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Chapter 3 Demonstration Problems The Adjusting Process Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-1.

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Presentation on theme: "Chapter 3 Demonstration Problems The Adjusting Process Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-1."— Presentation transcript:

1 Chapter 3 Demonstration Problems The Adjusting Process Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-1

2 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-2 Popular Advertising Agency completed the following selected transactions during July 2014: E3-19D Jul. 1Prepaid rent for three months, $6,000 4Received and paid electricity bill, $1,000 10Received cash for service rendered to customers, $5,000 15Paid cash for computer equipment, $20,000 20Service rendered on account, $10,000 31Made the adjusting entry for rent (from July 1). 31Accrued salary expense, $3,000 31Recorded depreciation for July on computer equipment, $170

3 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-3 E3-19D Requirements 1.Show whether each transaction would be handled as a revenue or an expense using both the cash basis and accrual basis accounting systems. 2.Calculate the amount of net income or net loss for Popular Advertising Agency under the accrual basis and cash basis accounting systems for July. 3.Considering your results from Requirement 2, which method gives the best picture of the true earnings of Popular Advertising Agency? Why?

4 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-4 E3-19D—Req.1 Amount of Revenue (Expense) for July DateCash Basis Amount of Revenue (Expense) Accrual Basis Amount of Revenue (Expense) Jul. 1($6,000) ($0)

5 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-5 E3-19D—Req.1 Amount of Revenue (Expense) for July DateCash Basis Amount of Revenue (Expense) Accrual Basis Amount of Revenue (Expense) Jul. 1($6,000) ($0) Jul. 4 (1,000)

6 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-6 E3-19D—Req.1 Amount of Revenue (Expense) for July DateCash Basis Amount of Revenue (Expense) Accrual Basis Amount of Revenue (Expense) Jul. 1($6,000) ($0) Jul. 4 (1,000) Jul. 10 5,000

7 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-7 E3-19D—Req.1 Amount of Revenue (Expense) for July DateCash Basis Amount of Revenue (Expense) Accrual Basis Amount of Revenue (Expense) Jul. 1($6,000) ($0) Jul. 4 (1,000) Jul. 10 5,000 Jul. 15(20,000) 0

8 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-8 E3-19D—Req.1 Amount of Revenue (Expense) for July DateCash Basis Amount of Revenue (Expense) Accrual Basis Amount of Revenue (Expense) Jul. 1($6,000) ($0) Jul. 4 (1,000) Jul. 10 5,000 Jul. 15(20,000) 0 Jul ,000

9 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-9 E3-19D—Req.1 Amount of Revenue (Expense) for July DateCash Basis Amount of Revenue (Expense) Accrual Basis Amount of Revenue (Expense) Jul. 1($6,000) ($0) Jul. 4 (1,000) Jul. 10 5,000 Jul. 15(20,000) 0 Jul ,000 Jul (2,000)* *Rent prepaid on July 1 for 3 months$6,000 Months÷3 Rent expense for July$2,000

10 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-10 E3-19D—Req.1 Amount of Revenue (Expense) for July DateCash Basis Amount of Revenue (Expense) Accrual Basis Amount of Revenue (Expense) Jul. 1($6,000) ($0) Jul. 4 (1,000) Jul. 10 5,000 Jul. 15(20,000) 0 Jul ,000 Jul (2,000)* Jul (3,000) *Rent prepaid on July 1 for 3 months$6,000 Months÷3 Rent expense for July$2,000

11 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-11 E3-19D—Req.1 Amount of Revenue (Expense) for July DateCash Basis Amount of Revenue (Expense) Accrual Basis Amount of Revenue (Expense) Jul. 1($6,000) ($0) Jul. 4 (1,000) Jul. 10 5,000 Jul. 15(20,000) 0 Jul ,000 Jul (2,000)* Jul (3,000) Jul (170) *Rent prepaid on July 1 for 3 months$6,000 Months÷3 Rent expense for July$2,000

12 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-12 E3-19D—Req.2 Net income (loss) under cash basis:

13 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-13 E3-19D—Req.2 Net income (loss) under cash basis: Calculation: Net Income (Loss)═Total Revenues – Total Expenses

14 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-14 E3-19D—Req.2 Net income (loss) under cash basis: Calculation: Net Income (Loss)═Total Revenues – Total Expenses ═$5,000 − ($6,000 + $1,000 + $20,000)

15 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-15 E3-19D—Req.2 Net income (loss) under cash basis: Calculation: Net Income (Loss)═Total Revenues – Total Expenses ═$5,000 − ($6,000 + $1,000 + $20,000) ═$5,000 − $27,000

16 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-16 E3-19D—Req.2 Net income (loss) under cash basis is ($22,000) Calculation: Net Income (Loss)═Total Revenues – Total Expenses ═$5,000 − ($6,000 + $1,000 + $20,000) ═$5,000 − $27,000 ═($22,000)

