REVISION OF PREVIOUS FIVE TOPICS

Tutorial 6
Solutions to Revision Questions

PROBLEM 2-8 (p93)

(a) & (c)
Cash
Date
Mar. 1
2
9
10
12
20
20
31
31
31

Explanation
Balance
Film Rental Expense
Admission Revenue
Accounts Payable
Advertising Expense
Admission Revenue
Film Rental Expense
Salaries Expense
Concession Revenue
Admission Revenue

Debit

J1
J1
J1
J1
J1
J1
J1
J1
J1

Accounts Receivable
Date
Explanation
Mar. 31
Concession Revenue
Land
Date
Mar. 1
Buildings
Date
Mar. 1

Explanation
Balance
Explanation
Balance

Equipment
Date
Explanation
Mar. 1
Balance
Accounts Payable
Date
Explanation
Mar. 1
Balance
2
Film Rental Expense
10
Cash

3,000
6,500
9,000
800
7,200
3,000
4,800
400
12,00
0

Debit
400

Credit

No. 112
Balance
400

Debit

Credit

No. 140
Balance
42,000

Debit

Credit

No. 145
Balance
18,000

Debit

Credit

Debit

Credit

No. 157

J1
J1

A. Russo, Capital
Date
Explanation
Mar. 1
Balance
Admission Revenue
Date
Explanation
Mar. 9
Cash
Principles of Accounting and Finance
5-1

No. 101
Balance
16,000
13,000
19,500
10,500
9,700
16,900
13,900
9,100
9,500
21,500

Credit

J1

6,000
9,000
Debit

Credit

Debit

Credit
6,500

Balance
16,000
No. 201
Balance
12,000
18,000
9,000
No. 301
Balance
80,000
No. 405
Balance
6,500

Accuracy checked

20
31

Cash
Cash

J1

7,200
12,000

13,700
25,700

Concession Revenue
Date

No. 406

Explanation

Ref.

Debit

Credit

Mar. 31
Cash / A/c Receivable
J1
Advertising Expense
No. 610
Date

Explanation

Ref.

Mar. 12

Cash

J1

Film Rental Expense

800
Debit
800

Explanation

Ref.

Debit

Mar. 2
20

Cash / A/c Payable

Cash

J1
J1

9,000
3,000

Explanation

Ref.

Debit

Mar. 31

Cash

J1

4,800

(b)
Date

Account Titles and Explanation

Mar. 2

Film Rental Expense

Accounts Payable
Cash
(Rented films for cash and on
account)
No entry.
Cash
Admission Revenue

10

(Received cash for services

provided)
Accounts Payable ($6000,+ $3000)
Cash

11
12

Balance
800

Credit

Balance
9,000
12,000

No. 726

Date

3
9

800

No. 632

Date

Salaries Expense

Credit

Balance

(Paid creditors on account)

No entry.
Advertising Expense
Cash

Credit

Balance
4,800

Re
f.
63
2
20
1
10
1

Debit

10
1
40
5

6,500

20
1
10
1

9,000

61
0
10
1

800

10
1
40
5

7,200

J1
Credit

9,000
6,000
3,000

6,500

9,000

800

(Paid advertising expense)

20

Cash
Admission Revenue

7,200

Principles of Accounting and Finance

5-2

Accuracy checked

(Received cash for services

provided)
Film Rental Expense

20

Cash
(Paid film rental)
Salaries Expense

31

Cash

63
2
10
1

3,000

72
6
10
1

4,800

10
1
11
2
40
6

400

10
1
40
5

12,000

3,000

4,800

(Paid salaries expense)

31

Cash
Accounts Receivable
Concession Revenue
(10% $8000)
(Received cash and balance on
account for concession revenue)
Cash

31

Admission Revenue

400
800

12,000

(Received cash for services

provided)
PROBLEM 2-8 (continued)
(d)

RUSSO THEATRE
Trial Balance
as at 31 March 2010
Cash
Accounts Receivable
Land
Buildings
Equipment
Accounts Payable
A. Russo, Capital
Admission Revenue
Concession Revenue
Advertising Expense
Film Rental Expense
Salaries Expense

Debit
$ 21,500
400
42,000
18,000
16,000

Credit

800
12,000
4,800
$115,500

9,000
80,000
25,700
800

______
$115,500

PROBLEM 4-1 (p166)

(a)
Date
2010
May 31

Account Titles and Explanation

Ref.

