Problem 3.4B Tone Deliveries

PROBLEM 3.4B TONE DELIVERIES 50 Minutes, Strong a. Income Statement Transaction Mar. 2 Mar. 4 Mar. 5 Mar. 9 Mar. 15 Mar. 19 Mar. 20 Mar. 28 Mar. 30 Mar. 30 Mar. 30 Revenue Expenses = NE NE NE I NE NE NE I NE NE NE NE NE I NE I I NE NE I I NE Balance Sheet Net Income Assets NE NE D I D D NE I D D NE P3.4B I I D I D D NE I D NE NE Liabilities = NE I NE NE NE NE NE NE NE I I Owners' Equity I NE D I D D NE I D D D PROBLEM 3.4B TONE DELIVERIES (continued) b. General Journal 2011 Mar. 2 80,000 Cash Ca p ital Stock Issued stock to Mary Tone. 80,000 4 Truck 45,000 Cash Notes Pa y able Purchased truck. 5 15,000 30,000 Rent Expense Cash Paid office rent for March. 2,500 2,500 9 Accounts Receivable Service Revenue Billed customers. 15 19 20 11,300 11,300 Salaries Expense Cash Paid salaries for first half of March. 7,100 Maintenance Expense Cash Paid Bill's Auto for repair services. 900 7,100 900 Cash 3,800 Accounts Receivable Collected portion of amount billed to customers. 28 Accounts Receivable Service Revenue Billed customers for services rendered through month-end. 30 30 30 Salaries Expense Cash Paid salaries through month-end. 3,800 14,400 14,400 7,500 7,500 Fuel Expense Accounts Pa y able Received bill for fuel used during March. 830 830 Dividends Dividends Pa y able Declared dividend payable April 30. 1,200 1,200 P3.4B (p.2) PROBLEM 3.4B TONE DELIVERIES (continued) c. Cash Date 2011 Mar. 2 4 5 15 19 20 30 Explanation Date 2011 Mar. 9 20 28 Explanation Date 2011 Mar. 4 Explanation Date 2011 Mar. 4 Explanation Date 2011 Mar. 30 Explanation Debit Credit Balance 80,000 15,000 2,500 7,100 900 3,800 7,500 Accounts Receivable Debit Credit 80,000 65,000 62,500 55,400 54,500 58,300 50,800 Balance 11,300 3,800 14,400 11,300 7,500 21,900 Truck Debit Credit Balance 45,000 Notes Payable Debit 45,000 Credit Balance 30,000 Accounts Payabl e Debit Credit Balance 830 P3.4B(p.3) 30,000 830 PROBLEM 3.4B TONE DELIVERIES (continued) Date 2011 Mar. 30 Explanation Date 2011 Mar. 2 Explanation Dividend Payable Debit Credit 1,200 Capital Stock Debit Credit 80,000 Balance 1,200 Balance 80,000 Dividends Date 2011 Mar. 30 Date 2011 Mar. 9 28 Date 2011 Mar. 19 Explanation Debit Credit 1,200 Explanation Service Revenue Debit 1,200 Credit 11,300 14,400 Explanation Maintenance Expense Debit Credit 900 P3.4B(p.4) Balance Balance 11,300 25,700 Balance 900 PROBLEM 3.4B TONE DELIVERIES (continued) Date 2011 Mar. 30 Explanation Date 2011 Mar. 15 30 Explanation Date 2011 Mar. 5 Explanation Fuel Expense Debit Credit 830 Salaries Expense Debit 830 Credit 7,100 7,500 Rent Expense Debit 2,500 P3.4B(p.5) Balance Balance 7,100 14,600 Credit Balance 2,500 d. PROBLEM 3.4B TONE DELIVERIES (continued) TONE DELIVERIES Trial Balance March 31, 2011 $ Cash Accounts receivable Truck Notes payable Accounts payable Dividends payable Capital stock Retained earnings Dividends Service revenue Maintenance expense Fuel expense Salaries expense Rent expense 50,800 21,900 45,000 $ 30,000 830 1,200 80,000 0 1,200 25,700 $ P3.4B (p.6) 900 830 14,600 2,500 137,730 $ 137,730 PROBLEM 3.4B TONE DELIVERIES (concluded) e. Total Assets: Cash Accounts receivable $ Trucks 50,800 21,900 45,000 Total assets Total Liabilities: Notes payable $ Accounts payable Dividends payable $ 117,700 $ 32,030 $ 85,670 30,000 830 1,200 Total liabilities Total Owners' Equity: Total assets - total liabilities ($117,700 - $32,030) The above figures are most likely not the amounts to be reported in the balance sheet dated March 31. The accounting cycle includes adjustments that must be made to the trial balance prior preparing the financial statements. The adjusting process is covered in Chapter 4. P3.4B (p.7)