Question

In: Accounting

Alison and Chuck Renny began operations of their furniture repair shop (Lazy Sofa Furniture, Inc.) on...

Alison and Chuck Renny began operations of their furniture repair shop (Lazy Sofa Furniture, Inc.) on January 1, 2017. The annual reporting period ends December 31. The trial balance on January 1, 2018, follows (amounts are rounded to thousands of dollars to simplify).

Account Titles Debit Credit
Cash $ 6
Accounts Receivable 3
Supplies 2
Equipment 5
Accumulated Depreciation $ 0
Software 10
Accumulated Amortization 4
Accounts Payable 6
Notes Payable (long-term) 0
Salaries and Wages Payable 0
Interest Payable 0
Income Tax Payable 0
Deferred Revenue 0
Common Stock 14
Retained Earnings 2
Service Revenue 0
Supplies Expense 0
Depreciation Expense 0
Salaries and Wages Expense 0
Amortization Expense 0
Interest Expense 0
Income Tax Expense 0
Totals $ 26 $ 26

Transactions during 2018 (summarized in thousands of dollars) follow:

  1. Borrowed $16 cash on July 1, 2018, signing a six-month note payable.
  2. Purchased equipment for $23 cash on July 2.
  3. Issued additional shares of common stock on July 3 for $5.
  4. Purchased additional equipment on August 4, $3 cash.
  5. Purchased, on account, supplies on September 5 for future use, $10.
  6. On December 6, recorded revenues in the amount of $60, including $9 on credit and $51 received in cash.
  7. Paid salaries and wages expenses on December 7, $24.
  8. Collected accounts receivable on December 8, $8.
  9. Paid accounts payable on December 9, $11.
  10. Received a $4 deposit on December 10 for work to start January 15, 2019.

Data for adjusting journal entries on December 31:

  1. Amortization for 2018, $4.
  2. Supplies of $4 were counted on December 31, 2018.
  3. Depreciation for 2018, $2.
  4. Accrued interest on notes payable of $5.
  5. Wages earned but not yet paid, $3.
  6. Income tax for 2018 was $4 and will be paid in 2019.
  1. Post the adjusting entries from requirement 4 and prepare an adjusted trial balance. (Enter your answers in thousands of dollars.)

Solutions

Expert Solution

Journal Entries

Journal Entries Dr. ($) Cr. ($)
a cash 16
To notes payable 16
b equipment 23
To cash 23
c cash 5
To common stock 5
d equipment 3
To cash 3
e supplies 10
To accounts payable 10
f cash 51
accounts receivable 9
To service revenue 60
g salaries and wages expenses 24
To cash 24
h cash 8
To accounts receivable 8
i accounts payable 11
To cash 11
j cash 4
To deferred revenue 4

Adjusting Journal Entries

Adjusting Journal Entries Dr. ($) Cr. ($)
a amortization expenses 4
To accumulated amortization 4
b supplies expenses (2+10-4) 8
To supplies 8
c depreciation expenses 2
To accumulated depreciation 2
d interest expenses 5
To interest payable 5
e salaries and wages expenses 3
To salaries and wages payable 3
f income tax expenses 4
To income tax payable 4

Adjusted Trial Balance

Adjusted Trial Balance
Accounts Dr. ($) Cr. ($)
Cash 29
Accounts Receivable 4
Supplies 4
Equipment 31
Accumulated Depreciation 2
Software 10
Accumulated Amortization 8
Accounts Payable 5
Notes Payable (long-term) 16
Salaries and Wages Payable 3
Interest Payable 5
Income Tax Payable 4
Deferred Revenue 4
Common Stock 19
Retained Earnings 2
Service Revenue 60
Supplies Expense 8
Depreciation Expense 2
Salaries and Wages Expense 27
Amortization Expense 4
Interest Expense 5
Income Tax Expense 4
Totals 128 128

