Page 187 - Accounting Principles (A Business Perspective)

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Salaries Expense 321,600
Travel Expense 96,480
Miscellaneous Expense 18,720
$ 882,640 $ 882,640

The prepaid rent is for the period 2010 July 1, to 2011 June 30.
The equipment has an expected life of 10 years with no salvage value.
Accrued salaries are USD 11,520.
Travel expenses accrued but unreimbursed to sales staff at December 31 were USD 17,280
a. Prepare a 12-column work sheet for the year ended 2010 December 31. You need not include account numbers
or explanations of adjustments.
b. Prepare adjusting journal entries.

c. Prepare closing journal entries.
Problem D The following trial balance and additional data are for South Sea Tours, Inc.:
SOUTH SEA TOURS, INC.
Trial Balance
2010 December 31
Debits Credits
Cash $ 109,050
Accounts Receivable 133,750
Prepaid Insurance 4,350
Prepaid Advertising 18,000
Notes Receivable 11,250
Land 90,000
Buildings 165,000
Accumulated Depreciation—Buildings $ 49,500
Office Equipment 83,400
Accumulated Depreciation—Office Equipment 16,680
Accounts Payable 56,850
Notes Payable 75,000
Capital Stock 240,000
Retained Earnings, 2010 January 1 47,820
Dividends 30,000
Service Revenue 368,350
Salaries Expense 96,000
Travel Expense 111,000
Interest Revenue 600
Interest Expense 3,000
$ 854,800 $ 854,800
The company consistently followed the policy of initially debiting all prepaid items to asset accounts.
The buildings have an expected life of 50 years with no salvage value.
The office equipment has an expected life of 10 years with no salvage value.

Accrued interest on notes receivable is USD 450.
Accrued interest on the notes payable is USD 1,000.
Accrued salaries are USD 2,100.
Expired prepaid insurance is USD 3,750.

Accounting Principles: A Business Perspective 188 A Global Text