Financial Accounting Week 3
Financial Accounting Week 3
Financial Accounting Week 3
Assets
Accounts
Date Transaction Cash
Receivable
Supplies Prepaid Van Equipment Accounts Notes Payable Common Retained Clearing Fees
Lease Payable Stock Earnings Earned
$ 9,000
$ 2,850
$ 10,000
$ 5,500 $ 3,000
$ 4,300
$ (350)
$ 3,500 $ 3,500
$ (3,000)
$ (1,000)
$ (1,750)
$ (995)
Expenses
$ 350
$ 1,750
$ 995
Deluxe Building Services offers custodial services on both a contract basis and an hourly basis. On
January 1, 2019, Deluxe collected $20,100 in advance on a six-month contract for work to be
performed evenly during the next six months. Assume that Deluxe closes its books and issues
financial reports on a monthly basis.
a. Prepare the entry on January 1 to record the receipt of $20, 100 cash for contract work ( 1) using the
financial statements effect template
Assets Liabilities Equity
Accounts Common Retained Revenue Expenses
Date Cash Payable Stock Earnings
1-Jan-19 $ 20,100 $ 20,100
b. Prepare the adjusting entry to be made on January 31, 2019, for the contract work done during January (1)
using the financial statements effect template
Assets Liabilities Equity
Accounts Common Retained Revenue Expenses
Date Cash Payable Stock Earnings
31-Jan-19 $ (3,350) $ 3,350
Revenue earned for one month = 20100/6
= $3350
For each of the following separate situations, prepare the necessary adjustments (a) using the financial statement
Assets
3. On the first day of the current period, rent for four $ (700)
periods was paid and recorded as a $2,800 debit to
Prepaid Rent and a $2,800 credit to Cash.
4. Nine months ago, the Hartford Financial Services
Group sold a one-year policy to a customer and
recorded the receipt of the premium by debiting
Cash for $624 and crediting Contract Liabilities for
$624. No adjusting entries have been prepared
during the nine-month period. Hartford's annual
financial statements are now being prepared.
$ 700
$ (468) $ 468
$ (965) $ 965
$ 300
Solomon Corporation's adjusted trial balance for the year ending December 31, 2018, is:
Prepare its income statement and statement of stockholders' equity for the current year, and its
balance sheet for the current year-end. Cash dividends were $8,000 and there were no stock
issuances or repurchases.
Prepare its income statement and statement of stockholders' equity for the current year, and its
balance sheet for the current year-end. Cash dividends were $8,000 and there were no stock
issuances or repurchases.
Statement of Equity
31st December 2018
Beg. Common Stock $ 43,000
Common Stock Issued $ -
Ending Common Stock $ 43,000
Prepare its income statement and statement of stockholders' equity for the current year, and its
balance sheet for the current year-end. Cash dividends were $8,000 and there were no stock
issuances or repurchases.
Balance Sheet
31st December 2018
Assets
Cash . $ 4,000
Accounts receivable $ 6,500
Current Assets $ 10,500
Equipment $ 78,000
Accumulated Depreciation $ (14,000)
Non- Current Assets $ 64,000
Total Assets $ 74,500
Liabilities
Notes payable $ 10,000
Total Liabilities $ 10,000
Equity
Common Stock $ 43,000
Retaineds earnings $ 21,500
Total Equity $ 64,500
Total Liabilities & equity $ 74,500
Murdock Carpet Cleaners ended its first month of operations on June 30, 2019. Monthly financial statements will
1. The balance in Prepaid Rent was the amount paid on June 1 for the first four months' rent.
2. Supplies available at June 30 were $820.
3. Equipment, purchased June 1, has an estimated life of five years.
4. Unpaid and unrecorded employee wages at June 30 were $210.
5. Utility services used during June were estimated at $300. A bill is expected early in July.
6. Fees earned for services performed but not yet billed on June 30 were $380. The company uses the account Accounts Rece
Preadjusted Adjustments
Balnce
Cash Asset $ 1,180 $ -
Accounts receivable Asset $ 450 $ 380
Prepaid rent Asset $ 3,100 $ (775)
Supplies Asset $ 2,520 $ (1,700)
Equipment Asset $ 4,440 $ (74)
Accounts payable liabilities $ 760 $ 510
Common stock Equity $ 2,000 $ -
Retained earnings Equity $ 5,300 $ -
Service fees revenue $ 4,650 $ 380
Wages expense $ 1,020 $ 210
Rental Expense $ 775
Supplies Expenses $ 1,700
Depreciation expense $ 74
Utility Expense $ 300
s the account Accounts Receivable to reflect amounts due but not yet billed.