Arnez Company's Annual Accounting Period

1.

Following are 2 income statements for Alexis Co. for the year concluded December 31. The left column is prepared before any adjusting entries are recorded, and the right column includes the furnishings of adjusting entries. The visitor records cash receipts and payments related to unearned and prepaid items in residuum canvas accounts.

ALEXIS CO. Income Statements For Yr Concluded Dec 31
	Unadjusted		Adjusted
Revenues
Fees earned	$	18,000	$	25,000
Commissions earned		36,500		36,500
Full revenues	$	54,500		61,500
Expenses
Depreciation expense—Computers		0		1,600
Depreciation expense—Office furniture		0		i,850
Salaries expense		thirteen,500		15,750
Insurance expense		0		1,400
Rent expense		three,800		3,800
Office supplies expense		0		580
Advertising expense		two,500		2,500
Utilities expense		1,245		1,335
Total expenses		21,045		28,815
Net income	$	33,455	$	32,685

Analyze the statements and prepare the eight adjusting entries that likely were recorded. ( Notation:  30% of the $7,000 adjustment for Fees Earned has been earned but not billed, and the other 70% has been earned by performing services that were paid for in advance.)

Date	General Journal	Debit	Credit
Dec 31	Accounts receivable	2,100
	Fees earned		2,100
Dec 31	Unearned fees	4,900
	Fees earned		4,900
Dec 31	Depreciation expense—Computers	1,600
	Accumulated depreciation—Computers		one,600
Dec 31	Depreciation expense—Office furniture	one,850
	Accumulated depreciation—Office piece of furniture		1,850
December 31	Salaries expense	ii,250
	Salaries payable		ii,250
Dec 31	Insurance expense	one,400
	Prepaid insurance		1,400
December 31	Office supplies expense	580
	Office supplies		580
Dec 31	Utilities expense	xc
	Utilities payable		90

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2.

Utilise the following information to compute profit margin for each separate company a  through eastward . (Round your answers to one decimal identify.)

	Cyberspace Income Net Sales Profit Margin (%) a. $iv,361 $44,500 9.8% b. 97,706 398,800 24.5% c. 111,281 257,000 43.3% d. 65,646 i,458,800 4.5% e. 80,132 435,500 xviii.4%

Which of the five companies is the most profitable according to the profit margin ratio?
Company c

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three.

Following are Nintendo's acquirement and expense accounts for a contempo calendar year.

Cyberspace sales	¥	1,014,345
Cost of sales		626,379
Advert expense		96,359
Other expense, net		213,986

Gear up the company's closing entries for its revenues and its expenses.

Date	General Periodical	Debit	Credit
Dec 31	Net sales	1,014,345
	Income summary		1,014,345
Dec 31	Income summary	936,724
	Price of sales		626,379
	Advertising expense		96,359
	Other expense, net		213,986

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4.

1.	Compute the current ratio in each of the separate cases. (Round your answers to two decimal places.)

	Current Assets Current Liabilities Current Ratio Case 1 $79,040 $32,000 ii.47 Instance 2 104,880 76,000 i.38 Instance three 45,080 49,000 0.92 Case 4 85,680 81,600 1.05 Case 5 61,000 100,000 0.61

two.	Place the company instance with the strongest liquidity position. (These cases correspond competing companies in the same manufacture.) Example i

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5.

Arnez Co. follows the practice of recording prepaid expenses and unearned revenues in residue sheet accounts. The company's annual accounting menstruation ends on December 31, 2015. The following information concerns the adjusting entries to be recorded every bit of that date.

a.	The Office Supplies account started the yr with a $four,000 balance. During 2015, the company purchased supplies for $13,400, which was added to the Office Supplies account. The inventory of supplies bachelor at Dec 31, 2015, totaled $2,554.

b.	An analysis of the company'due south insurance policies provided the following facts.

Policy	Engagement of Buy	Months of Coverage	Toll
A	April one, 2013	24	$	14,400
B	Apr 1, 2014	36		12,960
C	Baronial ane, 2015	12		2,400

The total premium for each policy was paid in full (for all months) at the purchase engagement, and the Prepaid Insurance business relationship was debited for the full cost. (Yr-end adjusting entries for Prepaid Insurance were properly recorded in all prior years.)

c.

