The income statement of Gentry's Shoe Repair is as follows:

GENTRY?S SHOE REPAIR

Income Statement

For the Month Ended April 30, 2016

Prince Sultan College for Business - Jeddah PRINCIPLES OF ACCOUNTING I (ACCT111) HOMEWORKS (Spring 2016) Lecturer: Hussain Ali Alattas (Ph - D) INSTRUCTIONS TO CANDIDATES Read each question carefully and answer what is asked You should be answer handwritten for all questions, and written the answers clearly and understandable. Before starting to answers, make sure that it is complete and that there are no Printing defects. This homework consists of three pages. Deadline to submit the homework on Tuesday, May 3, 2016. Write your name, ID and your group in the answers booklet. Please. 1 Answer the following Questions Problem No. 1 (20 minutes) The income statement of Gentry's Shoe Repair is as follows: GENTRY'S SHOE REPAIR Income Statement For the Month Ended April 30, 2016 Revenue Shoe Repair Revenue Expenses Salaries Expense Depreciation Expense Utilities Expense Rent Expense Supplies Expense Total Expenses Net Income $7,500 $3,400 350 400 600 1,050 5,800 $1,700 On April 1, the owner, Lee Gentry, had a capital balance of $12,900. During April, Gentry withdrew $3,000 cash for personal use. Instructions (a) Prepare closing entries at April 30. (b) Determine the balance in L. Gentry, Capital account after the entries have been posted. Problem No. 2 (15 minutes) Welch Company prepares monthly financial statements. Below are listed some selected accounts and their balances in the September 30 trial balance before any adjustments have been made for the month of September. WELCH COMPANY Trial Balance (Selected Accounts) September 30, 2015 Accounts Debit Credit Office Supplies $ 2,700 Prepaid Insurance 4,200 Office Equipment 16,200 Accumulated DepreciationOffice $ 1,000 Equipment Unearned Rent Revenue 1,200 (Note: Debit column does not equal credit column because this is a partial listing of selected account balances) An analysis of the account balances by the company's accountant provided the following additional information: 2 1. A physical count of office supplies revealed $1,000 on hand on September 30. 2. A two-year life insurance policy was purchased on June 1 for $4,800. 3. Office equipment depreciated $6,000 per year. 4. The amount of rent received in advance that remains unearned at September 30 is $500. Instructions Using the above additional information, prepare the adjusting entries that should be made by Welch Company on September 30. Problem No. 3 (10 minutes) Don Harder was reviewing his business activities at the end of the year (2014) and decided to prepare an Owner's Equity Statement. At the beginning of the year his assets were $500,000 and his liabilities were $200,000. At the end of the year the assets had grown to $950,000 but liabilities had also increased to $350,000. The net income for the year was $420,000. Don had withdrawn $120,000 during the year for his personal use. Instructions Prepare an Owner's Equity Statement in good form. Problem No. 4 (15 minutes) At September 1, the balance sheet accounts for Debbie's Restaurant were as follows: Account payable Account Receivable Building Cash Supplies $ 3,800 1,600 68,000 10,000 6,600 Land Debbie Capital Notes Payable Furniture $ 33,000 ?? 48,000 18,700 The following transactions occurred during the next two days: Debbie invested an additional $22,000 cash in the business. The accounts payable were paid in full. (No payment was made on the notes payable.) Instructions Prepare a balance sheet at September 3, 2015. 3