(45-60 min.

) P 3-35A
Req. 1

Journal
POST.
DATE ACCOUNTS AND EXPLANATIONS REF. DEBIT CREDIT
2012 Adjusting Entries
Dec 31
a. Insurance expense 1,600
Prepaid insurance 1,600

b. Supplies expense 500

Supplies 500

c. Depreciation expense 1,600

Accumulated depreciation 1,600

d. Salary expense 400

Salary payable 400

e. Unearned service revenue 1,000

Service revenue 1,000

Req. 2

ACCOUNT INSURANCE EXPENSE ACCOUNT NO

BALANCE
JRNL.
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
Dec 31 (a) 1,600 1,600

ACCOUNT PREPAID INSURANCE ACCOUNT NO

BALANCE
JRNL.
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
Dec 31 Bal. 2,300
(a) 1,600 700

ACCOUNT SUPPLIES EXPENSE ACCOUNT NO

BALANCE
JRNL.
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
Dec 31 (b) 500 500

ACCOUNT SUPPLIES ACCOUNT NO

BALANCE
JRNL.
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
Dec 31 Bal. 1,100
(b) 500 600
ACCOUNT DEPRECIATION EXPENSE ACCOUNT NO
BALANCE
JRNL.
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
Dec 31 Bal. 1,600
(c) 1,600

ACCOUNT ACCUMULATED DEPRECIATION ACCOUNT NO

BALANCE
JRNL.
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
Dec 31 Bal. 312,500
(c) 1,600 314,100

ACCOUNT SALARY EXPENSE ACCOUNT NO

BALANCE
JRNL.
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
Dec 31 Bal. 2,700
(d) 400 3,100

ACCOUNT SALARY PAYABLE ACCOUNT NO

BALANCE
JRNL.
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
Dec 31 (d) 400 400

ACCOUNT UNEARNED SERVICE REVENUE ACCOUNT NO

BALANCE
JRNL.
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
Dec 31 Bal. 2,400
(e) 1,000 1,400

ACCOUNT SERVICE REVENUE ACCOUNT NO.

BALANCE
JRNL.
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
Dec 31 Bal. 15,600
(e) 1,000 16,600
Req. 3

Lexington Inn Corporation

Adjusted Trial Balance
December 31, 2012
ACCOUNT DEBIT CREDIT
Cash $ 12,100
Accounts receivable 14,300
Prepaid insurance 700
Supplies 600
Building 411,000
Accumulated depreciation $ 314,100
Accounts payable 1,950
Salary payable 400
Unearned service revenue 1,400
Common stock 108,000
Retained earnings 6,740
Dividends 2,860
Service revenue 16,600
Salary expense 3,100
Insurance expense 1,600
Depreciation expense 1,600
Advertising expense 830
Supplies expense 500
Total $449,190 $449,190
(continued) P 3-35A
Req. 4
Lexington Inn Corporation
Income Statement
Month Ended December 31, 2012
Revenue:
Service revenue $ 16,600
Expenses:
Salary expense $3,100
Insurance expense 1,600
Depreciation expense 1,600
Advertising expense 830
Supplies expense 500
Total expenses 7,630
Net income $ 8,970

Lexington Inn Corporation

Statement of Retained Earnings
Month Ended December 31, 2012
Retained earnings, December 1, 2012 $ 6,740
Net income 8,970
15,710
Dividends (2,860)
Retained earnings, December 31, 2012 $ 12,850

Lexington Inn Corporation

Balance Sheet
December 31, 2012
ASSETS LIABILITIES
Cash $12,100 Accounts payable $ 1,950
Accounts receivable 14,300 Unearned service revenue 1,400
Prepaid insurance 700 Salary payable 400
Supplies 600 Total liabilities 3,750

Building $411,000 STOCKHOLDERS’ EQUITY

Acc. depr. (314,100) 96,900 Common stock 108,000
Retained earnings 12,850
Total stockholders’ equity
120,850
Total liabilities and
Total assets $124,600 stockholders’ equity $124,600
 (45-60 min.) P 3-36A
Req. 1

