Tugas Kelompok ke-1

(Minggu 3)

Case 1

For each of the following transactions below, prepare the journal entry (if one is required)
to record the initial transaction and then prepare the adjusting entry, if any, required on
September 30, the end of the fiscal year.

(a) On September 1, paid rent on the track facility for three months, $210,000.

(b) On September 1, sold season tickets for admission to the racetrack. The racing season
is year-round with 25 racing days each month. Season ticket sales totaled $840,000.

(c) On September 1, borrowed $300,000 from First National Bank by issuing a 9% note
payable due in three months.

(d) On September 5, schedules for 20 racing days in September, 25 racing days in October,
and 15 racing days in November were printed for $3,000.

(e) The accountant for the concessions company reported that gross receipts for
September were $160,000. Ten percent is due to the track and will be remitted by
October 10.

Answer:

a. Journal Entry

Sept. 1 Prepaid Rent 210,000

Cash 210,000
To Record paid rent on the track
facility for three months

Adjusting Entry

Sept. 30 Rent Expenses 70,000

Prepaid Rent 70,000
To Record rent expenses this
month

ACCT6174 – Introduction to Financial Accounting

 b. Journal Entry

Sept. 1 Cash 840,000

Unearned Revenue 840,000
To Record paid rent on the track
facility for three months

Adjusting Entry

Sept. 30 Unearned Revenue 70,000

Season Ticket Revenue 70,000
To Record season ticket revenue
this month

c. Journal Entry

Sept. 1 Cash 300,000

Notes Payable 300,000
To Record the borrowing 300,000
at 9% annual interest for three
months; due on Dec 31

Adjusting Entry

Sept. 30 Interest Expense 2,250

Interest Payable 2,250
To record accrued interest
(300,000 x 9% x (1/12))

d. Journal Entry

Sept. 5 Expenses 3,000

Cash 3,000
To record printing expenses

e. No need to create a journal entry because no transaction has occurred.

Note: We worked using Excel sheet and here is the original file (click twice on the icon to
open it).

Case 2
Ben Cartwright Pest Control has the following balances in selected accounts on December
31, 2014.

Accounts Receivable € 0

ACCT6174 – Introduction to Financial Accounting

 Accumulated Depreciation – Equipment 0

Equipment 6,650

Interest Payable 0

Notes Payable 20,000

Prepaid Insurance 3,000

Salaries and Wages Payable 0

Supplies 2,940

Unearned Service Revenue 36,000

All of the accounts have normal balances. The information below has been gathered at
December 31, 2014.

1. Depreciation on the equipment for 2014 is €1,250.

2. Ben Cartwright Pest Control borrowed €20,000 by signing a 6%, one-year note on
July 1, 2014.

3. Ben Cartwright Pest Control paid €3,000 for 12 months of insurance coverage on
October 1, 2014.

4. Ben Cartwright Pest Control pays its employees total salaries of €10,000 every
Monday for the preceding 5-day week (Monday-Friday). On Monday, December 27,
2014, employees were paid for the week ending December 24, 2014. All employees
worked the five days ending December 31, 2014.

5. Ben Cartwright Pest Control performed disinfecting services for a client in December
2014. The client will be billed €3,000.

6. On December 1, 2014, Ben Cartwright Pest Control collected €36,000 for disinfecting
processes to be performed from December 1, 2014, through May 31, 2015.

7. A count of supplies on December 31, 2014, indicates that supplies of €750 are on
hand.

Instructions

Prepare in journal form with explanations, the adjusting entries for the seven items listed
for Ben Cartwright Pest Control.

Answer:

ACCT6174 – Introduction to Financial Accounting

 1. Depreciation Expense 1,250
Accumulated Depreciation - Equipment 1,250
To record the depreciation of equipment

2. Interest Expense 30
Interest Payable 30
To record accrued interest (20,000 x 6% x (5/12))

3. Insurance Expense 500

Prepaid Insurance 500
To record Insurance expense ((3,000 / 12) x 2)

4. Salaries and Wages Expense 10,000

Salaries and Wages Payable 10,000
To record accrued salaries and wages

5. Account Receivables 3,000

Service Revenues 3,000
To record revenue for service performed

6. Unearned Service Revenue 7,200

Service Revenues 7,200
To record revenue for service performed

7. Supplies Expense 2,190

Supplies 2,190
To record supplies used

Note: We worked using Excel sheet and here is the original file (click twice on the icon to
open it).

Case 3
These financial statement items (in thousands) are for Chen Company at year-end, July 31,
2014.
Salaries and wages payable ¥ 4,580 Note payable (Non-Current) ¥ 3,300

Salaries and wages expense 45,700 Cash 22,200

Utilities expense 19,100 Accounts receivable 9,780

Equipment 24,000 Accumulated depreciationequip. 6,000

Accounts payable 4,100 Dividends 4,000

Service revenue 58,100 Depreciation expense 4,000

ACCT6174 – Introduction to Financial Accounting

Rent revenue 6,500 Retained earnings (8/1/2013) 30,000

Share capital-ordinary 16,200

Instructions

(a) Prepare an income statement and a retained earnings statement for the year.

(b) Prepare a classified statement of financial position at July 31, 2014.

