Chapter 3 Comprehensive Problem

On September 1, 2010, the account balances of Rand Equipment Repair were as follows.

No. / Debits / No. / Credits
101 / Cash / $4,828 / 154 / Accumulated Depreciation / $1,466
112 / Accounts Receivable / 3,501 / 201 / Accounts Payable / 3,437
126 / Supplies / 2,022 / 209 / Unearned Service Revenue / 1,384
153 / Store Equipment / 15,060 / 212 / Salaries Payable / 508
301 / J. Rand, Capital / 18,616
$25,411 / $25,411

During September the following summary transactions were completed.

Sept. 8 / Paid $1,486 for salaries due employees, of which $978 is for September.
10 / Received $1,184 cash from customers on account.
12 / Received $3,374 cash for services performed in September.
15 / Purchased store equipment on account $2,997.
17 / Purchased supplies on account $1,228.
20 / Paid creditors $4,538 on account.
22 / Paid September rent $478.
25 / Paid salaries $1,240.
27 / Performed services on account and billed customers for services provided $1,483.
29 / Received $690 from customers for future service.

Adjustment data consist of:

  1. Supplies on hand $1,185.
  2. Accrued salaries payable $428.
  3. Depreciation is $174 per month.
  4. Unearned service revenue of $1,453 is earned.

Instructions

(a) / Enter the September 1 balances in the ledger accounts.
(b) / Journalize the September transactions.
(c) / Post to the ledger accounts. Use J1 for the posting reference. Use the following accounts: No. 407 Service Revenue, No. 615 Depreciation Expense, No. 631 Supplies Expense, No. 726 Salaries Expense, and No. 729 Rent Expense.
(d) / Prepare a trial balance at September 30.
(e) / Journalize and post adjusting entries.
(f) / Prepare an adjusted trial balance.
(g) / Prepare an income statement and an owner’s equity statement for September and a balance sheet at September 30.

(b) General Journal(For multiple debit/credit entries, list amounts from largest to smallest eg 10, 5, 3, 2.)

J1
Date / Account Titles / Debit / Credit
Sept. 8 / Salaries Expense / 978
Salaries Payable / 508
Cash / 1486
Sept. 10 / Cash / 1184
Accounts Receivable / 1184
Sept. 12 / Cash / 3374
Service Revenue / 3374
Sept. 15 / Store Equipment / 2997
Accounts Payable / 2997
Sept. 17 / Supplies / 1228
Accounts Payable / 1228
Sept. 20 / Accounts Payable / 4538
Cash / 4538
Sept. 22 / Rent Expense / 478
Cash / 478
Sept. 25 / Salaries Expense / 1240
Cash / 1240
Sept. 27 / Accounts Receivable / 1483
Service Revenue / 1483
Sept. 29 / Cash / 690
Unearned Service Revenue / 690

(e)

Date / Account/Description / Debit / Credit
1. / Sept. 30 / Supplies expense / 2065
Supplies / 2065
2. / Sept. 30 / Salaries Expense / 428
Salaries Payable / 428
3. / Sept. 30 / Depreciation Expense / 174
Accumulated Depreciation / 174
4. / Sept. 30 / Unearned Service Revenue / 1453
Service Revenue / 1453

(a), (c) & (e) (If an amount should be blank, enter a zero. All boxes must be filled to be correct.)

