P4-1B Michael Pevnick began operations as a private investigator on January

1, 2017. MICHAEL PEVNICK, P.I. Trial Balance.. For the Quarter Ended March
31, 2017
Account Titles Dr Cr
Cash 11,400
Accounts Receivable 5,620
Supplies 1,050
Prepaid Insurance 2,400
Equipment 30,000
Notes Payable 10000
Accounts Payable 12350
Owner’s Capital 20000
Owner’s Drawings 200
Service Revenue 13620
Salaries and Wages Expense 2200
Travel Expense 1300
Rent Expense 1,200
Miscellaneous Expense 200
Other data:
1. Supplies on hand total $480.
2. Depreciation is $800 per quarter.
3. Interest accrued on 6-month note payable, issued January 1, $300.
4. Insurance expires at the rate of $200 per month.
5. Services performed but unbilled at March 31 total $1,030.
Instructions
(a) Enter the trial balance on a worksheet and complete the worksheet.
(c) Journalize the adjusting entries

E4-1B The trial balance columns of the worksheet for Lamar Company at June
30, 2017, are as follows.
LAMAR COMPANY Trial Balance for the Month Ended June 30, 2017
Cash $1,760
Accounts Receivable 2,100
Supplies 1,320
Accounts Payable 1080
Unearned Service Revenue 360
Owner’s Capital 2280
Service Revenue 2,100
Salaries and Wages Expense 500
Miscellaneous Expense 140
Other data:
1. A physical count reveals $250 of supplies on hand.
2. $120 of the unearned revenue is still unearned at month-end.
3. Accrued salaries are $250.
Instructions
Enter the trial balance on a worksheet and complete the worksheet.
E4-12B Troy Company discovered the following errors made in January 2017.
1. A payment of Salaries and Wages Expense of $700 was debited to Supplies
and credited to Cash, both for $700.
2. A collection of $4,000 from a client on account was debited to Cash $400 and
credited to Service Revenue $400.
3. The purchase of supplies on account for $860 was debited to Supplies $680
and credited to Accounts Payable $680.
Instructions
(a) Correct the errors by reversing the incorrect entry and preparing the correct
entry.
(b) Correct the errors without reversing the incorrect entry.
E4-13B Ellis Company has an inexperienced accountant. During the first 2
weeks on the job, the accountant made the following errors in journalizing
transactions. All entries were posted as made.
1. A payment on account of $720 to a creditor was debited to Accounts Payable
$270 and credited to Cash $270.
2. The purchase of supplies for $650 cash was debited to Inventory $65 and
credited to Cash $65.
3. A $500 withdrawal of cash for Ellis’ personal use was debited to Salaries and
Wages Expense $500 and credited to Cash $500.
Instructions
Prepare the correcting entries.
P4-1C The trial balance columns of the worksheet for Reliable Roofing at
March 31, 2017, are as follows.
Trial Balance For the Month Ended March 31, 2017
Cash 2,500
Accounts Receivable 1,800
Supplies 1,100
Equipment 6000
Accumulated Depreciation—Equipment 1200
Accounts Payable 1400
Owner’s Capital 7000
Owner’s Drawing 600
Service Revenue 3000
Salaries and Wages Expense 700
Unearned Service Revenue 300
Miscellaneous Expense 200
Other data:
1. A physical count reveals only $240 of roofing supplies on hand.
2. Depreciation for March is $200.
3. Unearned revenue amounted to $130 after adjustment on March 31.
4. Accrued salaries are $350.
Instructions
(a) Enter the trial balance on a worksheet and complete the worksheet.
(c) Journalize the adjusting entries
BE 164
The following information is available for Juxton Company for the year ended
December 31, 2008:
Accounts payable $ 2,700
Accumulated depreciation, equipment 4,000
Juxton, Capital 7,800
Intangible assets 2,500
Notes payable (due in 5 years) 7,500
Accounts receivable 1,500
Cash 2,600
Short-term investments 1,000
Equipment 7,500
Long-term investments 6,900
Instructions
Use the above information to prepare a classified balance sheet for the year
ended December 31, 2008.
 JUXTON COMPANY
Balance Sheet
For the Year Ended December 31, 2008
Assets
Current Assets
Cash $2,600
Short-term investments 1,000
Accounts receivable 1,500
Total Current Assets $5,100
Investments
Long-term investments 6,900
Property, Plant, and Equipment
Equipment 7,500
Less Accumulated depreciation, equipment4,000 3,500
Intangible assets 2,500
Total Assets
$18,000
Liabilities and Owner’s Equity
Current Liabilities
Accounts payable $2,700
Long-term liabilities
Notes payable 7,500
Total Liabilities $10,200
Owner’s equity
Juxton, Capital 7,800
Total owner’s equity 7,800
Total liabilities and owner’s equity $18,000
Ex. 173
At March 31, account balances after adjustments for Norton Cinema are as
follows:
Account Balances
Accounts (After Adjustment)
Cash $ 6,000
Concession Supplies 4,000
Theatre Equipment 50,000
Accumulated Depreciation—Theatre Equipment 12,000
Accounts Payable 5,000
Norton, Capital 20,000
Norton, Drawing 12,000
Admission Ticket Revenues 60,000
Popcorn Revenues 32,000
Candy Revenues 19,000
Advertising Expense 12,000
Concession Supplies Expense 19,000
Depreciation Expense 4,000
Film Rental Expense 16,000
Rent Expense 12,000
Salaries Expense 18,000
Utilities Expense 5,000

