PROBLEM 3-1A

(a)
Date
2006
May 31

Account Titles and Explanation

Ref.

Debit

Supplies Expense
Supplies

560
130

500

31

Travel Expense
Travel Payable

550
210

200

31

Insurance Expense
Prepaid Insurance
($2,400 24 months)

540
120

100

31

Unearned Service Revenue

Service Revenue
($3,000 $1,000)

230
400

2,000

31

Salaries Expense
Salaries Payable
[(3/5 X $500) X 2 employees]

510
220

600

31

Depreciation Expense
Accumulated Depreciation
Ofce Furniture

530

200

Accounts Receivable
Service Revenue

110
400

31

136

J4
Credit
500
200
100

2,000

600

200
1,000

1,000

(b)
Cash
Date
2006
May 31

Explanation
Balance

Ref.

Debit

Credit

No. 101
Balance
7,700

PROBLEM 3-1A (Continued)

Accounts Receivable
Date
Explanation
2006
May 31
Balance
31
Adjusting
Prepaid Insurance
Date
Explanation
2006
May 31
Balance
31
Adjusting
Supplies
Date
2006
May 31
31

Explanation
Balance
Adjusting

Ofce Furniture
Date
Explanation
2006
May 31
Balance

Ref.

J4

Ref.

Debit
1,000

4,000
5,000

Debit

Credit

No. 120
Balance

100

2,400
2,300

Credit

No. 130
Balance

500

1,500
1,000

Credit

No. 135
Balance

J4

Ref.

Debit

J4

Ref.

Debit

12,000

Accumulated DepreciationOfce Furniture

Date
Explanation
Ref.
Debit
2006
May 31
Adjusting
J4
Accounts Payable
Date
Explanation
2006
May 31
Balance

Credit

Ref.

No. 110
Balance

Debit

Credit

No. 136
Balance

200

200

Credit

No. 200
Balance
3,500

PROBLEM 3-1A (Continued)

Travel Payable
Date
Explanation
2006
May 31
Adjusting
Salaries Payable
Date
Explanation
2006
May 31
Adjusting
Unearned Service Revenue
Date
Explanation
2006
May 31
Balance
31
Adjusting
Common Stock
Date
Explanation
2006
May 31
Balance
Service Revenue
Date
Explanation
2006
May 31
Balance
31
Adjusting
31
Adjusting
Salaries Expense
Date
Explanation
2006
May 31
Balance
31
Adjusting

Ref.

Debit

J4

Ref.

Debit

J4

Ref.

J4

Ref.

Debit

Credit

No. 210
Balance

200

200

Credit

No. 220
Balance

600

600

Credit

No. 230
Balance

2,000

3,000
1,000

Debit

No. 311
Balance

Credit

19,100

Ref.

Credit

No. 400
Balance

2,000
1,000

6,000
8,000
9,000

Credit

No. 510
Balance

Debit

J4
J4

Ref.

J4

Debit
600

3,000
3,600

PROBLEM 3-1A (Continued)

Rent Expense
Date
Explanation
2006
May 31
Balance
Depreciation Expense
Date
Explanation
2006
May 31
Adjusting
Insurance Expense
Date
Explanation
2006
May 31
Adjusting
Travel Expense
Date
Explanation
2006
May 31
Adjusting
Supplies Expense
Date
Explanation
2006
May 31
Adjusting

Ref.

Debit

Credit

No. 520
Balance

1,000

Ref.

Debit

No. 530
Balance

J4

200

200

Ref.

Debit

No. 540
Balance

J4

100

100

Ref.

Debit

No. 550
Balance

J4

200

200

Ref.

Debit

No. 560
Balance

J4

500

Credit

Credit

Credit

Credit

500

PROBLEM 3-1A (Continued)

(c)

VEKTEK CONSULTING INC.

Adjusted Trial Balance
May 31, 2006

Cash......................................................................
Accounts Receivable..........................................
Prepaid Insurance...............................................
Supplies................................................................
Ofce Furniture....................................................
Accumulated DepreciationOfce
Furniture...........................................................
Accounts Payable................................................
Travel Payable......................................................
Salaries Payable..................................................
Unearned Service Revenue................................
Common Stock....................................................
Retained Earnings...............................................
Service Revenue..................................................
Salaries Expense.................................................
Rent Expense.......................................................
Depreciation Expense.........................................
Insurance Expense..............................................
Travel Expense.....................................................
Supplies Expense................................................

Debit
$7,700
5,000
2,300
1,000
12,000

3,600
1,000
200
100
200
500
$33,600

Credit

$ 200
3,500
200
600
1,000
19,100
-0 9,000

000,000
$33,600

PROBLEM 3-2A
(a)
Date
May 31

Account Titles and Explanation

Insurance Expense.............................
Prepaid Insurance.......................

