Comprehensive Problem 1 For Chapters 14
Requirements
1. Record each transaction in the journal. Explanations are not required.
2. Post the transactions in the T-accounts using the following chart of accounts.
3. Prepare an unadjusted trial balance as of December 31, 2016.
4. Prepare a worksheet as of December 31, 2016. (optional)
5. Journalize the adjusting entries using the following adjustment data. Post adjusting entries to
the T-accounts.
6. Prepare an adjusted trial balance as of December 31, 2016.
7. Prepare Magness Delivery Services income statement and statement of owner's equity for the
month ended December 31, 2016, and the classified balance sheet on that date. On the
income statement, list expenses in decreasing order by amountthat is, the largest expense
first, the smallest expense last.
8. Journalize the closing entries and post to the T-accounts.
9. Prepare a post- closing trial balance as of December 31, 2016.
Solution:
Requirement 1
Date Accounts and Explanation Debit
December,1 Cash 10,000
Truck 20,000
Magness, Capital
December1 Prepaied Insurance 1,000
Cash
Dec4 Office Supplies 500
Dec12 Cash 2,000
Service Revenue
Dec15 Accounts Recievable 2,500
Service Revenue
Dec18 Salaries Expense 1,000
Cash
Dec20 Cash 15,000
Service Revenue
Dec22 Cash 800
Unearned Revenue
Dec25 Cash 2,500
Accounts Recievable
Dec27 Fuel Expense-Truck 300
Accounts Payable
Dec28 Accounts Recievable 700
Service Revenue
Dec29 Rent Expense 1,600
Cash
Accounts and Explanation
Dec30 Accounts Payable 300
Cash
Dec31 Magness, Withdrawl 3,000
Cash
Requirement 2, 5 and 8
Cash Accounts Paya
10,000 500
2,000 1,000
15,000 300
800 1,600 Bal
2,500 3,000
Salaries Payab
Bal 23,900
Bal
Accounts Receivable Unearned Reve
0
Bal 0
Office Supplies Magness, Capi
Bal
Magness, Withdra
Prepaid Insurance
1,000
Income Summa
Bal 1,000
Truck
20,000
Service Reven
Bal 20,000
Accumulated DepreciationTruck
0
Bal 0
Salaries Expense Depreciation Expens
1,000
Bal 1,000 Bal
Insurance Expense Fuel Expense
250
Bal 250 Bal
Rent Expense Supplies Expen
1,600
Bal 1600 Bal
Requirement 3
MAGNESS DELIVERY SERVICE
Unadjusted Trial Balance
December 31, 2016
Balance
Account Title Debit
Cash $ 23,600
Accounts Recievable 2,500
Office Supplies 500
Prepaied Insurance 1,000
Truck 20,000
Unearned Revenue
Magness, Capital
Magness, Withdrawl 3,000
Service Revenue
Salaries expense 1,000
Fuel Expense 300
Rent Expense 1,600
Total: $ 51,000
Requirement 4
MAGNESS DELIVERY SERVICE
Worksheet
December 31, 2016
Unadjusted Trial
Adjustments Adjusted Trial Balance
Account Names Balance
Debit Credit Debit Credit Debit
Requirement 5
Date Accounts and Explanation Debit
A Salaries Expense 1,000
Salaries Payable
B Depreciation Expense-Truck 3,000
Accumulated Depreciation-Truck
C Insurance Expense 250
Prepaied Insurance
D Supplies Expense 400
Office Supplies
E Unearned Revenue 300
Service Revenue
F Accounts Recievable 650
Service Revenue
Requirement 6
MAGNESS DELIVERY SERVICE
Adjusted Trial Balance
December 31, 2016
Balance
Account Title Debit
Cash $ 23,600
Accounts Recievable 650
Office Supplies 100
Prepaied Insurance 250
Truck 20,000
Accumulated Depreciation- Truck
Salaries Payable
Unearned Revenue
Magness, Capital
Magness, Withdrawl 3,000
Service Revenue
Salaries expense 1,000
Depreciation Expense- Truck 250
Fuel Expense 300
Rent Expense 1,600
Total: 51,400
Requirement 7
MAGNESS DELIVERY SERVICE
