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Solved by :
Zeeshan Khalil
MBA SEMESTER
III
ACCOUNTING

Contact # : 0342-2178148
Email: fencible.zeeshan@gmail.com
Wesite: http://achieversin.weebly.com/
 Pat Campbel Corporation
General Journal
Date Account Titles and Explanation PR Debit Credit
1-Jun Cash 60,000
Pat Campbell, Capital 60,000
To record the capital contribution by Pat Campbell
2-Jun Aircraft 220,000
Cash 40,000
Notes Payable 180,000
To record the purchase of aircraft from Utility Aircraft

4-Jun Rent Expense 2,500

Cash 2,500
To record the payment of hangar and office space
rental to Woodrow Airport for the month of June
15-Jun Accounts Receivable 8,320
Crop Dusting Revenue 8,320
To record the billing for first half of June for crop
dusting services

15-Jun Salaries Expense 5,880

Cash 5,880
To record the payment of salaries for first half of June

18-Jun Maintenance Expense 1,890

Cash 1,890
To record the payment of repairs and maintenance
expense to Hannigan's Hangar

25-Jun Cash 4,910

Accounts Receivable 4,910
To record collection of revenue for first half of June

30-Jun Accounts Receivable 16,450

Crop Dusting Revenue 16,450
To record the billing for second half of June for crop
dusting services

30-Jun Salaries Expense 6,000

Cash 6,000
To record the payment of salaries for second half of
June

30-Jun Fuel Expense 2,510

Accounts Payable 2,510
To record the receipt of bill from Henry's Feed & Fuel
for June due by July 10
30-Jun Pat Campbell, Drawing 2,000
Cash 2,000
To record the withdrawal of Cash by Pat Campbell for
personal use
 The Ledger

Asset Accounts Liability & Owner's Equity Accounts

Cash Notes Payable

1-Jun 60,000 2-Jun 40,000 2-Jun 180,000 Balance 180,000
25-Jun 4,910 4-Jun 2,500
15-Jun 5,880
18-Jun 1,890
30-Jun 6,000
Balance 6,640 30-Jun 2,000 Accounts Payable
30-Jun 2,510 Balance 2,510

Accounts Receivable
15-Jun 8,320 25-Jun 4,910
Balance 19,860 30-Jun 16,450 Pat Campbell, Capital
1-Jun 60,000 Balance 60,000

Aircraft
Balance 220,000 2-Jun 220,000
Pat Campbell, Drawing
Balance 2,000 30-Jun 2,000

Maintenance Expense
Balance 1,890 18-Jun 1,890

Crop Dusting Revenue

15-Jun 8,320
Fuel Expense 30-Jun 16,450 Balance 24,770
Balance 2,510 30-Jun 2,510

Salaries Expense
15-Jun 5,880
Balance 11,880 30-Jun 6,000

Rent Expense
Balance 2,500 4-Jun 2,500
 Campbell Crop Dusting
Trial Balance
June 30, 2001
Cash 6,640
Accounts Receivable 19,860
Aircraft 220,000
Notes Payable 180,000
Accounts Payable 2,510
Pat Campbell, Capital 60,000
Pat Campbell, Drawing 2,000
Crop Dusting Revenue 24,770
Maintenance Expense 1,890
Fuel Expense 2,510
Salaries Expense 11,880
Rent Expense 2,500

267,280 267,280

TOTAL ASSETS
Cash 6,640
Accounts Receivable 19,860
Aircraft 220,000
Total Assets 246,500

TOTAL LIABILITIES
Notes Payable 180,000
Accounts Payable 2,510
Total Liabilities 182,510

TOTAL OWNER"S EQUITY

Pat Campbell, Capital 60,000
Pat Campbell, Drawing 2,000
Total Owner's Equity 58,000

No the figures will be different as the expense and revenue entries plus recording of
unrecorded expenses will need to be done (adjusting and closing entries) before the
final figures are reported.
Depreciation of Building:

Annual Depreciation = (Cost - Salvage Value) / Life in years

= (90000 - 0)/30
3000
Depreciation for March= 3000 x 1/12 = 250
Depreciation of Office Equipment:

