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Chapter 4--Completing the Accounting Cycle
Student: ___________________________________________________________________________
1. After analyzing transactions, the next step would be to post the transactions in the ledger. True False
2. The most important output of the accounting cycle is the financial statements. True False
3. The work sheet is not considered a part of the formal accounting records. True False
4. Cross-referencing is useful in assuring that the debits and credits are in balance. True False
5. When accounts do not appear on the unadjusted trial balance but are needed to post adjustments, they are simply added to the account title column. True False
6. Once the adjusted trial balance is in balance, the flow of accounts will now go into the financial statements. True False
7. There is really no benefit in preparing financial statements in any particular order. True False
8. Round tripping is a fraudulent scheme where business A artificially inflates revenue by lending money to customer B who uses that money to buy products from A. True False
9. On the income statement, miscellaneous expenses are usually presented as the last item without regard to the dollar amount. True False
10. The usual presentation of the statement of owner's equity is (1) Beginning capital, (2) Net income or loss, (3) Drawing, (4) Owner's contributions, (5) Ending capital. True False
11. The difference between a classified balance sheet and one that is not classified is that the classified one has subheadings. True False
12. Cash and other assets that may reasonably be expected to be realized in cash, sold, or consumed through the normal operations of a business, usually longer than one year, are called current assets. True False
13. Prepaid Insurance is an example of a current asset. True False
14. Land is an example of a plant asset. True False
15. Liabilities that will be due within one year or less and that are to be paid out of current assets are called current liabilities. True False
16. The amount of the net income for a period appears on both the income statement and the balance sheet for that period. True False
17. Accrued taxes payable are generally reported on the balance sheet as a current liability. True False
18. At the end of the fiscal period, prepaid expenses are reported on the income statement as expenses. True False
19. Office Equipment is an example of a current asset account. True False
20. Capital and Drawing are reported in the owner's equity section of the balance sheet. True False
21. Deferred expenses that benefit a relatively short period of time are listed on the balance sheet as current assets. True False
22. Unearned revenues that will be earned in a relatively short period of time are listed on the balance sheet as current assets. True False
23. Accrued expenses are ordinarily listed on the balance sheet as current assets. True False
24. Accrued revenues are ordinarily listed on the balance sheet as current liabilities. True False
25. The income statement is prepared from the adjusted trial balance or the income statement columns on the work sheet. True False
26. Examples of temporary accounts are supplies and prepaid expenses which are in the ledger for just a short time before they expire. True False
27. Accumulated Depreciation is a permanent account. True False
28. The drawing account is a temporary account. True False
29. The balance sheet accounts are referred to as real or permanent accounts. True False
30. Journalizing and posting the adjustments and closing entries updates the ledger for the new accounting period. True False
31. The income summary account is closed to the owner's capital account. True False
32. The accumulated depreciation account is closed to the income summary account. True False
33. The drawing account is closed to the income summary account. True False
34. The trial balance prepared after all the closing entries have been posted is called a pre-closing trial balance. True False
35. Entries required to close the balances of the temporary accounts at the end of the period are called final entries. True False
36. Journalizing and posting closing entries must be completed before financial statements can be prepared. True False
37. During the closing process, some balance sheet accounts are closed and end the period with a zero balance. True False
38. Closing entries are entered directly on to the work sheet. True False
39. The post-closing trial balance will generally have fewer accounts than the trial balance. True False
40. A post-closing trial balance contains only asset and liability accounts. True False
41. A post-closing trial balance should be prepared before the financial statements are prepared. True False
42. Assets, liabilities, and owner’s capital are real accounts and do not get closed at the end of the period. True False
43. The income summary account is also known as the clearing account. True False
44. All income statement accounts will be closed at the end of the period. True False
45. Balance Sheet accounts are not considered real accounts. True False
46. It is not necessary to post the closing entries to the general ledger. True False
47. Once an account has been closed for the period, inserting a line in the balance columns zeros out the account, making it ready for the following period. True False
48. The last step of the accounting cycle is to prepare a post-closing trial balance. True False
49. The accounting cycle begins with preparing an unadjusted trial balance. True False
50. Financial statements should be prepared before the closing entries are journalized and posted. True False
51. The unadjusted, adjusted, and final trial balances are prepared during the accounting cycle of a period. True False
52. Any twelve-month accounting period adopted by a company is known as its fiscal year. True False
53. A fiscal year that ends when business activities have reached their lowest point is called the natural business year. True False
54. All companies must use a calendar year as their fiscal year. True False
55. The majority of businesses end their fiscal year on December 31. True False
56. The balances of the capital accounts from the Adjusted Trial Balance of the work sheet are extended to the Statement of Owner’s Equity columns. True False
57. The work sheet is a working paper that accountants can use to summarize adjusting entries and the account balances for the financial statements. True False
58. In a computerized accounting system, a work sheet may not be necessary because the software program automatically posts entries to the accounts and prepares financial statements. True False
59. The trial balance may be listed on the work sheet instead of being prepared separately. True False
60. The totals of the Adjusted Trial Balance columns on a work sheet will always be the sum of the Trial Balance column totals and the Adjustments column totals. True False
61. A work sheet heading is dated for a period of time. True False
62. On the work sheet, the capital and drawing account balances are extended to the Balance Sheet columns. True False
63. After the account balances have been extended from the Adjusted Trial Balance columns on the work sheet, the difference between the initial totals of the Balance Sheet debit and credit columns is Net Income or Net Loss. True False
64. After Net Income or Loss is entered on the work sheet, the debit column total must equal the credit column total for the Balance Sheet pair of columns. True False
65. A net loss is shown on the work sheet in the credit columns of both the Income Statement columns and the Balance Sheet columns. True False
66. Net income is shown on the work sheet in the Income Statement debit column and the Balance Sheet credit column. True False
67. If the totals of the Income Statement debit and credit columns of a work sheet are $27,000 and $29,000, respectively, after all account balances have been extended, the amount of the net loss is $2,000. True False
68. The worksheet and the financial statements both require dollar signs. True False
69. The balance in the capital account on the worksheet will equal the amount presented in the balance sheet. True False
70. Since the adjustments are entered on the work sheet, it is not necessary to record them in the journal or post them to the ledger. True False
71. The chart of accounts, the journal, and the ledger are essential parts of the accounting system. True False
72. The closing process is sometimes referred to as closing the books. True False
73. Accounts reported on the balance sheet that are carried forward from year to year are known as permanent accounts. True False
74. Real accounts are not permanent accounts. True False
75. In the accounting cycle, the last step is A. preparing the financial statements B. journalizing and posting the adjusting entries C. preparing a post-closing trial balance D. journalizing and posting the closing entries
76. During the end-of-period processing which of the following best describes the logical order of this process A. Preparation of adjustments, adjusted trial balance, financial statements B. Preparation of Income Statement, adjusted trial balance, Balance Sheet C. Preparation of adjusted trial balance, cross-referencing, journalizing D. Preparation of adjustments, adjusted trial balance, posting
77. What is the major difference between the Unadjusted Trial Balance and the Adjusted Trial Balance? A. The Adjusted Trial Balance will show the net income (loss) as an additional account. B. Unlike the Adjusted Trial Balance, the Unadjusted Trial Balance will continue with the end-of-period processing even if it is not in balance. C. The Adjusted Trial Balance includes the postings of the adjustments for the period in the balance of the accounts. D. The Adjusted Trial Balance will be used to record the adjustments for the period.
78. Once the adjusting entries are posted, the Adjusted Trial Balance is prepared to A. verify that the debits and credits are in balance. B. verify that the net income correctly flows into the statement of owner’s equity from the income statement C. verify that the net income (loss) is correct for the period. D. verify the correct flow of accounts into the financial statements.
79. When preparing the statement of owner's equity, the beginning capital balance can always be found A. in the Income Statement columns of the work sheet B. in the statement of cash flows C. in the general ledger D. in the Balance Sheet columns of the work sheet
80. Accumulated Depreciation appears on the A. balance sheet in the current assets section B. balance sheet in the property, plant and equipment section C. balance sheet in the long-term liabilities section D. income statement as an operating expense
81. Notes Receivable due in 350 days appear on the A. balance sheet in the current assets section B. balance sheet in the fixed assets section C. balance sheet in the current liabilities section D. income statement as an expense
82. Unearned Fees appear on the A. balance sheet in the current assets section B. balance sheet as a current liability C. balance sheet in the owner's equity section D. income statement as revenue
83. Which one of the fixed asset accounts listed below will not have a related contra asset account? A. Office Equipment B. Land C. Delivery Equipment D. Building
84. Prepaid insurance is reported on the balance sheet as a A. current asset B. fixed asset C. current liability D. long-term liability
85. The income statement is prepared from: A. the adjusted trial balance. B. the income statement columns of the work sheet. C. either the adjusted trial balance or the income statement columns of the work sheet. D. both the adjusted trial balance and the income statement columns of the work sheet.
