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Practice Questions

This document provides a trial balance for an airline company as of June 30, 2016. [1] It lists asset, liability, equity, revenue and expense accounts with their balances. [2] Additional data is provided about transactions that occurred in June that require adjusting entries, such as prepaid rent expense being used up and depreciation expense on airplanes. [3] The required task is to prepare the necessary adjusting entries and a 10-column worksheet to update the trial balance for the month ended June 30, 2016.

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48 views2 pages

Practice Questions

This document provides a trial balance for an airline company as of June 30, 2016. [1] It lists asset, liability, equity, revenue and expense accounts with their balances. [2] Additional data is provided about transactions that occurred in June that require adjusting entries, such as prepaid rent expense being used up and depreciation expense on airplanes. [3] The required task is to prepare the necessary adjusting entries and a 10-column worksheet to update the trial balance for the month ended June 30, 2016.

Uploaded by

Syed Haider Raza
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Trial Balance

Question As at June 30th 2016

Cash $138,000
Prepaid Rent 19,600
unexpired Insurance 21,000
Prepaid maintenance service 32,500
Spare Parts 57,000
Airplanes 964,000
Accumulated Depreciation- Air
Planes $308,000

Notes Payable 600,000

Unearned Passenger revenue 60,000

Fared Capital 231,050


Fared Drawings 32,000

Passenger Revenue Earned 160,950


Fuel Expenses 13,800
Salaries Expenses 66,700
Advertising Expense 15,400

$1,360,000 $1,360,000

Other Data

1. Monthly rent amounted to $ 3,000 , reducing the prepaid rent account to $ 6,000
2. Insurance Expense for June was $ 3, 400 .Reduce the unexpired insurance account.
3. All necessary maintenance work was provided by Ryan Air Services. Three month maintenance
paid in advance on June 1 @ 7,500 / month.
4. Depreciation of the airplane for the month of June was $ 7,200
5. Salaries Earned by the Employees but not paid amounted to $ 3,300 at June 30th.
6. Interest accrued on notes payable at June 30 amounted to $ 700
7. Advertising expense wrongly include a transaction which advertising yet not published
amounted to $ 1400
8. Accrued Salaries amounting to $ 2,600

Required: Adjusting entries and 10 column work sheet


Question

Anther & Co uses the balance sheet approach to estimate bad debts and maintain an allowance account
the year produce the following age groups:

Not Yet Due $ 252,000


1-30 days past due 50,000
31-60 days past due 139,000
61-90 days past due 50,000
Over 90 days past due 33,000

In reliance upon its past experience with collections, the company estimated the percentages probably
uncollectable for the above five age group to be as follows:

Group 1, 1% Group 2, 4% Group 3, 10% Group 4, 30% Group 5, 50%


Prior to adjustment at December 31 the Allowance for Doubtful Accounts showed a credit balance of $
8000.

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