Reliable Limo Service Company

Preparation of Adjusted Trial Balance
June 30, 2012
TRIAL BALANCE ADJUSTMENTS ADJUSTED TRIAL
BALANCE
ACCOUNT TITLE DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT
Cash $ 6,900 $ 6,900
Accounts receivable 1,100 (a) $ 1,500 2,600
Prepaid rent 3,500 (b) $ 700 2,800
Supplies 1,100 (c) 400 700
Automobile 77,000 77,000
Accumulated depreciation $ 3,400 (d) 1,400 $ 4,800
Accounts payable 3,300 3,300
Salary payable (e) 300 300
Common stock 66,350 66,350
Retained earnings 13,650 13,650
Dividends 4,400 4,400
Service revenue 9,600 (a) 1,500 11,100
Salary expense 1,500 (e) 300 1,800
Rent expense (b) 700 700
Fuel expense 800 800
Depreciation expense (d) 1,400 1,400
Supplies expense (c) 400 400
Total $ 96,300 $ 96,300 $ 4,300 $ 4,300 $ 99,500 $ 99,500
 (continued) P 3-36A

Req. 2

Reliable Limo Service Company

Income Statement
Month Ended June 30, 2012
Revenue:
Service revenue $ 11,100
Expenses:
Salary expense $ 1,800
Depreciation expense 1,400
Fuel expense 800
Rent expense 700
Supplies expense 400
Total expenses 5,100
Net income $ 6,000

Reliable Limo Service Company

Statement of Retained Earnings
Month Ended June 30, 2012
Retained earnings, June 1, 2012 $ 13,650
Net income 6,000
19,650
Dividends (4,400)
Retained earnings, June 30, 2012 $ 15,250

Req. 2
Reliable Limo Service Company
Balance Sheet
June 30, 2012
ASSETS LIABILITIES
Cash $ 6,900 Accounts payable $ 3,300
Accounts receivable 2,600 Salary payable 300
Prepaid rent 2,800 Total liabilities 3,600
Supplies 700
Automobile $ 77,000 STOCKHOLDERS’ EQUITY
Acc. depr. (4,800) Common stock 66,350
72,200 Retained earnings 15,250
Total stockholders’ equity
81,600
Total liabilities and
Total assets $ 85,200 stockholders’ equity $ 85,200
(20-30 min.) P 3-37A (Req. 1)

Party Piano Tuning Service, Inc.

Income Statement
Year Ended May 31, 2012
Revenue:
Service revenue $ 65,000
Expenses:
Salary expense $ 9,600
Depreciation expense 5,600
Utilities expense 3,900
Insurance expense 3,700
Supplies expense 1,900
Total expenses 24,700
et income $ 40,300

Req. 2
Party Piano Tuning Service, Inc.
Statement of Retained Earnings
Year Ended May 31, 2012
Retained earnings, May 31, 2011 $ 11,800
Net income 40,300
52,100
Dividends (38,000)
Retained earnings, May 31, 2012 $ 14,100

Req. 3
Party Piano Tuning Service, Inc.
Balance Sheet
May 31, 2012
ASSETS LIABILITIES
Cash $ 12,600 Accounts payable $ 3,300
Accounts receivable 10,800 Unearned service revenue 4,700
Supplies 1,900 Salary payable 800
Equipment $25,900 Note payable 14,000
Acc. depr. (12,500) 13,400 Total liabilities 22,800
STOCKHOLDERS’ EQUITY
Common stock 1,800
Retained earnings 14,100
Total stockholders’ equity
15,900
Total liabilities and
Total assets $ 38,700 stockholders’ equity $ 38,700

Req. 4
The results of operations are reported on the income statement. Yes, operations were
successful because the income statement shows net income.

Req. 5
The company’s financial position is reported on the balance sheet.

