Chapter 4

EXERCISE 4-4B
(a) Apr. 30
30

30
30

Service Revenue .......................................

Income Summary ..............................

14,500

Income Summary......................................
Salaries Expense ..............................
Rent Expense ....................................
Depreciation Expense.......................
Interest Expense ...............................

10,600

Income Summary......................................
Retained Earnings ............................

3,900

Retained Earnings ....................................

Dividends...........................................

3,500

14,500
9,450
500
600
50
3,900
3,500

(b)
(2)
(3)

Income Summary
10,600 (1)
14,500
3,900
14,500
14,500

(4)

Retained Earnings
3,500
5,800
(3)
3,900
Bal.
6,200

EXERCISE 4-4B
(c)

BAD COMPANY
Post-Closing Trial Balance
April 30, 2008
Cash.....................................................................
Accounts Receivable ..........................................
Prepaid Rent .......................................................
Equipment ...........................................................
Accumulated Depreciation.................................
Notes Payable .....................................................
Accounts Payable ...............................................
Interest Payable ..................................................
Common Stock ...................................................
Retained Earnings ..............................................

Debit
$11,400
7,000
2,000
20,000

$40,400

Credit

$ 4,200
5,000
4,950
50
20,000
6,200
$40,400

EXERCISE 4-7B
(a) Service Revenue ....................................................
Income Summary .............................................

5,360

Income Summary ...................................................

Salaries Expense .............................................
Miscellaneous Expense ..................................
Supplies Expense ............................................

5,050

Income Summary ...................................................

Retained Earnings ...........................................

310

Retained Earnings .................................................

Dividends .........................................................

400

5,360
1,650
350
3,050
310
400

(b)

KIMMIE MEISSNER COMPANY

Post-Closing Trial Balance
For the Month Ended June 30, 2008
Account Titles
Cash........................................................................
Accounts Receivable .............................................
Supplies .................................................................
Accounts Payable ..................................................
Salaries Payable ....................................................
Unearned Revenue ................................................
Common Stock ......................................................
Retained Earnings .................................................

Debit
$ 4,650
5,200
640

$10,490

Credit

$ 2,500
600
200
5,000
2,190
$10,490

EXERCISE 4-8B
(a)
General Journal
Date
Account Titles
July 31 Commission Revenue .........................
Rent Revenue ......................................
Income Summary .......................

Ref.
404
429
350

Debit
42,400
5,100

31 Income Summary ................................

Salaries Expense .......................
Utilities Expense ........................
Depreciation Expense ................

350
720
732
711

49,900

31 Retained Earnings ...............................

Income Summary .......................

320
350

2,400

31 Retained Earnings ...............................

Dividends ....................................

320
332

11,000

J15
Credit

47,500
37,100
10,100
2,700
2,400
11,000

(b)
Retained Earnings
Date
Explanation
Ref.
Debit
July 31 Balance
31 Close net loss
J15
2,400
31 Close dividends
J15
11,000
Income Summary
Date
Explanation
Ref.
Debit
July 31 Close revenue
J15
31 Close expenses
J15
49,900
31 Close net loss
J15

(c)

Credit

Credit
47,500
2,400

No. 320
Balance
20,700
18,300
7,300
No. 350
Balance
47,500
(2,400)
0

COMMANCHE COMPANY
Post-Closing Trial Balance
July 31, 2008
Cash.....................................................................
Accounts Receivable ..........................................
Equipment ...........................................................
Accumulated Depreciation.................................
Accounts Payable ...............................................
Unearned Rent Revenue ....................................
Common Stock ...................................................
Retained Earnings ..............................................

Debit
$ 9,900
6,200
10,600

$26,700

Credit

$ 5,400
2,800
1,200
10,000
7,300
$26,700

EXERCISE 4-9B
(a)

COMMANCHE COMPANY
Income Statement
For the Year Ended July 31, 2008
Revenues
Commission revenue ..................................
Rent revenue ...............................................
Total revenues .....................................
Expenses
Salaries expense .........................................
Utilities expense ..........................................
Depreciation expense .................................
Total expenses.....................................
Net loss ...............................................................

$42,400
5,100
47,500
$37,100
10,100
2,700
49,900
($ 2,400)

COMMANCHE COMPANY
Retained Earnings Statement
For the Year Ended July 31, 2008
Retained earnings, August 1, 2007 ....................
Less: Net loss ....................................................
Dividends .................................................
Retained earnings, July 31, 2008 .......................
(b)

$20,700
$ 2,400
11,000

13,400
$ 7,300

COMMANCHE COMPANY
Balance Sheet
July 31, 2008
Assets
Current assets
Cash .....................................................................
Accounts receivable ...........................................
Total current assets ....................................
Property, plant, and equipment
Equipment ...........................................................
Less: Accumulated depreciation ......................
Total assets..................................................
Liabilities and Stockholders Equity
Current liabilities

$ 9,900
6,200
16,100
$10,600
5,400

5,200
$21,300

Accounts payable ...............................................

Unearned rent revenue .......................................
Total current liabilities ................................
Stockholders equity
Common stock ....................................................
Retained earnings ...............................................
Total liabilities and stockholders equity ...

$ 2,800
1,200
4,000
$10,000
7,300

17,300
$21,300