Gil Vogel started his own consulting firm, Vogel Consulting, on June 1, 2012

P4-2A Gil Vogel started his own consulting firm, Vogel Consulting, on June 1, 2012. The trial balance at June 30 is as follows.

VOGEL CONSULTING
Trial Balance
June 30, 2012
Debit Credit
Cash $ 6,850
Accounts Receivable 7,000
Prepaid Insurance 2,880
Supplies 2,000
Equipment 15,000
Accounts Payable $ 4,230
Unearned Service Revenue 5,200
Common Stock 22,000
Service Revenue 8,300
Salaries and Wages Expense 4,000
Rent Expense 2,000
$39,730 $39,730

In addition to those accounts listed on the trial balance, the chart of accounts for Vogel also contains the following accounts: Accumulated Depreciation—Equipment, Utilities Payable, Salaries and Wages Payable, Depreciation Expense, Insurance Expense, Utilities Expense, and Supplies Expense.

Other data:
1. Supplies on hand at June 30 total $720.
2. A utility bill for $180 has not been recorded and will not be paid until next month.
3. The insurance policy is for a year.
4. $4,100 of unearned service revenue has been earned at the end of the month.
5. Salaries of $1,250 are accrued at June 30.
6. The equipment has a 5-year life with no salvage value and is being depreciated at $250 per month for 60 months.
7. Invoices representing $3,900 of services performed during the month have not been recorded as of June 30.

Instructions
(a) Prepare the adjusting entries for the month of June.
(b) Post the adjusting entries to the ledger accounts. Enter the totals from the trial balance as beginning account balances. Use T accounts.
(c) Prepare an adjusted trial balance at June 30, 2012.

Click here for the solution: Gil Vogel started his own consulting firm, Vogel Consulting, on June 1, 2012

Smith and Jones each own tracts of land

Smith and Jones each own tracts of land. Because of the location of their current operations, each would prefer to have the other's land. Smith and Jones agree to exchange tracts. Jones pays Smith $36,000 based upon the following data.

Smith Land Jones Land
Original Cost $270,000 $280,000
Appraised fair value at date of exchange $300,000 $264,000

Instructions
(a) Prepare the journal entry to record the exchange on Smith's books, assuming the transaction has commercial substance.
(b) Prepare the journal entry to record the exchange on Smith's books, assuming the transaction does not have commercial substance.
(c) Prepare the journal entry to record the exchange on Jones’s books, assuming the transaction has commercial substance.
(d) Prepare the journal entry to record the exchange on Jones’s books, assuming the transaction does not have commercial substance.

Click here for the solution: Smith and Jones each own tracts of land

Linda Ace started her own consulting firm, Modine Consulting, Inc. on May 1, 2008

P3-1B Linda Ace started her own consulting firm, Modine Consulting, Inc. on May 1, 2008. The trial balance at May 31 is as follows.

MODINE CONSULTING, INC.
Trial Balance
May 31, 2008
Account
Number Debit Credit
101 Cash $ 7,700
112 Accounts Receivable 4,000
126 Supplies 1,500
130 Prepaid Insurance 4,800
149 Office Furniture 9,600
201 Accounts Payable $ 3,500
209 Unearned Service Revenue 3,000
311 Common Stock 19,100
400 Service Revenue 6,000
726 Salaries Expense 3,000
729 Rent Expense 1,000
$31,600 $31,600

In addition to those accounts listed on the trial balance, the chart of accounts for Modine Consulting also contains the following accounts and account numbers: No. 150 Accumulated Depreciation—Office Furniture, No. 212 Salaries Payable, No. 229 Travel Payable, No. 631 Supplies Expense,No. 717 Depreciation Expense,No. 722 Insurance Expense, and No. 736 Travel Expense.

