expense
Supplies Expense
Debit
$
15,400
10,000
4600
2,000
24000
7,200
2,000
400
200
400
1,000
$67,200
Principles of Accounting and Finance
5-6
Accuracy checked
Credit
$
400
7000
400
1,200
2,000
38,200
18,000
______
0$67,20
0
Problem 4-7 (p170)
(a)
Date
Account Titles & Explanation
Debit
Credit
2010
December
31
Accrued Revenue
December
31
Catering Supplies
December
31
Depreciation Expense
December
31
Depreciation Expense
December
31
Prepaid Insurance
22,500
Catering Revenue
22,500
8 000
Catering Supplies Expense
8 000
4 000
Accumulated Depreciation Motor Vehicle
4 000
10,000
Accumulated Depreciation Catering
equipment
10,000
1,050
Insurance Expense
1,050
(3/12 * $4200)
December
31
Salaries Expense
December
31
Interest Expense
December
31
Utilities Expense
15,000
Salaries Payable
15,000
2,000
Interest Payable
2,000
500
Utilities Payable
500
Principles of Accounting and Finance
5-7
Accuracy checked
(b)
December
31
Motor Vehicle Expense
December
31
Catering Revenue
800
Motor Vehicle Expenses Payable
800
10,000
Unearned Revenue
10,000
Accrual accounting records transactions that change an entitys financial reports
in the periods in which the events occurred. Capturing the transactions in the
period they occur has resulted in a net profit for the business of the business of
$31 650 compared to the $42 400 reported under a cash based system.
Principles of Accounting and Finance
5-8
Accuracy checked
PROBLEM 5-3 (p225)
(a)
WILLIAMS COMPANY
Income Statement
For the Year Ending 31 December 2010
Income
Service revenue
Expenses
Salaries expense
Depreciation expense
Insurance expense
Repair expense
Utilities expense
Total expenses
Net profit
$64,000
$37,000
2 ,600
2,200
2,000
1,700
45,500
$18 500
WILLIAMS COMPANY
Statement of Changes in Equity
For the Year Ending 31 December 2010
David Williams, Capital, 1 January
Add: Net profit for the year
$36,000
18,500
54,500
14,000
$40,500
Less: Drawings
David Williams, Capital, 31 December
WILLIAMS COMPANY
Balance Sheet
as at 31 December 2010
Assets
Current assets
Cash
Accounts receivable
Prepaid insurance
Total current assets
Non-current assets
Equipment
Less: Accumulated depreciation
Total non-current assets
Total assets
Liabilities and Owners Equity
Current liabilities
Accounts payable
Salaries payable
Total current liabilities
Owners equity
David Williams, Capital
Total liabilities and owners equity
$17,400
13,500
3,500
34,400
$26,000
5,600
20,400
$54,800
$11,300
3,000
14,300
40,500
$54,800
Principles of Accounting and Finance
5-9
Accuracy checked
PROBLEM 5-3 (continued)
(b)
General Journal
Date
Dec. 31
31
31
31
Account Titles and Explanation
Service Revenue
Profit and Loss Summary
Ref.
400
350
Debit
64 000
Profit and Loss Summary
Repair Expense
Depreciation Expense
Insurance Expense
Salaries Expense
Utilities Expense
350
622
711
722
726
732
45,500
Profit and Loss Summary
David Williams, Capital
350
301
18,500
David Williams, Capital
David Williams, Drawings
301
306
14,000
Credit
64,000
2,000
2,600
2,200
37,000
1,700
18,500
14,000
(c)
31/12
000
David Williams, Capital No. 301
Drawings14 1/1 O/B
36 000
31/12P&L
31/12 Bal.
31/12 O/B
18 500
40 500
Salaries Expense
37 000 31/12
P&L37000
No. 726
No. 732
31/12 O/B
Utilities Expense
1,700 31/12
P&L1,700
Service Revenue
No. 400
P&L64 000 31/12 O/B 64 000
Repair Expense
No. 622
31/12 O/B
2,000 31/12
P&L 2,000
31/12
Depreciation Expense No. 711
31/12 O/B
2 600 31/12
P&L 2
600
Insurance Expense
P&L 2
31/12 O/B
David Williams, DrawingsNo. 306
31/12 O/B 14 000 31/12 Capital
14
000
Profit and Loss Summary No. 350
31/12Expenses
31/12Service
45,500 Revenue
64 000
31/12Capital18 500
64 000
64 000
2 200 31/12
200
No. 722
Principles of Accounting and Finance
5-10
Accuracy checked
Principles of Accounting and Finance
5-11
Accuracy checked
PROBLEM 5-3 (continued)
(d)
WILLIAMS COMPANY
Post-Closing Trial Balance
as at 31 December 2010
Cash
Accounts Receivable
Prepaid Insurance
Equipment
Accumulated Depreciation
Accounts Payable
Salaries Payable
3,000
David Williams, Capital
Totals
Debit
$17,400
13,500
3,500
26,000
Credit
$5,600
11,300
______
$60 400
40, 500
$60 400
Principles of Accounting and Finance
5-12
Accuracy checked
MCD1010
