1. An inventory of supplies showed $3,000 were used up. 2. The furniture was purchased for $30,000. It has $0 salvage value and a 5 year usefullife. One year of depreciation must be recorded. 3. $3,000 of insurance was purchased for 12 months. $1,500 of insurance was used. 4. Performed $20,000 of services that was paid for in advance. 5. On last day of the month, performed $9,100 of services for new customer and will bepaid next month. 6. Happy cleaners provided $9,000 of cleaning services on the last day of the month. Thiswaas a special yearly clean. They will be paid next month. 7. An inventory count revealed there was $4,000 of inventory shrinkage. This was a largerthan usual amount of shrinkage. 8. The company estimates bad debt expense to be 1% of credit sales. Assume all sales aremade on credit. 9. A company with net assets of $100,000 was purchased for $190,000 one year ago. Thecurrent fair value of the company is 180,000. Perform a goodwill impairment test andrecord an impairment entry if one is needed. 10. The company had a calculated warranty expense of 19,000 on oustanding sales. 11. The company sold an additional 10,000 shares at a market price of $15. The par valueof the stock is $1. 12. The company purchased 1,000 of its own shares at a market price of $20. COMPREHENSIVE QUESTION # 12 WORKSHEETGeneral Ledger (starting with balances from unadjusted trial balance)Accounts PayableCashUnadj Bal.23,40019,900Unadj Bal.Bal.23,40019,900 Bal.Accounts ReceivableUtilities PayableUnadj Bal.22,000600Unadj Bal.Bal.22,000600 Bal.Office SuppliesUnearned RevenueUnadj Bal.5,00038,000Unadj Bal.Bal.5,00038,000 Bal.Prepaid InsuranceCommon StockUnadj Bal.3,000100,000Unadj Bal.Bal.3,000100,000 Bal.LandDividendsUnadj Bal.24,000Unadj Bal.4,000Bal.24,000Bal.4,000FurnitureSales or Service RevenueUnadj Bal.20,00076,900Unadj Bal.Bal.20,00076,900 Bal.Utilities Expense1,000Salary ExpenseUndadj6,000Unadj Bal.Bal.6,000Bal.1,000Supplies ExpenseRent ExpenseUnadj Bal.2,000Bal.Bal.2,0004 of 8 COMPREHENSIVE QUESTION # 12 WORKSHEETDepreciation Expense- FurnitureAccumulated Depreciation-FurnitureBal.O Bal.Insurance expenseCleaning expenseBal.Bal.Cost of goods soldInventoryUnadj Bal.25,000Unadj Bal. 60,000Bal.25,000Bal.60,000Bad Debt ExpenseAllowance for Doubtful AccountsUnadj Bal.Unadj Bal.Bal.O Bal.GoodwillImpairment LossUnadj Bal.40,000Unadj Bal.Bal.40,000Bal.Warranty ExpenseAllowance for Warranty ExpenseUnadj Bal.0 Unadj Bal.Bal.O Bal.Treasury StockAdditional Paid in Capital- Common StockUnadj Bal.Unadj Bal.Bal.O Bal.5 of 8

A T-Account is a log or list of accounts that keep track of account transfers.

. An inventory of supplies showed $3,000 were used up. 2. The furniture was purchased for $30,000. It has $0 salvage value and a 5 year useful life. One year of depreciation must be recorded. 3. $3,000 of insurance was purchased for 12 months. $1,500 of insurance was used. 4. Performed $20,000 of services that was paid for in advance. 5. On last day of the month, performed $9,100 of services for new customer and will be paid next month. 6. Happy cleaners provided $9,000 of cleaning services on the last day of the month. This waas a special yearly clean. They will be paid next month. 7. An inventory count revealed there was $4,000 of inventory shrinkage. This was a larger than usual amount of shrinkage. 8. The company estimates bad debt expense to be 1% of credit sales. Assume all sales are made on credit. 9. A company with net assets of $100,000 was purchased for $190,000 one year ago. The current fair value of the company is 180,000. Perform a goodwill impairment test and record an impairment entry if one is needed. 10. The company had a calculated warranty expense of 19,000 on oustanding sales. 11. The company sold an additional 10,000 shares at a market price of $15. The par value of the stock is $1. 12. The company purchased 1,000 of its own shares at a market price of $20.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter2: The Accounting Information System

Section: Chapter Questions

Problem 31BE: Brief Exercise 2-31 Debit and Credit Procedures Refer to the accounts listed below. Accounts...

