Name the accounts debited and credited for each of the following transactions. a. Billing a customer for work done. b. Receipt of cash from customer on account. c. Purchase of office supplies on account. d. Purchase of 15 gallons of gasoline for the delivery truck.

Greco Resort opened for business on June 1 with eight air-conditioned units. Its trial balance on August 31 is as follows.

$$\begin{array}{c} \textbf{GRECO RESORT}\\ \textbf{TRIAL BALANCE}\\ \textbf{AUGUST 31, 2017} \end{array}$$

$$\begin{array}{lrr} \\\hline{\text{}}&\text{Debit }&\text{Credit}\\\hline \text{Cash}&\text{\$\hspace{10pt}19,600}\\ \text{Prepaid Insurance}&\text{4,500}\\ \text{Supplies}&\text{2,600}\\ \text{Land}&\text{20,000}\\ \text{Buildings}&\text{120,000}\\ \text{Equipment}&\text{16,000}\\ \text{Accounts Payable}&&\text{\$\hspace{15pt}4,500}\\ \text{Unearned Rent Revenue}&&\text{4,600}\\ \text{Mortgage Payable}&&\text{60,000}\\ \text{Common Stock}&&\text{91,000}\\ \text{Retained Earnings}&&\text{9,000}\\ \text{Dividends}&\text{5,000}\\ \text{Rent Revenue}&&\text{76,200}\\ \text{Salaries and Wages Expense}&\text{44,800}\\ \text{Utilities Expenses}&\text{9,200}\\ \text{Maintenance and Repairs Expense}&\text{\underline{\hspace{20pt}3,600}}&\text{\underline{\hspace{43pt}}}\\ \text{}&\underline{\underline{\$\hspace{5pt}\text{245,300}}}&\underline{\underline{\$\hspace{5pt}\text{245,300}}}\\ \end{array}$$

1. The balance in prepaid insurance is a one-year premium paid on June 1, 2017.
2. An inventory count on August 31 shows $450 of supplies on hand.
3. Annual depreciation rates are buildings (4%) and equipment (10%). Salvage value is estimated to be 10% of cost.
4. Unearned Rent Revenue of$3,800 was earned prior to August 31.
5. Salaries of $375 were unpaid at August 31.
6. Rentals of$800 were due from tenants at August 31.
7. The mortgage interest rate is 8% per year.

Instructions

• a. Journalize the adjusting entries on August 31 for the 3-month period June 1–August 31. (Omit explanations.)
• b. Prepare an adjusted trial balance on August 31.

Kellogg Company has its headquarters in Battle Creek, Michigan. The company manufactures and sells ready-to-eat breakfast cereals and convenience foods including cookies, toaster pastries, and cereal bars.

Selected data from Kellogg Company's recent annual report follows (dollar amounts in millions).

$$\begin{array}{lccccc} \text{}&&\underline{\hspace{10pt}\text{Current Year}\hspace{10pt}}&\hspace{10pt}&\underline{\hspace{10pt}\text{Prior Year}\hspace{10pt}}&&\underline{\hspace{10pt}\text{2 Years Ago}\hspace{10pt}}&\hspace{10pt}\\ \text{Sales}&&\$14,580&\hspace{10pt}&\text{\$14,792}&&\$14,197\\ \text{Gross profit \\\%}&&34.73&&\text{41.26}&&36.28\\ \text{Operating profit}&&1,024&&\text{2,837}&&1,562\\ \text{Net cash flow less capital expenditures}&&1,211&&\text{1,170}&&1,225\\ \text{Net earnings}&&633&&\text{1,808}&&961\\ \end{array}$$

In its annual reports, Kellogg Company has indicated that it plans to achieve sustainability of its operating results with operating principles that emphasize profit-rich, sustainable sales growth, as well as cash flow and return on invested capital. Kellogg believes its steady earnings growth, strong cash flow, and continued investment during a multi-year period demonstrates the strength and flexibility of its business model.

Instructions

a. Compute the percentage change in sales, operating profit, net cash flow less capital expenditures, and net earnings from year to year for the years presented.

b. Evaluate Kellogg's performance. Which trend seems most favorable? Which trend seems least favorable? What are the implications of these trends for Kellogg's sustainable performance objectives? Explain.

The following trial balance of Blues Traveler Corporation does not balance.

$$\begin{array}{c} \textbf{BLUES TRAVELER CORPORATION}\\ \textbf{TRIAL BALANCE}\\ \textbf{APRIL 30, 2017} \end{array}$$

$$\begin{array}{lrr} \\\hline{\text{}}&\text{Debit }&\text{Credit}\\\hline \text{Cash}&\text{\$\hspace{10pt}5,912}\\ \text{Accounts Receivable}&\text{5,240}\\ \text{Supplies}&\text{2,967}\\ \text{Equipment}&\text{6,100}\\ \text{Accounts Payable}&&\text{\$\hspace{10pt}7,044}\\ \text{Common Stock}&&\text{8,000}\\ \text{Retained Earnings}&&\text{2,000}\\ \text{Service Revenue}&&\text{5,200}\\ \text{Office Expense}&\text{\underline{\hspace{15pt}4,320}}&\text{\underline{\hspace{38pt}}}\\ \text{}&\underline{\underline{\$\hspace{5pt}\text{24,539}}}&\underline{\underline{\$\hspace{5pt}\text{22,244}}}\\ \end{array}$$

An examination of the ledger shows these errors.