Other data:
1. $500 of supplies have been used during the month.
2. Travel expense incurred but not paid on May 31, 2008, $200.
3. The insurance policy is for 2 years.
4. $1,000 of the balance in the unearned service revenue account remains unearned at the end of the month.
5. May 31 is a Wednesday, and employees are paid on Fridays. Modine Consulting has two employees, who are paid $700 each for a 5-day work week.
6. The office furniture has a 5-year life with no salvage value. It is being depreciated at $160 per month for 60 months.
7. Invoices representing $1,000 of services performed during the month have not been recorded as of May 31.

Instructions
(a) Prepare the adjusting entries for the month of May. Use J4 as the page number for your journal.
(b) Post the adjusting entries to the ledger accounts. Enter the totals from the trial balance as beginning account balances and place a check mark in the posting reference column.
(c) Prepare an adjusted trial balance at May 31, 2008.

Check: (c) Adj. trial balance $33,800


Click here for the solution: Linda Ace started her own consulting firm, Modine Consulting, Inc. on May 1, 2008

Margaret started her own business in the current year and will report a profit for her first year

Margaret started her own business in the current year and will report a profit for her first year. Her results of operations are as follows:

Gross income $50,000
Travel 1,000
Transportation 6,173 miles, using standard mileage method
Entertainment in" total 4,000
Seven gifts at $50 each 350
Rent and utilities for apartment in total 10,000
(20% is used for a home office)

What is the net income Margaret should show on her Schedule C? Show the calculation of her taxable business income.


Click here for the solution: Margaret started her own business in the current year and will report a profit for her first year

Bill and Guilda each own 50 percent of the stock of Radiata Corporation, an S corporation

Bill and Guilda each own 50 percent of the stock of Radiata Corporation, an S corporation. Guilda's basis in her stock is $25,000. On July 31, 2010, Bill sells his stock, with a basis of $40,000, to Loraine for $50,000. For the 2010 tax year, Radiata Corporation has a loss of $100,375.

a. Calculate the amount of the corporation's loss that may be deducted by Bill on his 2010 tax return.
b. Calculate the amount of the corporation's loss that may be deducted by Guilda on her 2010 tax return.
c. Calculate the amount of the corporation's loss that may be deducted by Loraine on her 2010 tax return.


Click here for the solution: Bill and Guilda each own 50 percent of the stock of Radiata Corporation, an S corporation

Charlie's Pets succeeded so well that Charlie decided to manufacture his own brand of chewing bone—Fido Treats

P16-25A Charlie's Pets succeeded so well that Charlie decided to manufacture his own brand of chewing bone—Fido Treats. At the end of December 2012, his accounting records showed the following:

Inventories: Beginning Ending
Materials $ 13,400 $ 9,500
Work in process 0 2,000
Finished goods 0 5,300

Other information:
Direct material purchases $ 33,000 Utilities for plant $ 1,600
Plant janitorial services 800 Rent of plant 13,000
Sales salaries expense 5,000 Customer service hotline expense 1,400
Delivery expense 1,700 Direct labor 22,000
Sales revenue 109,000

Requirements
1.Prepare a schedule of cost of goods manufactured for Fido Treats for the year ended December 31, 2012.
2.Prepare an income statement for Fido Treats for the year ended December 31, 2012.
3.How does the format of the income statement for Fido Treats differ from the income statement of a merchandiser?
4.Fido Treats manufactured 18,075 units of its product in 2012. Compute the company's unit product cost for the year.


Click here for the solution: Charlie's Pets succeeded so well that Charlie decided to manufacture his own brand of chewing bone—Fido Treats

You are the accountant for a division of a company that is constructing a building for its own use

C10-11 (Ethics and Construction Cost) You are the accountant for a division of a company that is constructing a building for its own use. It is January 2011, and you are working on closing the books for 2010. The CEO of the division stops by your office and says, “I have some questions about our building. Although we started construction at the beginning of “June this year, we started planning it at the beginning of the previous year. I believe we can capitalize interest since then. Check to see if we did capitalize some in 2009. If not we can take it out of this year’s expense and get a double dose. Also I want you to add lots of overhead to the cost of the building so we can increase our profit for this year. For example, you spent quite a bit of time on the project. So perhaps we could add 1/12 of your salary to the cost of the cost of the building. You get the idea?” when the CEO leaves you check the files and find a letter to an architect dated January 2, 2009. There are numerous subsequent letters to and from the architect. From financial reporting and ethical perspectives, how would you reply to the CEO?