Cash / No. 101
Date / Explanation / Ref. / Debit / Credit / Balance
Sept. / 1 / Balance / P / 4828
8 / J1 / 0 / 1486 / 3342
10 / J1 / 1184 / 0 / 4526
12 / J1 / 3374 / 0 / 7900
20 / J1 / 0 / 4538 / 3362
22 / J1 / 0 / 478 / 2884
25 / J1 / 0 / 1240 / 1644
29 / J1 / 690 / 0 / 2334
Accounts Receivable / No. 112
Date / Explanation / Ref. / Debit / Credit / Balance
Sept. / 1 / Balance / P / 3501
10 / J1 / 0 / 1184 / 2317
27 / J1 / 1483 / 0 / 3800
Supplies / No. 126
Date / Explanation / Ref. / Debit / Credit / Balance
Sept. / 1 / Balance / P / 2,022
17 / J1 / 1228 / 0 / 3250
30 / J1 / 0 / 2065 / 1185
Store Equipment / No. 153
Date / Explanation / Ref. / Debit / Credit / Balance
Sept. / 1 / Balance / P / 15,060
15 / J1 / 2997 / 0 / 18057
Accumulated Depreciation—Equipment / No. 154
Date / Explanation / Ref. / Debit / Credit / Balance
Sept. / 1 / Balance / P / 1,466
30 / J1 / 0 / 174 / 1640
Accounts Payable / No. 201
Date / Explanation / Ref. / Debit / Credit / Balance
Sept. / 1 / Balance / P / 3,437
15 / J1 / 0 / 2997 / 6434
17 / J1 / 0 / 1228 / 7662
20 / J1 / 4538 / 0 / 3124
Unearned Service Revenue / No. 209
Date / Explanation / Ref. / Debit / Credit / Balance
Sept. / 1 / Balance / P / 1,384
29 / J1 / 0 / 690 / 2074
30 / J1 / 1453 / 0 / 621
Salaries Payable / No. 212
Date / Explanation / Ref. / Debit / Credit / Balance
Sept. / 1 / Balance / P / 508
8 / J1 / 508 / 0 / 0
30 / J1 / 0 / 428 / 428
J. Rand, Capital / No. 301
Date / Explanation / Ref. / Debit / Credit / Balance
Sept. / 1 / Balance / P / 18,616
Service Revenue / No. 407
Date / Explanation / Ref. / Debit / Credit / Balance
Sept. / 12 / J1 / 0 / 3374 / 3374
27 / J1 / 0 / 1483 / 4857
30 / J1 / 0 / 1453 / 6310
Depreciation Expense / No. 615
Date / Explanation / Ref. / Debit / Credit / Balance
Sept. / 30 / J1 / 174 / 0 / 174
Supplies Expense / No. 631
Date / Explanation / Ref. / Debit / Credit / Balance
Sept. / 30 / J1 / 2065 / 0 / 2065
Salaries Expense / No. 726
Date / Explanation / Ref. / Debit / Credit / Balance
Sept. / 8 / J1 / 978 / 0 / 978
25 / J1 / 1240 / 0 / 2218
30 / J1 / 428 / 0 / 2646
Rent Expense / No. 729
Date / Explanation / Ref. / Debit / Credit / Balance
Sept. / 22 / J1 / 478 / 0 / 478

(d) & (f)(If an amount should be blank, enter a zero. All boxes must be filled to be correct.)

RAND EQUIPMENT REPAIR
Trial Balances
September 30, 2010
Before / After
Adjustment / Adjustment
Dr. / Cr. / Dr. / Cr.
Cash / $ 2334 / $ 0 / $ 2334 / $ 0
Accounts Receivable / 3800 / 0 / 3800 / 0
Supplies / 3250 / 0 / 1185 / 0
Store Equipment / 18057 / 0 / 18057 / 0
Accumulated Depreciation / 0 / 1,466 / 0 / 1640
Accounts Payable / 0 / 3124 / 0 / 3124
Unearned Service Revenue / 0 / 2074 / 0 / 621
Salaries Payable / 0 / 0 / 0 / 428
J. Rand, Capital / 0 / 18,616 / 0 / 18,616
Service Revenue / 0 / 4857 / 0 / 6310
Depreciation Expense / 0 / 0 / 174 / 0
Supplies Expense / 0 / 0 / 2065 / 0
Salaries Expense / 2218 / 0 / 2646 / 0
Rent Expense / 478 / 0 / 478 / 0
$ 30137 / $ 30137 / $ 30739 / $ 30739

(g) (List amounts from largest to smallest eg 10, 5, 3, 2. If answer is zero, please enter 0. Do not leave any fields blank. For the balance sheet, list assets in order of liquidity and liabilities from largest to smallest eg 10, 5, 3, 2.)

RAND EQUIPMENT REPAIR
Income Statement
For the Month Ended September 30, 2010
Revenues
Service revenue / $ 6310
Expenses
Salaries expense / $ 2646
Supplies expense / 2065
Rent expense / 478
Depreciation expense / 174
Total expense / 5363
Net income / $ 947
RAND EQUIPMENT REPAIR
Owner’s Equity Statement
For the Month Ended September 30, 2010
J.Rand, Capital, September 1 / $ 18,616
Add: Net income / 947
J.Rand, Capital, September 30 / $ 19563
AND EQUIPMENT REPAIR
Balance Sheet
September 30, 2010
Assets
Cash / $ 2334
Accounts receivable / 3800
Supplies / 1185
Equipment / $ 18057
Less: Accumulated Depreciation / 1640 / 16417
Total assets / $ 23736
Liabilities and Owner's Equity
Liabilities
Accounts payable / $ 3124
Unearned service revenue / 621
Salaries payable / 428
Total liabilities / 4173
Owner's equity
J.Rand, Capital / 19563
Total liabilities and owner's equity / $ 23736