Debit

Supplies Expense
Supplies

560
130

1,00
0

J4
Credit

Principles of Accounting and Finance

5-3

Accuracy checked

1,000

31
31

31

31

31

31

Travel Expense
Travel Payable

550
210

400

Insurance Expense
Prepaid Insurance
($2400 24 months)

540
120

200

Unearned Service Revenue

Service Revenue
($3000 $1,000)

230
400

4,00
0

4,000

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

510
220

1,20
0

1,200

Depreciation Expense
Accumulated Depreciation Office
Furniture
($12,000 60 months)

530

400

Accounts Receivable
Service Revenue

110
400

400
200

136

400
2,00
0

2,000

(b)
Cash
Date
2010
May 31

Explanation
Balance

Accounts Receivable
Date
Explanation
2010
May 31
Balance
31
Adjusting
Prepaid Insurance
Date
Explanation
2010
May 31
Balance
31
Adjusting
Supplies
Date
2010
May 31
31

Explanation
Balance
Adjusting

Office Furniture
Date
Explanation

Ref.

Debit

Credit

No. 101
Balance
15,40
0

Ref.

J4
Ref.

Debit
2,000

8,000
10,000

Debit

No. 120
Balance

J4
Ref.

Credit

4,800
4,600

200
Debit

J4
Ref.

Credit

No. 110
Balance

Credit

No. 130
Balance
3,000
2,000

1,000
Debit

Credit

No. 135
Balance

Principles of Accounting and Finance

5-4

Accuracy checked

2010
May 31

Balance

24,000

Accumulated Depreciation Office Furniture

No. 136
Date
Explanation
Ref.
Debit
2010
May 31
Adjusting
J4
Accounts Payable
Date
Explanation
2010
May 31
Balance
Travel Payable
Date
Explanation
2010
May 31
Adjusting
Salaries Payable
Date
Explanation
2010
May 31
Adjusting
Unearned Service Revenue
Date
Explanation
2010
May 31
Balance
31
Adjusting
M. Griffin, Capital
Date
Explanation
2010
May 31
Balance
Service Revenue
Date
Explanation
2010
May 31
Balance
31
Adjusting
31
Adjusting
Salaries Expense
Date
Explanation
2010
May 31
Balance
31
Adjusting
Rent Expense
Date
Explanation
2010
May 31
Balance

Ref.

Debit

Credit

Balance

400

400

Credit

No. 200
Balance
7,000

Ref.

Debit

J4
Ref.

Credit

No. 210
Balance

400
Debit

J4
Ref.

Debit

J4

4 000

Ref.

Debit

400

Credit

No. 220
Balance

1,200

1,200

Credit

No. 230
Balance
6 000
2,000

Credit

No. 300
Balance
38,200

Ref.

Debit

J4
J4
Ref.

J4

Ref.

Debit

Credit

No. 400
Balance

4 000
2,000

12,000
16,000
18,000

Credit

No. 510
Balance
3,000
3,600

1,200
Debit

Credit

No. 520
Balance
2,000

Depreciation Expense

No. 530

Principles of Accounting and Finance

5-5

Accuracy checked

Date
2010
May 31

Explanation
Adjusting

Insurance Expense
Date
Explanation
2010
May 31
Adjusting
Travel Expense
Date
Explanation
2010
May 31
Adjusting
Supplies Expense
Date
Explanation
2010
May 31
Adjusting

Ref.

Debit

J4

400

Ref.

Debit

J4

200

Ref.

Debit

J4

400

Ref.

Debit

J4

1,000

Credit

Balance
400

Credit

No. 540
Balance
200

Credit

No. 550
Balance
400

Credit

No. 560
Balance
1,000

PROBLEM 4-1 (continued)

(c)

VEKTEK CONSULTING
Adjusted Trial Balance
as at 31 May 2010

Cash
Accounts Receivable
Prepaid Insurance
Supplies
Office Furniture
Accumulated Depreciation Office Furniture................
Accounts Payable
Travel Payable
Salaries Payable
Unearned Service Revenue
L. Griffin, Capital
Service Revenue
Salaries Expense
Rent Expense
Depreciation Expense
Insurance Expense
Travel Expense
Supplies Expense

Debit
$
15,400

10,000
4600
2,000
24000

7,200
2,000
400
200
400
1,000
$67,200

Principles of Accounting and Finance

5-6

Accuracy checked

Credit

$
400
7000
400

1,200
2,000
38,200

18,000

______
0$67,20
0

Problem 4-7 (p170)

(a)

