CHAPTER 4

PROBLEMS: SET B
P4-1B Michael Pevnick began operations as a private investigator on January 1, 2017. The
trial balance columns of the worksheet for Michael Pevnick, P.I., at March 31 are as follows.
MICHAEL PEVNICK, P.I.
Worksheet
For the Quarter Ended March 31, 2017

Prepare worksheet, financial

statements, and adjusting
and closing entries.

(LO 1, 2, 4)

Trial Balance
Account Titles

Dr.

Cash
Accounts Receivable
Supplies
Prepaid Insurance
Equipment
Notes Payable
Accounts Payable
Owners Capital
Owners Drawings
Service Revenue
Salaries and Wages Expense
Travel Expense
Rent Expense
Miscellaneous Expense

11,400
5,620
1,050
2,400
30,000

Cr.

10,000
12,350
20,000
600
13,620
2,200
1,300
1,200
200
55,970

55,970

Other data:
1.
2.
3.
4.
5.

Supplies on hand total $480.

Depreciation is $800 per quarter.
Interest accrued on 6-month note payable, issued January 1, $300.
Insurance expires at the rate of $200 per month.
Services performed but unbilled at March 31 total $1,030.

Instructions
(a) Enter the trial balance on a worksheet and complete the worksheet.
(b) Prepare an income statement and owners equity statement for the quarter and a
classified balance sheet at March 31. M. Pevnick did not make any additional
investments in the business during the quarter ended March 31, 2017.
(c) Journalize the adjusting entries from the adjustments columns of the worksheet.
(d) Journalize the closing entries from the financial statement columns of the worksheet.
P4-2B The adjusted trial balance columns of the worksheet for Greenwood Company are
as follows.
GREENWOOD COMPANY
Worksheet
For the Year Ended December 31, 2017

(a) Adjusted trial balance

$58,100
(b) Net income $7,480
Total assets $49,530

Complete worksheet; prepare

financial statements, closing
entries, and post-closing trial
balance.

(LO 1, 2, 4)

Adjusted
Trial Balance

Account
No.

Account Titles

Dr.

101
112
126
130
157
158
200
201

Cash
Accounts Receivable
Supplies
Prepaid Insurance
Equipment
Accumulated DepreciationEquipment
Notes Payable
Accounts Payable

18,800
16,200
2,300
4,400
46,000

Cr.

20,000
20,000
8,000

2 4

Completing the Accounting Cycle

Adjusted
Trial Balance

Account
No.
212
230
301
306
400
610
631
711
722
726
905

Account Titles

Dr.

Salaries and Wages Payable

Interest Payable
Owners Capital
Owners Drawings
Service Revenue
Advertising Expense
Supplies Expense
Depreciation Expense
Insurance Expense
Salaries and Wages Expense
Interest Expense

2,600
1,000
26,000
12,000
87,800
10,000
3,700
8,000
4,000
39,000
1,000

Totals

(a) Net income $22,100

(b) Current assets $41,700
Current liabilities $16,600

(e) Post-closing trial balance

$87,700

Prepare financial statements,

closing entries, and postclosing trial balance.

165,400

P4-3B The completed financial statement columns of the worksheet for Niho Company
are shown below.
NIHO COMPANY
Worksheet
For the Year Ended December 31, 2017
Account
No.

Account Titles

101
112
130
157
158
201
212
301
306
400
622
711
722
726
732

Cash
Accounts Receivable
Prepaid Insurance
Equipment
Accumulated DepreciationEquip.
Accounts Payable
Salaries and Wages Payable
Owners Capital
Owners Drawings
Service Revenue
Maintenance and Repairs Expense
Depreciation Expense
Insurance Expense
Salaries and Wages Expense
Utilities Expense
Totals
Net Loss

(d) Post-closing trial balance

$48,500

165,400

Instructions
(a) Complete the worksheet by extending the balances to the financial statement columns.
(b) Prepare an income statement, owners equity statement, and a classified balance sheet.
(Note: $5,000 of the notes payable become due in 2018.) T. Greenwood did not make
any additional investments in the business during 2017.
(c) Prepare the closing entries. Use J14 for the journal page.
(d) Post the closing entries. Use the three-column form of account. Income Summary is
account No. 350.
(e) Prepare a post-closing trial balance.

(LO 1, 2, 4)

(a) Net loss $1,600

Ending capital $25,200
Total assets $39,900

Cr.

Income Statement
Dr.
Cr.

