Problem 3-2A ?concluded
Adjustment (d) Dec. 31 Depreciation Expense—Building ................... 18,875 Accumulated Depreciation—Building ...
To record annual depreciation expense [($800,000 -$45,000) / 40 years = $18,875]
18,875
Adjustment (e) 31 Rent Receivable ............................................ Rent Earned ...........................................
To record earned but unpaid Dec. rent.
3,000
3,000
Adjustment (f)
31 Unearned Rent .............................................. Rent Earned ...........................................
To record the amount of rent earned for
November and December (2 x $2,718).
5,436
5,436
Part 2
Cash Payment for (c) Jan. 6 Salaries Payable ........................................... Salaries Expense* ........................................ Cash .......................................................
To record payment of accrued and
current salaries. *(3 days x $1,830)
3,660 5,490
9,150
Cash Payment for (e) 15 Cash ............................................................... Rent Receivable .................................... Rent Earned ...........................................
To record past due rent for two months.
6,000
3,000
3,000
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Fundamental Accounting Principles, 19th Edition
Problem 3-3A (90 minutes) Parts 1 and 2 Cash Unadj. Bal. 28,064 Accounts Receivable Unadj. Bal. 0 (f) 4,000 Adj. Bal. 4,000 Teaching Supplies Unadj. Bal. 11,000 (b) 9,000 Adj. Bal. 2,000 Prepaid Insurance Unadj. Bal. 16,000 (a) 3,000 Adj. Bal. 13,000 Prepaid Rent Unadj. Bal. 2,178 (h) 2,178 Adj. Bal. 0 Professional Library Bal. 33,000 Accumulated Depreciation— Professional Library Unadj. Bal. 10,000 (d) 5,000 Adj. Bal. 15,000 Equipment Unadj. Bal. 75,800 Accumulated Depreciation— Equipment Unadj. Bal. 15,000 (c) 10,000 Adj. Bal. 25,000 Accounts Payable Bal. 39,500 Salaries Payable Unadj. Bal. 0 (g) 480 Adj. Bal. 480 Unearned Training Fees Unadj. Bal. 12,500 (e) 5,000 Adj. Bal. 7,500 T. Wells, Capital Bal. 71,000 T. Wells, Withdrawals Bal. 44,000
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Problem 3-3A (Continued)
Tuition Fees Earned Unadj. Bal. 111,000 (f) 4,000 Adj. Bal. 115,000 Training Fees Earned Unadj. Bal. 41,000 (e) 5,000 Adj. Bal. 46,000 Depreciation Expense— Professional Library Unadj. Bal. 0 (d) 5,000 Adj. Bal. 5,000 Depreciation Expense— Equipment Unadj. Bal. 0 (c) 10,000 Adj. Bal. 10,000 Salaries Expense Unadj. Bal. 52,000 (g) 480 Adj. Bal. 52,480 Insurance Expense Unadj. Bal. 0 (a) 3,000 Adj. Bal. 3,000
Rent Expense Unadj. Bal. 23,958 (h) 2,178 Adj. Bal. 26,136 Teaching Supplies Expense Unadj. Bal. 0 (b) 9,000 Adj. Bal. 9,000 Advertising Expense Bal. 8,000 Utilities Expense Bal. 6,000
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Fundamental Accounting Principles, 19th Edition
Problem 3-3A (Continued) Part 2
Adjustment (a) Dec. 31 Insurance Expense ...............................................3,000 Prepaid Insurance ...........................................
3,000
Adjustment (b) 31 Teaching Supplies Expense ................................9,000
Teaching Supplies ..........................................
Adjustment (c) 31 Depreciation Expense—Equipment ....................10,000
Accumulated Depreciation—Equipment ............
Adjustment (d) 31 Depreciation Expense—Profess. Library ...........5,000
Accumul. Depreciation—Profess. Library .........
Adjustment (e) 31 Unearned Training Fees .......................................5,000
Training Fees Earned .....................................
Adjustment (f) 31 Accounts Receivable ............................................4,000
Tuition Fees Earned........................................
Adjustment (g) 31 Salaries Expense ..................................................
Salaries Payable..............................................
To record accrued salaries (2 days x $120 x 2 employees). To record tuition earned ($1,600 x 2 1/2 months).
To record 2 months’ training fees earned that were collected in advance.
To record professional library depreciation.
To record equipment depreciation.
To record supplies used ($11,000 - $2,000).
To record the insurance expired.
9,000
10,000
5,000
5,000
4,000
480
480
Adjustment (h) 31 Rent Expense ........................................................2,178
Prepaid Rent ....................................................
To record expiration of prepaid rent.
2,178
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Problem 3-3A (Continued) Part 3
WELLS TEACHING INSTITUTE
Adjusted Trial Balance
December 31, 2009
Debit Credit Cash .......................................................................... $ 28,064 Accounts receivable ................................................ 4,000 Teaching supplies ................................................... 2,000 Prepaid insurance .................................................... 13,000 Prepaid rent .............................................................. 0 Professional library ................................................. 33,000 Accumulated depreciation—Professional library ... $ 15,000 Equipment ................................................................ 75,800 Accumulated depreciation—Equipment ................ 25,000 Accounts payable .................................................... 39,500 Salaries payable ....................................................... 480 Unearned training fees ............................................ 7,500 T. Wells, Capital ....................................................... 71,000 T. Wells, Withdrawals .............................................. 44,000 Tuition fees earned .................................................. 115,000 Training fees earned ................................................ 46,000 Depreciation expense—Professional library ........ 5,000 Depreciation expense—Equipment ....................... 10,000 Salaries expense ..................................................... 52,480 Insurance expense................................................... 3,000 Rent expense ............................................................ 26,136 Teaching supplies expense .................................... 9,000 Advertising expense ................................................ 8,000 Utilities expense....................................................... 6,000 _______ Totals ........................................................................ $319,480 $319,480
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