Date

Account Titles & Explanation

Debit

Credit

2010
December
31

Accrued Revenue

December
31

Catering Supplies

December
31

Depreciation Expense

December
31

Depreciation Expense

December
31

Prepaid Insurance

22,500

Catering Revenue

22,500

8 000

Catering Supplies Expense

8 000

4 000

Accumulated Depreciation Motor Vehicle

4 000

10,000

Accumulated Depreciation Catering

equipment

10,000

1,050

Insurance Expense

1,050

(3/12 * $4200)

December
31

Salaries Expense

December
31

Interest Expense

December
31

Utilities Expense

15,000

Salaries Payable

15,000

2,000

Interest Payable

2,000

500

Utilities Payable

500

Principles of Accounting and Finance

5-7

Accuracy checked

(b)

December
31

Motor Vehicle Expense

December
31

Catering Revenue

800

Motor Vehicle Expenses Payable

800

10,000

Unearned Revenue

10,000

Accrual accounting records transactions that change an entitys financial reports

in the periods in which the events occurred. Capturing the transactions in the
period they occur has resulted in a net profit for the business of the business of
$31 650 compared to the $42 400 reported under a cash based system.

Principles of Accounting and Finance

5-8

Accuracy checked

PROBLEM 5-3 (p225)

(a)

WILLIAMS COMPANY
Income Statement
For the Year Ending 31 December 2010
Income
Service revenue
Expenses
Salaries expense
Depreciation expense
Insurance expense
Repair expense
Utilities expense
Total expenses
Net profit

$64,000
$37,000
2 ,600
2,200
2,000
1,700
45,500
$18 500

WILLIAMS COMPANY
Statement of Changes in Equity
For the Year Ending 31 December 2010
David Williams, Capital, 1 January
Add: Net profit for the year

$36,000
18,500
54,500
14,000
$40,500

Less: Drawings
David Williams, Capital, 31 December
WILLIAMS COMPANY
Balance Sheet
as at 31 December 2010
Assets
Current assets
Cash
Accounts receivable
Prepaid insurance
Total current assets
Non-current assets
Equipment
Less: Accumulated depreciation
Total non-current assets
Total assets
Liabilities and Owners Equity
Current liabilities
Accounts payable
Salaries payable
Total current liabilities
Owners equity
David Williams, Capital
Total liabilities and owners equity

$17,400
13,500
3,500
34,400
$26,000
5,600
20,400
$54,800

$11,300
3,000
14,300
40,500
$54,800

Principles of Accounting and Finance

5-9

Accuracy checked

PROBLEM 5-3 (continued)

(b)

General Journal

Date
Dec. 31
31

31
31

Account Titles and Explanation

Service Revenue
Profit and Loss Summary

Ref.
400
350

Debit
64 000

Profit and Loss Summary

Repair Expense
Depreciation Expense
Insurance Expense
Salaries Expense
Utilities Expense

350
622
711
722
726
732

45,500

Profit and Loss Summary

David Williams, Capital

350
301

18,500

David Williams, Capital

David Williams, Drawings

301
306

14,000

Credit
64,000
2,000
2,600
2,200
37,000
1,700
18,500
14,000

(c)
31/12
000

David Williams, Capital No. 301

Drawings14 1/1 O/B
36 000
31/12P&L
31/12 Bal.

31/12 O/B

18 500
40 500

Salaries Expense
37 000 31/12
P&L37000

No. 726

No. 732

31/12 O/B

Utilities Expense
1,700 31/12
P&L1,700

Service Revenue
No. 400
P&L64 000 31/12 O/B 64 000
Repair Expense
No. 622
31/12 O/B
2,000 31/12
P&L 2,000
31/12

Depreciation Expense No. 711

31/12 O/B
2 600 31/12
P&L 2
600

Insurance Expense

P&L 2

31/12 O/B
David Williams, DrawingsNo. 306
31/12 O/B 14 000 31/12 Capital
14
000

Profit and Loss Summary No. 350

31/12Expenses
31/12Service
45,500 Revenue
64 000
31/12Capital18 500
64 000
64 000

2 200 31/12
200

No. 722

Principles of Accounting and Finance

5-10

Accuracy checked

Principles of Accounting and Finance

5-11

Accuracy checked

PROBLEM 5-3 (continued)

(d)

WILLIAMS COMPANY
Post-Closing Trial Balance
as at 31 December 2010

Cash
Accounts Receivable
Prepaid Insurance
Equipment
Accumulated Depreciation
Accounts Payable
Salaries Payable
3,000
David Williams, Capital
Totals

Debit
$17,400
13,500
3,500
26,000

Credit

$5,600
11,300
______
$60 400

40, 500
$60 400

Principles of Accounting and Finance

5-12

Accuracy checked

MCD1010