17 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-17 E3-19D—Req.2 Net income (loss) under cash basis is ($22,000) Calculation: Net Income (Loss)═Total Revenues – Total Expenses ═$5,000 − ($6,000 + $1,000 + $20,000) ═$5,000 − $27,000 ═($22,000) Net income (loss) under accrual basis:

18 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-18 E3-19D—Req.2 Net income (loss) under cash basis is ($22,000) Calculation: Net Income (Loss)═Total Revenues – Total Expenses ═$5,000 − ($6,000 + $1,000 + $20,000) ═$5,000 − $27,000 ═($22,000) Net income (loss) under accrual basis: Calculation: Net Income (Loss)═Total Revenues – Total Expenses

19 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-19 E3-19D—Req.2 Net income (loss) under cash basis is ($22,000) Calculation: Net Income (Loss)═Total Revenues – Total Expenses ═$5,000 − ($6,000 + $1,000 + $20,000) ═$5,000 − $27,000 ═($22,000) Net income (loss) under accrual basis: Calculation: Net Income (Loss)═Total Revenues – Total Expenses ═$5,000 + $10,000 − ($1,000 + $2,000 + $3,000 + $170)

20 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-20 E3-19D—Req.2 Net income (loss) under cash basis is ($22,000) Calculation: Net Income (Loss)═Total Revenues – Total Expenses ═$5,000 − ($6,000 + $1,000 + $20,000) ═$5,000 − $27,000 ═($22,000) Net income (loss) under accrual basis: Calculation: Net Income (Loss)═Total Revenues – Total Expenses ═$5,000 + $10,000 − ($1,000 + $2,000 + $3,000 + $170) ═$15,000 − $6,170

21 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-21 E3-19D—Req.2 Net income (loss) under cash basis is ($22,000) Calculation: Net Income (Loss)═Total Revenues – Total Expenses ═$5,000 − ($6,000 + $1,000 + $20,000) ═$5,000 − $27,000 ═($22,000) Net income (loss) under accrual basis is $8,830 Calculation: Net Income (Loss)═Total Revenues – Total Expenses ═$5,000 + $10,000 − ($1,000 + $2,000 + $3,000 + $170) ═$15,000 − $6,170 ═$8,830

22 Accrual basis accounting gives the best picture of the true earnings of Popular Advertising, because revenues are recorded when earned and expenses are recorded when incurred, as dictated by the revenue recognition principle and the matching principle Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-22 E3-19D—Req.3 Net income (loss) under cash basis is ($22,000) Calculation: Net Income (Loss)═Total Revenues – Total Expenses ═$5,000 − ($6,000 + $1,000 + $20,000) ═$5,000 − $27,000 ═($22,000) Net income (loss) under accrual basis is $8,830 Calculation: Net Income (Loss)═Total Revenues – Total Expenses ═$5,000 + $10,000 − ($1,000 + $2,000 + $3,000 + $170) ═$15,000 − $6,170 ═$8,830

23 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-23 The unadjusted trial balance for Bright Solutions Company, the tutoring service, is as follows: E3-25D

24 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-24 E3-25D BRIGHT SOLUTIONS COMPANY Unadjusted Trial Balance December 31, 2014 Account TitleBalance Debitcredit Cash $1,500 Office Supplies4,000 Prepaid Insurance1,200 Equipment35,000 Accumulated Depreciation—Equipment $14,000 Accounts Payable 3,700 Salaries Payable Unearned Revenue 2,000 Common Stock 10,000 Dividends5,000 Service Revenue 27,000 Salaries Expense10,000 Supplies Expense Depreciation Expense—Equipment Insurance Expense Total $56,700

25 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-25 E3-25D During the 12 months ended December 31, 2014, Bright Solutions: a.used office supplies of $2,500. b.used prepaid insurance of $600. c.depreciated equipment, $700. d.accrued salaries expense of $500 that hasn’t been paid yet. e.earned $1,000 of unearned revenue. Requirements 1.Open a T-account for each account using the unadjusted balances. 2.Journalize the adjusting entries using the letter and December 31 date in the date column. 3.Post the adjustments to the T-accounts, entering each adjustment by letter. Show each account’s adjusted balance. 4.Prepare an adjusted trial balance.

26 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall 3-26 E3-25D—Req.1 Cash Bal.1,500 Office Supplies Bal.4,000 Prepaid Insurance Bal.1,200 Equipment Bal.35,000

27 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall 3-27 E3-25D—Req.1 Accumulated Depreciation -Equipment 14,000Bal. Accounts Payable 3,700Bal. Salaries PayableUnearned Revenue 2,000Bal.