(15-20 min.) P 3-43B

Req. 1

Journal
POST.
DATE ACCOUNTS AND EXPLANATIONS REF. DEBIT CREDIT
Adjusting Entries
a. Dec 31 Accounts receivable 900
Service revenue 900

b. 31 Supplies expense 800

Supplies 800

c. 31 Insurance expense 800

Prepaid insurance 800

d. 31 Depreciation expense 3,500

Accumulated depreciation 3,500

e. 31 Salary expense 500

Salary payable 500
(45-60 min.) P 3-44B (Req. 1)

Journal
POST.
DATE ACCOUNTS AND EXPLANATIONS REF. DEBIT CREDIT
2012 Adjusting Entries
Dec 31
a. Unearned service revenue 800
Service revenue 800

b. Rent expense 1,600

Prepaid rent 1,600

c. Supplies expense 400

Supplies 400

d. Depreciation expense 700

Accumulated depreciation 700

e. Advertising expense 900

Accounts payable 900

f. Salary expense 800

Salary payable 800

Req. 2
ACCOUNT UNEARNED SERVICE REVENUE ACCOUNT NO.
BALANCE
JRNL.
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
Dec 31 Bal. 2,600
(a) 800 1,800

ACCOUNT SERVICE REVENUE ACCOUNT NO.

BALANCE
JRNL.
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
Dec 31 Bal. 15,900
(a) 800 16,700
ACCOUNT RENT EXPENSE ACCOUNT NO.
BALANCE
JRNL.
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
Dec 31 (b) 1,600 1,600

ACCOUNT PREPAID RENT ACCOUNT NO.

BALANCE
JRNL.
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
Dec 31 Bal. 2,200
(b) 1,600 600

ACCOUNT SUPPLIES EXPENSE ACCOUNT NO.

BALANCE
JRNL.
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
Dec 31 (c) 400 400

ACCOUNT SUPPLIES ACCOUNT NO.

BALANCE
JRNL.
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
Dec 31 Bal. 1,600
(c) 400 1,200

ACCOUNT DEPRECIATION EXPENSE ACCOUNT NO.

BALANCE
JRNL.
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
Dec 31 (d) 700 700

ACCOUNT ACCUMULATED DEPRECIATION ACCOUNT NO.

BALANCE
JRNL.
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
Dec 31 Bal. 3,700
(d) 700 4,400

ACCOUNT ADVERTISING EXPENSE ACCOUNT NO.

BALANCE
ITEM JRNL.
DATE REF. DEBIT CREDIT DEBIT CREDIT
Dec 31 Bal. 900 1,300
(e) 2,200
ACCOUNT ACCOUNTS PAYABLE ACCOUNT NO.
BALANCE
JRNL.
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
Dec 31 Bal. 3,400
(e) 900 4,300

ACCOUNT SALARY EXPENSE ACCOUNT NO.

BALANCE
JRNL.
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
Dec 31 Bal. 3,300
(f) 800 4,100

ACCOUNT SALARY PAYABLE ACCOUNT NO.

BALANCE
JRNL.
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
Dec 31 Bal. 0
(f) 800 800

Req. 3
Canton Air Purification System, Inc.
Adjusted Trial Balance
December 31, 2012
ACCOUNT DEBIT CREDIT
Cash $ 7,200
Accounts receivable 19,400
Prepaid rent 600
Supplies 1,200
Equipment 20,000
Accumulated depreciation $ 4,400
Accounts payable 4,300
Salary payable 800
Unearned service revenue 1,800
Common stock 14,000
Retained earnings 25,000
Dividends 9,600
Service revenue 16,700
Salary expense 4,100
Rent expense 1,600
Depreciation expense 700
Advertising expense 2,200
Supplies expense 400
Total $ 67,000 $ 67,000
(45-60 min.) P 3-45B (Req. 1)
Journal
POST.
DATE ACCOUNTS AND EXPLANATIONS REF. DEBIT CREDIT
2012 Adjusting Entries
Dec 31
a. Insurance expense 1,900
Prepaid insurance 1,900

b. Supplies expense 500

Supplies 500

c. Depreciation expense 1,000

Accumulated depreciation 1,000

d. Salary expense 300

Salary payable 300

e. Unearned service revenue 1,500

Service revenue 1,500

Req. 2
ACCOUNT INSURANCE EXPENSE ACCOUNT NO.
JRNL. BALANCE
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
Dec 31 (a) 1,900 1,900

ACCOUNT PREPAID INSURANCE ACCOUNT NO.