The company has fifteen employees, who earn a total of $one,960 in salaries each working mean solar day. They are paid each Monday for their piece of work in the five-day workweek ending on the previous Friday. Assume that December 31, 2015, is a Tuesday, and all 15 employees worked the start two days of that week. Because New year'southward Day is a paid holiday, they will exist paid salaries for five full days on Monday, January half-dozen, 2016.

d.	The visitor purchased a building on January 1, 2015. It cost $960,000 and is expected to take a $45,000 salvage value at the terminate of its predicted 30-year life. Almanac depreciation is $30,500.

east.

Since the visitor is not large enough to occupy the unabridged building it owns, it rented space to a tenant at $three,000 per month, starting on November 1, 2015. The rent was paid on fourth dimension on November 1, and the corporeality received was credited to the Rent Earned business relationship. However, the tenant has not paid the December hire. The company has worked out an agreement with the tenant, who has promised to pay both December and Jan rent in total on January fifteen. The tenant has agreed non to fall behind again.

f.	On November 1, the company rented space to another tenant for $2,800 per calendar month. The tenant paid five months' rent in advance on that date. The payment was recorded with a credit to the Unearned Rent account.

Required:
i.	Employ the information to ready adjusting entries equally of Dec 31, 2015.

Transaction	General Periodical	Debit	Credit
a.	Function supplies expense	14,846
	Office supplies		fourteen,846
b.	Insurance expense	7,120
	Prepaid insurance		7,120
c.	Salaries expense	3,920
	Salaries payable		iii,920
d.	Depreciation expense—Building	30,500
	Accumulated depreciation—Building		30,500
eastward.	Rent receivable	iii,000
	Rent earned		3,000
f.	Unearned rent	5,600
	Rent earned		5,600

2.	Prepare journal entries to record the start subsequent cash transaction in 2016 for partsc ande.

Date	Full general Journal	Debit	Credit
Jan 06	Salaries payable	three,920
	Salaries expense	5,880
	Cash		9,800
Jan 15	Cash	six,000
	Rent receivable		3,000
	Hire earned		3,000

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Questions 6-8
[The following information applies to the questions displayed below.]

Wells Technical Institute (WTI), a school owned by Tristana Wells, provides training to individuals who pay tuition directly to the school. WTI besides offers training to groups in off-site locations. Its unadjusted trial balance equally of December 31, 2015, follows. WTI initially records prepaid expenses and unearned revenues in remainder sheet accounts. Descriptions of items a  through h  that require adjusting entries on December 31, 2015, follow.

Additional Information Items

a.	An analysis of WTI's insurance policies shows that $2,400 of coverage has expired.
b.	An inventory count shows that teaching supplies costing $2,800 are bachelor at year-end 2015.
c.	Annual depreciation on the equipment is $13,200.
d.	Almanac depreciation on the professional library is $7,200.
e.	On Nov 1, WTI agreed to exercise a special six-month grade (starting immediately) for a client. The contract calls for a monthly fee of $two,500, and the client paid the first five months' fees in advance. When the cash was received, the Unearned Training Fees account was credited. The fee for the sixth month will be recorded when it is collected in 2016.
f.	On Oct 15, WTI agreed to teach a four-calendar month class (beginning immediately) for an private for $three,000 tuition per calendar month payable at the cease of the class. The course started on October 15, but no payment has yet been received. (WTI's accruals are applied to the nearest half-month; for case, October recognizes one-half month accrual.)
one thousand.	WTI's ii employees are paid weekly. As of the finish of the twelvemonth, two days' salaries accept accrued at the rate of $100 per day for each employee.
h.	The residual in the Prepaid Rent account represents rent for December.

WELLS TECHNICAL INSTITUTE Unadjusted Trial Balance Dec 31, 2015
	Debit		Credit
Cash	$	34,000
Accounts receivable		0
Teaching supplies		viii,000
Prepaid insurance		12,000
Prepaid rent		3,000
Professional person library		35,000
Accumulated depreciation—Professional library			$	ten,000
Equipment		lxxx,000
Accumulated depreciation—Equipment				xv,000
Accounts payable				26,000
Salaries payable				0
Unearned training fees				12,500
Mutual stock				10,000
Retained earnings				eighty,000
Dividends		50,000
Tuition fees earned				123,900
Training fees earned				twoscore,000
Depreciation expense—Professional person library		0
Depreciation expense—Equipment		0
Salaries expense		50,000
Insurance expense		0
Rent expense		33,000
Teaching supplies expense		0
Advertising expense		half dozen,000
Utilities expense		6,400
Totals	$	317,400	$	317,400

6.

Required:
1.	Prepare the necessary adjusting journal entries for itemsa throughh. Presume that adjusting entries are made merely at year-stop.

