Week Three Problems and Exercises

ACC/290

University of Phoenix

BE4-1

cash

net income

A.

B.

C.

D.

E.

F.

-100

0

0

+800

-2,500

0

0

-20

+1,300

0

0

-600

P4-2A

Date

Accounts

Debit

Credit

1.

June 30

Accounts Rec.

3,900

3,900

2.

30

Unearned Service Rev.

4,100

4,100

3.

30

Insur. Exp.

  

  240

  240

4.

30

Utility Exp.

180

180

5.

30

Salary Exp.

1,250

1,250

6.

30

Depreciation Exp.

  250

  250

7.

30

Supply Exp.

1,280

1,280

Cash

6/30 … 6,850 

Accounts Receivable

6/30 … 7,000 

6/30 3,900 

6/30 … 10,900 

N/A

Supplies

6/30 … 2,000 

 6/30 1,280

6/30 … 720 

Prepaid Insurance

6/30 … 2,880 

 6/30 240

6/30 … 2,640 

Equipment

6/30 … 15,000 

Accounts Pay.

 6/30 …  4,230

 6/30 180

 6/30 4,410

Salary Pay.

 6/30  1,250

 6/30 …  1,250

Unearned Service Rev.

6/30  4,100 

 6/30 …  5,200

 6/30 …  1,100

Common Stock

 6/30 … 22,000

Salary Exp.

6/30 … 4,000 

6/30 1,250 

6/30 … 5,250 

Rent Exp.

6/30 … 2,000 

Insur. Exp.

6/30   240 

6/30 Bal.   240 

Utilities Exp.

6/30   180 

6/30 …   180 

Supply Exp.

6/30 1,280 

6/30 … 1,280 

Accumulated Depreciation

 6/30    250

 6/30 …    250

Depreciation Exp.

6/30   250 

6/30 …   250 

Service Rev.

 6/30 …  8,300

 6/30  4,100

 6/30  3,900

 6/30 … 16,300

Vogel Consult.

Adjusted Trial Balance

Debit

Credit

Accounts Rec.

Cash

Prepaid Insur.

Supplies

Equipment

Accumulated Depreciation

Accounts Pay.

Salary Pay.

Unearned Serv. Rev.

Common Stock

Service Rev.

Salary Exp.

Rent Exp.

Depreciation Exp.

Insur. Exp.

Utilities Exp.

Supply Exp.

10,900 

 6,850

  2,640

  720

 15,000

  5,250

  2,000

    250

    240

    180

1,280

$45,310

   250

  4,410

  1,250

  1,100

 22,000

 16,300

 

$45,310

P4-3A

Cash

5/31 … 2,500 

Prepaid Insur.

5/31 … 1,800 

 5/31 450

5/31 … 1,350 

Supplies

5/31 …  2,600 

 5/31 1,550

5/31 …  1,050 

Land

5/31 … 15,000 

Mortgage Pay.

Building

5/31 … 70,000 

Accumulated Depreciation

 5/31   300

 5/31 …   300

Equipment

5/31 … 16,800 

Accumulated Depreciation

 5/31   250

 5/31 …   250

Accounts Pay.

 5/31 … 4,700

Unearned Rent Rev.

5/31  2,500 

 5/31 … 3,300

 5/31 … 800

Salary Pay.

 5/31   900

 5/31 …   900

Interest Pay.

 5/31   180

 5/31 …   180

 5/31 … 36,000

Common Stock

 5/31 … 60,000

Rent Revenue

 5/31 …  9,000

 5/31  2,500

 5/31 … 11,500

Salary Exp.

5/31 … 3,000 

5/31   900 

5/31 … 3,900 

Utilities Exp.

5/31 … 800 

Advertising Exp.

5/31 …   500 

Interest Exp.

5/31   180 

5/31 …   180 

Insurance Exp.

5/31   450 

5/31 …   450 

Supplies Exp.

5/31 1,550 

5/31 … 1,550 

Depreciation Exp.

5/31 300 

5/31 250 

5/31 … 550 

Vang Hotel

Adjusted Trial Balance

Debit

Credit

Cash

Prepaid Insurance

Supplies

Land

Building

Accumulated Depreciation

Equipment

Accumulated Depreciation

Accounts Payable

Unearned Rent Revenue

Salary Payable

Interest Payable

Mortgage Payable

Common Stock

Rent Revenue

Salary Expense

Utilities Expense

Advertising Expense

Interest Expense

Insurance Expense

Supplies Expense

Depreciation Expense

  2,500

   1,350

   1,050

  15,000

  70,000

  16,800

   3,900

    800

     500

     180

     450

   1,550

     550

$114,630

    300

     250

   4,700

    800

     900

     180

  36,000

  60,000

  11,500

 

$114,630

Vang Hotel

Income Statement

Rent revenue 11,500

Salary expense 3,900

Supply expense  1,550

Utilities expense  800

Depreciation expense    550

Advertising expense    500

Insurance expense    450

Interest expense 180

Total expenses 7,930

Net income 3,570

Vang Hotel

Retained Earnings Statement

Retained earnings, May 1 0

Net income 3,570

Retained earnings, May 31 $3,570

Vang Hotel

Balance Sheet

Cash 2,500

Supplies 1,050

Prepaid insurance 1,350

Current assets 4,900

Land 15,000

Building 70,000

    300 69,700

Equipment  16,800

    250 16,550 101,250

Total assets 106,150

Accounts payable 4,700

Salaries and wages payable 900

Unearned rent revenue 800

Interest payable 180

Total current liabilities 6,580

Mortgage payable 36,000

Total liabilities 42,580

Common stock 60,000

Retained earnings 3,570

Total equity shareholders’ 63,570

Total liabilities and equity shareholders’

   106,150

Accounts closed:

Rent revenue, salary expense, utilities expense, advertising expense, interest expense, insurance expense, supply expense, and depre​ciation expense.

Answer the following summary question: Commercial accounting and generally accepted accounting principles, generally prescribe the accrual basis of accounting over the cash basis. Describe both bases of accounting and explain the differences.

Accrual accounting is where revenues are recognized when they are earned, not when they are received. In accrual accounting, cash does not need to change hands before the revenue is recognized. Under the cash basis method of accounting, income is not counted until cash is actually received, and expenses are not counted until they are actually paid.

1. May 31 Insur. Exp.   450

  450

2. 31 Supplies Exp. 1,550

1,550

3. 31 Depreciation Exp. 300

     300

31 Depreciation Exp. 250     

250

    

    

4. 31 Interest Exp. 180

180

    

5. 31 Unearned Rent Rev. 2,500

2,500

6. 31 Salary Exp. 900

900

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