86. Round-tripping is when A. a selling company sells to a customer company with huge discounts. B. a selling company pretends to sell to a fictitious company with the intent of inflating revenues C. a selling company lends money to a customer company to increase assets. D. a selling company lends money to a customer company to be used to purchase goods from the selling company.
87. The Statement of Owner’s Equity should be prepared A. before the income statement and after the balance sheet B. before the income statement and balance sheet C. after the income statement and balance sheet D. after the income statement and before the balance sheet
88. The income statement should be prepared A. before the statement of owner’s equity and balance sheet B. after the statement of owner’s equity and before the balance sheet C. after the statement of owner’s equity and balance sheet D. after the balance sheet and before the statement of owner’s equity
89. Use the following information in the adjusted trial balance for Stockton Company to answer the following questions.
Stockton Company Adjusted Trial Balance For the Year ended December 31, 20XX Cash $ 6,530 Accounts Receivable 2,100 Prepaid Expenses 700 Equipment 13,700 Accumulated Depreciation $ 1,100 Accounts Payable 1,900 Notes Payable 4,300 Bob Steely, Capital 12,940 Bob Steely, Withdrawals 790 Fees Earned 9,250 Wages Expense 2,500 Rent Expense 1,960 Utilities Expense 775 Depreciation Expense 250 Miscellaneous Expense 185 Totals $29,490 $29,490
Determine the net income (loss) for the period. A. Net Income $9,250 B. Net Loss $790 C. Net Loss $5,670 D. Net Income $3,580
90. Use the following information in the adjusted trial balance for Stockton Company to answer the following questions.
Stockton Company Adjusted Trial Balance For the Year ended December 31, 20XX Cash $ 6,530 Accounts Receivable 2,100 Prepaid Expenses 700 Equipment 13,700 Accumulated Depreciation $ 1,100 Accounts Payable 1,900 Notes Payable 4,300 Bob Steely, Capital 12,940 Bob Steely, Withdrawals 790 Fees Earned 9,250 Wages Expense 2,500 Rent Expense 1,960 Utilities Expense 775 Depreciation Expense 250 Miscellaneous Expense 185 Totals $29,490 $29,490 Determine the Owner’s Equity ending balance for the period. A. $12,150 B. $15,730 C. $6,480 D. $21,400
91. Use the following information in the adjusted trial balance for Stockton Company to answer the following questions.
Stockton Company Adjusted Trial Balance For the Year ended December 31, 20XX Cash $ 6,530 Accounts Receivable 2,100 Prepaid Expenses 700 Equipment 13,700 Accumulated Depreciation $ 1,100 Accounts Payable 1,900 Notes Payable 4,300 Bob Steely, Capital 12,940 Bob Steely, Withdrawals 790 Fees Earned 9,250 Wages Expense 2,500 Rent Expense 1,960 Utilities Expense 775 Depreciation Expense 250 Miscellaneous Expense 185 Totals $29,490 $29,490 Determine total assets. A. $24,130 B. $15,830 C. $21,930 D. $23,030
92. Use the following information in the adjusted trial balance for Stockton Company to answer the following questions.
Stockton Company Adjusted Trial Balance For the Year ended December 31, 20XX Cash $ 6,530 Accounts Receivable 2,100 Prepaid Expenses 700 Equipment 13,700 Accumulated Depreciation $ 1,100 Accounts Payable 1,900 Notes Payable 4,300 Bob Steely, Capital 12,940 Bob Steely, Withdrawals 790 Fees Earned 9,250 Wages Expense 2,500 Rent Expense 1,960 Utilities Expense 775 Depreciation Expense 250 Miscellaneous Expense 185 Totals $29,490 $29,490
