(a) HERCULES POIROT, P.I.

, SA
Worksheet
For the Quarter Ended March 31, 2017
Statement of
Adjusted Income Financial
Account Titles Trial Balance Adjustments Trial Balance Statement Position

SOLUTIONS TO PROBLEMS
Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr.
Cash 11,410 11,410 11,410
Accounts Receivable 5,920 (e) 1,080 7,000 7,000
Supplies 1,250 (a) 750 500 500
Prepaid Insurance 2,400 (d) 600 1,800 1,800
Equipment 15,000 15,000 15,000

PROBLEM 4-1A
Notes Payable 10,000 10,000 10,000
Accounts Payable 7,350 7,350 7,350
Share Capital—Ordinary 14,000 14,000 14,000
Dividends 600 600 600
Service Revenue 10,200 (e) 1,080 11,280 11,280
Salaries and Wages
Expense 2,240 2,240 2,240
Travel Expense 1,300 1,300 1,300
Rent Expense 1,200 1,200 1,200
Miscellaneous Expense 230 230 230
Totals 41,550 41,550
Supplies Expense (a) 750 750 750
Depreciation Expense (b) 680 680 680
Accumulated
Depreciation—Equipment (b) 680 680 680
Interest Expense (c) 300 300 300
Interest Payable (c) 300 300 300
Insurance Expense (d) 600 600 600
Totals 3,410 3,410 43,610 43,610 7,300 11,280 36,310 32,330
Net Income 3,980 3,980
Totals 11,280 11,280 36,310 36,310

Key: (a) Supplies Used; (b) Depreciation Expensed; (c) Accrued Interest on note; (d) Insurance Expired; (e) Service Revenue
Earned but unbilled.
PROBLEM 4-1A (Continued)

(b) HERCULES POIROT, P.I., SA

Income Statement
For the Quarter Ended March 31, 2017

Revenues
Service revenue ............................................... 11,280
Expenses
Salaries and wages expense .......................... 2,240
Travel expense ................................................. 1,300
Rent expense ................................................... 1,200
Depreciation expense ..................................... 680
Insurance expense .......................................... 600
Supplies expense ............................................ 750
Interest expense .............................................. 300
Miscellaneous expense ................................... 230
Total expenses ......................................... 7,300
Net income ............................................................... 3,980

HERCULES POIROT, P.I., SA

Retained Earnings Statement
For the Quarter Ended March 31, 2017

Retained Earnings, January 1 ........................................... 0

Add: Net income .............................................................. 3,980
3,980
Less: Dividends ................................................................. 600
Retained Earnings, March 31 ............................................ 3,380

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PROBLEM 4-1A (Continued)

HERCULES POIROT, P.I., SA

Statement of Financial Position
March 31, 2017

Assets
Property, plant, and equipment
Equipment ...................................................... 15,000
Less: Accumulated depreciation—
equipment................................................ 680 14,320
Current assets
Prepaid insurance .......................................... 1,800
Supplies .......................................................... 500
Accounts receivable ...................................... 7,000
Cash................................................................. 11,410 20,710
Total assets ............................................................ 35,030

Equity and Liabilities

Equity
Share capital—ordinary ................................. 14,000
Retained earnings .......................................... 3,380 17,380
Current liabilities
Notes payable ................................................. 10,000
Accounts payable .......................................... 7,350
Interest payable .............................................. 300 17,650
Total equity and liabilities ..................................... 35,030

(c) Mar. 31 Supplies Expense .................................. 750

Supplies .......................................... 750

31 Depreciation Expense ........................... 680

Accumulated Depreciation—
Equipment .................................. 680

31 Interest Expense .................................... 300

Interest Payable ............................. 300

31 Insurance Expense ................................ 600

Prepaid Insurance.......................... 600

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PROBLEM 4-1A (Continued)

Mar. 31 Accounts Receivable ................................. 1,080

Service Revenue ................................ 1,080

(d) Mar. 31 Service Revenue ....................................... 11,280

Income Summary .............................. 11,280

31 Income Summary ...................................... 7,300

Travel Expense .................................. 1,300
Salaries and Wages Expense .......... 2,240
Rent Expense .................................... 1,200
Insurance Expense ........................... 600
Depreciation Expense....................... 680
Supplies Expense ............................. 750
Interest Expense ............................... 300
Miscellaneous Expense .................... 230

31 Income Summary ...................................... 3,980

Retained Earnings............................. 3,980

31 Retained Earnings .................................... 600

Dividends ........................................... 600

LO: 4.1, 4.2, 4.6

Difficulty: Hard
BLOOMCODE: Analysis
AACSB: Analytic

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