Exercise For Chapter 4

Exercise 1.
The trial balance of AA company at the end of July 20x2 as follows:
AA Trial Balance
31 July, 20x2
Debit Credit ($)
Account Payable 8,000

Account Receivable 14,000
Accumulated Depreciation – PPE 200
Cash 8,000
AA, Capital 11,000
AA, Drawings 1,200
PPE 16,000
Prepaid Insurance 4,000
Service Revenue 28,400
Supplies 8,000
Unearned Revenue 6,000
Utilities Expense 400
Wages Expense 2,000
Requirement: Prepare a work sheet using the following information:

-Expired insurance $150
-Estimated depreciation on PPE $200
-Accrued wages $120
-Unused supplies on hand $5,800
-$4,000 of the unearned revenue balance had been earned by the end of the month.
Exercise 2. The following is “Partial” Adjusted Trial Balance of YY Company at 31 Aug 20x3:
YY, Capital 24,740

YY, Drawings 18,000
Service Revenue 185,400
Driver Wages Expense 88,900
Fuel Expense 19,000
Other Wages Expense 14,400
Packing Supplies Expense 6,200
PPE rental expense 3,000
Utilities Expense 4,450
Insurance Expense 4,200
Interest Expense 5,100
Depreciation Expense 10,040
Requirement: Prepare the closing entries for YY company and compute the ending balance of
YY, Capital account.
Exercise 3. On May 1 20x4, Mr Quan open Car Repair Service. During the month, he completed
the following transactions for the company:
May:
1st Began business by depositing $10,000 in a bank account in the name of company
rd
3 Paid store rent for current month, $850
th
6 Paid the premium on a one-year insurance policy, $960
th
8 Purchased repair equipment from X company, $8,400. Terms were $1,200 down and
$600 per month for one year. First payment is due June 1. The monthly estimated depreciation
on repair equipment is $140
9th Purchased repair supplies from Y company on credit, $936
th
14 Paid cash for an advertisement in a local newspaper, $120
th
18 Received cash repair revenue for the first half of the month, $800
th
20 Paid the amount owed to Y company, $450
th
25 Received cash repair revenue for the last half of May, $1,950
th
30 Made a withdrawal, $600
Requirement:
1) Prepare journal entries to record the May transactions
2) Prepare a trial balance for May
3) Using the following information, record adjusting entries:
a) One month’s insurance has expired
b) The remaining inventory of unused repair supplies is $338
4) Prepare an adjusted trial balance
5) From the adjusted trial balance, prepare a profit or loss statement, a statement of owner’s
equity, and balance sheet for May.
6) Complete the worksheet for May
7) Prepare closing entries.
During June, Car Repair Service completed these transactions:
June:
st
1 Paid the monthly rent, $850
1st Made the monthly payment to X company, $600
6th Purchased additional repair supplies on credit from Y company, $1,726
15th Received cash repair revenue for the first half of the month, $1,828
20th Paid cash for an advertisement in the local newspaper, $120
23rd Paid the amount owed to Y, $1,200
30th Received cash repair revenue for the last half of the month, $1,634
30th Record a withdrawal by owner, $600
Requirement:
1) Prepare journal entries to record the June transactions

2) Prepare a trial balance for June
3) Using the following information, record adjusting entries:
a) One month’s insurance has expired
b) The inventory of unused repair supplies is $826
4) Prepare an adjusted trial balance
5) From the adjusted trial balance, prepare a profit or loss statement, a statement of owner’s
equity, and balance sheet for May.
6) Complete the worksheet for May
7) Prepare closing entries.
Exercise 4. You have the following information for Mr Quan’s store for fiscal year 20X0:
January:
1st Signed a 6-months rental contract for the store (@ $500 per month and pay full in
advance) and bought $500 of supplies (cash paid).
3rd Purchased a vehicle at cost of $8,000 on credit.
5th Purchased goods at cost of $5,000 on credit.
6th Sold goods @ $11,000 and received cash (the mount of good originally costs $6,000).
8th Borrowed $9,000 cash from bank.
16th Paid for the vehicle by cash (@ $5,000).
17th Invested more $5,000 in cash to the business.
26th Purchased goods at cost of $4,000 by cash.
27st Sold goods (which originally cost $3,000) @$1,500 on credit.
31st Vehicle’s depreciation was estimated @$80.
Additional information:
Beginning balances of the month were:
Cash $10,000
Inventory $3,000
Trade Payable $3,000
Bank Payable $4,000
Quan’s Equity $6,000
The amount of supplies still on hand at the end of the month was valued @ $200
Requirement:
Journalize the transactions in January and answer the following questions:

1. What is the closing balance of COGS Account at the end of Jan?
2. What is the closing balance of Cash Account at the end of Jan?
3. What is the NBV (Net Book Value) of the vehicle at the end of Jan?
4. What is the closing amount of Owner’s Equity as of 31st Jan?
5. What is the Gross profit/loss of the month?
6. What are the closing entries for Revenue at the end of the month?
7. What is the opening balance of the Rent Expense Account at the 1st of Feb?

Exercise For Chapter 4

Uploaded by

Copyright:

Available Formats

Exercise For Chapter 4

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Exercise For Chapter 4

Uploaded by

Copyright:

Available Formats

Exercise 1.

The trial balance of AA company at the end of July 20x2 as follows:

Debit Credit ($)

Account Payable 8,000

Requirement: Prepare a work sheet using the following information:

YY, Capital 24,740

During June, Car Repair Service completed these transactions:

1) Prepare journal entries to record the June transactions

3rd Purchased a vehicle at cost of $8,000 on credit.

5th Purchased goods at cost of $5,000 on credit.

8th Borrowed $9,000 cash from bank.

16th Paid for the vehicle by cash (@ $5,000).

17th Invested more $5,000 in cash to the business.

26th Purchased goods at cost of $4,000 by cash.

27st Sold goods (which originally cost $3,000) @$1,500 on credit.

31st Vehicle’s depreciation was estimated @$80.

Beginning balances of the month were:

Trade Payable $3,000

Bank Payable $4,000

Quan’s Equity $6,000

Journalize the transactions in January and answer the following questions:

You might also like