Q7E E3-7 (L03) (Analyze Adjusted Dat... [FREE SOLUTION]

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Chapter 3: Q7E (page 132)

E3-7 (L03) (Analyze Adjusted Data) A partial adjusted trial balance of Piper Company at January 31, 2017, shows the following.
PIPER COMPANY
ADJUSTED TRIAL BALANCEJANUARY 31, 2017
Debit ($) Credit($)Supplies $ 700Prepaid Insurance 2,400Salaries and Wages Payable $ 800UnearnedService Revenue 750Supplies Expense 950Insurance Expense 400Salaries and Wages Expense 1,800Service Revenue 2,000
InstructionsAnswer the following questions, assuming the year begins January 1.(a) If the amount in Supplies Expense is the January 31 adjusting entry, and $850 of supplies was purchased in January,what was the balance in Supplies on January 1?(b) If the amount in Insurance Expense is the January 31 adjusting entry, and the original insurance premium was for oneyear, what was the total premium and when was the policy purchased?(c) If $2,500 of salaries was paid in January, what was the balance in Salaries and Wages Payable at December 31, 2016?(d) If $1,600 was received in January for services performed in January, what was the balance in Unearned Service Revenueat December 31, 2016?

Short Answer

Expert verified

(a)Supplies on January 1 are $800

(b) Purchased the premium policy in August 2016.

(d) Unearned service revenue on December 31 2016, was $350

Step by step solution

Meaning of Trial balance

A trial balance means a worksheet that lists all the ending balances of the ledger accounts on their respective debit or credit side.

Calculation of Supply balance on January 1

$\begin{matrix} 厂耻辫辫濒测鈥塨补濒补苍肠别鈥塉补苍耻补谤测鈥� 1 鈥� = 厂耻辫辫濒测鈥塨补濒补苍肠别鈥塉补苍耻补谤测鈥� 31 鈥� + 厂耻辫辫濒颈别蝉鈥塃虫辫别苍蝉别蝉鈥� 鈭� 笔耻谤肠丑补蝉别蝉鈥� \\ 鈥� = $ 700 + $ 950 鈭� $ 850 \\ = $ 1650 鈭� $ 850 \\ = $ 800 \end{matrix}$

The supply balance on January 1 is$800

Calculation of total insurance purchase

Calculation of insurance expense per year

$\begin{matrix} 滨苍蝉耻谤补苍肠别鈥塃虫辫别苍蝉别鈥塸别谤鈥墆别补谤鈥�(罢辞迟补濒鈥塸谤别尘颈耻尘) = 滨苍蝉耻谤补苍肠别鈥塃虫辫别苍蝉别鈥塸别谤鈥尘辞苍迟丑脳 12 \\ = $ 400 脳 12 = $ 4800 \end{matrix}$

Calculation of prepaid insurance balance at the beginning of the year

$\begin{matrix} 笔谤别辫补颈诲鈥塱苍蝉耻谤补苍肠别鈥塨补濒补苍肠别鈥� (beginning) = 笔谤别辫补颈诲鈥塱苍蝉耻谤补苍肠别 + 滨苍蝉耻谤补苍肠别鈥塸谤别尘颈耻尘 \\ = $ 2, 400 + $ 400 \\ = $ 2, 800 \end{matrix}$

Calculation of Insurance purchased

$\begin{matrix} 滨苍蝉耻谤补苍肠别鈥塸耻谤肠丑补蝉别诲鈥尘辞苍迟丑濒测 = 鈥� \frac{滨苍蝉耻谤补苍肠别鈥塭虫辫别苍蝉别鈥塸别谤鈥墆别补谤鈭� prepaidinsurance(beginning)}{滨苍蝉耻谤补苍肠别鈥塭虫辫别苍蝉别鈥塸别谤鈥尘辞苍迟丑} \\ = \frac{$ 4, 800 鈭� $ 2, 800}{$ 400} \\ = 5 鈥尘辞苍迟丑蝉 \end{matrix}$

Premium purchased for (Total premium) $4800

Premium purchased month is August 2016 (5 months before January which means August, September, October, November and December)