Income Statement
Month Ended December 31, 2016
Revenues:
Service Revenues
Expenses:
Salary Expenses $ 1,000
Depreciation Expense-Truck 250
Insurance Expense 1,000
Supplies Expense 400
Rent Expense 1,600
Fuel Expense 300
Total:
Net Income:
MAGNESS DELIVERY SERVICE
Statement of Owners Equity
Month Ended December 31, 2016
Magness Capital Jan 1 2016
Net Income:
Owner Withdrawal:
Magness Capital, Jan 31 2016
MAGNESS DELIVERY SERVICE
Balance Sheet
December 31, 2016
Assets
Cash
Accounts Recievable
Office Supplies
Prepaied Insurance
Longterm Assets:
Truck 20,000
(less) Accumulated Depreciation $ (3,000)
Total Assets:
Liabilities
Accounts Payable 0
Salaries Payable $ -
Unearned Revenue 800
Total Liabilites:
Owner's Equity
Magness Capital Dec 31
Total Liabilites and Owners Equity
Requirement 8
Date Accounts and Explanation Debit
Dec31 Service Revenue 20,200
Income Summary
To Close Income Summary
Dec31 Income Summary 3,800
Salary Expenses
Depreciation Expenses-Truck
Insurance Expenses
Supplies Expenses
Rent Expenses
Fuel Expenses
To Close Expenses
Dec31 Income Summary 16,400
Magness Capital
To Close Income summary
Dec31 Magness Capital 3,000
Magness Withdrawl
To Close Withdrawls
Requirement 9
MAGNESS DELIVERY SERVICE
Post-Closing Trial Balance
December 31, 2016
Balance
Account Title Debit
Cash $ 16,000
Accounts Recievable 650
Office Supplies 700
Prepaied Insurance 750
Truck 17,000
Accumulated Depreciation-Truck
Salaries payable
Unearned Revenue
Magness Capital
Total: 34,500
nts.
adjusting entries to
owner's equity for the
at date. On the
the largest expense
Credit
30,000
1,000
500
2,000
2,500
1,000
15,000
800
2,500
300
700
1600
300
3,000
Accounts Payable
0
Salaries Payable
0
Unearned Revenue
800
800 Bal
Magness, Capital
30,000
30,000
Magness, Withdrawals
3,000
3,000 Bal
Income Summary
Service Revenue
2,000
2,500
15,000
700
20,200 Bal
Depreciation ExpenseTruck
0
Fuel Expense
300
300
Supplies Expense
500
500
Balance
Credit
$ 800
30,000
20,200
$ 51,000
SERVICE
016
Adjusted Trial Balance Income Statement Balance Sheet
Credit Debit Credit Debit Credit
Credit
1,000
3,000
250
400
300
650
Balance
Credit
$ 3,000
$ 1,000
$ 300
30,000
20,200
54,500
$ 20,200
(4,550)
$ 15,650
$ 30,000
15,650
45,650
(3,000)
$ 42,650
23,600
800
500
1,000
17,000
25,900
(800)
25,100
25,900
Credit
20,200
1,000
250
250
400
1,600
300
16,400
3,000
Balance
Credit
$ 3,000
$ 1,000
500
30,000
34,500
Comprehensive Problem 2 For Chapters 14
Requirements
1. Record each transaction in the journal. Explanations are not required.
2. Post the transactions in the T-accounts. Dont forget to use the December 31, 2016 ending
balances as appropriate.
3. Prepare an unadjusted trial balance as of January 31, 2017.
4. Prepare a worksheet as of January 31, 2017. (optional)
5. Journalize the adjusting entries using the following adjustment data. Post adjusting entries
to the T-accounts.
6. Prepare an adjusted trial balance as of January 31, 2017.
7. Prepare Magness Delivery Services income statement and statement of owner's equity for
the month ended January 31, 2017, and the classified balance sheet on that date. On the
income statement, list expenses in decreasing order by amount-that is, the largest expense
first, the smallest expense last.
8. Calculate the following ratios as of January 31, 2017 for Magness Delivery Service: return on
assets, debt ratio, and current ratio.