Transaction	General Journal	Debit	Credit
a.	Insurance expense	2,400
	Prepaid insurance		ii,400
b.	Teaching supplies expense	v,200
	Instruction supplies		5,200
c.	Depreciation expense—Equipment	xiii,200
	Accumulated depreciation—Equipment		13,200
d.	Depreciation expense—Professional person library	7,200
	Accumulated depreciation—Professional library		seven,200
east.	Unearned training fees	v,000
	Training fees earned		5,000
f.	Accounts receivable	vii,500
	Tuition fees earned		vii,500
g.	Salaries expense	400
	Salaries payable		400
h.	Rent expense	iii,000
	Prepaid rent		3,000

2.one

Post the balance from the unadjusted trial rest and the adjusting entries in to the T-accounts.

Cash Equipment Unadj. Bal. 34,000 Unadj. Bal. lxxx,000 Adj. Bal. 34,000 Adj. Bal. lxxx,000 Accounts Receivable Accumulated Depreciation—Equipment Unadj. Bal. 0 Unadj. Bal. xv,000 f 7,500 c 13,200 Adj. Bal. vii,500 Adj. Bal. 28,200 Education Supplies Accounts Payable Unadj. Bal. 8,000 0 Unadj. Bal. 26,000 0 b 5,200 0 0 0 0 Adj. Bal. 2,800 Adj. Bal. 26,000 Prepaid Insurance Salaries Payable Unadj. Bal. 12,000 Unadj. Bal. 0 a 2,400 grand 400 Adj. Bal. 9,600 Adj. Bal. 400 Prepaid Hire Unearned Training Fees Unadj. Bal. 3,000 Unadj. Bal. 12,500 h 3,000 east 5,000 Adj. Bal. 0 Adj. Bal. seven,500 Professional Library Common Stock Unadj. Bal. 35,000 Unadj. Bal. ten,000 Adj. Bal. 35,000 Adj. Bal. 10,000 Accumulated Depreciation—Professional Library Dividends Unadj. Bal. x,000 Unadj. Bal. 50,000 d 7,200 Adj. Bal. 17,200 Adj. Bal. 50,000 Tuition Fees Earned Insurance Expense Unadj. Bal. 123,900 Unadj. Bal. 0 f seven,500 a ii,400 Adj. Bal. 131,400 Adj. Bal. 2,400 Preparation Fees Earned Hire Expense Unadj. Bal. 0 40,000 Unadj. Bal. 33,000 0 due east v,000 h 3,000 Adj. Bal. 45,000 Adj. Bal. 36,000 Depreciation Expense—Professional Library Teaching Supplies Expense Unadj. Bal. 0 Unadj. Bal. 0 d 7,200 b 5,200 Adj. Bal. seven,200 Adj. Bal. v,200 Depreciation Expense—Equipment Ad Expense Unadj. Bal. 0 Unadj. Bal. six,000 c 13,200 Adj. Bal. 13,200 Adj. Bal. half dozen,000 Salaries Expense Utilities Expense Unadj. Bal. 50,000 Unadj. Bal. 6,400 g 400 Adj. Bal. fifty,400 Adj. Bal. half dozen,400 Retained Earnings Unadj. Bal. 80,000 Adj. Bal. 80,000

2.two

Prepare an adjusted trial balance.

WELLS TECHNICAL INSTITUTE Adjusted Trial Residuum December 31, 2015 Debit Credit Cash $34,000 Accounts receivable 7,500 Pedagogy supplies 2,800 Prepaid insurance 9,600 Prepaid rent 0 Professional library 35,000 Accumulated depreciation—Professional library 17,200 Equipment fourscore,000 Accumulated depreciation—Equipment 28,200 Accounts payable 26,000 Salaries payable 400 Unearned preparation fees 7,500 Mutual stock 10,000 Retained earnings eighty,000 Dividends 50,000 Tuition fees earned 131,400 Training fees earned 45,000 Depreciation expense—Professional library vii,200 Depreciation expense—Equipment 13,200 Salaries expense 50,400 Insurance expense ii,400 Rent expense 36,000 Educational activity supplies expense 5,200 Advertising expense six,000 Utilities expense half dozen,400 Totals $345,700 $345,700

viii.

