Question

Required information Problem 3-32A Comprehensive problem: single cycle LO 3-1, 3-2, 3-3, 3-4 [The following information applies to the questions displayed below) The following transactions pertain to Smith Training Company for Year 1: Jan. 30 Established the business when it acquired $45,000 cash from the issue of common stock. Feb. 1 Paid rent for office space for two years, $24,000 cash. Apr. 10 Purchased $3,200 of supplies on account. July 1 Received $24,000 cash in advance for services to be provided over the next year. 20 Paid $1,500 of the accounts payable from April 10. Aug. 15 Billed a customer $18,000 for services provided during August. Sept. 15 Completed a job and received $8,400 cash for services rendered. Oct. 1 Paid employee salaries of $12,000 cash. 15 Received $15,eee cash from accounts receivable. Nov. 16 Billed customers $42,000 for services rendered on account. Dec. 1 Paid a dividend of $15,000 cash to the stockholders. 31 Adjusted records to recognize the services provided on the contract of July 1. 31 Recorded $3,600 of accrued salaries as of December 31. 31 Recorded the rent expense for the year. (See February 1.) 31 Physically counted supplies; $280 was on hand at the end of the period.

Answer 1

SI. Date Account title Credit Debit 45,000 1 Jan 30 Cash Common Stock 45,000 2 24,000 Feb 1 Prepaid Rent Cash 24,000 3 3,200 Apr 10 Supplies Accounts Payable 3,200 4 Jul 1 24,000 Cash Unearned Revenue 24,000 5 1,500 Jul 20 Accounts Payable Cash 1,500 6 18,000 Aug 15 Accounts Receivable Service Revenue 18,000 7 Sep 15 Cash 8,400 Service Revenue 8,400 8 Oct 1 12,000 Salaries Expense Cash 12,000

9 Oct 15 Cash 15,000 Accounts Receivable 15,000 10 42,000 Nov 16 Accounts Receivable Service Revenue 42,000 11 Dec 1 15,000 Dividends Cash 15,000 12 12,000 Dec 31 Unearned Revenue Service Revenue (To record revenue for service performed) ($24,000/12*6] 12,000 13 3,600 Dec 31 Salaries Expense Salaries Payable (To record accrued salaries) 3,600 14 Dec 31 11,000 Rent Expense Prepaid Rent (To record rent expired) ($24,000/24*11] 11,000 15 2,920 Dec 31 Supplies Expense Supplies (To record supplies used) [$3,200-280] 2,920

Cash Accounts Receivable Beg.Bal Aug 15 Nov 16 15,000 Oct 15 Beg.Bal Jan 30 Jul 1 Sep 15 Oct 15 End. Bal 18,000 42,000 45,000 24,000 8,400 15,000 39,900 Feb 1 Jul 20 Oct 1 24,000 1,500 12,000 15,000 Dec 1 End. Bal 45,000 Prepaid Rent Supplies Beg.Bal Feb 1 Beg.Bal Apr 10 24,000 11,000 Dec 31 3,200 2,920 Dec 31 End. Bal 13,000 End. Bal 280 Accounts Payable Unearned Revenue Beg.Bal Jul 20 Beg.Bal Dec 31 1,500 3,200 Apr 10 12,000 24,000 Jul 1 End. Bal 1,700 End. Bal 12,000 Salaries Payable Common Stock Beg.Bal Beg.Bal 3,600 Dec 31 45,000 Jan 30 End. Bal 3,600 End. Bal 45,000

Dividends Service Revenue Beg.Bal Dec 1 Beg.Bal 15,000 Aug 15 Sep 15 End. Bal 15,000 18,000 8,400 42,000 12,000 80,400 Nov 16 Dec 31 End. Bal Rent Expense Salaries Expense Beg.Bal Dec 31 11,000 12,000 Beg.Bal Oct 1 Dec 31 End. Bal 3,600 End. Bal 11,000 15,600 Supplies Expense Beg.Bal Dec 31 2,920 End. Bal 2,920

- Smith Training Company Trial Balance Year 1 Debit Credit Cash $ 39,900 Accounts Receivable $ 45,000 Prepaid Rent $ 13,000 Supplies $ 280 Accounts Payable $ 1,700 Unearned Revenue $ 12,000 Salaries Payable $ 3,600 Common Stock $ 45,000 Dividends $ 15,000 Service Revenue $ 80,400 Rent Expense $ 11,000 Salaries Expense $ 15,600 Supplies Expense $ 2,920 Totals $ 142,700 $ 142,700 $

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