28 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall 3-28 E3-25D—Req.1 Common Stock 10,000Bal. Dividends Bal.5,000 Service Revenue 27,000Bal. Salaries Expense Bal.10,000

29 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall 3-29 E3-25D—Req.1 Supplies Expense Depreciation Expense—Equipment Insurance Expense

30 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-30 a. Used office supplies of $2,500. E3-25D—Req.2&3 DateAccounts and ExplanationDebitCredit a. Dec. 31 Supplies Expense 2,500 Office Supplies 2,500 To record office supplies used. Office Supplies Bal.4,0002,500a. Supplies Expense a.2,500

31 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-31 b. Used prepaid insurance of $600 E3-25D—Req.2&3 DateAccounts and ExplanationDebitCredit b. Dec. 31 Insurance Expense 600 Prepaid Insurance 600 To record insurance expense. Insurance Expense b.600 Prepaid Insurance Bal.1,200600b.

32 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-32 c. Depreciated equipment, $700 E3-25D—Req.2&3 DateAccounts and ExplanationDebitCredit c. Dec. 31 Depreciation Expense—Equipment 700 Accumulated Depreciation—Equipment 700 To record depreciation on equipment. Depreciation Expense—Equipment c.700 Accumulated Depreciation -Equipment 14,000Bal. 700c.

33 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-33 d. Accrued salaries expense of $500 that hasn’t been paid yet. E3-25D—Req.2&3 DateAccounts and ExplanationDebitCredit d. Dec. 31 Salaries Expense 500 Salaries Payable 500 To accrue salaries expense. Salaries Expense Bal.10,000 d.500 Salaries Payable 500d.

34 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-34 e. Earned $1,000 of unearned revenue. E3-25D—Req.2&3 DateAccounts and ExplanationDebitCredit e. Dec. 31 Unearned Revenue 1,000 Service Revenue 1,000 To record service revenue earned that was collected in advance. Unearned Revenue e.1,0002,000Bal. Service Revenue 27,000Bal. 1,000e.

35 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall 3-35 E3-25D—Req.3 Cash Bal.1,500 Bal.1,500 Office Supplies Bal.4,0002,500a. Bal.1,500 Prepaid Insurance Bal.1,200600b. Bal.600 Equipment Bal.35,000 Bal.35,000

36 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall 3-36 E3-25D—Req.3 Accumulated Depreciation -Equipment 14,000Bal. 700c. 14,700Bal. Accounts Payable 3,700Bal. 3,700Bal. Salaries Payable 500d. 500Bal. Unearned Revenue e.1,0002,000Bal. 1,000Bal.

37 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall 3-37 E3-25D—Req.3 Common Stock 10,000Bal. 10,000Bal. Dividends Bal.5,000 Bal.5,000 Service Revenue 27,000Bal. 1,000e. 28,000Bal. Salaries Expense Bal.10,000 d.500 Bal.10,500

38 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall 3-38 E3-25D—Req.3 Supplies Expense a.2,500 Bal.2,500 Depreciation Expense—Equipment c.700 Bal.700 Insurance Expense b.600 Bal.600

39 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-39 E3-25D—Req.4 BRIGHT SOLUTIONS COMPANY Adjusted Trial Balance December 31, 2014 Account TitleBalance Debitcredit Cash $1,500

40 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-40 E3-25D—Req.4 BRIGHT SOLUTIONS COMPANY Adjusted Trial Balance December 31, 2014 Account TitleBalance Debitcredit Cash $1,500 Office Supplies1,500

41 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-41 E3-25D—Req.4 BRIGHT SOLUTIONS COMPANY Adjusted Trial Balance December 31, 2014 Account TitleBalance Debitcredit Cash $1,500 Office Supplies1,500 Prepaid Insurance600

42 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-42 E3-25D—Req.4 BRIGHT SOLUTIONS COMPANY Adjusted Trial Balance December 31, 2014 Account TitleBalance Debitcredit Cash $1,500 Office Supplies1,500 Prepaid Insurance600 Equipment35,000

43 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-43 E3-25D—Req.4 BRIGHT SOLUTIONS COMPANY Adjusted Trial Balance December 31, 2014 Account TitleBalance Debitcredit Cash $1,500 Office Supplies1,500 Prepaid Insurance600 Equipment35,000 Accumulated Depreciation—Equipment $14,700

44 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-44 E3-25D—Req.4 BRIGHT SOLUTIONS COMPANY Adjusted Trial Balance December 31, 2014 Account TitleBalance Debitcredit Cash $1,500 Office Supplies1,500 Prepaid Insurance600 Equipment35,000 Accumulated Depreciation—Equipment $14,700 Accounts Payable 3,700

45 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-45 E3-25D—Req.4 BRIGHT SOLUTIONS COMPANY Adjusted Trial Balance December 31, 2014 Account TitleBalance Debitcredit Cash $1,500 Office Supplies1,500 Prepaid Insurance600 Equipment35,000 Accumulated Depreciation—Equipment $14,700 Accounts Payable 3,700 Salaries Payable 500

46 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-46 E3-25D—Req.4 BRIGHT SOLUTIONS COMPANY Adjusted Trial Balance December 31, 2014 Account TitleBalance Debitcredit Cash $1,500 Office Supplies1,500 Prepaid Insurance600 Equipment35,000 Accumulated Depreciation—Equipment $14,700 Accounts Payable 3,700 Salaries Payable 500 Unearned Revenue 1,000

