Accounting

Complete the six-column table by entering adjustments that reflect the following information:
a. As of December 31, 2005, employees had earned $900 of unpaid and unrecorded salaries. The
next payday is January 4, at which time $1,600 of salaries will be paid.
b. The cost of supplies still available at December 31, 2005, is $2,700.
c. The notes payable requires an interest payment to be made every three months. The amount
of unrecorded accrued interest at December 31, 2005, is $1,250. The next interest payment,
at an amount of $1,500, is due on January 15, 2006.
d. Analysis of the unearned member fees account shows $5,600 remaining unearned at December
31, 2005.
e. In addition to the member fees included in the revenue account balance, the company has earned
another $9,100 in unrecorded fees that will be collected on January 31, 2006. The company
is also expected to collect $8,000 on that same day for new fees earned in January 2006.
f. Depreciation expense for the year is $12,500.
2. Use the work sheet to enter the adjusting and closing entries; then journalize them.
3. Prepare the income statement and the statement of owner’s equity for the year ended June 30 and
the classified balance sheet at June 30, 2005.
Analysis Component
4. Analyze the following separate errors and describe how each would affect the 10-column work
sheet. Explain whether the error is likely to be discovered in completing the work sheet and, if
not, the effect of the error on the financial statements.
a. Assume that the adjustment for supplies used consisted of a credit to Supplies for $3,200 and
a debit for $3,200 to Supplies Expense.
b. When the adjusted trial balance in the work sheet is completed, the $17,500 Cash balance is
incorrectly entered in the Credit column.
166 Chapter 4 Completing the Accounting Cycle
Check (3) Total assets, $120,250;
current liabilities, $14,290; Net income,
$39,300
Check (1) Adjusted trial balance
totals, $224,000

Bullseye Ranges
December 31,2005

Account Title Unadjusted Adjustments Adjusted
Trial Balance Trial Balance
DR CR DR CR DR CR
Cash…………………………………..$13,000
Accounts receivable…………… 0
Supplies……………………………..$5,500
Equipment………………………$130,000
ACCUMULATED DEPRECIATION
Equipment…………………………………………………$25,000
Interest payable………………………………………..0
Salaries payable………………………………………….0
Unearned member fees……………………………..$14,000
Notes payable……………………………………………..$50,000
T. Allen Capital……………………………………………..$58,250
T. Allen withdrawls………………$20,000
Member fees earned………………………………….$3,000
DEPRECIATION EXPENSES
Equipment……………………………0
Salaries expense………………..$28,000
Interest expense……………….$3,750
Supplies expense………………0
Totals…………………………$200,250 $200,250

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  1. Part 1
    BULLSEYE RANGES
    For Year Ended December 31, 2005
    Unadjusted
    Trial Balance
    Adjustments Adjusted
    Trial Balance
    Account Title Dr. Cr. Dr. Cr. Dr. Cr.
    Cash 13,000 13,000
    Accounts receivable (e) 9,100 9,100
    Supplies 5,500 (b) 2,800 2,700
    Equipment 130,000 130,000
    Accumulated depreciation--Equipment
    25,000
    (f)
    12,500
    37,500
    Interest payable (c) 1,250 1,250
    Salaries payable (a) 900 900
    Unearned member fees 14,000 (d) 8,400 5,600
    Notes payable 50,000 50,000
    T. Allen, Capital 58,250 58,250
    T. Allen, Withdrawals 20,000 20,000
    Member fees earned 53,000 (d)
    (e) 8,400
    9,100 70,500
    Depreciation expense—
    Equipment (f) 12,500 12,500
    Salaries expense 28,000 (a) 900 28,900
    Interest expense 3,750 (c) 1,250 5,000
    Supplies expense ______ ______ (b) 2,800 _____ 2,800 ______
    Totals 200,250 200,250 34,950 34,950 224,000 224,000

    Part 2 (all adjusting entries dated December 31, 2005)
    (a) Salaries Expense 900
    Salaries Payable 900
    To record accrued salaries.
    (b) Supplies Expense 2,800
    Supplies 2,800
    To record cost of consumed supplies.
    (c) Interest Expense 1,250
    Interest Payable 1,250
    To record accrued interest expense.
    (d) Unearned Member Fees 8,400
    Member Fees Earned 8,400
    To record earned fees.
    (e) Accounts Receivable 9,100
    Membership Fees Earned 9,100
    To record accrued revenues.
    (f) Depreciation Expense, Equipment 12,500
    Accumulated Depreciation, Equipment 12,500
    To record depreciation.

