Accounting

P3-43 This problem continues the Haupt Consulting situation from Problem 2-64 of Chapter 2. Start from the trial balance and the posted T-accounts that Haupt Consulting prepared at December 18, as follows:

HAUPT CONSULTING Trial Balance

December 18,2010

Account Title Cash Accounts receivable

Supplies Equipment Accumulated depreciarion-eequipment

Furniture Accumulated depreciation-c-furniture

Accounts payable

Salary payable Unearned service revenue

Carl Haupt, Capital Carl Haupt, Withdrawals Service revenue Rent expense Utilities expense Salary expense Depredation expense-c-equipmenr Depreciation expense-efurniture

Supplies expense

Total

Later in December, the business completed these transactions, as follows:

$16,400 $16,400~~~~-~

Balance

Debit Credit s 8,100

1,700 ]00

2,000

.1,600

$ 3,900

10,000

2,500 .100

200

Dee 21 Received $900 in advance for client service tn be:performed evenly over the next JOJays.

21 Hired a secretary to be paid $1,500 on the 2(1th day of each month. The secretary begins work immediately.

26 Paid $300 o n account. 18 Collected $600 on account, ~O Owner withdrew $1,600.

The Adjusting Process 185

Requirements 1. Open these additional T-accounts: Accumulated depreciation-equipment;

Accumulated depreciation-e-fumirure; Salary payable; Unearned service revenue; Depreciation expense-equipment; Depreciation expense-furniture; Supplies expense.

2. Journalize the transactions of December 21-30. 3. Post to the T-accounrs, keying all items by date.

4. Prepare a trial balance at December .>1. Also set up columns for the adjustments and for the adjusted trial balance, as illustrared in Exhibir 3-9.

S. At December 31, the business gathers the following information for the adjust- ing entries:

Accrued service revenue, $400 h. Earned S.lOOof the service revenue collected in advance un December 2] c. Supplies.• on hand, $100 d. Depreciation expense=equipment, $.1:\; furniture, $60 e. Accrued $700 expense for secretary's salary

On your work sheet make these adjustments directly in the adjustments columns, and complete the adjusted trial balance at December 31. Throughout the hook, to avoid rounding errors, we base adjusting entries on30-day months and 360-day years.

6. Journalize and post the adjusting entries. In the 'f-accounrs denote each adjusting amount as Adj and an account balance as Bal.

7. Prepare the income statement and the statement of owner's equiry of Haupt Consulting for the month ended December 31, 2010, and prepare the balance sheet at that date .

• Using the Trial balance prepared in Chapter 2 consider the following adjustment data gath- ered by C]:

3. CJ prepared an inventory of supplies and found there were $70 of supplies in the cabinet on April.'lO h. One month's combined depreciation on all assets was estimated to be 5300

Requirements 1. Using the data provided from the trial balance, the previous adjustment infor-

mation, and the information from Chapter 2, prepare all required adjusting journal entries for A pri!.

2. Prepare an adjusted trial balance as of April 30 for Crystal Clear Cleaning.

Apply Your Knowledge

Case 1. Lee Nichola, has been the owner and has operated World.com Advertising since its beginning 10 years ago. The company has prospered. Recently, Nicholas mentioned that he would sell the business for the right price.

186 Chapter 3