Practice Problems
Demonstration problem
Solution to demonstration problem
a. See the work sheet below.
GREEN HILLS RIDING STABLE, INCORPORATE
Work Sheet
For the Month Ended 2010 July 31
Acct. | Account Titles | Trial Balance | Adjustments | Adjusted Balance | Income Statement | Statement of Retained Earnings | Balance Sheet | ||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
No. | Debit | Credit | Debit | Credit | Debit | Credit | Debit | Credit | Debit | Credit | Debit | Credit | |
100 | Cash | 10,700 | 10,700 | 10,700 | |||||||||
103 | Accounts Receivable | S,100 | 3,100 | S,100 | |||||||||
130 | Land | 40,000 | 40,000 | 40,000 | |||||||||
140 | Buildings | 24,000 | 24,000 | 24,000 | |||||||||
200 | Accounts Payable | 1,100 | 1,100 | 1,100 | |||||||||
201 | Notes Payable | 40,000 | 40,000 | 40,000 | |||||||||
300 | Capital Stock | 35,000 | 35,000 | 35,000 | |||||||||
310 | Retained Earnings 2010 July 1 | 3,100 | 3,100 | 3,100 | |||||||||
320 | Dividends | 1,000 | 1,000 | 1,000 | |||||||||
402 | Horse Boarding Fees Revenue | 4,500 | 4,500 | 4,500 | |||||||||
404 | Riding and Lesson Fees Revenue | 3,500 | 3,600 | 3,600 | |||||||||
507 | Salaries Expense | 1,400 | (2) 300 | 1,700 | 1,700 | ||||||||
513 | Feed Expense | 1,100 | 1,100 | 1,100 | |||||||||
540 | Interest Expense | 200 | 200 | 200 | |||||||||
563 | Miscellaneous Expense |
300 87,300 |
37,300 |
SOO | SOO | ||||||||
520 | Depreciation Expense Buildings | (1) 200 | 200 | 200 | |||||||||
141 | Accumulated Depreciation Buildings | (1) 200 | 200 | 200 | |||||||||
206 | Salaries Payable | EOO |
(2) 300 5oo |
87,500 |
300 37,300 |
300 | |||||||
Net Income | 4,000 4,100 |
8,100 |
4,100 |
||||||||||
Retained Earnings, 2010 July 31 | 8,100 | 8,100 | 1,000 | 7,200 | 82,300 | 76,600 | |||||||
6,200 7,200 |
7,200 |
S2,S00 |
6,200 32,800 |
b.
GREEN HILLS RIDING STABLE, INCORPORATED
General Journal
Date | Account Titles and Explanation | Post. Ref. |
Debt | Credit | |
2010 | Adjusting Entries | ||||
July |
31 | Depredation Expense Buildings (-SE) | 520 | 200 | |
Accumulated Depreciation Buildings (-A) | 141 | 200 | |||
To record depreciation expense. | |||||
31 | Salaries Expense (-SE) | 507 | 300 | ||
Salaries Payable (+L) |
206 |
300 |
|||
To record accrued salaries. |
c.
GREEN HILLS RIDING STABLE, INCORPORATED
General Journal
Date | Account Titles and Explanation |
Post. Ref. |
Debt | Credit | |
2010 | Closing Entries | ||||
July | 31 | Horse Boarding Fees Revenue | 402 | 4500 | |
Riding Lesson Fees Revenue |
404 | 3600 | |||
Income Summary | 600 | 8100 | |||
To close revenue accounts. | |||||
31 | Income Summary | 600 | 4000 | ||
Salaries Expense | 507 | 1700 | |||
Feed Expense | 513 | 1100 | |||
Interest Expense | 540 | 200 | |||
Miscellaneous Expense | 568 | 800 | |||
Depreciation Expense – Buildings | 520 | 200 | |||
To close expense accounts. | |||||
31 | Income Summary | 600 | 4100 | ||
Retained Earnings | 310 | 4100 | |||
To close Income Summary account. | |||||
31 | Retained Earnings | 310 | 1000 | ||
Dividends | 320 | 1000 | |||
To close dividends account. |