    Part 3 (all reversing entries dated January 1, 2006)
    (a) Salaries Payable 900
    Salaries Expense 900
    To reverse accrued salaries.
    (c) Interest Payable 1,250
    Interest Expense 1,250
    To reverse accrued interest expense.
    (e) Member Fees Earned 9,100
    Accounts Receivable 9,100
    To reverse accrued revenues.
    Part 4
    2006
    Jan. 4 Salaries Expense 1,600
    Cash 1,600
    To record payroll.
    15 Interest Expense 1,500
    Cash 1,500
    To record interest payment.
    31 Cash ($9,100 + $8,000) 17,100
    Member Fees Earned 17,100
    To record collection of membership fees.

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  2. Part 1
    BULLSEYE RANGES
    For Year Ended December 31, 2005 Unadjusted Trial Balance Adjustments Adjusted Trial Balance
    Account Title Dr. Cr. Dr. Cr. Dr. Cr.
    Cash 13,000 13,000
    Accounts receivable (e) 9,100 9,100
    Supplies 5,500 (b) 2,800 2,700
    Equipment 130,000 130,000
    Accumulated depreciation--Equipment
    25,000
    (f)
    12,500
    37,500
    Interest payable (c) 1,250 1,250
    Salaries payable (a) 900 900
    Unearned member fees 14,000 (d) 8,400 5,600
    Notes payable 50,000 50,000
    T. Allen, Capital 58,250 58,250
    T. Allen, Withdrawals 20,000 20,000
    Member fees earned 53,000 (d)
    (e) 8,400
    9,100 70,500
    Depreciation expense—
    Equipment (f) 12,500 12,500
    Salaries expense 28,000 (a) 900 28,900
    Interest expense 3,750 (c) 1,250 5,000
    Supplies expense ______ ______ (b) 2,800 _____ 2,800 ______
    Totals 200,250 200,250 34,950 34,950 224,000 224,000

    Part 2 (all adjusting entries dated December 31, 2005)
    (a) Salaries Expense 900
    Salaries Payable 900
    To record accrued salaries.
    (b) Supplies Expense 2,800
    Supplies 2,800
    To record cost of consumed supplies.
    (c) Interest Expense 1,250
    Interest Payable 1,250
    To record accrued interest expense.
    (d) Unearned Member Fees 8,400
    Member Fees Earned 8,400
    To record earned fees.
    (e) Accounts Receivable 9,100
    Membership Fees Earned 9,100
    To record accrued revenues.
    (f) Depreciation Expense, Equipment 12,500
    Accumulated Depreciation, Equipment 12,500
    To record depreciation.

    Part 3 (all reversing entries dated January 1, 2006)
    (a) Salaries Payable 900
    Salaries Expense 900
    To reverse accrued salaries.
    (c) Interest Payable 1,250
    Interest Expense 1,250
    To reverse accrued interest expense.
    (e) Member Fees Earned 9,100
    Accounts Receivable 9,100
    To reverse accrued revenues.
    Part 4
    2006
    Jan. 4 Salaries Expense 1,600
    Cash 1,600
    To record payroll.
    15 Interest Expense 1,500
    Cash 1,500
    To record interest payment.
    31 Cash ($9,100 + $8,000) 17,100
    Member Fees Earned 17,100
    To record collection of membership fees.

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  3. prepared an adjusted trail balance, journalizing, posting and prepaid a financial statements would be completed last

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  4. If the company paid $17,500 in salaries in 2010, what was the balance in Salaries Payable on December 31, 2009?

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