PROBLEM 3-5A

(a), (c) & (e)

Cash No. 101

Date Explanation Ref. Debit Credit Balance
Sept. 1 Balance
4,880
8 J1 1,400 3,480
10 J1 1,200 4,680
12 J1 3,400 8,080
20 J1 4,500 3,580
22 J1 500 3,080
25 J1 1,250 1,830
29 J1 650 2,480

Accounts Receivable No. 112

Date Explanation Ref. Debit Credit Balance
Sept. 1 Balance
3,520
10 J1 1,200 2,320
27 J1 1,500 3,820

Supplies No. 126

Date Explanation Ref. Debit Credit Balance
Sept. 1 Balance
2,000
17 J1 1,200 3,200
30 Adjusting J1 2,000 1,200

Store Equipment No. 153

Date Explanation Ref. Debit Credit Balance
Sept. 1 Balance
15,000
15 J1 3,000 18,000

Copyright © 2011 John Wiley & Sons, Inc. Weygandt, IFRS, 1/e, Solutions Manual (For Instructor Use Only) 3-43
PROBLEM 3-5A (Continued)

Accumulated Depreciation—Equipment No. 154

Date Explanation Ref. Debit Credit Balance
Sept. 1 Balance
1,500
30 Adjusting J1 100 1,600

Accounts Payable No. 201

Date Explanation Ref. Debit Credit Balance
Sept. 1 Balance
3,400
15 J1 3,000 6,400
17 J1 1,200 7,600
20 J1 4,500 3,100

Unearned Service Revenue No. 209

Date Explanation Ref. Debit Credit Balance
Sept. 1 Balance
1,400
29 J1 650 2,050
30 Adjusting J1 1,450 600

Salaries Payable No. 212

Date Explanation Ref. Debit Credit Balance
Sept. 1 Balance
500
8 J1 500 0
30 Adjusting J1 400 400

Share Capital—Ordinary No. 311

Date Explanation Ref. Debit Credit Balance
Sept. 1 Balance
15,000

Retained Earnings No. 320

Date Explanation Ref. Debit Credit Balance
Sept. 1 Balance
3,600

3-44 Copyright © 2011 John Wiley & Sons, Inc. Weygandt, IFRS, 1/e, Solutions Manual (For Instructor Use Only)
PROBLEM 3-5A (Continued)

Service Revenue No. 400

Date Explanation Ref. Debit Credit Balance
Sept. 12 J1 3,400 3,400
27 J1 1,500 4,900
30 Adjusting J1 1,450 6,350

Depreciation Expense No. 615

Date Explanation Ref. Debit Credit Balance
Sept. 30 Adjusting J1 100 100

Supplies Expense No. 631

Date Explanation Ref. Debit Credit Balance
Sept. 30 Adjusting J1 2,000 2,000

Salaries Expense No. 726

Date Explanation Ref. Debit Credit Balance
Sept. 8 J1 900 900
25 J1 1,250 2,150
30 Adjusting J1 400 2,550

Rent Expense No. 729

Date Explanation Ref. Debit Credit Balance
Sept. 22 J1 500 500

Copyright © 2011 John Wiley & Sons, Inc. Weygandt, IFRS, 1/e, Solutions Manual (For Instructor Use Only) 3-45
PROBLEM 3-5A (Continued)

(b)
General Journal J1
Date Account Titles Ref. Debit Credit
Sept. 8 Salaries Payable........................................ 212 500
Salaries Expense ...................................... 726 900
Cash....................................................... 101 1,400