Solution:
Requirement 1
Date Accounts and Explanation Debit
Jan3,2017 Cash 1,000
Accounts Recievable
Jan 5 Office Supplies 600
Accounts Payable
Jan 12 Cash 2,000
Service Revenue
Jan 15 Salaries Expense 2,500
Salaries Payable
Jan 18 Accounts Recievable 950
Service Revenue
Jan 20 Accounts Payable 200
Cash
Jan 24 Fuel Expense 250
Cash
Jan 27 Unearned Revenue 800
Sales Revenue
Jan 28 Rent Expense 1,600
Cash
Jan 30 Cash 3,200
Unearned Revenue
Jan 31 Magness, Withdrawl 2,000
Cash
Date Accounts and Explanation Debit
Requirement 2, 5
Cash Accounts Payabl
Jan3 1,000 200 Jan20 Jan 5
Jan12 2,000 250 Jan24
Jan 30 3,200 1,600 Jan28
2,000 Jan31
Bal. 2,150 Salaries Payable
Accounts Receivable Unearned Revenu
Jan 18 950 1,000 Jan3 Jan 27
50 Bal
Office Supplies Magness, Capita
Jan 5 600
Bal 600
Prepaid Insurance Magness, Withdraw
Jan 31
Bal
Truck
Accumulated DepreciationTruck Service Revenue
Salaries Expense Depreciation Expense
Jan 15 2,500
Bal 2,500
Insurance Expense Fuel Expense
Jan 28
Bal
Rent Expense Supplies Expens
Jan 28 1,600 Jan 5
Bal 1,600 Bal
Requirement 3
MAGNESS DELIVERY SERVICE
Unadjusted Trial Balance
January 31, 2017
Balance
Account Title Debit
Cash $ 2,150
Accounts Recievable 50
Office Supplies 600
Prepaied Insurance 500
Truck 20,000
Unearned Revenue
Magness Capital
Magness Withdrawl 2,000
Service Revenue 3,750
Salaries Expense
Fuel Expense
Rent Expense
Total: 29,050
Requirement 4
MAGNESS DELIVERY SERVICE
Worksheet
January 31, 2017
Unadjusted Trial
Adjustments Adjusted Trial Balance
Account Names Balance
Debit Credit Debit Credit Debit
Requirement 5
Date Accounts and Explanation Debit
A Supplies Expense 480
Office Supplies
B Unearned Revenue 800
Service Revenue
C Salaries Payable 1,500
Salaries Expense
D Insurance Expense 1,000
Prepaied Insurance
E Depreciation Expense-Truck 250
Accumulated Depreciation-Truck
Requirement 6
MAGNESS DELIVERY SERVICE
Adjusted Trial Balance
January 31, 2017
Balance
Account Title Debit
Cash $ 2,150
Accounts Recievable 50
Office Supplies 120
Prepaied Insurance -
Truck 20,000
Accumulated Depreciation- Truck 500
Salaries Payable 15,000
Unearned Revenue
Magness, Capital
Magness, Withdrawl 2,000
Service Revenue 4,550
Salaries expense
Depreciation Expense- Truck
Fuel Expense
Rent Expense
Total: 94,320
Requirement 7
MAGNESS DELIVERY SERVICE
Income Statement
Month Ended January 31, 2017
Revenue:
Service Revenue
Expense:
Salaries Expense $ 1,000
Depreciation Expense-Truck 250
Insurance Expense 750
Supplies Expense 480
Rent Expense 1,600
Fuel Expense 250
Total Expense
Net Income
MAGNESS DELIVERY SERVICE
Statement of Owner's Equity
Month Ended January 31, 2017
Magness Capital, Jan 1
Net Income
Magness Withdrawl
Magness Capital, Jan 31
MAGNESS DELIVERY SERVICE
Balance Sheet
January 31, 2017
Assets
Cash
Accounts Recievable
Office Supplies
Prepaied Insurance
Longeterm Assets:
Truck
(less) Accumulated Depresiation-Truck
Total Assets:
Liabilities
Accounts Payable 400
Salaries Payable $ 1,000
Unearned Revenue 2,400
Total Liabilites
Owner's Equity
Magness Capital Jan 31
Total Liabilites and Owner Equity
Requirement 8
Return on Assets: 1%
Debt Ratio: 19.40%
Current Ratio: 51%
er 31, 2016 ending
st adjusting entries
of owner's equity for
n that date. On the
the largest expense
ery Service: return on
Credit
1,000
600
2,000
2,500
950
200
250
800
1,600
3,200
2,000
Credit
Accounts Payable
200 600 Jan5
400 Bal
Salaries Payable
2,500 Jan15
2,500 Bal
Unearned Revenue
800 3,200 Jan30
2,400 Bal
Magness, Capital
30,000
30,000 Bal
Magness, Withdrawals
2,000
2,000
Service Revenue
2,000 Jan12
950 Jan18
800 Jan27
3,750 Bal
Depreciation ExpenseTruck
Fuel Expense
250
250
Supplies Expense
600
600
Balance
Credit
$ 2,400
30,000
2,500
250
1,600
36,500
Y SERVICE
017
Adjusted Trial Balance Income Statement Balance Sheet
Credit Debit Credit Debit Credit
Credit
480
800
1,500
1,000
250
Balance
Credit
1,600
30,000
1,000
500
250
1,600
34,950
$ 23,950
4,330
19,620
$ 30,000
19,620
49,620
(2,000)
$ 47,620
2,150
$ 50
126
-
$ 17,000
250
$ 19,576
(3,800)
15,776
$ 19,576