JRNL. BALANCE
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
Dec 31 Bal. 2,800
(a) 1,900 900

ACCOUNT SUPPLIES EXPENSE ACCOUNT NO.

JRNL. BALANCE
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
Dec 31 (b) 500 500

ACCOUNT SUPPLIES ACCOUNT NO.

JRNL. BALANCE
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
Dec 31 Bal. 1,400
(b) 500 900
ACCOUNT DEPRECIATION EXPENSE ACCOUNT NO.
BALANCE
JRNL.
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
Dec 31 (c) 1,000 1,000

Req. 2
ACCOUNT ACCUMULATED DEPRECIATION ACCOUNT NO.
BALANCE
JRNL.
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
Dec 31 Bal. 310,500
(c) 1,000 311,500

ACCOUNT SALARY EXPENSE ACCOUNT NO.

BALANCE
JRNL.
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
Dec 31 Bal. 2,800
(d) 300 3,100

ACCOUNT SALARY PAYABLE ACCOUNT NO.

BALANCE
JRNL.
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
Dec 31 (d) 300 300

ACCOUNT UNEARNED SERVICE REVENUE ACCOUNT NO.

BALANCE
JRNL.
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
Dec 31 Bal. 3,000
(e) 1,500 1,500

ACCOUNT SERVICE REVENUE ACCOUNT NO.

BALANCE
JRNL.
DATE ITEM REF. DEBIT CREDIT DEBIT CREDIT
Dec 31 Bal. 15,700
(e) 1,500 17,200
Req. 3
Concord Bed and Breakfast Corporation
Adjusted Trial Balance
December 31, 2012
ACCOUNT DEBIT CREDIT
Cash $ 12,000
Accounts receivable 14,400
Prepaid insurance 900
Supplies 900
Building 435,000
Accumulated depreciation $ 311,500
Accounts payable 1,930
Salary payable 300
Unearned service revenue 1,500
Common stock 122,000
Retained earnings 19,060
Dividends 2,940
Service revenue 17,200
Salary expense 3,100
Insurance expense 1,900
Depreciation expense 1,000
Advertising expense 850
Supplies expense 500
Total $ 473,490 $ 473,490

Req. 4
Concord Bed and Breakfast Corporation
Income Statement
Month Ended December 31, 2012
Revenue:
Service revenue $ 17,200
Expenses:
Salary expense $ 3,100
Insurance expense 1,900
Depreciation expense 1,000
Advertising expense 850
Supplies expense 500
Total expenses 7,350
Net income $ 9,850
 Concord Bed and Breakfast Corporation
Statement of Retained Earnings
Month Ended December 31, 2012
Retained earnings, December 1, 2012 $ 19,060
Net income 9,850
28,910
Dividends (2,940)
Retained earnings, December 31, 2012 $ 25,970

Concord Bed and Breakfast Corporation

Balance Sheet
December 31, 2012
ASSETS LIABILITIES
Cash $12,000 Accounts payable $ 1,930
Accounts receivable 14,400 Unearned service
Prepaid insurance 900 revenue 1,500
Supplies 900 Salary payable 300
Building $ 435,000 Total liabilities 3,730
Acc. depr. (311,500) 123,500
STOCKHOLDERS’ EQUITY
Common stock 122,000
Retained earnings 25,970
Total stockholders’ equity
147,970
Total liabilities and
Total assets $151,700 stockholders’ equity $151,700