In: Accounting
Crazy Mountain Outfitters Co., an outfitter store for fishing treks, prepared the following unadjusted trial balance at the end of its first year of operations:
Crazy Mountain Outfitters Co. | ||||
Unadjusted Trial Balance | ||||
April 30, 20Y5 | ||||
Debit Balances |
Credit Balances |
|||
Cash | 13,770 | |||
Accounts Receivable | 91,430 | |||
Supplies | 22,030 | |||
Equipment | 468,860 | |||
Accounts Payable | 21,480 | |||
Unearned Fees | 24,240 | |||
Common Stock | 55,000 | |||
Retained Earnings | 269,000 | |||
Dividends | 18,180 | |||
Fees Earned | 550,800 | |||
Wages Expense | 127,790 | |||
Rent Expense | 97,490 | |||
Utilities Expense | 69,950 | |||
Miscellaneous Expense | 11,020 | |||
920,520 | 920,520 |
For preparing the adjusting entries, the following data were assembled:
Required:
1. Journalize the adjusting entries necessary on April 30, 20Y5. If an amount box does not require an entry, leave it blank.
Apr. 30 | |||
30 | |||
30 | |||
30 | |||
30 | |||
2. Determine the revenues, expenses, and net income of Crazy Mountain Outfitters Co. before the adjusting entries.
Revenues | $ | |
Expenses | ||
Net income | $ |
3. Determine the revenues, expenses, and net income of Crazy Mountain Outfitters Co. after the adjusting entries.
Revenues | $ | |
Expenses | ||
Net income | $ |
4. Determine the effect of the adjusting
entries on Retained Earnings.
Retained Earnings by $.
1) | Adjusting Entries | ||||
Particulars | Debit | Credit | |||
a) | Supplies Expense | $ 13,890.00 | |||
To Supplies | $ 13,890.00 | ||||
($ 22030 - $ 8140) | |||||
b) | Accounts Receivable | $ 9,970.00 | |||
To Fees Earned | $ 9,970.00 | ||||
c) | Depreciation Expense | $ 13,770.00 | |||
To Accumulated Depreciation | $ 13,770.00 | ||||
d) | Wages Expense | $ 1,760.00 | |||
To Wages Payable | $ 1,760.00 | ||||
e) | Unearned Fees | $ 19,150.00 | |||
To Fees Earned | $ 19,150.00 |
2) | Revenues | ||||
Fees Earned | $ 550,800.00 | ||||
Expenses | |||||
Wages Expense | $ 127,790.00 | ||||
Rent Expense | $ 97,490.00 | ||||
Utilities Expense | $ 69,950.00 | ||||
Miscellaneous Expense | $ 11,020.00 | ||||
$ 306,250.00 | |||||
Net Income | ($ 550800 - $ 306250) | $ 244,550.00 |
3) | Revenues | ||||
Fees Earned | $ 579,920.00 | ||||
($ 550800 + $ 9970 + $ 19150) | |||||
Expenses | |||||
Wages Expense | ($ 127790 + $ 1760) | $ 129,550.00 | |||
Rent Expense | $ 97,490.00 | ||||
Utilities Expense | $ 69,950.00 | ||||
Miscellaneous Expense | $ 11,020.00 | ||||
Depreciation Expense | $ 13,770.00 | ||||
Supplies Expense | $ 13,890.00 | ||||
$ 335,670.00 | |||||
Net Income | ($ 579920 - $ 335670) | $ 244,250.00 |
4) | Because of the adjusting entries, | |||
retained earnings decreased by | $ 300.00 | |||
($ 244550 - $ 244250) | ||||