Annual Depreciation = (Cost - Salvage Value) / Life in years

= (21000 - 0)/5
4200
Depreciation for March= 4200 x 1/12 = 350

Adjusting Entries:
S# Particulars P/R Dr Cr
1 Depreciation Expense 250
Allowance for depreciation "Building" 250
2 Depreciation Expense 350
Allowance for depreciation "Off. Equipment" 350
3 Office supplies expense 350
Office supplies 350

Adjusted Trial Balance:

Cash 9,750
Account Receivable 7,500
Office Supplies 500
Land 30,000
Building 90,000
Accumulated depreciation Building 750
Office equipment 21,000
Accumulated depreciation Office equipment 1,050
Account Payable 14,750
M. val. Capital 136,650
M. val. Drawing 4,500
Depreciation expense 600
Office supplies expense 350
Commission earned 20,000
Advertising expense 900
Automobile rental expense 500
Salaries expense 7,000
Telephone expense 600
173,200 173,200

Income Statement:
Commission earned 20,000
Less: Operating Expenses:
Depreciation expense 600
Office supplies expense 350
Advertising expense 900
Rent expense 500
Salaries expense 7,000
Telephone expense 600
Total expenses (9,950)
 Net Income 10,050
Statement of owner's equity:
Capital 136,650
Less: Drawing (4,500)
Add: Net Income 10,050
142,200

Balance Sheet:
Assets Equities
Current Assets: Current Liabilities:
Cash 9,750 Account payable 14,750
Account receivable 7,500
Office Supplies 500

Fixed Assets: Owner's equity 142,200

Land 30,000
Building 90,000
Less: Allowance for depreciation (750) 89,250

Office Equipment 21,000

Less: Allowance for depreciation (1,050) 19,950

156,950 156950

Closing Entries:
S# Particulars P/R Dr Cr
1 Expense & Revenue summary 9950
Depreciation expense 600
Office supplies expense 350
Advertising expense 900
Rent expense 500
Salaries expense 7000
Telephone expense 600
2 Commission earned 20000
Expense & Revenue summary 2000
Expense & Revenue summary 10050
Capital 10050
Capital 4500
Drawing 4500

Expense & Revenue Summary Capital

9950 20000 4500 136650
10050
4500 146700

Balance 10050 Balance 142200

After Closing Trial Balance:

Cash 9,750
Account Receivable 7,500
Office Supplies 500
Land 30,000
Building 90,000
Accumulated depreciation Building 750
Office equipment 21,000
Accumulated depreciation Office equipment 1,050
Account Payable 14,750
M. val. Capital 142,200
158,750 158,750
PROBLEM 4.4 (a)
NICK CHARLES INVESTIGATOR
ADJUSTING ENTRIES
AS ON MARCH 31, 2001
DATE PARTICULAR PR DEBIT CREDIT
a Depreciation expense 285
Allowance for depreciation 285
(To record depreciation expense)
b Unearned retainer fees 8400
Fees earned 8400
(To adjust unearned income)
c Salaries expense 1665
Salaries payable 1665
(To record salaries expense)
d Rent expense 1800
Prepaid rent 1800
(To record rent expense)
e Fees receivable 3900
Fees earned 3900
(Fees earned but not yet received)
f Office supplies expense 350
Office supplies 350
(To record office supplies expense)
g Insurance expense 400
Unexpired insurance 400
(To record insurance expense)

PROBLEM 4.4 (b)

