Crazy Mountain Outfitters Co., an outfitter store for fishing treks, prepared th
ID: 2412630 • Letter: C
Question
Crazy Mountain Outfitters Co., an outfitter store for fishing treks, prepared the following unadjusted trial balance at the end of its first year of operations:
Crazy Mountain Outfitters Co.
UNADJUSTED TRIAL BALANCE
April 30, 2016
1
Cash
11,400.00
2
Accounts Receivable
72,600.00
3
Supplies
7,200.00
4
Equipment
112,000.00
5
Accounts Payable
12,200.00
6
Unearned Fees
19,200.00
7
Diana Keck, Capital
137,800.00
8
Diana Keck, Drawing
10,000.00
9
Fees Earned
305,800.00
10
Wages Expense
157,800.00
11
Rent Expense
55,000.00
12
Utilities Expense
42,000.00
13
Miscellaneous Expense
7,000.00
14
Totals
475,000.00
475,000.00
For preparing the adjusting entries, the following data were assembled:
Chart of Accounts
Journal
1. Journalize the adjusting entries necessary on April 30. Refer to the Chart of Accounts for exact wording of account titles.
PAGE 1
JOURNAL
1
Adjusting Entries
2
3
4
5
6
7
8
9
10
11
Final Questions
2. Determine the revenues, expenses, and net income of Crazy Mountain Outfitters Co. before the adjusting entries.
Before Adjusting Entries
1
Revenues
2
Expenses
3
Net income
3. Determine the revenues, expense, and net income of Crazy Mountain Outfitters Co. after the adjusting entries.
After Adjusting Entries
1
Revenues
2
Expenses
3
Net income
4. Determine the effect of the adjusting entries on Diana Keck, Capital.
The capital account by
ACCOUNT TITLE DEBIT CREDIT1
Cash
11,400.00
2
Accounts Receivable
72,600.00
3
Supplies
7,200.00
4
Equipment
112,000.00
5
Accounts Payable
12,200.00
6
Unearned Fees
19,200.00
7
Diana Keck, Capital
137,800.00
8
Diana Keck, Drawing
10,000.00
9
Fees Earned
305,800.00
10
Wages Expense
157,800.00
11
Rent Expense
55,000.00
12
Utilities Expense
42,000.00
13
Miscellaneous Expense
7,000.00
14
Totals
475,000.00
475,000.00
Explanation / Answer
Solution :
Solution 2:
Revenues before adjusting entries = $305,800
Expenses before adjusting entries = $157,800 + $55,000 + $42,000 + $7,000 = $261,800
Net Income before adjusting entries = $305,800 - $261,800 = $44,000
Solution 3:
Revenues before adjusting entries = $305,800 + $3,900 + $14,140 = $323,840
Expenses before adjusting entries = $157,800 + $55,000 + $42,000 + $7,000 + $5,820 + $3,000 + $2,475 = $273,095
Net Income before adjusting entries = $323,840 - $273,095 = $50,745
Solution 4:
Effect of the adjusting entries on Diana Keck, Capital:
Diana Keck capital will increase by = $50,745 - $44,000 = $6,745
Adjusting Journal Entries - Crazy Mountain Outfitters Co Event Date Particulars Debit Credit a. 30-Apr-16 Supplies Expense Dr $5,820.00 To Supplies $5,820.00 (To record supplies Expense) b 30-Apr-16 Accounts Receivables Dr $3,900.00 To Fees Earned $3,900.00 (To record revenue for service performed) c 30-Apr-16 Depreciation Expense Dr $3,000.00 To Accumulated Depreciation - Equipment $3,000.00 (To record depreciation expense) d 30-Apr-16 Wages Expense Dr $2,475.00 To Wages Payable $2,475.00 (To record wages expense) e 30-Apr-16 Unearned Fees Dr $14,140.00 To Fees Earned $14,140.00 (To record fees earned for amount received earlier in advance)