E4.

13 Prepare a correct income statement

The income statement of Norski Co. for the month of July shows net income of $2,000
based on Service Revenue $5,500; Salaries and Wages $2,100; Supplies Expense $900;
and Utilities Expense $500. In reviewing the statement, you discover the following:
1. Insurance expired during July of $350 was omitted.
2. Supplies expense includes $200 of supplies that are still on hand at July 31.
3. Depreciation on equipment of $150 was omitted.
4. Accrued but unpaid wages at July 31 of $360 were not included,
5. Services performed but unrecorded totaled $700.

Instructions
Prepare a correct income statement for July 2022.
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a

NORSKI Co.
Income Statement
For the Month Ended July 31, 2022

Revenues
Service revenue $6,200
Expenses
Salaries and wages expens $2,460
Supplies expense 700
Utilities expense 500
Insurance expense 350
Depreciation expense 150
Total expenses 4,160
Net income $2,040

After you have completed E4.13, consider the following additional question
1. Assume that services performed but unrecorded was $950; supplies expense included
$285 of supplies still on hand; and, insurance expense of $450 was omitted. What
impact do these changes have on the income statement?

NORSKI Co.
Income Statement
For the Month Ended July 31, 2022
Revenues
Service revenue $6,450
Expenses
Salaries and wages expens $2,460
Supplies expense 615
Utilities expense 500
Insurance expense 450
Depreciation expense 150
Total expenses 4,175
Net income $2,275
formula in cells with a "?" .

included
E4.15 Analyze adjusted data
This is a partial adjusted trial balance of Ramon Company

RAMON COMPANY
Adjusted Trial Balance
January 31, 2022

Debit Credit
Supplies $700
Prepaid Insurance 1,560
Salaries and Wages Payable $1,060
Unearned Service Revenue 750
Supplies Expense 950
Insurance Expense 520
Salaries and Wages Expense 1,800
Service Revenue 4,000

Instructions
Answer these questions, assuming the year begins January 1.
(a) If the amount in Supplies Expense is the January 31 adjusting entry, and
$300 of supplies was purchased in January, what was the balance in Supplies
on January 1?
(b) If the amount in Insurance Expense is the January 31 adjusting entry, and the
original insurance premium was for 1 year, what was the total premium and
when was the policy purchased?
(c ) If $2,500 of salaries was paid in January, what was the balance in Salaries and
Wages Payable at December 31, 2021?
(d) If $1,800 was received in January for services performed in January, what was
the balance in Unearned Service Revenue at December 31, 2021?
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells wi

(a) Supplies expense $950

Add: Supplies (1/31) 700
Less: Supplies purchased 300
Supplies (1/1) $1,350

(b) Monthly premium $520

Number of months X 12
Total premium $6,240

Prepaid Insurance, 1/31 $1,560

Monthly premium 520
Number of months remaining,1/31 3
 Date of Purchase 05/01/22

(c) Cash Paid $2,500

Salaries and wages payable, 1/31/22 1,060
3,560
Less: Salaries and wages expense 1,800
Salaries and wages payable, 12/31/21 $1,760

(d) Service revenue $4,000

Unearned revenue, 1/31/22 750
3,250
Cash received in January 1,800
Unearned revenue, 12/31/21 $1,450

After you have completed E4.15, consider the following additional question.
1. Assume that amounts for purchase of supplies, salaries paid and cash received in services perfor
January changed to $500, $1,800 and $2,800 respectively. How do these changes impact your re

(a) Supplies expense $950

Add: Supplies (1/31) 700
Less: Supplies purchased 500
Supplies (1/1) $1,150

(c) Cash Paid $1,800

Salaries and wages payable, 1/31/22 1,060
2,860
Less: Salaries and wages expense 1,800
Salaries and wages payable, 12/31/21 $1,060

(d) Service revenue $4,000

Unearned revenue, 1/31/22 750
3,250
Cash received in January 2,800
Unearned revenue, 12/31/21 $450
er or a formula in cells with a "?" .
received in services performed in
ese changes impact your responses?
E4.22 Prepare adjusting entries from analysis of trial balance
The following trial balances are before and after adjustment for Ryan Company at the end of its fiscal year

RYAN COMPANY
Trial Balance
August 31, 2022

Before After
Adjustment Adjustment
Dr. Cr. Dr. Cr.
Cash $10,900 $10,900
Accounts Receivable 8,800 9,400
Supplies 2,500 500
Prepaid Insurance 4,000 2,500
Equipment 16,000 16,000
Accumulated Depreciation - Equipment $3,600 $4,800
Accounts Payable 5,800 5,800
Salaries and Wages Payable 0 1,100
Unearned Rent Revenue 1,800 800
Common Stock 10,000 10,000
Retained Earnings 5,500 5,500
Dividends 2,800 2,800
Service Revenue 34,000 34,600
Rent Revenue 12,100 13,100
Salaries and Wages Expense 17,000 18,100
Supplies Expense 0 2,000
Rent Expense 10,800 10,800
Insurance Expense 0 1,500
Depreciation Expense 0 1,200
$72,800 $72,800 $75,700 $75,700

Instructions
Prepare the adjusting entries that were made
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a

Aug . 31 Accounts Receivable 600

Service Revenue

Aug . 31 Supplies Expense 2,000

Supplies
Aug . 31 Insurance Expense 1,500
Prepaid Insurance

Aug . 31 Depreciation Expense 1,200

Accumulated Depreciation - Equipment

Aug . 31 Salaries & Wages Expense 1,100

Salaries and Wages Payable

Aug . 31 Unearned Rent Revenue 1,000

Rent Revenue

After you have completed E4.22, consider the additional question.

