(a) HERCULES POIROT, P.I.

, SA
Worksheet
For the Quarter Ended March 31, 2017

Statement of
Adjusted Income Financial

Account Titles Trial BalanceDr. Adjustments Trial BalanceDr. Statement Position Dr.

SOL UTIONS TO PROBLEMS

Cr. Dr. Cr. Cr. Dr. Cr. 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

PROBL EM 4-1A
Equipment 15,000 15,000 15,000 Notes Payable 10,000 10,000 10 ,000
7,350
Accounts Payable 7,350 7,350 14 ,000
Share Capital—Ordinary 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
Depreciation—Equipment (b) 680 680 680
Interest Expense
(c) 300 300 300
Interest Payable
(c) 300 300 300
Insurance Expense
Totals (d) 600 600 600
11,280 36,310
Net Income 3,410 3,410 43,610 43,610 7,300 32,330
Totals 3,980 3,980
11,280 11,280 36,310 36,310
Accumulated
Key: (a) Supplies Used; (b) Depreciation Expensed; (c) Accrued Interest on note; (d) Insurance Expired; (e) Service Revenue
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
 4-47

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

4-48

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
4-49