Solution Manual for Chapter 5 354 Problem 5-3A (90 minutes) Part 1 CHALLENGER CONSTRUCTION Work Sheet For Year Ended September 30, 2011 Unadjusted Trial Balance Adjustments Adjusted Trial Balance Income Statement Balance Sheet & Statement of Changes in Equity No. Account Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit 101 Cash... 36,000 36,000 36,000 126 Supplies... 18,800 (a) 5,000 5,000 128 Prepaid insurance... 12,400 (b) 8,000 4,400 4,400 149 Land not currently used in op.... 50,000 50,000 50,000 167 Equipment... 106,000 106,00 0 106,000 168 Accum. deprec., equipment... 40,500 (c) 58,500 58,500 191 Copyright... 6,000 6,000 6,000 201 Accounts payable... 9,600 (d) 800 10,400 10,400 203 Interest payable... (f) 500 500 500 210 Wages payable... (e) 3,000 3,000 3,000 251 Long-term notes payable... 50,000 50,000 50,000 301 Chris Challenger, capital... 55,320 55,320 55,320 302 Chris Challenger, withdrawals... 72,000 72,000 72,000 401 Construction fees earned... 280,000 280,000 280,000 612 Deprec. expense, equipment... (c) 18,000 18,000 18,000 623 Wages expense... 82,000 (e) 3,000 85,000 85,000 633 Interest expense... 3,000 (f) 500 3,500 3,500 637 Insurance expense... (b) 8,000 8,000 8,000 640 Rent expense... 26,400 26,400 26,400 652 Supplies expense... (a) 13,800 13,800 13,800 683 Business taxes expense... 10,000 10,000 10,000 684 Repairs expense... 5,020 5,020 5,020 690 Utilities expense... 7,800 (d) 800 8,600 8,600 13,800 18,000
Totals... 435,420 435,420 44,100 457,72 457,720 178,320 280,000 279,400 177,720 44,100 0 Net income... 101,680 101,680 Totals... 280,000 280,000 279,400 279,400
Problem 5-3A (continued) Part 2 2011 Adjusting entries: a) Sept. 30 Supplies Expense... 13,800 Supplies... 13,800 To record consumption of supplies. b) 30 Insurance expense... 8,000 Prepaid Insurance... 8,000 To record consumption of insurance coverage. c) 30 Depreciation Expense, Equipment... 18,000 Accumulated Depreciation, Equipment... 18,000 To record depreciation. d) 30 Utilities Expense... 800 Accounts Payable... 800 To record accrued utilities costs. e) 30 Wages Expense... 3,000 Wages Payable... 3,000 To record accrued wages. f) 30 Interest Expense... 500 Interest Payable... 500 To record accrued interest expense.
Problem 5-3A (continued) Part 2 2011 Closing entries: Sept. 30 Construction Fees Earned... 280,000 Income Summary... 280,000 To close the revenue account to the Income Summary account. 30 Income Summary... 178,320 Depreciation Expense, Equipment... 18,000 Wages Expense... 85,000 Interest Expense... 3,500 Insurance Expense... 8,000 Rent Expense... 26,400 Supplies Expense... 13,800 Business Taxes Expense... 10,000 Repairs Expense... 5,020 Utilities Expense... 8,600 To close the expense accounts to the Income Summary account. 30 Income Summary... 101,680 Chris Challenger, Capital... 101,680 To close the Income Summary account to capital. 30 Chris Challenger, Capital... 72,000 Chris Challenger, Withdrawals... 72,000 To close the withdrawals account to capital. 4 Fundamental Accounting Principles, Thirteenth Canadian Edition
Problem 5-3B (90 minutes) Part 1 WEBSTER DEMOLITION COMPANY Work Sheet For Year Ended June 30, 2011 Balance Sheet Adjusted and Unadjusted Trial Income Statement of Trial Balance Adjustments Balance Statement Changes in Equity No. Title Debit Credit Debit Credit. Debit Credit Debit Credit Debit Credit 101 Cash... 4,500 4,500 4,500 126 Supplies... 9,000 (a) 4,950 4,050 4,050 128 Prepaid insurance... 7,300 (b) 5,750 1,550 1,550 167 Equipment... 70,000 70,000 70,000 168 Accumulated deprec., equipment... 5,000 (c) 9,000 14,000 14,000 201 Accounts payable... 8,000 (d) 350 8,350 8,350 203 Interest payable... (f) 100 100 100 210 Wages payable... (e) 1,100 1,100 1,100 251 Long-term notes payable... 45,000 45,000 45,000 301 Rusty Webster, capital... 33,450 33,450 33,450 302 Rusty Webster, withdrawals... 2,000 2,000 2,000 401 Demolition fees earned... 68,500 68,500 68,500 612 Depreciation expense, equipment... (c) 9,000 9,000 9,000 623 Wages expense... 25,700 (e) 1,100 26,800 26,800 633 Interest expense... 1,100 (f) 100 1,200 1,200 637 Insurance expense... (b) 5,750 5,750 5,750 640 Rent expense... 24,400 24,400 24,400 652 Supplies expense... (a) 4,950 4,950 4,950 683 Business tax expense... 4,200 4,200 4,200 684 Repairs expense... 3,350 3,350 3,350 690 Utilities expense... 8,400 (d) 350 8,750 8,750 Totals... 159,950 159,950 21,250 21,250 170,500 170,500 88,400 68,500 82,100 102,000 Net loss... 19,900 19,900 Totals... 88,400 88,400 102,000 102,000
Problem 5-3B (continued) Part 2 2011 Adjusting entries: (a) June 30 Supplies Expense... 4,950 Supplies... 4,950 To record consumption of supplies. (b) 30 Insurance Expense... 5,750 Prepaid Insurance... 5,750 To record consumption of insurance coverage. (c) 30 Depreciation Expense, Equipment... 9,000 Accumulated Depreciation, Equipment... 9,000 To record depreciation. (d) 30 Utilities Expense... 350 Accounts Payable... 350 To record accrued utilities costs. (e) 30 Wages Expense... 1,100 Wages Payable... 1,100 To record accrued wages. (f) 30 Interest Expense... 100 Interest Payable... 100 To record accrued interest expense. 6 Fundamental Accounting Principles, ThirteenthCanadian Edition
Problem 5-3B (continued) Part 2 2011 Closing entries: June 30 Demolition Fees Earned... 68,500 Income Summary... 68,500 To close the revenue account. 30 Income Summary... 88,400 Depreciation Expense, Equipment... 9,000 Wages Expense... 26,800 Interest Expense... 1,200 Insurance Expense... 5,750 Rent Expense... 24,400 Supplies Expense... 4,950 Business Tax Expense... 4,200 Repairs Expense... 3,350 Utilities Expense... 8,750 To close the expense accounts. 30 Rusty Webster, Capital... 19,900 Income Summary... 19,900 To close the Income Summary account. 30 Rusty Webster, Capital... 2,000 Rusty Webster, Withdrawals... 2,000 To close the withdrawals account. Solutions Manual for Chapter 5 7