1. Cash received from a customer on account was recorded (both debit and credit) as $1,380 instead of$1,830.
2. The purchase on account of a computer costing $3,200 was recorded as a debit to Office Expense and a credit to Accounts Payable.
3. Services were performed on account for a client,$2,250, for which Accounts Receivable was debited $2,250 and Service Revenue was credited$225.
4. A payment of $95 for telephone charges was entered as a debit to Office Expense and a debit to Cash.
5. The Service Revenue account was totaled at$5,200 instead of $5,280.

From this information prepare a corrected trial balance.

Included in Metlock Company’s December 31 trial balance is a note receivable of $9,600. The note is a 4-month, 10% note dated October 1. Prepare Metlock’s December 31 adjusting entry to record$240 of accrued interest, and the February 1 journal entry to record receipt of $9,920 from the borrower.

The following trial balance of Blues Traveler Corporation does not balance.

$$\begin{array}{ c } \hspace{15pt}\textbf{Blues Traveler Corporation}&\\ \hspace{15pt}\textbf{Trial Balance}&\\ \hspace{15pt}\textbf{April 30, 2020} \end{array}\\$$

$$\begin{array} {lrr}\hline \textbf{}&\textbf{Debit}&\textbf{Credit}\\ \hline \text{Cash}\hspace{40pt}& \text{\$5,912}&\\ \text{Accounts Receivable}\hspace{52pt} & \text{5,240} &\\ \text{Supplies}\hspace{40pt}& \text{2,967}&\\ \text{Equipment}\hspace{52pt}& \text{6,100} &\\ \text{Accounts Payable}\hspace{65pt} && \text{\$7,044}&\\ \text{Common Stock}\hspace{60pt}&& \text{8,000}&\\ \text{Retained Earnings}\hspace{60pt}&& \text{2,000}&\\ \text{Service Revenue}\hspace{71pt}&&\ \text{5,200}&\\ \text{Office Expense}\hspace{50pt}&\ \text{4,320}&\\ \hline \textbf{Total}\hspace{100pt}& \textbf{\$24,539} &\ \textbf{\$22,244} \\\hline \hline \end{array}$$

An examination of the ledger shows these errors.

1. Cash received from a customer on account was recorded (both debit and credit) as $1,380 instead of$1,830.

2. The purchase on account of a computer costing $3,200 was recorded as a debit to Office Expense and a credit to Accounts Payable.

3. Services were performed on account for a client,$2,250, for which Accounts Receivable was debited $2,250 and Service Revenue was credited$225.

4. A payment of $95 for telephone charges was entered as a debit to Office Expense and a debit to Cash.

5. The Service Revenue account was totaled at$5,200 instead of $5,280.

From this information prepare a corrected trial balance.

On July 1, 2012, Crowe Co. pays $15,000 to Zubin Insurance Co. for a 3-year insurance policy. Both companies have fiscal years ending December 31. For Crowe Co., journalize the entry on July 1 and the adjusting entry on December 31.

A review of the ledger of Baylor Company at December 31, 2017, produces the following data pertaining to the preparation of annual adjusting entries.

1. Salaries and Wages Payable $0. There are eight employees. Salaries and wages are paid every Friday for the current week. Five employees receive$700 each per week, and three employees earn $600 each per week. December 31 is a Tuesday. Employees do not work weekends. All employees worked the last 2 days of December.

2. Unearned Rent Revenue$429,000. The company began subleasing office space in its new building on November 1. Each tenant is required to make a $5,000 security deposit that is not refundable until occupancy is terminated. At December 31, the company had the following rental contracts that are paid in full for the entire term of the lease.

$$\begin{array}{lccc} \text{\underline{Date}}&\text{\underline{Term (in months)}}&\text{\underline{Monthly Rent}}&\text{\underline{Number of Leases}}\\ \text{Nov. 1}&\text{6}&\text{\$\hspace{5pt}6,000}&\text{5}\\ \text{Dec. 1}&\text{6}&\text{\hspace{10pt}8,500}&\text{4}\\ \end{array}$$

3. Prepaid Advertising $13,200. This balance consists of payments on two advertising contracts. The contracts provide for monthly advertising in two trade magazines. The terms of the contracts are as shown below.

$$\begin{array}{lccc} \text{\underline{Contract}}&\text{\underline{Date}}&\text{\underline{Amount}}&\text{\underline{Number of Magazine Issues}}\\ \text{A650 }&\text{May 1}&\text{\$\hspace{5pt}6,000}&\text{12}\\ \text{B974}&\text{Oct. 1}&\text{\hspace{10pt}7,200}&\text{24}\\ \end{array}$$

The first advertisement runs in the month in which the contract is signed.

