Question 1: The records of Skymaster Airplane Rental, accounting homework help

Question 1: The records of Skymaster Airplane Rental, accounting homework help

EXAM #1 WEEK 3 (Chapters 1–3)

Should be completed by Sunday at 11:59 p.m. ET.

Question 1: The records of Skymaster Airplane Rentals show the following information as of December 31, 2011

Accounts payable

$ 36,000

2011 Wages expense

$75,000

Insurance expense

2,000

2011 Advertising expense

22,000

Accounts receivable

24,000

Cash

11,000

Retained earnings,

December 31, 2010

130,000

Common stock

Office furniture

20,000

15,000

Airplanes

150,000

2011 Maintenance expense

39,000

Notes payable

47,000

2011 Revenues

217,000

Hangar

60,000

Dividends of $52,000 were paid during 2011.

Using the above information, prepare an income statement for 2011. (15 points)

Question 2: The records of Skymaster Airplane Rentals show the following information as of December 31, 2011

Accounts payable

$36,000

2011 Wages expense

$75,000

Insurance expense

2,000

2011 Advertising expense

22,000

Accounts receivable

24,00

Cash

11,000

Retained earnings,

December 31, 2010

130,000

Common stock

Office furniture

20,000

15,000

Airplanes

150,000

2011 Maintenance expense

39,000

Notes payable

47,000

2011 Revenues

217,000

Hangar

60,000

Dividends of $52,000 were paid during 2011.

Using the above information, prepare a statement of retained earnings for 2011 (15 points)

Question 3: The records of Skymaster Airplane Rentals show the following information as of December 31, 2011

Accounts payable

$36,000

2011 Wages expense

$75,000

Insurance expense

2,000

2011 Advertising expense

22,000

Accounts receivable

24,000

Cash

11,000

Retained earnings,

December 31, 2010

130,000

Common stock

Office furniture

20,000

15,000

Airplanes

150,000

2011 Maintenance expense

39,000

Notes payable

47,000

2011 Revenues

217,000

Hangar

60,000

Dividends of $52,000 were paid during 2011.

Using the above information, prepare a balance sheet at December 31, 2011. (15 points)

Question 4: The following is a list of accounts and identification letters A through J for Shannon Management Co.:

A.

Common Stock

F.

Prepaid Rent

B.

Interest Payable

G.

Advertising Expense

C.

Land

H.

Unearned Rent Revenue

D.

Dividends

I.

Commissions Earned

E.

Fees Earned

J.

Notes Receivable

Use the form below to identify the type of account and its normal balance. The first item is filled in as an example. (10 points)

Type of Account

Normal Balance

Asset

Liability

Equity

Debit

Credit

A.

X

X

B.

C.

D.

E.

F.

G.

H.

I.

J.

Question 5: Dolly Barton began Barton Office Services in October and during the month completed the following transactions:
a. Invested $10,000 cash and $15,000 of computer equipment in exchange for common stock
b. Paid $500 cash for an insurance premium covering the next 12 months
c. Completed a word processing assignment for a customer and collected $1,000 cash
d. Paid $200 cash for office supplies
e. Paid $2,000 for October’s rent.
Prepare journal entries to record the above transactions. Explanations are unnecessary. (15 points)

Question 6: In general journal form, record the December 31 adjusting entries for the following transactions and events. Assume that December 31 is the end of the annual accounting period. (15 points)
a. The Prepaid Insurance account shows a debit balance of $2,340, representing the cost of a three-year fire insurance policy that was purchased on October 1 of the current year
b. The Office Supplies account has a debit balance of $400; a year-end inventory count reveals $80 of supplies still on hand
c. On November 1 of the current year, Rent Earned was credited for $1,500. This amount represented the rent earned for a three-month period beginning November 1
d. Estimated depreciation on office equipment is $600
e. Accrued salaries amount to $400

Question 7: The adjusted trial balance of Sara’s Web Services follows:

SARA’S WEB SERVICES

Adjusted Trial Balance

December 31

Cash

$ 1,170

Supplies

1,930

Prepaid insurance

600

Computer equipment

20,600

Accumulated depreciation – Computer equipment

$ 5,400

Accounts payable

325

Common stock

3,000

Retained earnings

10,925

Dividends

4,800

Services revenue

21,720

Salaries expense

6,920

Depreciation expense

2,000

Rent expense

1,200

Supplies expense

800

Utilities expense

950

Insurance expense

400

Totals

$41,370

$41,370

  • 1.
    (a) Prepare the closing entries for Sara’s Web Services. (15 points)