HCS 380 week 2

30 Sep No Comments
Question 1Ivanhoe Company, 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.CashReceiptsCashPaymentsIssuance of common shares$18,200Payment to purchase repair shop equipment$9,100Payments to landlord1,295Newspaper advertising payment390Utility bill payments885Part-time helper’s wage payments2,750Income tax payment11,200Cash receipts from ski and snowboard repair services30,400Subtotals48,60025,620Cash balance22,980Totals$48,600$48,600The 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 $185. The part-time helper is owed $375 at April 30, 2017, for unpaid wages. At April 30, 2017, customers owe Ivanhoe Company $540 for services they have received but have not yet paid for.  
  HYPERLINK “javascript:void(0)” o “Collapse question part” (a)Your answer is correct.  Prepare an accrual-basis income statement for the 6 months ended April 30, 2017.IVANHOE COMPANYIncome Statement$$$
Question 2The adjusted trial balance for Pharoah Company is given below:PHAROAH COMPANYTrial BalanceAugust 31, 2017BeforeAdjustmentAfterAdjustmentDr.Cr.Dr.Cr.Cash$11,320$11,320Accounts Receivable8,3108,840Supplies2,9101,880Prepaid Insurance4,0602,690Equipment16,21016,210Accumulated Depreciation—Equipment$3,647$4,847Accounts Payable5,1805,180Salaries and Wages Payable01,280Unearned Rent Revenue1,8601,050Common Stock15,46015,460Retained Earnings5,0505,050Dividends2,5702,570Service Revenue33,62034,150Rent Revenue13,62014,430Salaries and Wages Expense16,17017,450Supplies Expense01,030Rent Expense16,88716,887Insurance Expense01,370Depreciation Expense01,200$78,437$78,437$81,447$81,447  
  HYPERLINK “javascript:void(0)” o “Collapse question part” (a)Your answer is correct.  Prepare the income statement for the year ended August 31.PHAROAH COMPANYIncome Statement$$$SHOW LIST OF ACCOUNTSSHOW ANSWERLINK TO TEXTAttempts: 1 of 3 used   
  HYPERLINK “javascript:void(0)” o “Collapse question part” (b)Your answer is correct.  Prepare the retained earnings statements for the year ended August 31. (List items that increase retained earnings first.)PHAROAH COMPANYRetained Earnings Statement$: : $SHOW LIST OF ACCOUNTSSHOW SOLUTIONSHOW ANSWERLINK TO TEXTAttempts: 2 of 3 used   
  HYPERLINK “javascript:void(0)” o “Collapse question part” (c)Your answer is correct.  Prepare the classified balance sheet at August 31. (List Current Assets in order of liquidity.)PHAROAH COMPANYBalance SheetAssets$$: $Liabilities and Stockholders’ Equity$$$

Question 3

  Your answer is 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.

Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly. (If no entry is required, select “No Entry” for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

No. Date Account Titles and Explanation Debit Credit
1. Mar. 31      
2. Mar. 31      
3. Mar. 31      
4. Mar. 31      
5. Mar. 31      

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