10 Cash .............................................................. 101 1,200

Accounts Receivable....................... 112 1,200

12 Cash .............................................................. 101 3,400

Service Revenue ............................... 400 3,400

15 Store Equipment ....................................... 153 3,000

Accounts Payable............................. 201 3,000

17 Supplies ....................................................... 126 1,200

Accounts Payable............................. 201 1,200

20 Accounts Payable..................................... 201 4,500

Cash ...................................................... 101 4,500

22 Rent Expense ............................................. 729 500

Cash ...................................................... 101 500

25 Salaries Expense ...................................... 726 1,250

Cash ...................................................... 101 1,250

27 Accounts Receivable............................... 112 1,500

Service Revenue ............................... 400 1,500

29 Cash .............................................................. 101 650

Unearned Service Revenue............. 209 650

3-46 Copyright © 2011 John Wiley & Sons, Inc. Weygandt, IFRS, 1/e, Solutions Manual (For Instructor Use Only)
PROBLEM 3-5A (Continued)

(d) & (f) RAND EQUIPMENT REPAIR, INC.

Trial Balances
September 30, 2011

Before After
Adjustment Adjustment
Dr. Cr. Dr. Cr.
Cash .................................................... £ 2,480 £ 2,480
Accounts Receivable..................... 3,820 3,820
Supplies ............................................. 3,200 1,200
Store Equipment ............................. 18,000 18,000
Accumulated Depreciation .......... £ 1,500 £ 1,600
Accounts Payable........................... 3,100 3,100
Unearned Service Revenue ......... 2,050 600
Salaries Payable.............................. –0– 400
Share Capital—Ordinary............... 15,000 15,000
Retained Earnings .......................... 3,600 3,600
Service Revenue ............................. 4,900 6,350
Depreciation Expense ................... 100
Supplies Expense ........................... 2,000
Salaries Expense ............................ 2,150 2,550
Rent Expense ................................... 500 500
£30,150 £30,150 £30,650 £30,650

(e) 1. Sept. 30 Supplies Expense ............................ 631 2,000

Supplies (£3,200 – £1,200) ....... 126 2,000

2. 30 Salaries Expense ............................. 726 400

Salaries Payable........................ 212 400

3. 30 Depreciation Expense .................... 615 100

Accumulated Depreciation—
Equipment .............................. 154 100

4. 30 Unearned Service Revenue .......... 209 1,450

Service Revenue ....................... 400 1,450

Copyright © 2011 John Wiley & Sons, Inc. Weygandt, IFRS, 1/e, Solutions Manual (For Instructor Use Only) 3-47
PROBLEM 3-5A (Continued)

(g) RAND EQUIPMENT REPAIR, INC.

Income Statement
For the Month Ended September 30, 2011

Revenues
Service revenue........................................................... £6,350
Expenses
Salaries expense......................................................... £2,550
Supplies expense ....................................................... 2,000
Rent expense ............................................................... 500
Depreciation expense................................................ 100
Total expenses ................................................... 5,150
Net income............................................................................. £1,200

RAND EQUIPMENT REPAIR, INC.

Retained Earnings Statement
For the Month Ended September 30, 2011

Retained Earnings, September 1..................................................... £3,600

Add: Net income .................................................................................. 1,200
Retained Earnings, September 30 .................................................. £4,800

3-48 Copyright © 2011 John Wiley & Sons, Inc. Weygandt, IFRS, 1/e, Solutions Manual (For Instructor Use Only)
PROBLEM 3-5A (Continued)

RAND EQUIPMENT REPAIR, INC.

Statement of Financial Position
September 30, 2011

Assets
Equipment ........................................................................ £18,000
Less: Accumulated depreciation—
equipment ........................................................... 1,600 £16,400
Supplies............................................................................. 1,200
Accounts receivable...................................................... 3,820
Cash.................................................................................... 2,480
Total assets ............................................................. £23,900

Equity and Liabilities

Equity
Share capital—ordinary ...................................... £15,000
Retained earnings ................................................. 4,800 £19,800
Liabilities
Accounts payable ................................................. 3,100
Unearned service revenue ................................. 600
Salaries payable .................................................... 400 4,100
Total equity and liabilities ........................................... £23,900

Copyright © 2011 John Wiley & Sons, Inc. Weygandt, IFRS, 1/e, Solutions Manual (For Instructor Use Only) 3-49