CHAPTER 4 Completing the Accounting Cycle and Classifying Account Problem 4-13A
ID: 2569864 • Letter: C
Question
CHAPTER 4 Completing the Accounting Cycle and Classifying Account Problem 4-13A Performing the steps in the accounting cycle L02.3 CHECK FOURES; 4. Loss $1.070; Total assets-S 102.1006. Post-Ceun; 0aance-Si On June 1, 2017, Samm Near created a new travel agency called ToursPor Less These act $104.150 during the company's first month cneated the new company by investing 540,000 cash, $5.000 ot famiture, and $60,000 2 The company rented fumished office space by paying $3.200 rent for the first month 3 The company purchased $2,400 of office supplies for cash 0 The compary paid $7,200 for the premium on a 14 The owner's assistant was paid $3,600 for two weeks' salary 24 The company collected $13,600 28 The assistant was paid another $3,600 for two weeks' salary 29 The company paid the month's $3.500 phone bi 30 The company repaired its computer for $700 on account 30 The owner withdrew $2,850 cash from the business for personal use. one year insurance policy of commissions from airlines on tickets obtained for customers The company's chart of accounts included these accounts: 101 Cash 106 Accounts Receivable 124 Office Supplies 128 Prepaid Insurance 160 Furniture 161 Accumulated Depreciation, Furniture 167 Computer Equipment 168 Accumulated Depreciation, Computer Equipment 302 Sam Near, Withdrawals 405 Commissions Revenue 610 Depreciation Expense, Furniture 612 Depreciation Expense, Computer Equipmen 622 Sataries Expense 637 Insurance Expense 640 Rent Expense 650 Office Supplies Expense 684 Repairs Expense 688 Telephone Expense 901 Income Summary 201 Accounts Payable 209 Salaries Payable 301 Sam Near, Capital Required 1. Set up each of the listed accounts. Note: Your instructor will tell you to use either the balance column format or T-accounts 2. Prepare journal entries to record the transactions for June and post them to the accounts 3. Use the following information to journalize and post the adjustments for the month: a. Two-thirds of one month's insurance coverage was consumed b. There were $1,600 of office supplies on hand at the end of the month. e. Depreciation on the computer equipment was estimated to be $1,650 and $400 on the furniture d-The assistant had earned $320 of unpaid and unrecorded salary. e. The compang had earned $3,500 of commissions that had not get been billed. 4 Prepare an income statement, a statement of changes in equity, and a classified ba S. Prepare jounal entries to close the temporary accounts and post them to the accounts ó. Prepare a post-closing trial balance. 290Explanation / Answer
Answers to 4-13A:
4. Income Statement, statement of changes in equity and classified balance sheet is as prepared below:
Sam Near
Income Statement
For the month ended June 30, 2017
Amount ($)
Amount ($)
Commissions revenue
17,100
Less: Operating Expenses
Depreciation expense (1,650+400)
2,050
Salaries Expense
7,520
Rent expense
3,200
Telephone Expense
3,500
Repairs Expense
700
Insurance Expense (7,200/12)*2/3
400
Supplies exp (2,400-1,600)
800
Total operating exp
18,170
Income/(loss) from operations
-1,070
Sam Near
Balance Sheet
At June 30, 2017
Amount ($)
Amount ($)
ASSETS
Current assets
Cash (40,000-3,200-2,400-7,200-3,600+13,600-3,600-3,500-2,850
27,250
Account Receivable
3,500
Office Supplies (2,400-800)
1,600
Prepaid Insurance (7,200-400)
6,800
Current Assets
39,150
Furniture
5,000
Acc Dep-Furniture
-400
4,600
Computer Equipment
60,000
Acc Dep-Equipment
-1,650
58,350
Total assets
1,02,100
LIABILITIES AND EQUITY
Current liabilities
Accounts Payable
700
Salaries payable
320
Total current liabilities
1,020
Total liabilities
1,020
Shareholders’ Equity
Owners capital
1,01,080
Total liabilities and stockholders’ equity
1,02,100
Sam Near
Statement of Owners equity
For the month ended June 30, 2017
Sam Near capital June 1 1
1,05,000
Net Income for the year
-1,070
Less: Sam near Withdrawals
-2,850
Increase in capital
-3,920
E.salon capital December 31
1,01,080
5. Journal entry to close the temporary accounts is as shown below:
Date
Particulars
L.F
Amount ($)
Amount ($)
Jun-30
Commissions revenue
17,100
Income Summary
17,100
(For close revenue accounts)
Jun-30
Income Summary
18,170
Depreciation expense (1,650+400)
2,050
Salaries Expense
7,520
Rent expense
3,200
Telephone Expense
3,500
Repairs Expense
700
Insurance Expense (7,200/12)*2/3
400
Supplies exp (2,400-1,600)
800
(For close expense accounts)
Jun-30
Statement of equity
1,070
Income summary
1,070
(For close income summary accounts)
6. Post-closing Trial balance is as prepared below:
Sam near
Post-Closing Trial balance
As of June 30, 2017
Particulars
Debit Balances
Credit Balances
Cash
27,250
Account Receivable
3,500
Office Supplies
1,600
Prepaid Insurance
6,800
Furniture
5,000
Acc Dep-Furniture
400
Computer Equipment
60,000
Acc Dep-Equipment
1,650
Accounts Payable
700
Salaries payable
320
Owners capital
1,01,080
Total
1,04,150
1,04,150
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Sam Near
Income Statement
For the month ended June 30, 2017
Amount ($)
Amount ($)
Commissions revenue
17,100
Less: Operating Expenses
Depreciation expense (1,650+400)
2,050
Salaries Expense
7,520
Rent expense
3,200
Telephone Expense
3,500
Repairs Expense
700
Insurance Expense (7,200/12)*2/3
400
Supplies exp (2,400-1,600)
800
Total operating exp
18,170
Income/(loss) from operations
-1,070