Click here for the solution: You are the accountant for a division of a company that is constructing a building for its own use

Nick Waege started his own consulting firm, Waegelein Consulting, on June 1, 2010

Nick Waege started his own consulting firm, Waegelein Consulting, on June 1, 2010. The trial balance at June 30 is as follows.

WAEGELEIN CONSULTING
Trial Balance
June 30, 2010
Debit Credit
Cash 6,850
Accounts Receivable 7,000
Prepaid Insurance 2,640
Supplies 2,000
Office Equipment 15,000
Accounts Payable 4,540
Unearned Service Revenue 5,200
Common Stock 21,750
Service Revenue 8,000
Salaries Expense 4,000
Rent Expense 2,000
39,490 39,490

In addition to those accounts listed on the trial balance, the chart of accounts for Waegelein also contains the following accounts:

Accumulated Depreciation - Office Equipment, Utilities Payable, Salaries Payable, Depreciation Expense, Insurance Expense, Utilities Expense, Supplies Expense

Other data:
1. Supplies on hand at June 30 total $980.
2. A utility bill for $180 has not been recorded and will not be paid until next month.
3. The insurance policy is for a year.
4. $3,900 of unearned service revenue has been earned at the end of the month.
5. Salaries of $1,250 are accrued at June 30.
6. The office equipment has a 5-year life with no salvage value and is being depreciated at $250 per month for 60 months.
7. Invoices representing $3,500 of services performed during the month have not been recorded as of June 30.

Instructions:
a. Prepare the adjusting entries for the month of June.
b. Post the adjusting entries to the ledger accounts. Enter the totals from the trial balance as beginning account balances. Use T accounts.
c. Prepare an adjusted trial balance at June 30, 2010.

Click here for the solution: Nick Waege started his own consulting firm, Waegelein Consulting, on June 1, 2010

Pamela Quinn started her own consulting firm, Quinn Consulting, on May 1, 2012

P4-2B Pamela Quinn started her own consulting firm, Quinn Consulting, on May 1, 2012. The trial balance at May 31 is as shown below.

Quinn CONSULTING
Trial Balance
May 31, 2012
Debit Credit
Cash$ 7,500
Accounts Receivable 3,000
Prepaid Insurance 3,600
Supplies 2,500
Equipment 12,000
Accounts Payable $ 3,500
Unearned Service Revenue 4,000
Common Stock 19,100
Service Revenue 7,500
Salaries and Wages Expense 4,000
Rent Expense 1,500
34,100 $34,100

In addition to those accounts listed on the trial balance, the chart of accounts for Quinn Consulting also contains the following accounts: Accumulated Depreciation Equipment, Salaries and Wages Payable, Depreciation Expense, Insurance Expense, Utilities Expense, and Supplies Expense.

Other data:
1. $750 of supplies have been used during the month.
2. Utility costs incurred but not paid are $260.
3. The insurance policy is for 2 years.
4. $1,500 of the balance in the Unearned Service Revenue account remains unearned at the end of the month.
5. Assume May 31 is a Thursday and employees are paid on Fridays. Quinn Consulting has two employees that are paid $600 each for a5-day work week.
6. The equipment has a 5-year life with no salvage value and is being depreciated at $200 per month for 60 months.
7. Invoices representing $1,980 of services performed during the month have not been recorded as of May 31.

Instructions
(a) Prepare the adjusting entries for the month of May.
(b) Post the adjusting entries to the ledger accounts. Enter the totals from the trial balance as beginning account balances. Use T accounts.
(c) Prepare an adjusted trial balance at May 31, 2012.

Check: (c) tot. trial balance $37,500

Click here for the solution: Pamela Quinn started her own consulting firm, Quinn Consulting, on May 1, 2012