47 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-47 E3-25D—Req.4 BRIGHT SOLUTIONS COMPANY Adjusted Trial Balance December 31, 2014 Account TitleBalance Debitcredit Cash $1,500 Office Supplies1,500 Prepaid Insurance600 Equipment35,000 Accumulated Depreciation—Equipment $14,700 Accounts Payable 3,700 Salaries Payable 500 Unearned Revenue 1,000 Common Stock 10,000

48 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-48 E3-25D—Req.4 BRIGHT SOLUTIONS COMPANY Adjusted Trial Balance December 31, 2014 Account TitleBalance Debitcredit Cash $1,500 Office Supplies1,500 Prepaid Insurance600 Equipment35,000 Accumulated Depreciation—Equipment $14,700 Accounts Payable 3,700 Salaries Payable 500 Unearned Revenue 1,000 Common Stock 10,000 Dividends5,000

49 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-49 E3-25D—Req.4 BRIGHT SOLUTIONS COMPANY Adjusted Trial Balance December 31, 2014 Account TitleBalance Debitcredit Cash $1,500 Office Supplies1,500 Prepaid Insurance600 Equipment35,000 Accumulated Depreciation—Equipment $14,700 Accounts Payable 3,700 Salaries Payable 500 Unearned Revenue 1,000 Common Stock 10,000 Dividends5,000 Service Revenue 28,000

50 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-50 E3-25D—Req.4 BRIGHT SOLUTIONS COMPANY Adjusted Trial Balance December 31, 2014 Account TitleBalance Debitcredit Cash $1,500 Office Supplies1,500 Prepaid Insurance600 Equipment35,000 Accumulated Depreciation—Equipment $14,700 Accounts Payable 3,700 Salaries Payable 500 Unearned Revenue 1,000 Common Stock 10,000 Dividends5,000 Service Revenue 28,000 Salaries Expense10,500

51 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-51 E3-25D—Req.4 BRIGHT SOLUTIONS COMPANY Adjusted Trial Balance December 31, 2014 Account TitleBalance Debitcredit Cash $1,500 Office Supplies1,500 Prepaid Insurance600 Equipment35,000 Accumulated Depreciation—Equipment $14,700 Accounts Payable 3,700 Salaries Payable 500 Unearned Revenue 1,000 Common Stock 10,000 Dividends5,000 Service Revenue 28,000 Salaries Expense10,500 Supplies Expense2,500

52 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-52 E3-25D—Req.4 BRIGHT SOLUTIONS COMPANY Adjusted Trial Balance December 31, 2014 Account TitleBalance Debitcredit Cash $1,500 Office Supplies1,500 Prepaid Insurance600 Equipment35,000 Accumulated Depreciation—Equipment $14,700 Accounts Payable 3,700 Salaries Payable 500 Unearned Revenue 1,000 Common Stock 10,000 Dividends5,000 Service Revenue 28,000 Salaries Expense10,500 Supplies Expense2,500 Depreciation Expense—Equipment700

53 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-53 E3-25D—Req.4 BRIGHT SOLUTIONS COMPANY Adjusted Trial Balance December 31, 2014 Account TitleBalance Debitcredit Cash $1,500 Office Supplies1,500 Prepaid Insurance600 Equipment35,000 Accumulated Depreciation—Equipment $14,700 Accounts Payable 3,700 Salaries Payable 500 Unearned Revenue 1,000 Common Stock 10,000 Dividends5,000 Service Revenue 28,000 Salaries Expense10,500 Supplies Expense2,500 Depreciation Expense—Equipment700 Insurance Expense600

54 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-54 E3-25D—Req.4 BRIGHT SOLUTIONS COMPANY Adjusted Trial Balance December 31, 2014 Account TitleBalance Debitcredit Cash $1,500 Office Supplies1,500 Prepaid Insurance600 Equipment35,000 Accumulated Depreciation—Equipment $14,700 Accounts Payable 3,700 Salaries Payable 500 Unearned Revenue 1,000 Common Stock 10,000 Dividends5,000 Service Revenue 28,000 Salaries Expense10,500 Supplies Expense2,500 Depreciation Expense—Equipment700 Insurance Expense600 Total $57,900

55 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-55 The worksheet of Clear Telephonic Services follows but is incomplete. E3-30D