Related Solutions

Alison and Chuck Renny began operations of their furniture repair shop (Lazy Sofa Furniture, Inc.) on...
Alison and Chuck Renny began operations of their furniture repair shop (Lazy Sofa Furniture, Inc.) on January 1, 2017. The annual reporting period ends December 31. The trial balance on January 1, 2018, follows (amounts are rounded to thousands of dollars to simplify). Account Titles Debit Credit Cash $ 6 Accounts Receivable 3 Supplies 2 Equipment 5 Accumulated Depreciation $ 0 Software 10 Accumulated Amortization 4 Accounts Payable 6 Notes Payable (long-term) 0 Salaries and Wages Payable 0 Interest Payable...
Alison and Chuck Renny began operations of their furniture repair shop (Lazy Sofa Furniture, Inc.) on...
Alison and Chuck Renny began operations of their furniture repair shop (Lazy Sofa Furniture, Inc.) on January 1, 2017. The annual reporting period ends December 31. The trial balance on January 1, 2018, follows (amounts are rounded to thousands of dollars to simplify). Account Titles Debit Credit Cash $ 6 Accounts Receivable 3 Supplies 2 Equipment 5 Accumulated Depreciation $ 0 Software 10 Accumulated Amortization 4 Accounts Payable 6 Notes Payable (long-term) 0 Salaries and Wages Payable 0 Interest Payable...
Alison and Chuck Renny began operations of their furniture repair shop (Lazy Sofa Furniture, Inc.) on...
Alison and Chuck Renny began operations of their furniture repair shop (Lazy Sofa Furniture, Inc.) on January 1, 2017. The annual reporting period ends December 31. The trial balance on January 1, 2018, follows (amounts are rounded to thousands of dollars to simplify). Account Titles Debit Credit Cash $ 6 Accounts Receivable 3 Supplies 2 Equipment 5 Accumulated Depreciation $ 0 Software 10 Accumulated Amortization 4 Accounts Payable 6 Notes Payable (long-term) 0 Salaries and Wages Payable 0 Interest Payable...
Alison and Chuck Renny began operations of their furniture repair shop (Lazy Sofa Furniture, Inc.) on...
Alison and Chuck Renny began operations of their furniture repair shop (Lazy Sofa Furniture, Inc.) on January 1, 2017. The annual reporting period ends December 31. The trial balance on January 1, 2018, follows (amounts are rounded to thousands of dollars to simplify). Account Titles Debit Credit Cash $ 6 Accounts Receivable 3 Supplies 2 Equipment 5 Accumulated Depreciation $ 0 Software 10 Accumulated Amortization 4 Accounts Payable 6 Notes Payable (long-term) 0 Salaries and Wages Payable 0 Interest Payable...
Alison and Chuck Renny began operations of their furniture repair shop (Lazy Sofa Furniture, Inc.) on...
Alison and Chuck Renny began operations of their furniture repair shop (Lazy Sofa Furniture, Inc.) on January 1, 2014. The annual reporting period ends December 31. The trial balance on January 1, 2015, appears below (amounts are rounded to thousands of dollars to simplify).   Account Titles Debit Credit   Cash $ 4   Accounts Receivable 5   Supplies 3   Equipment 7   Accumulated Depreciation $ 0   Software 11   Accumulated Amortization 4   Accounts Payable 8   Notes Payable (long-term) 0   Salaries and Wages Payable 0   Interest...
Alison and Chuck Renny began operations of their furniture repair shop (Lazy Sofa Furniture, Inc.) on...
Alison and Chuck Renny began operations of their furniture repair shop (Lazy Sofa Furniture, Inc.) on January 1, 2014. The annual reporting period ends December 31. The trial balance on January 1, 2015, appears below (amounts are rounded to thousands of dollars to simplify).   Account Titles Debit Credit   Cash $ 5   Accounts Receivable 4   Supplies 2   Equipment 6   Accumulated Depreciation $ 0   Software 12   Accumulated Amortization 3   Accounts Payable 7   Notes Payable (long-term) 0   Salaries and Wages Payable 0   Interest...
Aubrae and Tylor Williamson began operations of their furniture repair shop (Furniture Refinishers, Inc.) on January...
Aubrae and Tylor Williamson began operations of their furniture repair shop (Furniture Refinishers, Inc.) on January 1, 2019. The annual reporting period ends December 31. The trial balance on January 1, 2020, was as follows: Furniture Refinishers, Inc. Trial Balance on January 1, 2020 Account Titles Debit Credit Cash 5,000 Accounts receivable 4,000 Supplies 6,000 Small tools 6,000 Equipment Accumulated depreciation (on equipment) Other noncurrent assets (not detailed to simplify) 8,000 Accounts payable 6,000 Dividends payable Notes payable Wages payable...
On May 1, Marty's Repair Shop Itd. began operations . The following transactions were completed during...
On May 1, Marty's Repair Shop Itd. began operations . The following transactions were completed during the month: 1) Issued common shares for $8,000 cash. 2) Paid $1,280 for May office rent . 3) Purchased equipment for $16,000, paying $4.000 cash and signing a bank loan payable for the balance . 4) Purchased supplies on account , $700. 5) Received $4,200 from customers for repair services provided . 6) Paid for supplies purchased in transaction 4. 7) Paid May telephone...
On May 1, Marty's Repair Shop Itd. began operations . The following transactions were completed during...
On May 1, Marty's Repair Shop Itd. began operations . The following transactions were completed during the month: 1) Issued common shares for $8,000 cash. 2) Paid $1,280 for May office rent . 3) Purchased equipment for $16,000, paying $4.000 cash and signing a bank loan payable for the balance . 4) Purchased supplies on account , $700. 5) Received $4,200 from customers for repair services provided . 6) Paid for supplies purchased in transaction 4. 7) Paid May telephone...
On May 1, Marty's Repair Shop Itd. began operations . The following transactions were completed during...
On May 1, Marty's Repair Shop Itd. began operations . The following transactions were completed during the month: 1) Issued common shares for $8,000 cash. 2) Paid $1,280 for May office rent . 3) Purchased equipment for $16,000, paying $4.000 cash and signing a bank loan payable for the balance . 4) Purchased supplies on account , $700. 5) Received $4,200 from customers for repair services provided . 6) Paid for supplies purchased in transaction 4. 7) Paid May telephone...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT