Page 175

E4-13, Analyze adjusted data.

This is a partial adjusted trial balance of Barone Company.
BARONE COMPANY
Adjusted Trial Balance
January 31, 2014
Debit Credit
Supplies $700
Prepaid Insurance 1,560
Salaries and Wages Payable $1,060
Unearned Service Revenue 750
Supplies Expense 950
Insurance Expense 520
Salaries and Wages Expense 1,800
Service Revenue 4,000

Instructions:
Answer these questions, assuming the year begins January 1.
(a) If the amount in Supplies Expense is the January 31 adjusting entry, and $300 of supplies was purchased in

January, what was the balance in Supplies on January 1?

Supplies balance = $1,350 Computation:

Supplies expense $950
Add: Supplies (1/31) 700
Less: Supplies purchased (300)
Supplies (1/1) $1,350

(b) If the amount in Insurance Expense is the January 31 adjusting entry, and the original insurance premium was for 1 year, what was
the total premium and when was the policy purchased?

Monthly expense 12 = Annual premium, Ann. premium, ($520 12) $6,240

End of month balance, $1,560 Monthly expense = Months remaining 3
Purchase date = May 1, 2013
Purchase date: On Jan. 31, there are 3 months coverage remaining ($520 3). Thus, the
purchase date was 9 months earlier on May 1, 2013.

(c) If $2,500 of salaries was paid in January, what was the balance in Salaries and Wages Payable at

December 31, 2013?

Salaries and wages payable = $1,760 Computation
Cash paid $2,500
Salaries and wages payable (1/31/14) 1,060
3,560
Less: Salaries and wages expense 1,800
Salaries and wages payable (12/31/13) $1,760
(d) If $1,800 was received in January for services performed in January, what was the balance in Unearned Service

Revenue at December 31, 2013?

Unearned service revenue = $2,950 Computation

Service revenue $4,000
Unearned service revenue (1/31/14) 750
4,750
Cash received in Jan. 1,800
Unearned service revenue (12/31/13) $2,950
purchased in
+ Increase in - Increase
Cash Receipts Revenue (or Deferral in Accrual
(Payments) for Expense) for the (Prepaid/ (Receivables /
Revenue (Expense) = period Unearned) Payables)
Cash paid to purchase
supplies Supplies Expense + (Closing balance - Opening balance)
300 = 950 + ( 700 - Opening Balance)
Opening Balance =1650-300= 1350

Or,
Supplies (on1st) + Supplies purchased - supplies expense = Supplies (on 31st)
1350 + 300 - 950=700
for 1 year, what was

+ Increase in - Increase
at Cash Receipts Revenue (or Deferral in Accrual
(Payments) for Expense) for the (Prepaid/ (Receivables /
Revenue (Expense) = period Unearned) Payables)
Cash Paid = Wages Expense - (Closing Balance - Opening Balance)
2500 = 1800 - (1060 - Opening Balance)
Opening Balance = 2500 - (1800-1060) = 1760

Or,
Salaries Payable (on1st Jan) + Salaries Expense - Salaries Paid = Salaries Payable (on 31st Jan)
1760 + 1800 - 2500 = 1060
Unearned Service
+ Increase in - Increase
Cash Receipts Revenue (or Deferral in Accrual
(Payments) for Expense) for the (Prepaid/ (Receivables /
Revenue (Expense) = period Unearned) Payables)
Cash Received = Revenue for the period + (Closing balance - Opening balance)
1800 = 4000 + 750 - Opening
Opening = = 4750 - 1800 = 2950