56 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-56 CLEAR TELEPHONIC SERVICES Worksheet 31-Dec-14 Account NamesUnadjusted Trial BalanceAdjustments DebitCreditDebitCredit Cash$30,000 Accounts Receivable20,000 (h)$4,000 Office Supplies500 (b)$300 Prepaid Insurance3,000 (a)2,000 Equipment180,000 Accumulated Depreciation—Equipment (c)1,800 Computers110,000 Accumulated Depreciation—Computers (d)2,200 Accounts Payable $6,000 Utilities Payable 1,500 Salaries Payable (f)9,000 Interest Payable (g)200 Unearned Revenue 5,000(e)3,000 Notes Payable 50,000 Common Stock 250,000 Dividends35,000 Service Revenue 120,000 (e, h)7,000 Rent Expense20,000 (a)2,000 Salaries Expense25,000 (f)9,000 Supplies Expense (b)300 Utilities Expense9,000 Depreciation Expense—Equipment (c)1,800 Depreciation Expense—Computers (d)2,200 Interest Expense (g)200 Total$432,500 $22,500 E3-30D

57 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-57 E3-30D Requirements Calculate and enter the adjusted account balances in the Adjusted Trial Balance columns.

58 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-58 CLEAR TELEPHONIC SERVICES Worksheet 31-Dec-14 Account NamesUnadjusted Trial BalanceAdjustments Adjusted Trial Balance DebitCreditDebitCredit DebitCredit Cash$30,000 E3-30D

59 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-59 CLEAR TELEPHONIC SERVICES Worksheet 31-Dec-14 Account NamesUnadjusted Trial BalanceAdjustments Adjusted Trial Balance DebitCreditDebitCredit DebitCredit Cash$30,000 Accounts Receivable20,000 (h)$4,000 24,000 E3-30D

60 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-60 CLEAR TELEPHONIC SERVICES Worksheet 31-Dec-14 Account NamesUnadjusted Trial BalanceAdjustments Adjusted Trial Balance DebitCreditDebitCredit DebitCredit Cash$30,000 Accounts Receivable20,000 (h)$4,000 24,000 Office Supplies500 (b)$ E3-30D

61 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-61 CLEAR TELEPHONIC SERVICES Worksheet 31-Dec-14 Account NamesUnadjusted Trial BalanceAdjustments Adjusted Trial Balance DebitCreditDebitCredit DebitCredit Cash$30,000 Accounts Receivable20,000 (h)$4,000 24,000 Office Supplies500 (b)$ Prepaid Insurance3,000 (a)2,000 1,000 E3-30D

62 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-62 CLEAR TELEPHONIC SERVICES Worksheet 31-Dec-14 Account NamesUnadjusted Trial BalanceAdjustments Adjusted Trial Balance DebitCreditDebitCredit DebitCredit Cash$30,000 Accounts Receivable20,000 (h)$4,000 24,000 Office Supplies500 (b)$ Prepaid Insurance3,000 (a)2,000 1,000 Equipment180,000 E3-30D

63 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-63 CLEAR TELEPHONIC SERVICES Worksheet 31-Dec-14 Account NamesUnadjusted Trial BalanceAdjustments Adjusted Trial Balance DebitCreditDebitCredit DebitCredit Cash$30,000 Accounts Receivable20,000 (h)$4,000 24,000 Office Supplies500 (b)$ Prepaid Insurance3,000 (a)2,000 1,000 Equipment180,000 Accumulated Depreciation—Equipment (c)1,800 $1,800 E3-30D

64 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-64 CLEAR TELEPHONIC SERVICES Worksheet 31-Dec-14 Account NamesUnadjusted Trial BalanceAdjustments Adjusted Trial Balance DebitCreditDebitCredit DebitCredit Cash$30,000 Accounts Receivable20,000 (h)$4,000 24,000 Office Supplies500 (b)$ Prepaid Insurance3,000 (a)2,000 1,000 Equipment180,000 Accumulated Depreciation—Equipment (c)1,800 $1,800 Computers110,000 E3-30D

65 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-65 CLEAR TELEPHONIC SERVICES Worksheet 31-Dec-14 Account NamesUnadjusted Trial BalanceAdjustments Adjusted Trial Balance DebitCreditDebitCredit DebitCredit Cash$30,000 Accounts Receivable20,000 (h)$4,000 24,000 Office Supplies500 (b)$ Prepaid Insurance3,000 (a)2,000 1,000 Equipment180,000 Accumulated Depreciation—Equipment (c)1,800 $1,800 Computers110,000 Accumulated Depreciation—Computers (d)2,200 E3-30D

66 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-66 CLEAR TELEPHONIC SERVICES Worksheet 31-Dec-14 Account NamesUnadjusted Trial BalanceAdjustments Adjusted Trial Balance DebitCreditDebitCredit DebitCredit Cash$30,000 Accounts Receivable20,000 (h)$4,000 24,000 Office Supplies500 (b)$ Prepaid Insurance3,000 (a)2,000 1,000 Equipment180,000 Accumulated Depreciation—Equipment (c)1,800 $1,800 Computers110,000 Accumulated Depreciation—Computers (d)2,200 Accounts Payable $6,000 6,000 E3-30D

