Financial Accounting

MidtermExam-PartII.xlsx

Problem #1

Davis & Bell began a health clinic as a corporation in 2014. Several transactions which occurred early in
2014 are descibed below. Record each transaction in proper journal entry form, excluding written
explanations.
Required: 5 points each
Record each transaction in proper journal entry form, excluding written explanations.
A	1/15/14	Stockholders invested $90,000 in the business and received shares of common
		stock as evidence of ownership.
B	2/1/14	Rent of $2,000 was paid for the month of February
C	2/10/14	Equipment with a cost of $10,000 was purchased on credit; payment is due
		in 30 days.
D	2/14/14	Fees totaling $5,500 were billed to patients; $3,000 was collected immediately
		and the balance of $2,500 is due within 30 days.
E	2/19/14	Full payment was made for the equipment purchased on February 10th.

Pete's Roofing, Inc.
Unadjusted Trial Balance
December 31, 2014
Account	Debit	Credit
Cash	$ 5,000
Accounts Receivable	20,000
Supplies	6,000
Prepaid Rent	10,500
Equipment	850,000
Accumulated Depreciation		235,000
Other Assets	65,000
Accounts Payable		10,500
Unearned Service Revenue		12,500
Note Payable		60,000
Common Stock		285,000
Retained Earnings		35,000
Service Revenue		625,000
Wages Expense	205,000
Rent Expense	92,600
Interest Expense	8,900
Totals	$ 1,263,000	$ 1,263,000
At year end, you have the following data for adjustments:
a. An analysis indicates that prepaid rent on December 31 should be $4,000
b. A physical inventory shows that $1,650 of office supplies is on hand.
c. Depreciation for 2014 is $40,000
d. An analysis indicates that unearned service revenue should be $6,500
e. Wages of $5,500 are owed but unpaid and unrecorded at year end.
f. Six month's interest at 5% on the note was paid on September 30. Interest
for the period October 1 to December 31 is unpaid and unrecorded.
REQUIRED:			Points
1. Prepare the adjusting entries.			5
2. After posting the adjusting entries, prepare an adjusted trial balance.			5

The following trial balance has been adjusted as of December 31, 20XX
	Debits	Credits
Cash	$ 25,000	$ -
Accounts Receivable	6,000	-
Supplies Inventory	4,500	-
Prepaid Rent	18,000	-
Equipment	90,000	-
Accumulated Depreciation	-	2,500
Accounts Payable	-	6,000
Utilities Payable	-	4,000
Unearned Revenue	-	1,500
Interest Payable	-	150
Notes Payable	-	24,000
Common Stock	-	100,000
Service Revenue	-	90,000
Wages Expense	35,000	-
Supplies Expense	20,000	-
Rent Expense	15,000	-
Miscellaneous Expense	2,000	-
Electricity Expense	2,400	-
Telephone Expense	1,500	-
Depreciation Expense	1,000	-
Interest Expense	250	-
Dividend	7,500	-
Total	$ 228,150	$ 228,150
Required:			Points
(1) Prepare an Income Statement			5
(2) Prepare a Statement of Retained Earnings			5
(3) Prepare a Balance Sheet			5