Ref.
722
130

Debit
200

31

Supplies Expense...............................
Supplies ($1,900 $900).............

631
126

1,000

31

Depreciation ExpenseLodge..........
($2,400 X 1/12)
Accumulated Depreciation
Lodge........................................

619

200

Depreciation ExpenseFurniture.....
($3,000 X 1/12)
Accumulated Depreciation
Furniture...................................

621

31

Interest Expense.................................
Interest Payable...........................
[($35,000 X 12%) X 1/12]

718
230

350

31

Unearned Rent.....................................
Rent Revenue...............................

208
429

2,500

31

Salaries Expense.................................
Salaries Payable..........................

726
212

800

31

142

J1
Credit
200
1,000

200
250

150

250
350

2,500
800

(b)
Cash
Date
May 31

Explanation
Balance

Ref.

Debit

Credit

No. 101
Balance
2,500

PROBLEM 3-2A (Continued)

Supplies
Date
May 31
31

Explanation
Balance
Adjusting

Prepaid Insurance
Date
Explanation
May 31
Balance
31
Adjusting
Land
Date
May 31
Lodge
Date
May 31

Explanation
Balance

Explanation
Balance

Ref.

J1

Ref.

J1

Ref.

Ref.

Accumulated DepreciationLodge
Date
Explanation
Ref.
May 31
Adjusting
J1
Furniture
Date
Explanation
May 31
Balance

Ref.

Accumulated DepreciationFurniture
Date
Explanation
Ref.
May 31
Adjusting
J1

Debit

Credit
1,000

Debit

Credit
200

Debit

Debit

Debit

Debit

Debit

No. 126
Balance
1,900
900
No. 130
Balance
2,400
2,200

Credit

No. 140
Balance
15,000

Credit

No. 141
Balance
70,000

Credit
200

Credit

Credit
250

No. 142
Balance
200
No. 149
Balance
16,800
No. 150
Balance
250

PROBLEM 3-2A (Continued)

Accounts Payable
Date
Explanation
May 31
Balance
Unearned Rent
Date
Explanation
May 31
Balance
31
Adjusting
Salaries Payable
Date
Explanation
May 31
Adjusting
Interest Payable
Date
Explanation
May 31
Adjusting
Mortgage Payable
Date
Explanation
May 31
Balance
Common Stock
Date
Explanation
May 31
Balance
Retained Earnings
Date
Explanation
May 31
Balance

Ref.

Ref.

J1

Ref.
J1

Ref.
J1

Ref.

Ref.

Ref.

Debit

Debit

Credit

Credit

2,500

Debit

Debit

Debit

Debit

Debit

No. 201
Balance
5,300
No. 208
Balance
4,600
2,100

Credit
800

No. 212
Balance
800

Credit
350

No. 230
Balance
350

Credit

No. 275
Balance
35,000

Credit

No. 311
Balance
60,000

Credit

No. 320
Balance
0

PROBLEM 3-2A (Continued)

Dividends
Date
Explanation
May 31
Balance
Rent Revenue
Date
Explanation
May 31
Balance
31
Adjusting
Advertising Expense
Date
Explanation
May 31
Balance
Depreciation ExpenseLodge
Date
Explanation
May 31
Adjusting
Depreciation ExpenseFurniture
Date
Explanation
May 31
Adjusting
Supplies Expense
Date
Explanation
May 31
Adjusting

Ref.

Ref.

J1

Ref.

Ref.
J1

Ref.
J1

Ref.
J1

Debit

Debit

Credit

No. 332
Balance
1,000

Credit

No. 429
Balance
9,200
11,700

2,500

Debit

Debit
200

Debit
250

Debit
1,000

Credit

No. 610
Balance
500

Credit

No. 619
Balance
200

Credit

No. 621
Balance
250

Credit

No. 631
Balance
1,000

PROBLEM 3-2A (Continued)

Interest Expense
Date
Explanation
May 31
Adjusting
Insurance Expense
Date
Explanation
May 31
Adjusting
Salaries Expense
Date
Explanation
May 31
Balance
31
Adjusting
Utilities Expense
Date
Explanation
May 31
Balance

Ref.
J1

Ref.
J1

Ref.

J1

Ref.

Debit
350

Debit
200

Debit

Credit

No. 718
Balance
350

Credit

No. 722
Balance
200

Credit

No. 726
Balance
3,000
3,800

Credit

No. 732
Balance
1,000

800

Debit

PROBLEM 3-2A (Continued)

(c)

THAYER MOTEL INC.