Calculation of salaries and wages payable on December 31, 2016

$\begin{matrix} 厂补濒补谤颈别蝉鈥塧苍诲鈥墂补驳别蝉鈥塸补测补产濒别鈥塧迟鈥塂别肠别尘产别谤鈥� 31, 鈥� 2016 = 厂补濒补谤颈别蝉鈥塭虫辫别苍蝉别蝉鈥� + 奥补驳别蝉鈥塸补测补产濒别鈭� 厂补濒补谤颈别蝉鈥塸补颈诲 \\ = $ 1800 + $ 800 鈭� $ 2500 \\ = $ 2600 鈭� $ 2500 \\ = $ 100 \end{matrix}$

Salaries and wages payable on December 31, 2016, are$100

Calculation of unearned service revenue on December 31 2016

$\begin{matrix} 鲍苍别补谤苍别诲鈥塻别谤惫颈肠别鈥塺别惫别苍耻别鈥塧迟鈥塂别肠 31, 2016 = 颁补蝉丑鈥塺别肠别颈惫别诲鈥� 鈭� 厂别谤惫颈肠别鈥塺别惫别苍耻别 + 鲍苍别补谤苍别诲鈥塻别谤惫颈肠别鈥塺别惫别苍耻别辞苍鈥塉补苍鈥� 31 \\ = $ 1600 鈭� $ 2000 + $ 750 \\ = 鈭� $ 400 + $ 750 \\ = $ 350 \end{matrix}$

Unearned service revenue on December 31 2016, was$350

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MASON ADVERTISINGTRIAL BALANCEDECEMBER 31, 2017
	Unadjusted		Adjusted
	Dr.	Cr.	Dr.	Cr.
Cash	\( 11,000		\) 11,000
Accounts Receivable	20,000		23,500
Supplies	8,400		3,000
Prepaid Insurance	3,350		2,500
Equipment	60,000		60,000
Accumulated Depreciation鈥擡quipment		\( 28,000		\) 33,000
Accounts Payable		5,000		5,000
Interest Payable		鈥�0鈥�		150
Notes Payable		5,000		5,000
Unearned Service Revenue		7,000		5,600
Salaries and Wages Payable		鈥�0鈥�		1,300
Common Stock		10,000		10,000
Retained Earnings		3,500		3,500
Service Revenue		58,600		63,500
Salaries and Wages Expense	10,000		11,300
Insurance Expense			850
Interest Expense	350		500
Depreciation Expense			5,000
Supplies Expense			5,400
Rent Expense	4,000		4,000
	\(117,100	\)117,100	\(127,050	\)127,050

CRESTWOOD GOLF CLUB, INC. TRIAL BALANCE DECEMBER 31
	Debit	Credit
Cash	\(15,000
Accounts receivables	13,000
Allowance for doubtful accounts		\)1,100
Prepaid insurance	9,000
Land	350,000
Building	120,000
Accumulated depreciation 鈥� building		38,400
Equipment	150,000
Accumulated depreciation 鈥� equipment		70,000
Common stock		400,000
Retained earnings		82,000
Dues revenue		200,000
Green fees revenue		5,900
Rent revenue		17,600
Utilities expenses	54,000
Salaries and wages expenses	80,000
Maintenance and repair expenses	24,000
	\(815,000	\)815,000

COOKE COMPANY Worksheet For The Month Ended September 30, 2017
	Trial Balance		Adjusted Trial Balance
Account Titles	Dr.	Cr.	Dr.	Cr.
Cash	37,400		37,400
Supplies	18,600		4,200
Prepaid Insurance	31,900		3,900
Land	80,000		80,000
Equipment	120,000		120,000
Accumulated Depreciation鈥擡quipment		36,200		42,000
Accounts Payable		14,600		14,600
Unearned Service Revenue		2,700		700
Mortgage Payable		50,000		50,000
Common Stock		107,700		107,700
Retained Earnings, Sept. 1, 2017		2,000		2,000
Dividends	14,000		14,000
Service Revenue		278,500		280,500
Salaries and Wages Expense	109,000		109,000
Maintenance and Repairs Expense	30,500		30,500
Advertising Expense	9,400		9,400
Utilities Expenses	16,900		16,900
Property Tax Expense	18,000		21,000
Interest Expense	6,000		12,000
Totals	491,700	491,700
Insurance Expense			28,000
Supplies Expense			14,400
Interest Payable				6,000
Depreciation Expense			5,800
Property Taxes Payable				3,000
Totals			506,500	506,500

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Short Answer

Step by step solution

Meaning of Trial balance

Calculation of Supply balance on January 1

Calculation of total insurance purchase

Calculation of salaries and wages payable on December 31, 2016

Calculation of unearned service revenue on December 31 2016

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