MODULE 4: Learning Activities

A.
JOURNAL ENTRY T-ACCOUNTS
Date Particulars Debit Credit Prepaid Insurance Insurance Expense
3/1/2013 Prepaid Insurance 54,000.00 54,000.00 22,500.00 22,500.00
Cash 54,000.00 31,500.00 22,500.00
Payment for 2years Insurance Premium

ADJUSTING ENTRY FOR DEC. 31 *Asset Method

12/31/2013 Insurance Expense 22,500.00
Prepaid Insurance 22,500.00
To recognized the expired portion of the insurance premium

B.
JOURNAL ENTRY
12/1/2013 Cash 120,000.00 Unearned Service Revenue Service Revenue
Unearned Service Revenue 120,000.00 0.00 120,000.00 0.00
Payment for Professional Service for 1st quarter of 2014 120,000.00 0.00
ADJUSTING ENTRY FOR DEC. 31 *Liability Method
12/31/2013 NO ENTRY

C.
JOURNAL ENTRY
Office Supplies 6,500.00 Office Supplies Supplies Expense
Cash 6,500.00 6,500.00 3,300.00 3,300.00
Purchase of Office Supplies 3,200.00 3,300.00
ADJUSTING ENTRY FOR DEC. 31 *Asset Method
Supplies Expenses 3,300.00
Office Supplies 3,300.00
To record used supplies.
 D.
JOURNAL ENTRY
Equipment 100,000.00
Cash 100,000.00 Equipment Depreciation Expense
To recognized purchase of equipment 100,000.00 0.00 4,166.66
ADJUSTING ENTRY FOR DEC. 31 *Depreciation 100,000.00 4,166.66
Depreciation Expense 4,166.66
Accumulated Depreciation - DE 4,166.66
To record depreciation for 5 months. Acc. Depreciation
4,166.66
4,166.66

E.
JOURNAL ENTRY
Cash 150,000.00
Note Payable 150,000.00 Note Payable Interest Expense
To record liability 150,000.00 2,500.00
ADJUSTING ENTRY FOR DEC. 31 *Depreciation 150,000.00 2,500.00
Interest Expense 2,500.00
Accrued Interest 2,500.00
To regonized Accrued Interest for 2months Accrued Interest
2,500.00
2,500.00
TEST YOUR LEARNING
A. ADJUSTING ENTRY B. ADJUSTED TRIAL BALANCE
1 Supplies Expense 12,000.00
Office Supplies 12,000.00 Cash 120,000.00
# Accounts Receivable 60,000.00
2 Insurance Expense 24,000.00 Allowance for Uncollectible Account 1,200.00
Prepaid Insurance 24,000.00 Office Supplies 38,000.00
# Office Equipment 240,000.00
3 Depreciation Expense - Office Equipment 69,999.99 Accu. Depreciation - Office Equipment 69,999.99
Accu. Depreciation - Office Equipment 69,999.99 Furniture and Fixtures 40,000.00
# Accu. Depreciation - F&F 2,999.99
4 Depreciation Expense - F&F 2,999.99 land 800,000.00
Accu. Depreciation - F&F 2,999.99 Building 1,300,000.00
# Accu. Depreciation - Building 45,000.00
5 Depreciation Expense - Building 45,000.00 Accounts Payable 168,000.00
Accu. Depreciation - Building 45,000.00 Loans Payable 500,000.00
# Unearned Professional Fee 35,000.00
6 Professional Fees 35,000.00 DBS, Capital 1,800,000.00
Unearned Professional Fees 35,000.00 Professional Fees 505,000.00
# Uncollectible Account Expense 1,200.00
7 Uncollectible Account Expense 1,200.00 Depreciation Expense - Office Equipment 69,999.99
Allowance for Uncollectible Account 1,200.00 Depreciation Expense - F&F 2,999.99
# Depreciation Expense - Building 45,000.00
Insurance Expense 24,000.00
Supplies Expense 12,000.00
Salaries Expense 250,000.00
Advertising Expense 36,000.00
Transporation Expense 10,000.00
Utilities Expense 70,000.00
Miscellaneous Expense 8,000.00
TOTAL 3,127,199.98 3,127,199.98
 INCOME STATEMENT BALANCE SHEET
ASSET
Professional Fees 505,000.00 Cash 120,000.00
GROSS PROFIT 505,000.00 Accounts Receivable 60,000.00
Uncollectible Account Expense 1,200.00 Allowance for Uncollectible Account (1,200.00)
Depreciation Expense - Office Equipment 69,999.99 Office Supplies 38,000.00
Depreciation Expense - F&F 2,999.99 Office Equipment 240,000.00
Depreciation Expense - Building 45,000.00 Accu. Depreciation - Office Equipment (69,999.99)
Insurance Expense 24,000.00 Furniture and Fixtures 40,000.00
Supplies Expense 12,000.00 Accu. Depreciation - F&F (2,999.99)
Salaries Expense 250,000.00 land 800,000.00
Advertising Expense 36,000.00 Building 1,300,000.00
Transporation Expense 10,000.00 Accu. Depreciation - Building (45,000.00)
Utilities Expense 70,000.00 2,478,800.02
Miscellaneous Expense 8,000.00 529,199.98
NET LOSS -24,199.98 LIABILITIES AND EQUITY
Accounts Payable 168,000.00
STATEMENT OF CHANGES IN EQUITY Loans Payable 500,000.00
Unearned Professional Fee 35,000.00
DBS, Capital Beg. 1,800,000.00 DBS, Capital 1,775,800.02
Add: Net income 2,478,800.02
Total 1,800,000.00
Less: Withdrawal
Net Loss -24,199.98
DBS, Capital END 1,775,800.02