Exercise 4-1 The trial balance columns of the worksheet for Dixon Company at Jun
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Question
Exercise 4-1 The trial balance columns of the worksheet for Dixon Company at June 30, 2017, are as follows. DIXON COMPANY For the Month Ended June 30, 2017 Trial Balance Account Titles Cr. Dr. 2,300 2,200 1,800 Cash Accounts Receivable 1,100 390 2,220 3,400 Accounts Payable Unearned Service Revenue Owner's Capital Service Revenue Salaries and Wages Expense590 Miscellaneous Expense 220 Total 7,110 7,110 Other data: 1. 2. 3. A physical count reveals $700 of supplies on hand. $180 of the unearned revenue is still unearned at month-end. Accrued salaries are $270. cy Polisy I 2000-2018 1ohn Wiley & Sons,Ins, All Rights Reserved. A Division of 02 FBExplanation / Answer
Dixon Company
Dixon Company
Worksheet
for the year ended June 30, 2017
Account Titles
Trial Balance
Adjustments
Adjusted Trial Balance
Income Statement
Balance Sheet
Debit
Credit
Debit
Credit
Debit
Credit
Debit
Credit
Debit
Credit
Cash
$2,300
$2,300
$2,300
Accounts Receivable
$2,200
$2,200
$2,200
Supplies
$1,800
$1,100
$700
$700
Accounts Payable
$1,100
$1,100
$1,100
Unearned Service Revenue
$390
$210
$180
$180
Owner's Capital
$2,220
$2,220
$2,220
Service Revenue
$3,400
$210
$3,610
$3,610
Salaries and Wages expense
$590
$270
$860
$860
Miscellaneous Expense
$220
$220
$220
Totals
$7,110
$7,110
Supplies Expense
$1,100
$1,100
$1,100
Salaries and Wages payable
$270
$270
$270
Totals
$1,580
$1,580
$7,380
$7,380
$2,180
$3,610
$5,200
$3,770
Net Income
$1,430
$1,430
Totals
$3,610
$5,200
$5,200
The salaries payable is $270. This indicates salaries expense accrued but unpaid. Hence, the same is added to salaries and wages expense to show the actual expense for the period, and the same is reported on the adj. trial balance, income statement (as total salaries expense) and balance sheet (as salaries payable).
The difference in the beginning and ending balances of supplies account, $1,100 (1,800 – 700) indicates the cost of supplies used during the period. The same is recorded as an adjustment ‘supplies expense’. This is an income statement item as well as is shown in adj. trial balance.
The ending balance in unearned revenue of $180 indicates the earned portion, $390 - $180 = $210. The earned portion is added to the service revenue to arrive at the actual revenue for the period. The same gets reflected in the income statement as revenues.
The balance in unearned revenue account of $180 is shown in the balance sheet.
Dixon Company
Worksheet
for the year ended June 30, 2017
Account Titles
Trial Balance
Adjustments
Adjusted Trial Balance
Income Statement
Balance Sheet
Debit
Credit
Debit
Credit
Debit
Credit
Debit
Credit
Debit
Credit
Cash
$2,300
$2,300
$2,300
Accounts Receivable
$2,200
$2,200
$2,200
Supplies
$1,800
$1,100
$700
$700
Accounts Payable
$1,100
$1,100
$1,100
Unearned Service Revenue
$390
$210
$180
$180
Owner's Capital
$2,220
$2,220
$2,220
Service Revenue
$3,400
$210
$3,610
$3,610
Salaries and Wages expense
$590
$270
$860
$860
Miscellaneous Expense
$220
$220
$220
Totals
$7,110
$7,110
Supplies Expense
$1,100
$1,100
$1,100
Salaries and Wages payable
$270
$270
$270
Totals
$1,580
$1,580
$7,380
$7,380
$2,180
$3,610
$5,200
$3,770
Net Income
$1,430
$1,430
Totals
$3,610
$5,200
$5,200
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