67 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-67 CLEAR TELEPHONIC SERVICES Worksheet 31-Dec-14 Account NamesUnadjusted Trial BalanceAdjustments Adjusted Trial Balance DebitCreditDebitCredit DebitCredit Cash$30,000 Accounts Receivable20,000 (h)$4,000 24,000 Office Supplies500 (b)$ Prepaid Insurance3,000 (a)2,000 1,000 Equipment180,000 Accumulated Depreciation—Equipment (c)1,800 $1,800 Computers110,000 Accumulated Depreciation—Computers (d)2,200 Accounts Payable $6,000 6,000 Utilities Payable 1,500 E3-30D

68 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-68 CLEAR TELEPHONIC SERVICES Worksheet 31-Dec-14 Account NamesUnadjusted Trial BalanceAdjustments Adjusted Trial Balance DebitCreditDebitCredit DebitCredit Cash$30,000 Accounts Receivable20,000 (h)$4,000 24,000 Office Supplies500 (b)$ Prepaid Insurance3,000 (a)2,000 1,000 Equipment180,000 Accumulated Depreciation—Equipment (c)1,800 $1,800 Computers110,000 Accumulated Depreciation—Computers (d)2,200 Accounts Payable $6,000 6,000 Utilities Payable 1,500 Salaries Payable (f)9,000 E3-30D

69 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-69 CLEAR TELEPHONIC SERVICES Worksheet 31-Dec-14 Account NamesUnadjusted Trial BalanceAdjustments Adjusted Trial Balance DebitCreditDebitCredit DebitCredit Cash$30,000 Accounts Receivable20,000 (h)$4,000 24,000 Office Supplies500 (b)$ Prepaid Insurance3,000 (a)2,000 1,000 Equipment180,000 Accumulated Depreciation—Equipment (c)1,800 $1,800 Computers110,000 Accumulated Depreciation—Computers (d)2,200 Accounts Payable $6,000 6,000 Utilities Payable 1,500 Salaries Payable (f)9,000 Interest Payable (g)200 E3-30D

70 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-70 CLEAR TELEPHONIC SERVICES Worksheet 31-Dec-14 Account NamesUnadjusted Trial BalanceAdjustments Adjusted Trial Balance DebitCreditDebitCredit DebitCredit Cash$30,000 Accounts Receivable20,000 (h)$4,000 24,000 Office Supplies500 (b)$ Prepaid Insurance3,000 (a)2,000 1,000 Equipment180,000 Accumulated Depreciation—Equipment (c)1,800 $1,800 Computers110,000 Accumulated Depreciation—Computers (d)2,200 Accounts Payable $6,000 6,000 Utilities Payable 1,500 Salaries Payable (f)9,000 Interest Payable (g)200 Unearned Revenue 5,000(e)3,000 2,000 E3-30D

71 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-71 CLEAR TELEPHONIC SERVICES Worksheet 31-Dec-14 Account NamesUnadjusted Trial BalanceAdjustments Adjusted Trial Balance DebitCreditDebitCredit DebitCredit Cash$30,000 Accounts Receivable20,000 (h)$4,000 24,000 Office Supplies500 (b)$ Prepaid Insurance3,000 (a)2,000 1,000 Equipment180,000 Accumulated Depreciation—Equipment (c)1,800 $1,800 Computers110,000 Accumulated Depreciation—Computers (d)2,200 Accounts Payable $6,000 6,000 Utilities Payable 1,500 Salaries Payable (f)9,000 Interest Payable (g)200 Unearned Revenue 5,000(e)3,000 2,000 Notes Payable 50,000 E3-30D

72 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-72 CLEAR TELEPHONIC SERVICES Worksheet 31-Dec-14 Account NamesUnadjusted Trial BalanceAdjustments Adjusted Trial Balance DebitCreditDebitCredit DebitCredit Cash$30,000 Accounts Receivable20,000 (h)$4,000 24,000 Office Supplies500 (b)$ Prepaid Insurance3,000 (a)2,000 1,000 Equipment180,000 Accumulated Depreciation—Equipment (c)1,800 $1,800 Computers110,000 Accumulated Depreciation—Computers (d)2,200 Accounts Payable $6,000 6,000 Utilities Payable 1,500 Salaries Payable (f)9,000 Interest Payable (g)200 Unearned Revenue 5,000(e)3,000 2,000 Notes Payable 50,000 Common Stock 250,000 E3-30D

73 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-73 CLEAR TELEPHONIC SERVICES Worksheet 31-Dec-14 Account NamesUnadjusted Trial BalanceAdjustments Adjusted Trial Balance DebitCreditDebitCredit DebitCredit Cash$30,000 Accounts Receivable20,000 (h)$4,000 24,000 Office Supplies500 (b)$ Prepaid Insurance3,000 (a)2,000 1,000 Equipment180,000 Accumulated Depreciation—Equipment (c)1,800 $1,800 Computers110,000 Accumulated Depreciation—Computers (d)2,200 Accounts Payable $6,000 6,000 Utilities Payable 1,500 Salaries Payable (f)9,000 Interest Payable (g)200 Unearned Revenue 5,000(e)3,000 2,000 Notes Payable 50,000 Common Stock 250,000 Dividends35,000 E3-30D

