HCS 380 week 2 H 380 2 Homework

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Exercise 4-6 (Part Level Submission)

Carla Vista Co., a ski tuning and repair shop, opened on November 1, 2016. The company carefully kept track of all its cash receipts and cash payments. The following information is available at the end of the ski season, April 30, 2017.

    CashReceipts   CashPayments
Issuance of common shares   $19,900    
Payment to purchase repair shop equipment       $9,100
Payments to landlord       1,225
Newspaper advertising payment       330
Utility bill payments       810
Part-time helper’s wage payments       2,700
Income tax payment       10,300
Cash receipts from ski and snowboard repair services   30,700    
Subtotals   50,600   24,465
Cash balance       26,135
Totals   $50,600   $50,600

The repair shop equipment was purchased on November 1 and has an estimated useful life of 5 years. Lease payments to the landlord are made at the beginning of each month. The payments to the landlord included a security deposit of $175. The part-time helper is owed $400 at April 30, 2017, for unpaid wages. At April 30, 2017, customers owe Carla Vista Co. $445 for services they have received but have not yet paid for.

Prepare an accrual-basis income statement for the 6 months ended April 30, 2017.

       
      $
       
  $    
       
       
       
       
       
       
      $

Solution

[Revenues – Expenses = Net income or (loss)]

Service revenue   ($30,700 + $445) $31,145
Salaries and wages expense   ($2,700 + $400) $3,100
Rent expense   ($1,225 – $175 ) $1,050
Depreciation expense   [($9,100 ÷ 5) × 6/12] $910

Exercise 4-22 (Part Level Submission)

The adjusted trial balance for Ivanhoe Company is given below:

    BeforeAdjustment   AfterAdjustment
    Dr.   Cr.   Dr.   Cr.
Cash   $11,070       $11,070    
Accounts Receivable   8,990       9,540    
Supplies   2,640       1,210    
Prepaid Insurance   4,490       3,020    
Equipment   15,410       15,410    
Accumulated Depreciation—Equipment       $3,467       $4,667
Accounts Payable       5,270       5,270
Salaries and Wages Payable       0       1,050
Unearned Rent Revenue       1,810       920
Common Stock       15,950       15,950
Retained Earnings       5,680       5,680
Dividends   2,920       2,920    
Service Revenue       34,300       34,850
Rent Revenue       13,520       14,410
Salaries and Wages Expense   16,120       17,170    
Supplies Expense   0       1,430    
Rent Expense   18,357       18,357    
Insurance Expense   0       1,470    
Depreciation Expense   0       1,200    
    $79,997   $79,997   $82,797   $82,797

Exercise 4-9

  Your answer is partially correct.
   

The ledger of Sunland Company on March 31 of the current year includes the selected accounts below before adjusting entries have been prepared.

    Debit   Credit
Supplies   $3,450    
Prepaid Insurance   4,140    
Equipment   25,200    
Accumulated Depreciation—Equipment       $7,560
Notes Payable       19,600
Unearned Rent Revenue       10,650
Rent Revenue       55,500
Interest Expense   0    
Salaries and Wages Expense   14,100    

An analysis of the accounts shows the following.

1.   The equipment depreciates $330 per month.
2.   Half of the unearned rent revenue was earned during the quarter.
3.   Interest of $470 is accrued on the notes payable.
4.   Supplies on hand total $800.
5.   Insurance expires at the rate of $460 per month.



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