USR on 1stJan + Cash Received - Revenue Earned = USR on 31st Jan

=750-1800+4000 =
ble (on 31st Jan)
Page 181
PROBLEM 4-7A

(a) Entering Nov 1 Balances in Ledger (T) Accounts

(c) & (e) Posting to Ledger Accounts - Nov transactions, and Adjusting Entries

Cash
1-Nov 2790 11/8
10-Nov 11/20
12-Nov 11/22
29-Nov 11/25
11/30 Bal. 2790

Accounts Receivable
11/1 Bal. 2910 11/10
11/27
11/30 Bal. 2910

Supplies
11/1 Bal. 1120 11/30
11/17
11/30 Bal. 1120

Equipment
11/1 Bal. 10000
11/15
11/30 Bal. 10000

Accumulated DepreciationEquipment
1-Nov 500

30-Nov 500

Accounts Payable
20-Nov 1-Nov 2300

11/30 Bal. 2300

Unearned Service Revenue

30-Nov 1-Nov 400
11/29
11/30 Bal. 400
 Salaries and Wages Payable
8-Nov 1-Nov 620
11/30
11/30 Bal. 620

Common Stock
1-Nov 10000
30-Nov 10000

Retained Earnings
1-Nov 3000
11/30 Bal. 3000

Service Revenue
11/12
11/27
11/30
11/30 Bal. 0

Depreciation Expense
30-Nov
11/30 Bal. 0

Supplies Expense
30-Nov
11/30 Bal. 0

Salaries and Wages Expense

8-Nov
25-Nov
30-Nov
11/30 Bal. 2,080 0

Rent Expense
22-Nov
11/30 Bal. 0
 (b) Journalisation of November Transactions
usting Entries Date Account Titles Debit Credit

Nov. 8 Salaries and Wages Payable 620

Salaries and Wages Expense 600
Cash 1,220

10 Cash 1,800
Accounts Receivable 1,800

12 Cash 3,700
Service Revenue 3,700

15 Equipment 3,600
Accounts Payable 3,600

17 Supplies 1,300
Accounts Payable 1,300

20 Accounts Payable 2,500

Cash 2,500

22 Rent Expense 480

Cash 480

25 Salaries and Wages Expense 1,000

Cash 1,000

27 Accounts Receivable 900

Service Revenue 900

29 Cash 750
Unearned Service Revenue 750

Adjusting Entries
1 Nov. 30 Supplies Expense 1,320
Supplies ($2,420 $1,100) 1,320 1120+1300= 2420

2 30 Salaries and Wages Expense 480

Salaries and Wages Payable 480

3 30 Depreciation Expense 250

Accum. Depr.Equipment 250
 4 30 Unearned Service Revenue 500
Service Revenue 500
0

RIJO EQUIPMENT REPAIR

Trial Balances
as on November 30, 2014

Opening Balances Before After

Adjustment Adjustment
Dr. Cr. Dr. Cr. Dr.
Cash 2,790
Accounts Receivable 2,910
Supplies 1,120
Equipment 10,000
Accumulated Depreciation
Equipment 500
Accounts Payable 2300
Unearned Service Revenue 400
Salaries and Wages Payable 620
Common Stock 10000
Retained Earnings 3000
Service Revenue
Salaries and Wages Expense
Rent Expense
Supplies Expense
Depreciation Expense
$16,820 $16,820 $0 $0 $0
1120+1300= 2420
Adjustment
Cr.

$0
 PROBLEM 4-7A

(a) Entering Nov 1 Balances in Ledger (T) Accounts

(c) & (e) Posting to Ledger Accounts - Nov transactions, and Adjusting Entries

Cash
1-Nov 2790 11/8 1220
10-Nov 1800 11/20 2500
12-Nov 3700 11/22 480
29-Nov 750 11/25 1000
11/30 Bal. 3840

Accounts Receivable
11/1 Bal. 2910 11/10 1800
11/27 900
11/30 Bal. 2010

Supplies
11/1 Bal. 1120 11/30 1320
11/17 1300
11/30 Bal. 1100 1120+1300-1100

Equipment
11/1 Bal. 10000
11/15 3600
11/30 Bal. 13600

Accumulated DepreciationEquipment
1-Nov 500
30-Nov 250
30-Nov 750

Accounts Payable
20-Nov 2500 1-Nov 2300
11/15 3600
11/17 1300
11/30 Bal. 4700

Unearned Service Revenue

30-Nov 500 1-Nov 400
11/29 750
11/30 Bal. 650
 Salaries and Wages Payable
8-Nov 620 1-Nov 620
11/30 480
11/30 Bal. 480

