Test 2: Chapters 3 and 4

Problem 1: (15 Points)

Ledger Account Balances for Smith Company

Account Title

Cash $6,000

Accounts Receivable 2,200

Office Supplies 1,000

Equipment 15,000

Accumulated DepreciationEquipment $9,000

Salaries Payable 600

T. Bryan, Capital 15,000

T. Bryan, Withdrawals 3,000

Service Revenue 10,800

Supplies Expense 1,300

Salaries Expense 4,600

Rent Expense 800

Depreciation ExpenseEquipment 1,500

Prepare the Closing Entries:

Problem 2: (15 points)

Ledger Account Balances for Shutterbug Photography at December 31, 2017 is as follows:

Accounts

Cash $15,000

Accounts Receivable 30,000

Prepaid Insurance 7,500

Supplies 3,200

Building 160,000

Accumulated DepreciationBuilding 12,000

Equipment 75,000

Accumulated DepreciationEquipment 8,500

Land 40,000

Accounts Payable 12,000

Salaries Payable 2,000

Unearned Revenue 25,000

Mortgage Payable 100,000

T. Smith, Capital 21,290

T. Smith, Withdrawals 23,000

Service Revenue 289,000

Salaries Expense 61,000

Depreciation ExpenseBuilding and Equipment 6,150

Supplies Expense 14,040

Insurance Expense 14,000

Utilities Expense 20,900

Using the information above, prepare a post-closing trial balance for Shutterbug Photography (dated December 31, 2017).

Problem 3: (15 Points)

Lorring Landscaping has the following data for the December 31 adjusting entries:

Each Friday, Lorring pays employees for the current weeks work. The amount of the weekly payroll is $6,000 for a five-day workweek. This year, December 31 falls on a Tuesday.

On January 1 of the current year, Lorring purchases an insurance policy that covers two years, $4,000.

The beginning balance of Office Supplies was $4,100. During the year, Lorring purchased office supplies for $5,500, and at December 31 the office supplies on hand total $2,200.

During December, Lorring designed a landscape plan and the client prepaid $4,000. Lorring recorded this amount as Unearned Revenue. The job will take several months to complete, and Lorring estimates that the company has earned 50% of the total revenue during the current year.

At December 31, Lorring had earned $4,500 for landscape services completed for Tomball Appliances.

Depreciation for the Equipment is $3,000.

Lorring has incurred $800 of advertising expense to be paid on January 10.

Requirements

Journalize the adjusting entry needed on December 31