Adjusted Trial Balance
May 31, 2006

Cash......................................................................
Supplies................................................................
Prepaid Insurance...............................................
Land......................................................................
Lodge....................................................................
Accumulated DepreciationLodge...................
Furniture...............................................................
Accumulated DepreciationFurniture..............
Accounts Payable................................................
Unearned Rent.....................................................
Salaries Payable..................................................
Interest Payable...................................................
Mortgage Payable................................................
Common Stock....................................................
Retained Earnings...............................................
Dividends.............................................................
Rent Revenue.......................................................
Advertising Expense...........................................
Depreciation ExpenseLodge...........................
Depreciation ExpenseFurniture......................
Supplies Expense................................................
Interest Expense..................................................
Insurance Expense..............................................
Salaries Expense.................................................
Utilities Expense..................................................

Debit
$2,500
900
2,200
15,000
70,000
16,800

1,000
500
200
250
1,000
350
200
3,800
1,000
$115,700

Credit

$ 200
250
5,300
2,100
800
350
35,000
60,000
-011,700

0000,000
$115,700

PROBLEM 3-2A (Continued)

(d)

THAYER MOTEL INC.

Income Statement
For the Month Ended May 31, 2006

Revenues
Rent revenue....................................................
$11,700
Expenses
Salaries expense..............................................
Utilities expense...............................................
Supplies expense.............................................
Advertising expense........................................
Interest expense...............................................
Depreciation expensefurniture...................
Depreciation expenselodge.........................
Insurance expense...........................................
Total expenses..........................................
7,300
Net income...............................................................
4,400

$3,800
1,000
1,000
500
350
250
200
200

THAYER MOTEL INC.

Retained Earnings Statement
For the Month Ended May 31, 2006

Retained earnings, May 1.........................................................

Add: Net income......................................................................

4,400
....................................................................................................
Less: Dividends.........................................................................
1,000
Retained earnings, May 31.......................................................
3,400

4,400

PROBLEM 3-2A (Continued)

THAYER MOTEL INC.
Balance Sheet
May 31, 2006
Assets
Cash.....................................................................
2,500
Supplies...............................................................
900
Prepaid insurance...............................................
2,200
Land.....................................................................
15,000
Lodge...................................................................
Less: Accumulated depreciationlodge.........
69,800
Furniture..............................................................
Less: Accumulated depreciationfurniture. . .
16,550
Total assets..........................................
$106,950

$70,000
200
16,800
250

Liabilities and Stockholders Equity

Liabilities
Accounts payable........................................
5,300
Unearned rent..............................................
2,100
Salaries payable..........................................
800
Interest payable...........................................
350
Mortgage payable........................................
35,000
Total liabilities......................................
43,550
Stockholders equity
Common stock............................................

$60,000

63,400

Retained earnings.......................................

$106,950

Total liabilities and stockholders

equity................................................

3,400

PROBLEM 3-3A
(a) Sept. 30

Accounts Receivable.....................................
Commission Revenue............................

200

30

Rent Expense.................................................
Prepaid Rent...........................................

600

30

Supplies Expense..........................................
Supplies..................................................

200

30

Depreciation Expense...................................
Accum. DepreciationEquipment.......

850

30

Interest Expense............................................
Interest Payable......................................

50

30

Unearned Rent...............................................
Rent Revenue.........................................

400

30

Salaries Expense...........................................
Salaries Payable.....................................

400

(b)

800

MENDOZA CO.
Income Statement
For the Quarter Ended September 30, 2006
Revenues
Commission revenue.......................................
$14,200
Rent revenue....................................................
Total revenues..........................................

15,000
Expenses
Salaries expense..............................................
Rent expense....................................................
Depreciation expense......................................
Utilities expense...............................................

$9,400
1,500
850
510

Supplies expense.............................................
Interest expense...............................................
Total expenses..........................................

12,510
Net income...............................................................
2,490

200
50

PROBLEM 3-3A (Continued)

MENDOZA CO.
Retained Earnings Statement
For the Quarter Ended September 30, 2006

Retained earnings, July 1, 2006...............................................

Add: Net income......................................................................

2,490
2,490
Less: Dividends........................................................................
600
Retained earnings, September 30, 2006..................................
1,890
MENDOZA CO.
Balance Sheet
September 30, 2006
Assets
Cash........................................................................
6,700
Accounts receivable..............................................
Prepaid rent............................................................
900
Supplies..................................................................
1,000
Equipment..............................................................
Less: Accum. depreciationequipment.............
14,150
Total assets.............................................
$23,350

600

$15,000
850

Liabilities and Stockholders Equity

Liabilities
Notes payable.................................................
5,000

1,510
400
50
500

Accounts payable...........................................
Salaries payable.............................................
Interest payable..............................................

Unearned rent.................................................
Total liabilities.........................................

7,460
Stockholders equity
Common stock...............................................
Retained earnings..........................................
15,890
Total liabilities and stockholders equity
$23,350

$14,000
1,890

(c) Interest of 12% per year equals a monthly rate of 1%; monthly
interest is $50 ($5,000 X 1%). Since total interest expense is $50,
the note has been outstanding one month.