1. Assume that the balance after adjustment for Accounts Receivable, Supplies, Prepaid Insurance
and Unearned Rent Revenue changed to $9,800, $750, $2,750 and $900 respectively. Show the
impact on these changes on the adjusting entries.

Aug . 31 Accounts Receivable 1,000

Service Revenue

Aug . 31 Supplies Expense 1,750

Supplies

Aug . 31 Insurance Expense 1,250

Prepaid Insurance

Aug . 31 Unearned Rent Revenue 900

Rent Revenue
the end of its fiscal year.

a formula in cells with a "?" .

600

2,000
 1,500

1,200

1,100

1,000

plies, Prepaid Insurance,

0 respectively. Show the

1,000

1,750

1,250

900
P4.1A Record transactions on accrual basis; convert revenue to cash receipts
The following selected data are taken from the comparative financial statements of Yankee
Curling Club. The club prepares its financial statements using the accrual basis of accounting.

September 30 2022 2021

Accounts receivable for member dues $ 15,000 $ 19,000
Unearned sales revenue 20,000 23,000
Service revenue (from member dues) 151,000 135,000

Dues are billed to members based upon their use of the club's facilities. Unearned sales
revenues arise from the sale of tickets to events, such as the Skins Game.

Instructions
(Hint: You will find it helpful to use T-accounts to analyze the following data. You must
analyze these data sequentially, as missing information must first be deduced before
moving on. Post your journal entries as you progress, rather than waiting until the end.)
(a) Prepare journal entries for each of the following events that took place during 2022.
1. Dues receivable from members from 2021 were all collected during 2022.
2. During 2022, goods were provided for all of the unearned sales revenue at the end
of 2021.
3. Additional tickets were sold for $44,000 cash during 2022, a portion of these were
used by the purchasers during the year. The entire balance remaining in Unearned
Sales Revenue relates to the upcoming Skins Game in 2022.
4. Dues for the 2021-2022 fiscal year were billed to members.
5. Dues receivable for 2022 (i.e., those billed in item (4) above ) were partially collected.
(b) Determine the amount of cash received by Yankee from the above transactions during
the year ended September 30, 2022.
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a

(a)(1) Cash 19,000

Accounts Receivable

(a)(2) Unearned Sales Revenue 23,000

Sales Revenue

(a)(3) Cash 44,000

Unearned Sales Revenue

Unearned Sales Revenue 24,000

Sales Revenue
(a)(4) Accounts Receivable 151,000
Service Revenue

(a)(5) Cash 136,000

Accounts Receivable

(b) Cash received with respect to fees and dues

1. Collection of 2021 dues $19,000
3. Sales of tickets 44,000
5. Collection of 2022 dues 136,000
$199,000

Cash Service Revenue

1. 19,000 4. 151,000
3. 44,000
5. 136,000 2022 151,000
2022 199,000 Bal.
Bal.

Accounts Receivable Sales Revenue

2021 19,000 1. 19,000 2. 23,000
Bal. 5. 136,000 3. 24,000
4. 151,000
2022 47,000
2022 15,000 Bal.
Bal.

Unearned Sales Revenue

2. 23,000 2021 23,000
3. 24,000 Bal.
3. 44,000

2022 20,000
Bal.

After you have completed P4.1A, consider the following additional question.
1. Assume that the 2022 balances for Unearned sales revenue and that additional ticket sold during
 the year changed to $18,000 and $48,000 respectively. Recalculate the amount of cash collected
for the year ended September 30, 2022.

(b) Cash received with respect to fees and dues

1. Collection of 2021 dues $19,000
3. Sales of tickets 48,000
5. Collection of 2022 dues 136,000
$203,000

Cash Service Revenue

1. 19,000 4. 151,000
3. 48,000
5. 136,000 2022 151,000
2022 203,000 Bal.
Bal.

Accounts Receivable Sales Revenue

2021 19,000 1. 19,000 2. 23,000
Bal. 5. 136,000 3. 30,000
4. 151,000
2022 53,000
2022 15,000 Bal.
Bal.

Unearned Sales Revenue

2. 23,000 2021 23,000
3. 30,000 Bal.
3. 48,000

2022 18,000
Bal.
f accounting.

e at the end

hese were
in Unearned

ially collected.
tions during

a formula in cells with a "?" .

19,000

23,000

44,000

24,000
 151,000

136,000

ional ticket sold during

mount of cash collected