Answer:
a. Chen Company
Income Statement
For the Month Ended July 31, 2014
Revenues
Service Revenue 58,100
Rent Revenue 6,500
Total Revenues 64,600

Expenses
Salaries and wages expense 45,700
Utilities expense 19,100
Depreciation expense 4,000
Total Expenses 68,800

Net Loss 4,200

Chen Company
Retained Earnings Statement
For the Month Ended July 31, 2014
Retained Earnings, August 1 2013 30,000
Less: Net Loss 4,200
25,800

Less: Dividends 4,000

Retained Earnings, July 2014 21,800

ACCT6174 – Introduction to Financial Accounting

 b. Chen Company
Statement of Financial Position
For the Month Ended July 31, 2014
Assets
Property, plant and equipment
Equipment 24,000
Less: Accumulated depreciation - Equipment 6,000 18,000
Current Assets
Cash 22,200
Account Receivables 9,780
Total Assets 49,980

Equity and Liabilities

Equity
Share capital - ordinary 16,200
Retained Earnings 21,800 38,000

Current Liabilities
Salaries and wages payable 4,580
Accounts payable 4,100
Notes payable 3,300 11,980
Total equity and liabilities 49,980

Note: We worked using Excel sheet and here is the original file (click twice on the icon to
open it).

Case 4
Vanguard Company had the following adjusted trial balance at December 31, 2014.

VANGUARD COMPANY

Adjusted Trial Balance

For the Year Ended December 31, 2014

Account Titles Debits Credits

Cash ₤ 12,800

Accounts Receivable 8,800

Equipment 15,900

ACCT6174 – Introduction to Financial Accounting

 Accounts Payable ₤ 4,400

Accumulated DepreciationEquip. 7,400

Share Capital - Ordinary 17,000

Retained Earnings 25,500

Dividends 16,000

Service Revenue 68,000

Unearned Rent Revenue 1,800

Rent Revenue 6,500

Salaries and Wages Expense 55,700

Depreciation Expense 6,000

Supplies Expense 200

Utilities Expense 14,900       

₤130,300 ₤130,300

Instructions:
(a) Journalize the entries required to close the accounts.

(b) Prepare a retained earnings statement for the year ended December 31, 2014.

ACCT6174 – Introduction to Financial Accounting

Answer:

a. Date Account Titles and Explanation Debit Credit

Dec. 31, 2014 Service Revenue 68,000

Rent Revenue 6,500
Income Summary 74,500
(To close revenue accounts)

Dec. 31, 2014 Income Summary 76,800

Salaries and Wages expense 55,700
Depreciation expense 6,000
Supplies expense 200
Utilities expense 14,900
(To close expense accounts)

Dec. 31, 2014 Retained Earnings 2,300

Income Summary 2,300
(To close net loss to retained earnings)

Dec. 31, 2014 Retained Earnings 16,000

Dividends 16,000
(To close dividends to retained earnings)

b. Vanguard Company
Retained Earnings Statement
For the Year Ended December 31, 2014
Retained Earnings, Dec 1 2014 25,500
Add: Net Loss (2,300)
23,200

Less: Dividends 16,000

Retained Earnings, Dec 31 2014 7,200

Note: We worked using Excel sheet and here is the original file (click twice on the icon to
open it).

Case 5
Presented below is an adjusted trial balance for Cowell Company, at December 31, 2014.

Cash €10,700 Accounts payable €10,000

Accounts receivable 20,000 Notes payable 9,000
Prepaid insurance 15,000 Accumulated depreciation—

ACCT6174 – Introduction to Financial Accounting

Equipment 35,000 equipment 14,000
Depreciation expense 7,000 Service revenue 30,000
Dividends 1,500 Retained earnings 12,000
Advertising expense 1,400 Unearned service revenue 11,000
Rent expense 800 Share capital-ordinary 12,000
Salaries and wages expense 5,000
Insurance expense 1,600
€98,000 €98,000

Instructions

(a) Prepare closing entries for December 31, 2014.

(b) Determine the balance in the retained earnings account after the entries have been
posted.

Answer: (On the next page)

ACCT6174 – Introduction to Financial Accounting

 a. Date Account Titles and Explanation Debit Credit
Dec. 31, 2014 Service Revenue 30,000
Income Summary 30,000
(To close revenue account)

Dec. 31, 2014 Income Summary 15,800

Depreciation expense 7,000
Advertising expense 1,400
Rent expense 800
Salaries and Wages expense 5,000
Insurance expense 1,600
(To close expense accounts)

Dec. 31, 2014 Income Summary 14,200

Retained Earnings 14,200
(To close net loss to retained earnings)

Dec. 31, 2014 Retained Earnings 1,500

Dividends 1,500
(To close dividends to retained earnings)

b. Cowell Company
Retained Earnings Statement
For the Year Ended December 31, 2014
Retained Earnings, Dec 1 2014 12,000
Add: Net Income 14,200
26,200

Less: Dividends 1,500

Retained Earnings, Dec 31 2014 24,700

Note: We worked using Excel sheet and here is the original file (click twice on the icon to
open it).

ACCT6174 – Introduction to Financial Accounting