Crazy Mountain Outfitters Co an outfitter store for fishing

Crazy Mountain Outfitters Co., an outfitter store for fishing treks, prepared the following unadjusted trial balance at the end of its first year of operations:

Crazy Mountain Outfitters Co.

UNADJUSTED TRIAL BALANCE

April 30, 2016

1

Cash

11,400.00

2

Accounts Receivable

72,600.00

3

Supplies

7,200.00

4

Equipment

112,000.00

5

Accounts Payable

12,200.00

6

Unearned Fees

19,200.00

7

Diana Keck, Capital

137,800.00

8

Diana Keck, Drawing

10,000.00

9

Fees Earned

305,800.00

10

Wages Expense

157,800.00

11

Rent Expense

55,000.00

12

Utilities Expense

42,000.00

13

Miscellaneous Expense

7,000.00

14

Totals

475,000.00

475,000.00

For preparing the adjusting entries, the following data were assembled:

Chart of Accounts

Journal

1. Journalize the adjusting entries necessary on April 30. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 1

JOURNAL

1

Adjusting Entries

2

3

4

5

6

7

8

9

10

11

Final Questions

2. Determine the revenues, expenses, and net income of Crazy Mountain Outfitters Co. before the adjusting entries.

Before Adjusting Entries

1

Revenues

2

Expenses

3

Net income

3. Determine the revenues, expense, and net income of Crazy Mountain Outfitters Co. after the adjusting entries.

After Adjusting Entries

1

Revenues

2

Expenses

3

Net income

4. Determine the effect of the adjusting entries on Diana Keck, Capital.

The capital account by

	ACCOUNT TITLE	DEBIT	CREDIT
1	Cash	11,400.00
2	Accounts Receivable	72,600.00
3	Supplies	7,200.00
4	Equipment	112,000.00
5	Accounts Payable		12,200.00
6	Unearned Fees		19,200.00
7	Diana Keck, Capital		137,800.00
8	Diana Keck, Drawing	10,000.00
9	Fees Earned		305,800.00
10	Wages Expense	157,800.00
11	Rent Expense	55,000.00
12	Utilities Expense	42,000.00
13	Miscellaneous Expense	7,000.00
14	Totals	475,000.00	475,000.00

Solution

Solution :

Solution 2:

Revenues before adjusting entries = $305,800

Expenses before adjusting entries = $157,800 + $55,000 + $42,000 + $7,000 = $261,800

Net Income before adjusting entries = $305,800 - $261,800 = $44,000

Solution 3:

Revenues before adjusting entries = $305,800 + $3,900 + $14,140 = $323,840

Expenses before adjusting entries = $157,800 + $55,000 + $42,000 + $7,000 + $5,820 + $3,000 + $2,475 = $273,095

Net Income before adjusting entries = $323,840 - $273,095 = $50,745

Solution 4:

Effect of the adjusting entries on Diana Keck, Capital:

Diana Keck capital will increase by = $50,745 - $44,000 = $6,745

Adjusting Journal Entries - Crazy Mountain Outfitters Co
Event	Date	Particulars	Debit	Credit
a.	30-Apr-16	Supplies Expense Dr	$5,820.00
		To Supplies		$5,820.00
		(To record supplies Expense)
b	30-Apr-16	Accounts Receivables Dr	$3,900.00
		To Fees Earned		$3,900.00
		(To record revenue for service performed)
c	30-Apr-16	Depreciation Expense Dr	$3,000.00
		To Accumulated Depreciation - Equipment		$3,000.00
		(To record depreciation expense)
d	30-Apr-16	Wages Expense Dr	$2,475.00
		To Wages Payable		$2,475.00
		(To record wages expense)
e	30-Apr-16	Unearned Fees Dr	$14,140.00
		To Fees Earned		$14,140.00
		(To record fees earned for amount received earlier in advance)