Balance Sheet
Dr.
Cr.
6,200
7,500
1,800
33,000
8,600
11,700
3,000
34,000
7,200

46,000
4,400
2,800
1,200
35,200
4,000
47,600

46,000
1,600

55,700
1,600

57,300

47,600

47,600

57,300

57,300

Instructions
(a) Prepare an income statement, owners equity statement, and a classified balance sheet.
S. Niho made an additional investment in the business of $4,000 during 2017.
(b) Prepare the closing entries.
(c) Post the closing entries and underline and balance the accounts. (Use T-accounts.)
Income Summary is account No. 350.
(d) Prepare a post-closing trial balance.

Problems: Set B
P4-4B Avalon Amusement Park has a fiscal year ending on September 30. Selected data
from the September 30 worksheet are presented below.
AVALON AMUSEMENT PARK
Worksheet
For the Year Ended September 30, 2017

Trial Balance
Dr.
Cash
Supplies
Prepaid Insurance
Land
Equipment
Accumulated DepreciationEquip.
Accounts Payable
Unearned Ticket Revenue
Mortgage Payable
Owners Capital
Owners Drawings
Ticket Revenue
Salaries and Wages Expense
Maintenance and Repairs Expense
Advertising Expense
Utilities Expense
Property Tax Expense
Interest Expense
Totals

Totals

41,400
18,600
31,900
80,000
120,000

(LO 1, 2, 4)

Adjusted
Trial Balance
Dr.

Cr.

41,400
2,200
10,900
80,000
120,000
36,200
14,600
3,700
50,000
109,700

14,000

42,200
14,600
1,000
50,000
109,700
14,000

277,500
105,000
30,500
9,400
16,900
18,000
6,000
491,700

Insurance Expense
Supplies Expense
Interest Payable
Depreciation Expense
Property Taxes Payable

Cr.

280,200
105,000
30,500
9,400
16,900
21,000
10,000

491,700
21,000
16,400
4,000
6,000
3,000
504,700

504,700

Instructions
(a) Prepare a complete worksheet.
(b) Prepare a classified balance sheet. (Note: $15,000 of the mortgage note payable is due
for payment in the next fiscal year.)
(c) Journalize the adjusting entries using the worksheet as a basis.
(d) Journalize the closing entries using the worksheet as a basis.
(e) Prepare a post-closing trial balance.

P4-5B Gillian Shaw opened Shaws Carpet Cleaners on March 1. During March, the following transactions were completed.
Mar. 1
1
3
5
14
18
20
21
28
31
31

Complete worksheet; prepare

classified balance sheet,
entries, and post-closing trial
balance.

Invested $10,000 cash in the business.

Purchased used truck for $6,000, paying $3,000 cash and the balance on
account.
Purchased cleaning supplies for $1,200 on account.
Paid $1,200 cash on a 1-year insurance policy effective March 1.
Billed customers $4,800 for cleaning services.
Paid $1,500 cash on amount owed on truck and $500 on amount owed on
cleaning supplies.
Paid $1,800 cash for employee salaries.
Collected $1,400 cash from customers billed on March 14.
Billed customers $2,500 for cleaning services.
Paid $200 for the monthly gasoline bill for the truck.
Withdrew $700 cash for personal use.

(a) Net income $44,000

(b) Total current assets $54,500

(e) Post-closing trial balance

$254,500

Complete all steps in

accounting cycle.

(LO 1, 2, 3, 4)

4 4

Completing the Accounting Cycle

The chart of accounts for Shaws Carpet Cleaners contains the following accounts: No. 101
Cash, No. 112 Accounts Receivable, No. 126 Supplies, No. 130 Prepaid Insurance, No. 157
Equipment, No. 158 Accumulated DepreciationEquipment, No. 201 Accounts Payable,
No. 212 Salaries and Wages Payable, No. 301 Owners Capital, No. 306 Owners Drawings,
No. 350 Income Summary, No. 400 Service Revenue, No. 631 Supplies Expense, No. 633
Gasoline Expense, No. 711 Depreciation Expense, No. 722 Insurance Expense, and No.
726 Salaries and Wages Expense.

(b) Trial balance $19,500

(c) Adjusted trial balance
$20,850

Instructions
(a) Journalize and post the March transactions. Use page J1 for the journal and the
three-column form of account.
(b) Prepare a trial balance at March 31 on a worksheet.
(c) Enter the following adjustments on the worksheet and complete the worksheet.
(1) Unbilled revenue for services performed at March 31 was $500.
(2) Depreciation on equipment for the month was $300.