74 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-74 CLEAR TELEPHONIC SERVICES Worksheet 31-Dec-14 Account NamesUnadjusted Trial BalanceAdjustments Adjusted Trial Balance DebitCreditDebitCredit DebitCredit Cash$30,000 Accounts Receivable20,000 (h)$4,000 24,000 Office Supplies500 (b)$ Prepaid Insurance3,000 (a)2,000 1,000 Equipment180,000 Accumulated Depreciation—Equipment (c)1,800 $1,800 Computers110,000 Accumulated Depreciation—Computers (d)2,200 Accounts Payable $6,000 6,000 Utilities Payable 1,500 Salaries Payable (f)9,000 Interest Payable (g)200 Unearned Revenue 5,000(e)3,000 2,000 Notes Payable 50,000 Common Stock 250,000 Dividends35,000 Service Revenue 120,000 (e, h)7, ,000 E3-30D

75 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-75 CLEAR TELEPHONIC SERVICES Worksheet 31-Dec-14 Account NamesUnadjusted Trial BalanceAdjustments Adjusted Trial Balance DebitCreditDebitCredit DebitCredit Cash$30,000 Accounts Receivable20,000 (h)$4,000 24,000 Office Supplies500 (b)$ Prepaid Insurance3,000 (a)2,000 1,000 Equipment180,000 Accumulated Depreciation—Equipment (c)1,800 $1,800 Computers110,000 Accumulated Depreciation—Computers (d)2,200 Accounts Payable $6,000 6,000 Utilities Payable 1,500 Salaries Payable (f)9,000 Interest Payable (g)200 Unearned Revenue 5,000(e)3,000 2,000 Notes Payable 50,000 Common Stock 250,000 Dividends35,000 Service Revenue 120,000 (e, h)7, ,000 Rent Expense20,000 (a)2,000 22,000 E3-30D

76 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-76 CLEAR TELEPHONIC SERVICES Worksheet 31-Dec-14 Account NamesUnadjusted Trial BalanceAdjustments Adjusted Trial Balance DebitCreditDebitCredit DebitCredit Cash$30,000 Accounts Receivable20,000 (h)$4,000 24,000 Office Supplies500 (b)$ Prepaid Insurance3,000 (a)2,000 1,000 Equipment180,000 Accumulated Depreciation—Equipment (c)1,800 $1,800 Computers110,000 Accumulated Depreciation—Computers (d)2,200 Accounts Payable $6,000 6,000 Utilities Payable 1,500 Salaries Payable (f)9,000 Interest Payable (g)200 Unearned Revenue 5,000(e)3,000 2,000 Notes Payable 50,000 Common Stock 250,000 Dividends35,000 Service Revenue 120,000 (e, h)7, ,000 Rent Expense20,000 (a)2,000 22,000 Salaries Expense25,000 (f)9,000 34,000 E3-30D

77 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-77 CLEAR TELEPHONIC SERVICES Worksheet 31-Dec-14 Account NamesUnadjusted Trial BalanceAdjustments Adjusted Trial Balance DebitCreditDebitCredit DebitCredit Cash$30,000 Accounts Receivable20,000 (h)$4,000 24,000 Office Supplies500 (b)$ Prepaid Insurance3,000 (a)2,000 1,000 Equipment180,000 Accumulated Depreciation—Equipment (c)1,800 $1,800 Computers110,000 Accumulated Depreciation—Computers (d)2,200 Accounts Payable $6,000 6,000 Utilities Payable 1,500 Salaries Payable (f)9,000 Interest Payable (g)200 Unearned Revenue 5,000(e)3,000 2,000 Notes Payable 50,000 Common Stock 250,000 Dividends35,000 Service Revenue 120,000 (e, h)7, ,000 Rent Expense20,000 (a)2,000 22,000 Salaries Expense25,000 (f)9,000 34,000 Supplies Expense (b)300 E3-30D

78 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-78 CLEAR TELEPHONIC SERVICES Worksheet 31-Dec-14 Account NamesUnadjusted Trial BalanceAdjustments Adjusted Trial Balance DebitCreditDebitCredit DebitCredit Cash$30,000 Accounts Receivable20,000 (h)$4,000 24,000 Office Supplies500 (b)$ Prepaid Insurance3,000 (a)2,000 1,000 Equipment180,000 Accumulated Depreciation—Equipment (c)1,800 $1,800 Computers110,000 Accumulated Depreciation—Computers (d)2,200 Accounts Payable $6,000 6,000 Utilities Payable 1,500 Salaries Payable (f)9,000 Interest Payable (g)200 Unearned Revenue 5,000(e)3,000 2,000 Notes Payable 50,000 Common Stock 250,000 Dividends35,000 Service Revenue 120,000 (e, h)7, ,000 Rent Expense20,000 (a)2,000 22,000 Salaries Expense25,000 (f)9,000 34,000 Supplies Expense (b)300 Utilities Expense9,000 E3-30D