Common Stock
1-Nov 10000
30-Nov 10000

Retained Earnings
1-Nov 3000
11/30 Bal. 3000

Service Revenue
11/12 3700
11/27 900
11/30 500
11/30 Bal. 5100

Depreciation Expense
30-Nov 250
11/30 Bal. 250

Supplies Expense
30-Nov 1320
11/30 Bal. 1320

Salaries and Wages Expense

8-Nov 600
25-Nov 1000
30-Nov 480
11/30 Bal. 2,080 2080

Rent Expense
22-Nov 480
11/30 Bal. 480
 (b) Journalisation of November Transactions
usting Entries Date Account Titles Debit Credit

Nov. 8 Salaries and Wages Payable 620

Salaries and Wages Expense 600
Cash 1,220

10 Cash 1,800
Accounts Receivable 1,800

12 Cash 3,700
Service Revenue 3,700

15 Equipment 3,600
Accounts Payable 3,600

17 Supplies 1,300
Accounts Payable 1,300

20 Accounts Payable 2,500

Cash 2,500
2420 before adj
22 Rent Expense 480
Cash 480

25 Salaries and Wages Expense 1,000

Cash 1,000

27 Accounts Receivable 900

Service Revenue 900
before adj
29 Cash 750
Unearned Service Revenue 750

Adjusting Entries
1 Nov. 30Supplies Expense 1,320
Supplies ($2,420 $1,100) 1,320 1120+1300= 2420

2 30 Salaries and Wages Expense 480

Salaries and Wages Payable 480
before adj
400 +750 3 30 Depreciation Expense 250
1150 Accum. Depr.Equipment 250

4 30 Unearned Service Revenue 500

 Service Revenue 500
0

RIJO EQUIPMENT REPAIR

Trial Balances
as on November 30, 2014

Before After
Adjustment Adjustment
Dr. Cr. Dr. Cr.
Cash 3,840 3840
Accounts Receivable 2,010 2,010
Supplies 2,420 1100
Equipment 13,600 13,600
Accumulated Depreciation
3700+900 =4600 Equipment 500 750
Accounts Payable 4700 4700
Unearned Service Revenue 1150 650
Salaries and Wages Payable 480
Common Stock 10000 10000
Retained Earnings 3000 3000
Service Revenue 4600 5100
Salaries and Wages Expense 1,600 2080
Rent Expense 480 480
Supplies Expense 1320
Depreciation Expense 250
$23,950 $23,950 $24,680 $24,680

600+1000 =1600
PROBLEM 4-7A
RIJO EQUIPMENT REPAIR
(g) RIJO EQUIPMENT REPAIR Balance Sheet as on
Income Statement November 30, 2014
For the Month Ended November 30, 2014 Assets
Current assets
Revenues Cash 3840
Service revenue 5100 Accounts receivable 2010
Expenses Supplies 1100
Salaries and wages expense 2080 Total current assets
Supplies expense 1320 Property, plant and equipment
Rent expense 480 Equipment 13600
Depreciation expense 250 Less: Accumulated depreciation
Total expenses 4130 Equipment 750
Net Income $970 Total assets
Liabilities and Stockholders Equity
Current liabilities
RIJO EQUIPMENT REPAIR Accounts payable 4700
Retained Earnings Statement Unearned service revenue 650
For the Month Ended November 30, 2014 Salaries and wages payable 480
Total current liabilities
Retained earnings, November 1 3000 Stockholders equity
Add: Net Income $970 Common stock 10000
Retained earnings, November 30 3970 Retained earnings 3970
Total stockholders equity

Total liabilities and stockholders Equity

 $6,950

12,850
$19,800

$5,830

13,970

$19,800