Chapter 4 Homework (4/22)

EXERCISE 4-12
(a) 1.

Equipment ........................................................

700

Cash..........................................................

700

Salaries and Wages Expense .........................

Cash..........................................................

700

Cash ..................................................................

300

700

2.

Service Revenue ...............................

Cash ..................................................................
Accounts Receivable ..............................
3.

(b) 1.

2.

3.

300
800
800

Equipment ........................................................
Accounting Payable ................................

670

Equipment ........................................................
Accounts Payable....................................

760

Salaries and Wages Expense .........................

Equipment ................................................

700

Service Revenue ..............................................

Cash ..................................................................
Accounts Receivable ..............................

300
500

Equipment ........................................................
Accounts Payable

90

670

760

700

800

90

EXERCISE 4-14
(a)

REGO BOWLING ALLEY

Statement of Financial Position
December 31, 2014
Assets
Property, plant, and equipment
Land..............................................
Buildings ......................................
Less: Acc. depr.buildings ....
Equipment....................................
Less: Acc. depr.equipment ..
Current assets
Prepaid insurance .......................
Accounts receivable ...................
Cash .............................................
Total assets .........................................

$128,000
42,600
62,400
18,720

$67,000
85,400
43,680
4,680
7,540
18,040

$196,080

30,260
$226,340

REGO BOWLING ALLEY

Statement of Financial Position (Continued)
December 31, 2014
Equity and Liabilities

Equity
Share capitalordinary ...............................
Retained earnings ($28,000 + $8,440*) .......
Non-current liabilities
Note payable .................................................
Current liabilities
Current portion of note payable..................
Accounts payable ........................................
Interest payable ............................................
Total equity and liabilities ...................................

$80,000
36,440

$116,440
80,000

15,000
12,300
2,600

29,900
$226,340

*Net income = $19,180 $780 $7,360 $2,600 = $8,440

(b) Current assets exceed current liabilities by only $360 ($30,260 $29,900).
However, approximately 60% of current assets are in the form of cash. The
companys liquidity appears to be reasonably good, but some caution is
needed.

TERESINA AMUSEMENT PARK

Worksheet
For the Year Ended September 30, 2014
Account Titles

Trial Balance
Dr.

Cash
Supplies
Prepaid Insurance
Land
Equipment
Accumulated Depreciation
Equipment
Accounts Payable
Unearned Ticket Revenue
Mortgage Payable
Share CapitalOrdinary
Retained Earnings
Dividends
Ticket Revenue
Salaries and Wages Expense
Maintenance and Repairs
Expense
Advertising Expense
Utilities Expense
Property Tax Expense
Interest Expense
Totals
Insurance Expense
Supplies Expense
Interest Payable
Depreciation Expense
Property Taxes Payable
Totals
Net Income
Totals

Adjustments

Cr.

Dr.

34,400
18,600
29,900
80,000
120,000

Cr.
(a) 16,400
(b) 19,000

36,200
14,600
3,900
50,000
60,000
36,100

(d)

(c)

6,000

(d)

2,900

Adjusted
Trial Balance
Dr.

Cr.

Income
Statement
Dr.

Cr.

34,400
2,200
10,900
80,000
120,000

98,000
30,500
9,400
16,900
21,000
6,000
478,700 478,700

42,200
14,600
1,000
50,000
60,000
36,100
14,000

280,800

280,800

98,000

98,000

3,000
2,000

30,500
9,400
16,900
24,000
8,000

30,500
9,400
16,900
24,000
8,000

(b) 19,000
(a) 16,400

19,000
16,400

19,000
16,400

(e)
(f)

(f)
(c)

2,000

6,000
3,000
49,300

2,000

2,000
6,000

(e)
49,300

Cr.

34,400
2,200
10,900
80,000
120,000

14,000
277,900

Dr.

42,200
14,600
1,000
50,000
60,000
36,100

2,900

14,000

Statement of
Financial Position

3,000
489,700 489,700

6,000
228,200 280,800
52,600
280,800 280,800

261,500
261,500

3,000
208,900
52,600
261,500

Key: (a) Supplies Used; (b) Expired Insurance; (c) Depreciation Expensed; (d) Ticket Revenue Earned; (e) Accrued Property Taxes;
(f) Accrued Interest Payable.

PROBLEM 4-4A

Copyright 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only)

(a)

4-47

PROBLEM 4-4A (Continued)

(b)

TERESINA AMUSEMENT PARK, INC.

Statement of Financial Position
September 30, 2014
Assets

Property, plant, and equipment

Land ..............................................
R$80,000
Equipment .................................... R$120,000
Less: Accum. depreciation
77,800 R$157,800
equipment..........................
42,200
Current assets
Prepaid insurance .......................
10,900
Supplies........................................
2,200
47,500
Cash..............................................
34,400
Total assets .........................................
R$205,300
Equity and Liabilities

Equity
Share capitalordinary ..............
Retained earnings .......................
Non-current liabilities
Mortgage payable
(due after 2015) .......................
Current liabilities
Mortgage payable (due in 2015) .
Accounts payable........................
Interest payable ...........................
Property taxes payable ...............
Unearned ticket
revenue.....................................
Total equity and liabilities ..................

R$60,000
74,700* R$134,700
35,000
15,000
14,600
2,000
3,000
1,000

35,600
R$205,300

*R$36,100 + R$52,600 R$14,000

4-48

Copyright 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only)

PROBLEM 4-4A (Continued)

(c) Sept. 30

Supplies Expense ................................

Supplies ........................................

16,400

Insurance Expense ..............................

Prepaid Insurance ........................

19,000

Depreciation Expense .........................

Accumulated Depreciation
Equipment..................................

6,000

30

Unearned Ticket Revenue ...................

Ticket Revenue.............................

2,900

30

Property Tax Expense .........................

Property Taxes Payable...............

3,000

30

Interest Expense ..................................

Interest Payable............................

2,000

(d) Sept. 30

Ticket Revenue ....................................

Income Summary .........................

280,800

Income Summary.................................
Salaries and Wages Expense......
Maintenance and Repairs
Expense .....................................
Insurance Expense ......................
Property Tax Expense .................
Supplies Expense ........................
Utilities Expense ..........................
Interest Expense ..........................
Advertising Expense....................
Depreciation Expense..................

228,200

Income Summary.................................
Retained Earnings........................

52,600

Retained Earnings ...............................

Dividends ......................................

14,000

30
30

30

30
30

16,400
19,000

6,000
2,900
3,000
2,000

280,800
98,000
30,500
19,000
24,000
16,400
16,900
8,000
9,400
6,000
52,600

Copyright 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only)

14,000
4-49

PROBLEM 4-4A (Continued)

(e)

TERESINA AMUSEMENT PARK

Post-Closing Trial Balance
September 30, 2014
Debit
Cash ..................................................................... R$ 34,400
Supplies ...............................................................
2,200
Prepaid Insurance ...............................................
10,900
Land......................................................................
80,000
Equipment............................................................
120,000
Accumulated DepreciationEquipment...........
Accounts Payable ...............................................
Interest Payable...................................................
Property Taxes Payable......................................
Unearned Ticket Revenue ..................................
Mortgage Payable ...............................................
Share CapitalOrdinary.....................................
Retained Earnings...............................................
R$247,500

4-50

Credit

R$ 42,200
14,600
2,000
3,000
1,000
50,000
60,000
74,700
R$247,500

Copyright 2013 John Wiley & Sons, Inc. Weygandt Financial, IFRS, 2/e, Solutions Manual (For Instructor Use Only)