79 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-79 CLEAR TELEPHONIC SERVICES Worksheet 31-Dec-14 Account NamesUnadjusted Trial BalanceAdjustments Adjusted Trial Balance DebitCreditDebitCredit DebitCredit Cash$30,000 Accounts Receivable20,000 (h)$4,000 24,000 Office Supplies500 (b)$ Prepaid Insurance3,000 (a)2,000 1,000 Equipment180,000 Accumulated Depreciation—Equipment (c)1,800 $1,800 Computers110,000 Accumulated Depreciation—Computers (d)2,200 Accounts Payable $6,000 6,000 Utilities Payable 1,500 Salaries Payable (f)9,000 Interest Payable (g)200 Unearned Revenue 5,000(e)3,000 2,000 Notes Payable 50,000 Common Stock 250,000 Dividends35,000 Service Revenue 120,000 (e, h)7, ,000 Rent Expense20,000 (a)2,000 22,000 Salaries Expense25,000 (f)9,000 34,000 Supplies Expense (b)300 Utilities Expense9,000 Depreciation Expense—Equipment (c)1,800 E3-30D

80 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-80 CLEAR TELEPHONIC SERVICES Worksheet 31-Dec-14 Account NamesUnadjusted Trial BalanceAdjustments Adjusted Trial Balance DebitCreditDebitCredit DebitCredit Cash$30,000 Accounts Receivable20,000 (h)$4,000 24,000 Office Supplies500 (b)$ Prepaid Insurance3,000 (a)2,000 1,000 Equipment180,000 Accumulated Depreciation—Equipment (c)1,800 $1,800 Computers110,000 Accumulated Depreciation—Computers (d)2,200 Accounts Payable $6,000 6,000 Utilities Payable 1,500 Salaries Payable (f)9,000 Interest Payable (g)200 Unearned Revenue 5,000(e)3,000 2,000 Notes Payable 50,000 Common Stock 250,000 Dividends35,000 Service Revenue 120,000 (e, h)7, ,000 Rent Expense20,000 (a)2,000 22,000 Salaries Expense25,000 (f)9,000 34,000 Supplies Expense (b)300 Utilities Expense9,000 Depreciation Expense—Equipment (c)1,800 Depreciation Expense—Computers (d)2,200 E3-30D

81 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-81 CLEAR TELEPHONIC SERVICES Worksheet 31-Dec-14 Account NamesUnadjusted Trial BalanceAdjustments Adjusted Trial Balance DebitCreditDebitCredit DebitCredit Cash$30,000 Accounts Receivable20,000 (h)$4,000 24,000 Office Supplies500 (b)$ Prepaid Insurance3,000 (a)2,000 1,000 Equipment180,000 Accumulated Depreciation—Equipment (c)1,800 $1,800 Computers110,000 Accumulated Depreciation—Computers (d)2,200 Accounts Payable $6,000 6,000 Utilities Payable 1,500 Salaries Payable (f)9,000 Interest Payable (g)200 Unearned Revenue 5,000(e)3,000 2,000 Notes Payable 50,000 Common Stock 250,000 Dividends35,000 Service Revenue 120,000 (e, h)7, ,000 Rent Expense20,000 (a)2,000 22,000 Salaries Expense25,000 (f)9,000 34,000 Supplies Expense (b)300 Utilities Expense9,000 Depreciation Expense—Equipment (c)1,800 Depreciation Expense—Computers (d)2,200 Interest Expense (g)200 E3-30D

82 Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall3-82 CLEAR TELEPHONIC SERVICES Worksheet 31-Dec-14 Account NamesUnadjusted Trial BalanceAdjustments Adjusted Trial Balance DebitCreditDebitCredit DebitCredit Cash$30,000 Accounts Receivable20,000 (h)$4,000 24,000 Office Supplies500 (b)$ Prepaid Insurance3,000 (a)2,000 1,000 Equipment180,000 Accumulated Depreciation—Equipment (c)1,800 $1,800 Computers110,000 Accumulated Depreciation—Computers (d)2,200 Accounts Payable $6,000 6,000 Utilities Payable 1,500 Salaries Payable (f)9,000 Interest Payable (g)200 Unearned Revenue 5,000(e)3,000 2,000 Notes Payable 50,000 Common Stock 250,000 Dividends35,000 Service Revenue 120,000 (e, h)7, ,000 Rent Expense20,000 (a)2,000 22,000 Salaries Expense25,000 (f)9,000 34,000 Supplies Expense (b)300 Utilities Expense9,000 Depreciation Expense—Equipment (c)1,800 Depreciation Expense—Computers (d)2,200 Interest Expense (g)200 Total$432,500 $22,500 $449,700 E3-30D

83 End of Chapter Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall


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