4. Notes Payable $60,000. This balance consists of a note for one year at an annual interest rate of 12%, dated June 1.

Prepare the adjusting entries at December 31, 2017. (Show all computations).

A review of the ledger of Baylor Company at December 31, 2012, produces the following data pertaining to the preparation of annual adjusting entries.

1. Salaries and Wages Payable $0. There are eight employees. Salaries and wages are paid every Friday for the current week. Five employees receive$700 each per week, and three employees earn $600 each per week. December 31 is a Tuesday. Employees do not work weekends. All employees worked the last 2 days of December.

2. Unearned Rent Revenue$429,000. The company began subleasing office space in its new building on November 1. Each tenant is required to make a $5,000 security deposit that is not refundable until occupancy is terminated. At December 31, the company had the following rental contracts that are paid in full for the entire term of the lease.

$$\begin{array}{cccc} \textbf{Date} & \textbf{Term (in months)} & \textbf{Monthly Rent} & \textbf{Number of Leases}\\ \\ \text{Nov. 1} & 6 & \$6,000 & 5\\ \text{Dec. 1} & 6 & \hspace{5pt}8,500 & 4 \end{array}$$

3. Prepaid Advertising $13,200. This balance consists of payments on two advertising contracts. The contracts provide for monthly advertising in two trade magazines. The terms of the contracts are as shown below.

$$\begin{array}{cccc} \textbf{Contract} & \textbf{Date} & \textbf{Amount} & \textbf{Number of Magazine Issues}\\ \\ \text{A650} & \text{May 1} & \$6,000 & 12\\ \text{B974} & \text{Oct. 1} & \text{\hspace{7pt}7,200} & 24\\ \end{array}$$

The first advertisement runs in the month in which the contract is signed.

4. Notes Payable $60,000. This balance consists of a note for one year at an annual interest rate of 12%, dated June 1.

Instructions

Prepare the adjusting entries at December 31, 2012. (Show all computations).

On July 1, 2012, Crowe Co. pays $15,000 to Zubin Insurance Co. for a 3-year insurance policy. Both companies have fiscal years ending December 31. For Crowe Co., journalize the entry on July 1 and the adjusting entry on December 31.

Jurassic Park Co. prepares monthly financial statements from a worksheet. Selected portions of the January worksheet showed the following data.

During February, no events occurred that affected these accounts. But at the end of February, the following information was available.

$$\begin{array} {lrrrrr} \text{(a) Supplies on hand}& \hspace{10pt}\text{\$715}&\\ \text{(b) Monthly depreciation}& \hspace{10pt}\text{\$257}&\\ \text{(c) Accrued interest}& \text{\$50}&\\ \end{array}$$

Reproduce the data that would appear in the February worksheet, and indicate the amounts that would be shown in the February income statement.

The adjusted trial balance for Ed Bradley Co. is presented in the following worksheet for the month ended April 30, 2020.

Complete the worksheet and prepare a classified balance sheet.

Letterman Co. prepares monthly financial statements from a worksheet. Selected portions of the January worksheet showed the following data.

$$\begin{array}{l} \hspace{110pt}\textbf{LETTERMAN CO.}\\ \hspace{100pt}\textbf{Worksheet (PARTIAL)}\\ \hspace{70pt}\textbf{For The Month Ended January 31, 2012}\\ \end{array}$$

$$\begin{array}{l} \hspace{205pt}\textbf{Trial} & \hspace{20pt}\textbf{Adjustments} & \hspace{20pt}\textbf{Adjusted Trial}\\ \hspace{200pt}\textbf{Balance} && \hspace{20pt} \textbf{Balance}\\ \end{array}$$

$$\begin{array}{lrrllrrr} \textbf{Accounts} & \textbf{Debit} & \textbf{Credit} & \textbf{Debit} & \textbf{Credit} & \textbf{Debit} & \textbf{Credit}\\ \\ \text{Supplies} & 3,256 &&& \text{(a) 1,500} & 1,756\\ \text{Accumulated Depreciation—Equipment} && 7,710 && \text{(b) 257} && 7,967\\ \text{Interest Payable} && 100 && \text{(c) 50} && 150\\ \text{Supplies Expense} &&& \text{(a) 1,500} && 1,500\\ \text{Depreciation Expense} &&& \text{(b) 257} && 257\\ \text{Interest Expense} &&& \text{(c ) 50} && 50\\ \end{array}$$

During February no events occurred that affected these accounts, but at the end of February the following information was available.

$$\begin{array}{lr} \text{(a) Supplies on hand} & \$\hspace{8pt}55\\ \text{(b) Monthly depreciation} & 257\\ \text{(c) Accrued interest} & 50\\ \end{array}$$

Instructions

Reproduce the data that would appear in the February worksheet, and indicate the amounts that would be shown in the February income statement.

On July 1, 2017, Crowe Co. pays $15,000 to Zubin Insurance Co. for a 3-year insurance policy. Both companies have fiscal years ending December 31. For Crowe Co., journalize the entry on July 1 and the adjusting entry on December 31.