Instructions
Prepare the closing journal entries for Norton Cinema.
Mar. 31 Admission Ticket Revenues ............................. 60,000
Popcorn Revenues ........................................... 32,000
Candy Revenues .............................................. 19,000
Income Summary ..................................... 111,000
(To close revenue accounts)
31 Income Summary ............................................. 86,000
Advertising Expense ................................. 12,000
Concession Supplies Expense ................. 19,000
Depreciation Expense .............................. 4,000
Film Rental Expense ................................ 16,000
Rent Expense ........................................... 12,000
Salaries Expense ..................................... 18,000
Utilities Expense ....................................... 5,000
(To close expense accounts)
31 Income Summary ............................................. 25,000
Norton, Capital ......................................... 25,000
(To transfer net income to capital)
31 Norton, Capital ................................................. 12,000
Norton, Drawing ....................................... 12,000
(To close drawings to capital)
P3-2B Maquoketa River Resort opened for business on June 1 with eight air-
conditioned units. Its trial balance before adjustment on August 31 is as follows.

MAQUOKETA RIVER RESORT

Trial Balance
August 31, 2017
Account Number Debit Credit

101 Cash $ 19,600

126 Supplies 3,300
130 Prepaid Insurance 6,000
140 Land 25,000
143 Buildings 125,000
149 Equipment 26,000
201 Accounts Payable $ 6,500
208 Unearned Rent Revenue 7,400
275 Mortgage Payable 80,000
301 Owner’s Capital 100,000
306 Owner’s Drawings 5,000
429 Rent Revenue 80,000
622 Maintenance Expense 3,600
726 Salaries Expense 51,000
732 Utilities Expense 9,400
Other data:
1. Insurance expires at the rate of $300 per month.
2. A count on August 31 shows $800 of supplies on hand.
3. Annual depreciation is $6,000 on buildings and $2,400 on equipment.
4. Unearned rent revenue of $4,800 was earned prior to August 31.
5. Salaries of $400 were unpaid at August 31.
6. Rentals of $4,000 were due from tenants at August 31.
7. The mortgage interest rate is 9% per year. (The mortgage was taken out on
August 1.)
Instructions
(a) Journalize the adjusting entries on August 31 for the 3-month period June
1–August 31
Ex. 182
As Jeff Wills was doing his year-end accounting, he noticed that the bookkeeper had made errors in
recording several transactions. The erroneous transactions are as follows:
(a) A check for $700 was issued for goods previously purchased on account. The bookkeeper
debited Accounts Receivable and credited Cash for $700.
(b) A check for $380 was received as payment on account. The bookkeeper debited Accounts
Payable for $830 and credited Accounts Receivable for $830.
(c) When making the entry to record the year's depreciation expense, the bookkeeper debited
Accumulated Depreciation for $1,000 and credited Cash for $1,000.
(d) When accruing interest on a note payable, the bookkeeper debited Interest Receivable for $200
and credited Interest Payable for $200.
Instructions
Prepare the appropriate correcting entries. (Do not reverse the original entries.)

Solution 182 (5 min.)

(a) Accounts Payable ........................................................................ 700
Accounts Receivable ........................................................... 700
(b) Cash ............................................................................................ 380
Accounts Receivable ................................................................... 450
Accounts Payable................................................................ 830
(c) Cash ............................................................................................ 1,000
Depreciation Expense .................................................................. 1,000
Accumulated Depreciation................................................... 2,000
(d) Interest Expense .......................................................................... 200
Interest Receivable.............................................................. 200

Ex. 181
An examination of the accounts of Shaw Company for the month of June revealed the following errors
after the transactions were journalized and posted.
1. A check for $750 from R. Linton, a customer on account, was debited to Cash $750 and credited
to Service Revenue, $750.
2. A payment for Advertising Expense costing $420 was debited to Utilities Expense, $240 and
credited to Cash $240.
3. A bill for $840 for Office Supplies purchased on account was debited to Office Equipment, $480
and credited to Accounts Payable $480.
Instructions
Prepare correcting entries for each of the above assuming the erroneous entries are not reversed.
Explain how the transaction as originally recorded affected net income for the month of June.

Solution 181 (10 min.)

1. Service Revenue ................................................................................. 750
Accounts Receivable ................................................................... 750
(To correct error in recording collection of accounts receivable)
The transaction as originally recorded overstated net income by $750.
2. Advertising Expense ............................................................................ 420
Utilities Expense.......................................................................... 240
Cash ........................................................................................... 180
(To correct errors in recording advertising expense)
The transaction as originally recorded overstated net income by $180.

3. Office Supplies..................................................................................... 840

Office Equipment......................................................................... 480
Accounts Payable ....................................................................... 360
(To correct error in recording office supplies)
The transaction as originally recorded had no effect on net income.