NICK CHARLES INVESTIGATOR
INCOME STATEMENT
AS ON MARCH 31, 2001

Legal fees earned 45,620

Less: OPERATING EXPENSES:
Salaries expense 21,165
Travelling expense 3,400
Office rent expense 4,800
Office supplies expense 800
Depreciation expense 855
Telephone expense 1,200
Insurance expense 1,200
Total operating expenses 33,420
NET INCOME 12,200
PROBLEM 4.4 (c )
Yes, rent increases by 300 $, the rent of old office was 1500 $ per month & the rent of new office
is 1800 $ per month
PROBLEM 4.10 (a)
ISLAND HOPPER
WORK SHEET
JUNE 30,2001'
Trial Balance Adjustment Adjusted Trial Balance
Account Title
Debit Credit Debit Credit Debit
Cash 23600 23600
Account receivable 7200 7200
Prepaid rent 9600 4800 4800
Unexpired insurance 21000 2100 18900
Aircraft 1200000 1200000
Accumulated depreciation AC 380000 10000
Notes payable 600000
Unearned passenger revenue 60000 38650
Capital 230850
Drawing 7000 7000
Freight revenue 130950 4600
Fuel expense 53800 53800
Salaries expense 66700 3300 70000
Maintenance expense 12900 12900
Depreciation expense 10000 10000
Passenger revenue 38650
Salaries payable 3300
Interest expense 5000 5000
Interest payable 5000
Freight receivable 4600 4600
Rent expense 4800 4800
Insurance expense 2100 2100
1401800 1401800 68450 68450 1424700
NET INCOME
a) To record depreciation expense (Aircraft)
b) To adjust unearned income
c) To record Salarie expense
d) To record interest expense
e) To record freight revenue earned but not yet received
f) To record rent expense
g) To record insurance expense
 DATE: March 17,2013
ER
T
1'
Adjusted Trial Balance Income Statement Balance Sheet
Credit Debit Credit Debit Credit
23600
7200
4800
18900
1200000
390000 390000
600000 600000
21350 21350
230850 230850
7000
135550 135550
53800
70000
12900
10000
38650 38650
3300 3300
5000
5000 5000
4600
4800
2100
1424700 158600 174200 1266100 1250500
15600 15600
174200 174200 1266100 1266100
PROBLEM 4.10 (b)
ISLAND HOPPER
INCOME STATEMENT
AS ON JUNE 30, 2001
Passenger revenue 38,650
Add: Freight revenue 135,550
Total earned revenue 174,200
Less: OPERATING EXPENSES:
Salaries expense 70,000
Fuel expense 53,800
Rent expense 4,800
Interest expense 5,000
Depreciation expense 10,000
Maintenance expense 12,900
Insurance expense 2,100
Total operating expenses 158,600
NET INCOME 15,600

PROBLEM 4.10 (c)

ISLAND HOPPER
ADJUSTING ENTRIES
AS ON JUNE 30, 2001
DATE PARTICULAR PR DEBIT CREDIT
a Depreciation expense 10000
Accumulated depreciation 10000
(To record depreciation expense)
b Unearned passenger revenue 38650
Passenger revenue 38650
(To record earned revenue)
c Salaries expense 3300
Salaries payable 3300
(To record salaries expense)
d Interest expense 5000
Interest payable 5000
(To record interest expense)
e Freight revenue recievable 4600
Freight income 4600
(Freight revenue earned but not yet received)
f Rent expense 4800
Prepaid rent 4800
(To record rent expense)
h Insurance expense 2100
Unexpired insurance 2100
(To record insurance expense)
PROBLEM 4.10 (d)
ISLAND HOPPER
CAPITAL STATEMENT
AS ON JUNE 30, 2001

Mary Earhart, Capital 230,850

Less: Mary Earhart, Drawing (7,000)
Add: Net Income for the month of june 2001 15,600
239,450

ISLAND HOPPER
BALANCE SHEET
AS ON JUNE 30, 2001

ASSETS EQUTIES
Current assets Current liabilities
Cash 23600 Unearned Pass. Revenue 21350
Account receivable 7200 Salaries payable 3300
Prepaid rent 4800 Interest payable 5000
Unexpired insurance 18900 Total Current liabilities 29650
Freight recievable 4600 Non-Current liabilities
Total current asset 59100 Notes payable 600000
Fixed assets Owner's Equities
Aircraft 1200000 Capital 230,850
Less: Acc. Depreciation 390000 Less: Drawing (7,000)
Total fixed assets 810000 Add: Net Income 15,600
Total Owner's equities 239,450
869100 869,100