3.1	Set up Wells Technical Institute's income statement for the twelvemonth 2015.

WELLS TECHNICAL INSTITUTE Income Statement For Twelvemonth Concluded December 31, 2015 Revenues Training fees earned $45,000 Tuition fees earned 131,400 Total revenues $176,400 Expenses Depreciation expense—Equipment xiii,200 Salaries expense 50,400 Insurance expense 2,400 Rent expense 36,000 Teaching supplies expense five,200 Utilities expense 6,400 Advertising expense six,000 Depreciation expense—Professional library vii,200 Total expenses 126,800 Cyberspace income $49,600

3.2	Ready Wells Technical Establish's statement of retained earnings for the yr 2015.

	WELLS TECHNICAL INSTITUTE Statement of Retained Earnings For Year Ended Dec 31, 2015 Retained earnings, Dec 31, 2014 $fourscore,000 Add: Net income 49,600 129,600 Less: Dividends 50,000 Retained earnings, December 31, 2015 $79,600

3.three

Prepare Wells Technical Constitute's residue sail as of December 31, 2015.

WELLS TECHNICAL Institute Residue Sheet December 31, 2015 Assets Cash $34,000 Accounts receivable seven,500 Teaching supplies 2,800 Prepaid insurance 9,600 Professional library $35,000 Accumulated depreciation—Professional library (17,200) 17,800 Equipment lxxx,000 Accumulated depreciation—Equipment (28,200) 51,800 Total avails $123,500 Liabilities Accounts payable $26,000 Salaries payable 400 Unearned training fees 7,500 Total liabilities 33,900 Equity Common stock x,000 Retained earnings 79,600 Full equity 89,600 Total liabilities and equity $123,500

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nine.

a.	Depreciation on the company'southward equipment for 2015 is computed to be $18,000.
b.	The Prepaid Insurance account had a $6,000 debit remainder at Dec 31, 2015, before adjusting for the costs of whatever expired coverage. An analysis of the visitor's insurance policies showed that $1,100 of unexpired insurance coverage remains.
c.	The Part Supplies account had a $700 debit balance on December 31, 2014; and $iii,480 of office supplies were purchased during the yr. The December 31, 2015, concrete count showed $300 of supplies available.
d.	Two-thirds of the work related to $fifteen,000 of cash received in accelerate was performed this period.
e.	The Prepaid Insurance account had a $vi,800 debit balance at December 31, 2015, earlier adjusting for the costs of whatever expired coverage. An analysis of insurance policies showed that $v,800 of coverage had expired.
f.	Wage expenses of $3,200 accept been incurred but are not paid every bit of Dec 31, 2015.

Prepare adjusting journal entries for the year concluded (date of) December 31, 2015, for each of these divide situations. Assume that prepaid expenses are initially recorded in asset accounts. Likewise presume that fees nerveless in advance of piece of work are initially recorded as liabilities.

Transaction	General Journal	Debit	Credit
a.	Depreciation expense—Equipment	18,000
	Accumulated depreciation—Equipment		18,000
b.	Insurance expense	4,900
	Prepaid insurance		iv,900
c.	Role supplies expense	3,880
	Part supplies		3,880
d.	Unearned fee acquirement	x,000
	Fee revenue		ten,000
e.	Insurance expense	v,800
	Prepaid insurance		5,800
f.	Wages expense	iii,200
	Wages payable		3,200

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ten.

The following is the adjusted trial residue of Wilson Trucking Company.

Account Championship	Debit		Credit
Greenbacks	$	8,000
Accounts receivable		17,500
Office supplies		three,000
Trucks		172,000
Accumulated depreciation—Trucks			$	36,000
Land		85,000
Accounts payable				12,000
Interest payable				iv,000
Long-term notes payable				53,000
Common stock				20,000
Retained earnings				155,000
Dividends		20,000
Trucking fees earned				130,000
Depreciation expense—Trucks		23,500
Salaries expense		61,000
Office supplies expense		eight,000
Repairs expense—Trucks		12,000
Totals	$	410,000	$	410,000

The Retained Earnings account balance is $155,000 at December 31, 2014.

(1).	Prepare the income argument for the twelvemonth ended Dec 31, 2015.

	WILSON TRUCKING COMPANY Income Statement For Year Ended December 31, 2015 Revenues Trucking fees earned $130,000 Expenses Repairs expense—Trucks $12,000 Office supplies expense 8,000 Salaries expense 61,000 Depreciation expense—Trucks 23,500 Total expenses 104,500 Cyberspace income $25,500

(2).	Gear up the statement of retained earnings for the yr ended December 31, 2015.

	WILSON TRUCKING Company Statement of Retained Earnings For Year Concluded Dec 31, 2015 Retained earnings, December 31, 2014 $155,000 Add: Net income 25,500 180,500 Less: Dividends 20,000 Retained earnings, December 31, 2015 $160,500

Arnez Company's Annual Accounting Period,

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