Problem 3.4A Aerial Views

PROBLEM 3.4A AERIAL VIEWS 50 Minutes, Strong a. Income Statement Transaction June 1 June 2 June 4 June 15 June 15 June 18 June 25 June 30 June 30 June 30 June 30 Revenue NE NE NE I NE NE NE I NE NE NE Expenses = 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 P3.4A 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 3.4A AERIAL VIEWS (continued ) b. General Journal 2011 June 1 60,000 Cash Ca p ital Stock Issued stock to Wendy Winger. 60,000 2 Aircraft 220,000 Cash Notes Pa y able Purchased plane from Utility Aircraft. 4 40,000 180,000 Rent Expense Cash Paid office rent for June. 2,500 2,500 15 Accounts Receivable Aerial Photo g rap hy Revenue Billed customers for first half of June. 15 18 25 8,320 8,320 Salaries Expense Cash Paid salaries for first half of June. 5,880 Maintenance Expense Cash Paid Hannigan's Hangar for repair services. 1,890 Cash 4,910 5,880 1,890 Accounts Receivable Collected portion of amount billed to customers. 4,910 30 Accounts Receivable Aerial Photo g rap hy Revenue Billed customers for services rendered through month-end. 16,450 30 Salaries Ex p ense Cash Paid salaries throu 6,000 16,450 6,000 g h month-end. 30 Fuel Ex p ense Accounts Pa y able Received bill for fuel used durin 2,510 2,510 g June. 30 Dividends Dividends Pa y able Declared dividend p ay able June 15. 2,000 2,000 P3.4A (p.2) PROBLEM 3.4 A A ERIAL VIEWS (continued) c. Cash Date 2011 June 1 Debit Explanation Credit 60 ,000 2 4 15 18 25 30 40 ,000 2,500 5 ,880 1 ,890 4 ,910 6 ,000 Date 2011 June 15 25 30 Explanation Date 2011 June 2 Explanation Date 2011 June 2 Explanation Date 2011 June 30 Explanation Accounts Receivable Debit Credit 8 ,320 4 ,910 16 ,450 Balance 60 20 17 11 9 14 8 ,000 ,000 ,500 ,620 ,730 ,640 ,640 Balance 8 ,320 3 ,410 19 ,860 Aircraf t Debit Credit 220 ,000 Notes Payable Debit 220 ,000 Credit 180 ,000 Accounts Payabl e Debit Credit 2 ,510 P3.4A(p.3) Balance Balance 180 ,000 Balance 2 ,510 PROBLEM 3.4 A AERIAL VIEWS (continued ) Date 2011 June 30 Explanation Date 2011 June 1 Explanation Date 2011 June 30 Explanation Date 2011 June 15 30 Explanation Date 2011 June 18 Explanation Dividends Payable Debit Credit 2,000 Capital Stock Debit Credit 60,000 Balance 2,000 Balance 60,000 Dividends Debit Credit 2,000 Aerial Photography Revenue Debit 2,000 Credit 8,320 16,450 Maintenance Expense Debit 1,890 P3.4A(p.4) Balance Credit Balance 8,320 24,770 Balance 1,890 PROBLEM 3.4 A AERIAL VIEWS (continued ) Date 2011 June 30 Explanation Date 2011 June 15 30 Explanation Date 2011 June 4 Explanation Fuel Expense Debit Credit 2,510 Salaries Expense Debit 2,510 Credit 5,880 6,000 Rent Expense Debit 2,500 P3.4A(p.5) Balance Balance 5,880 11,880 Credit Balance 2,500 d. PROBLEM 3.4A AERIAL VIEWS (continued ) AERIAL VIEWS Trial Balance June 30, 2011 $ Cash Accounts receivable Aircraft Notes payable Accounts payable Dividends payable Capital stock Retained earnings Dividends Aerial photography revenue Maintenance expense Fuel expense Salaries expense Rent expense 8,640 19,860 220,000 $ 180,000 2,510 2,000 60,000 0 2,000 24,770 $ P3.4A (p.6) 1,890 2,510 11,880 2,500 269,280 $ 269,280 PROBLEM 3.4A AERIAL VIEWS (concluded ) e. Total Assets: Cash Accounts receivable Aircraft Total assets $ Total Liabilities: Notes payable Accounts payable Dividends pa y able Total liabilities Total Owners' Equity: Total assets - total liabilities $ ($248 ,500 - $184 ,510 ) The above figures are most likely not the amounts to be reported in the balance sheet dated June 30. The accounting cycle includes adjustments that must be made to the trial balance figures before financial statements are prepared. The adjusting process is covered in Chapter 4. P3.4A (p.7) 8,640 19,860 220,000 $ 248,500 $ 184,510 $ 63,990 180,000 2,510 2,000