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Accounting Problems
Problem 1:JOURNAL ENTRIES
The ledger accounts given below, with an identification number for each, are used by Wynne Company.
Instructions: Indicate the appropriate entries for the month of June by placing the appropriate identification number(s) in the debit and credit columns provided. Item 0 is given as an example. Write “none” if no entry is appropriate.
1. Cash 7. Salaries Payable 13. Service Revenue
2. Accounts Receivable 8. Accounts Payable 14. Equipment Expense
3. Supplies 9. Unearned Service Revenue 15. Advertising Expense
4. Prepaid Salaries 10. Notes Payable 16. Supplies Expense
5. Prepaid Advertising 11. H. Wynne, Capital 17. Rent Expense
6. Equipment 12. H. Wynne, Drawing 18. Salaries Expense
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Entry Account(s) Account(s)
No. Entry Information Debited Credited
0. June 1 H. Wynne invested $25,000 in the business. 1 11
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1. June 4 Paid a supplier $2,000 cash on account.
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2. June 5 Equipment was purchased at a cost of $5,000; a three-month, 12% note payable was signed for this amount.
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3. June 8 Received $7,000 from customers for services rendered during the week.
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4. June 10 Purchased supplies for $3,500 cash. The supplies are expected to last through August.
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5. June 14 Paid $400 cash to the Daily News for advertisements run this past week.
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6. June 16 Billed customers $6,000 for services rendered.
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7. June 19 Paid $2,000 in cash to Santo Company for June rent.
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8. June 25 Additional supplies were purchased on account at a cost of $1,000 from Supply Company. These supplies will be used during July.
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9. June 26 Paid the Daily News $400 for an advertisement that will run the first week in July.
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10. June 27 Received $9,000 from customers for services to be rendered early in July.
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11. June 28 Received $3,000 on account.
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12. June 30 Wynne withdrew $900 for personal use.
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13. June 30 B. Kiner, H. Wynne’s administrative assistant, was paid $2,000 cash for her salary.
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Problem 2: ADJUSTING ENTRIES
The ledger accounts given below, with an identification number for each, are used by Silas Company.
Instructions: Prepare appropriate adjusting entries for the year ended December 31, 2010, by replacing the appropriate identification number(s) in the debit and credit columns provided and the dollar amount in the adjoining column. Item 0 is given as an example.
1. Notes Receivable 10. Unearned Service Revenue
2. Accounts Receivable 11. Notes Payable
3. Interest Receivable 12. Interest Revenue
4. Supplies 13. Service Revenue
5. Prepaid Insurance 14. Depreciation Expense—Equipment
6. Equipment 15. Salaries Expense
7. Accumulated Depreciation—Equipment 16. Interest Expense
8. Salaries Payable 17. Supplies Expense
9. Interest Payable 18. Insurance Expense
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Account(s) Account(s) Dollar
Entry Information Debited Credited Amount
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0. Interest of $500 is accrued on a note 3 12 $500
receivable at December 31, 2010.
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1. Silas has three employees who each earn $160 $
per day. At December 31, four days’ salaries
have been earned but not paid.
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2. A customer paid Silas $18,000 on December 1, $
2010 for services to be rendered from December 1
through January 31, 2011. The receipt was credited
to a liability account.
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3. Silas purchased equipment costing $48,000 on $
January 1, 2009. Monthly depreciation is $600.
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4. Silas provided services to a customer in 2010 at a $
fee of $700. This fee has not yet been received or billed.
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5. Silas started the year with no supplies on hand. $
They purchased $6,000 in supplies during the year
and have $2,000 on hand at December 31. Supplies
were debited to an asset account when purchased.
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6. Silas paid $12,000 for a three-year insurance policy $
on July 1, 2010, debiting an asset account at that time.
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7. Silas borrowed $20,000 by signing a three-month, $
9% interest, note payable on November 1, 2010.
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8. Silas purchased short-term investments on November 1, $
2010. Interest of $300 per month has been earned but
not received prior to December 31.
Problem 3: BASIC INVENTORY COMPUTATIONS
Vaughn Company, which uses a periodic inventory system, had a beginning inventory on May 1, of 400 units of Product A at a cost of $7 per unit. During May, the following purchases and sales were made.
Purchases Sales
May 6 375 units at $9 May 4 275 units
14 250 units at $10 8 300 units
21 300 units at $11 22 400 units
28 425 units at $13 24 225 units
1,350 1,200
Instructions: Compute the May 31 ending inventory and May cost of goods sold under (a) Average Cost, (b) FIFO, and (c) LIFO. Provide appropriate supporting calculations.
(a) Average – Ending Inventory = $____17500___ ; Cost of Goods Sold = $__12000_______.
(b) FIFO – Ending Inventory = $___6900______; Cost of Goods Sold = $___10600______.
(c) LIFO – Ending Inventory = $____4150_____; Cost of Goods Sold = $__13350_______.
Would you please check if I these answers are correct?
