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    Case 4-4 Waltham Oil & Lube Center, Inc.: $40,000 Deposit With National

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    Cyd Marie Victoriano
    The document provides journal entries for Waltham Oil & Lube Center for May through July 2019. It includes entries for capital contributions, purchases, revenues and expenses. Key figures from the period include total revenues of $110,120, cost of sales of $9,260, and lease expenses totaling $27,900. For August parking checks received of $400, the entry would be to record it as unearned revenue initially then recognize it as earned in the following period. Family use of services continuing to be recorded as a $450 receivable.

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    Case 4-4 Waltham Oil & Lube Center, Inc.: $40,000 Deposit With National

    Uploaded by

    Cyd Marie Victoriano
    551 views5 pages
    The document provides journal entries for Waltham Oil & Lube Center for May through July 2019. It includes entries for capital contributions, purchases, revenues and expenses. Key figures from the period include total revenues of $110,120, cost of sales of $9,260, and lease expenses totaling $27,900. For August parking checks received of $400, the entry would be to record it as unearned revenue initially then recognize it as earned in the following period. Family use of services continuing to be recorded as a $450 receivable.

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    Waltham Oil.xlsx

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    The document provides journal entries for Waltham Oil & Lube Center for May through July 2019. It includes entries for capital contributions, purchases, revenues and expenses. Key figures from the period include total revenues of $110,120, cost of sales of $9,260, and lease expenses totaling $27,900. For August parking checks received of $400, the entry would be to record it as unearned revenue initially then recognize it as earned in the following period. Family use of services continuing to be recorded as a $450 receivable.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    551 views5 pages

    Case 4-4 Waltham Oil & Lube Center, Inc.: $40,000 Deposit With National

    Uploaded by

    Cyd Marie Victoriano
    The document provides journal entries for Waltham Oil & Lube Center for May through July 2019. It includes entries for capital contributions, purchases, revenues and expenses. Key figures from the period include total revenues of $110,120, cost of sales of $9,260, and lease expenses totaling $27,900. For August parking checks received of $400, the entry would be to record it as unearned revenue initially then recognize it as earned in the following period. Family use of services continuing to be recorded as a $450 receivable.

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    © All Rights Reserved
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    You are on page 1of 5

    Group 4

    Cyrus Gatongay
    Joe Lalimarmo

    Case 4-4 Waltham Oil & Lube Center, Inc.

    1. Prepare Journal Entries for the Period May 1 to July 31


    DR CR

    4/1/2019 $40,000 Capital contribution


    Cash 40,000
    Frank Knight Capital 40,000

    $40,000 Deposit with National


    Deposit - National Oil & Lube Center 40,000
    Cash 40,000

    4/30/2019 $6,000 furniture purchase


    Furniture 6,000
    Cash 6,000

    $10,000 Capital contribution


    Cash 10,000
    Frank Knight Capita 10,000

    $1,200 Insurance payment (12 months)


    Prepaid Insurance 1,200
    Cash 1,200

    $35,450 deductions from deposit


    Oil & Grease Inventory 6,320
    Uniforms & Operating Supplies 4,130
    Down payment for Equipment 25,000
    Deposit - National Oil & Lube Center 35,450

    $1500 Lease payment


    Lease expense 1,500
    Deposit - National Oil & Lube Center 1,500

    $49,800 Note payable


    Equipment 75,000
    Down payment for Equipment 25,000
    Deposit - National Oil & Lube Center 200
    Note Payable 49,800

    $108,600 Bank deposits


    Cash 108,600
    Parking revenue 3,300
    Services revenue 105,300

    Oil & Grease Inventory 8,230


    Salary Expense 34,560
    Utilities expense 1,700
    Miscellaneous expenses 6,600
    Cash 51,090

    $26,400 Lease payments ($1500 x 2 months = $3,000; $10 x 2,340 cars = $23,400)
    Lease expense 3,000
    Lease expense 23,400
    Cash 26,400

    $2,490 Equipment payables payments ($830 x 3 months)


    Note Payable 2,490
    Cash 2,490

    Withdrawals by Frank Knight of $4,500


    Withdrawals 4,500
    Cash 4,500

    Overnight parkers & Local Merchants


    Accounts receivable 1,520
    Parking Revenues 340
    Service Revenues 730
    Service Revenues (Knight Family use) 450

    Employees payroll (owed)


    Salary Expense 2,100
    Salary Payable 2,100

    Utilities owed
    Utilities expense 350
    Accrued Expense 350

    Inventory costing $5,290 on hand ($6,320 + $8,230 - $5,290)


    Cost of Sold 9,260
    Oil & Grease Inventory 9,260

    Furniture depreciation for period May to July ($6,000/120 mos*3 months)


    Depreciation expense - Furniture 150
    Accumulated depreciation - Furniture 150

    Equipment depreciation for period May to July (($75,000/60 mos*3 months)


    Depreciation expense - Equipment 3,750
    Accumulated depreciation - Equipment 3,750

    Amortize Prepaid Insurance ($1,200/12*3)


    Insurance expense 300
    Prepaid Insurance 300
    2 What is the balance of the following accounts:

    a. Capital
    Knight has made two capital contributions ($40,000 and $10,000); so the total is
    $50,000

    b. Accumulated depreciation
    The accumulated depreciation account is the sum of two amounts, $150 (furniture) and
    $3,750 Equipment). The balance is $3,900.

    c. Prepaid Assets
    The only prepaid asset is prepaid insurance. The balance is $900 ($1200 - $300.)

    d. Cash balance
    The cash balance is $26,920

    e. Accounts Receivable
    Knight was owed $340 by overnight parkers and $730 by local merchants & $450
    for his family's use of Waltham' service. The accounts receivable balance is $1,520.

    f. Liabilities
    There are three liabilities at the end of July. They are salary ($2,100), utilities ($350)
    & notes payable ($47,310) The liability account balance is $49,760

    3 What is the amount of the following:

    a. Withdrawals is $4,500

    b. Cost of Sales is $9,260


    Beginning inventory $6,320
    Purchase inventory $8,230
    Ending Inventory $5,290

    c. Parking revenues
    The amount is $3,640 ($3,300 cash received and $340 account receivable)

    d. Lease Expenses
    The total amount is $27,900 (May $1500 prepaid flat rental, plus $3,000 June – July flat
    rental paid and $23,400 - per car $10 payments.)

    e. Total Revenues

    Total revenues is the sum of parking revenues ($3,640), cash service revenues ($105,300)
    and credit service sales ($730 + $450 of Waltham's family use.) The amount is $110,120.
    4. How should Knight account for the $400 August parking checks? Possible bad
    debts? Family use of Waltham Center's services?

    a. Rent Revenue 400


    Unearned Parking Revenue 400

    b.

    c. Accounts Receivable 450


    Services Revenue 450

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