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Question

1. An inventory of supplies showed $3,000 were used up.

2. The furniture was purchased for $30,000. It has $0 salvage value and a 5 year useful
life. One year of depreciation must be recorded.

3. $3,000 of insurance was purchased for 12 months. $1,500 of insurance was used.

4. Performed $20,000 of services that was paid for in advance.

5. On last day of the month, performed $9,100 of services for new customer and will be
paid next month.

6. Happy cleaners provided $9,000 of cleaning services on the last day of the month. This
waas a special yearly clean. They will be paid next month.

7. An inventory count revealed there was $4,000 of inventory shrinkage. This was a larger
than usual amount of shrinkage.

8. The company estimates bad debt expense to be 1% of credit sales. Assume all sales are
made on credit.

9. A company with net assets of $100,000 was purchased for $190,000 one year ago. The
current fair value of the company is 180,000. Perform a goodwill impairment test and
record an impairment entry if one is needed.

10. The company had a calculated warranty expense of 19,000 on oustanding sales.

11. The company sold an additional 10,000 shares at a market price of $15. The par value
of the stock is $1.

12. The company purchased 1,000 of its own shares at a market price of $20.

COMPREHENSIVE QUESTION # 12 WORKSHEET
General Ledger (starting with balances from unadjusted trial balance)
Accounts Payable
Cash
Unadj Bal.
23,400
19,900
Unadj Bal.
Bal.
23,400
19,900 Bal.
Accounts Receivable
Utilities Payable
Unadj Bal.
22,000
600
Unadj Bal.
Bal.
22,000
600 Bal.
Office Supplies
Unearned Revenue
Unadj Bal.
5,000
38,000
Unadj Bal.
Bal.
5,000
38,000 Bal.
Prepaid Insurance
Common Stock
Unadj Bal.
3,000
100,000
Unadj Bal.
Bal.
3,000
100,000 Bal.
Land
Dividends
Unadj Bal.
24,000
Unadj Bal.
4,000
Bal.
24,000
Bal.
4,000
Furniture
Sales or Service Revenue
Unadj Bal.
20,000
76,900
Unadj Bal.
Bal.
20,000
76,900 Bal.
Utilities Expense
1,000
Salary Expense
Undadj
6,000
Unadj Bal.
Bal.
6,000
Bal.
1,000
Supplies Expense
Rent Expense
Unadj Bal.
2,000
Bal.
Bal.
2,000
4 of 8

COMPREHENSIVE QUESTION # 12 WORKSHEET
Depreciation Expense- Furniture
Accumulated Depreciation-Furniture
Bal.
O Bal.
Insurance expense
Cleaning expense
Bal.
Bal.
Cost of goods sold
Inventory
Unadj Bal.
25,000
Unadj Bal. 60,000
Bal.
25,000
Bal.
60,000
Bad Debt Expense
Allowance for Doubtful Accounts
Unadj Bal.
Unadj Bal.
Bal.
O Bal.
Goodwill
Impairment Loss
Unadj Bal.
40,000
Unadj Bal.
Bal.
40,000
Bal.
Warranty Expense
Allowance for Warranty Expense
Unadj Bal.
0 Unadj Bal.
Bal.
O Bal.
Treasury Stock
Additional Paid in Capital- Common Stock
Unadj Bal.
Unadj Bal.
Bal.
O Bal.
5 of 8

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