Determine the current assets. A. $23,030 B. $9,330 C. $21,930 D. $8,630
93. Use the following information in the adjusted trial balance for Stockton Company to answer the following questions.
Stockton Company Adjusted Trial Balance For the Year ended December 31, 20XX Cash $ 6,530 Accounts Receivable 2,100 Prepaid Expenses 700 Equipment 13,700 Accumulated Depreciation $ 1,100 Accounts Payable 1,900 Notes Payable 4,300 Bob Steely, Capital 12,940 Bob Steely, Withdrawals 790 Fees Earned 9,250 Wages Expense 2,500 Rent Expense 1,960 Utilities Expense 775 Depreciation Expense 250 Miscellaneous Expense 185 Totals $29,490 $29,490 Determine the total liabilities for the period. A. $1,900 B. $6,200 C. $4,300 D. $20,240
94. The Balance Sheet should be prepared A. before the income statement and the statement of owner’s equity B. before the income statement and after the statement of owner’s equity C. after the income statement and the statement of owner’s equity D. after the income statement and before the statement of owner’s equity
95. The Statement of Owner’s Equity begins with the beginning balance followed by A. plus Net Income (loss) less withdrawals B. plus Net Income (loss) plus investments C. plus investments less withdrawals D. plus investments plus Net Income (loss) less withdrawals
96. The Income Statement will include the following accounts A. Revenues less Expenses (ordered largest to smallest amount) with Miscellaneous Expense listed last B. Revenues less Expenses (ordered smallest to largest amounts) with Miscellaneous Expense listed last C. Revenues less Expenses (ordered in alphabetical order) D. Revenues less Expenses (order is not important)
97. The classified Balance Sheet will subsection the assets section as follows A. Current Assets and Other Assets B. Current Assets and Property, Plant, and Equipment C. Current Assets and Short-Term Assets D. Other Assets and Property, Plant and Equipment
98. The classified Balance Sheet will divide its Liabilities Section as the following subsections A. Current Liabilities and Long-Term Liabilities B. Current Liabilities and Other Liabilities C. Other Liabilities and Long-Term Liabilities D. Present Liabilities and Tomorrow’s Liabilities
99. Short-term liabilities are those liabilities that A. will be paid in less than one year B. are due to be paid in 5 to 10 years C. are due to be paid in more than one year D. are owed to the owner and will never be paid
100. Owner’s Equity is A. added to assets and the two are equal to liabilities B. added to liabilities and the two are equal to assets C. subtracted from liabilities and the net amount is equal to assets D. equal to the total of assets and liabilities
101. Balance sheet accounts A. represent amounts accumulated during a specific period of time B. are called real accounts C. have zero balances after the closing entries have been posted D. are not affected by adjustments
102. On which financial statement will Income Summary be shown? A. Statement of Owner’s Equity B. Balance Sheet C. Income Statement D. No financial statement
103. Which of the following is not true about closing entries? A. There are four closing entries that update the owner’s equity account. B. After the second closing entry, the income summary account is equal to the net income or (loss) for the period. C. All real accounts are closed at the end of the period. D. By closing nominal accounts at the end of the period to zero, it is possible to isolate next period’s information correctly.
104. The income summary account is also called A. the imprest account B. the clearing account C. the adjustments account D. the helpful account
105. After posting the second closing entry to the income summary account, the balance will be equal to A. zero. B. owner’s equity. C. revenues for the period D. the net income or (loss) for the period.
106. What is the last account that should be listed in the Post Closing Trial Balance? A. Income Summary B. Capital account C. Cash D. Fees Earned
107. Which of the following account groups are all considered nominal accounts? A. Cash, Owner’s Equity, Wages Payable B. Prepaid Insurance, Property, Plant & Equipment, Fees Earned C. Capital Account, Dividend Account, Income Summary D. Rent Revenue, Fees Earned, Miscellaneous Expense
108. There are four closing entries. The first one is to close ____, the second one is to close ____, the third one is to close ____, and the last one is to close ____. A. Revenues, expenses, income summary, drawing account B. Expenses, assets, income summary, capital account C. Capital account, drawing account, income summary, assets D. Drawing account, income summary, expenses, revenues
109. Closing entries A. need not be journalized if adjusting entries are prepared B. need not be posted if the financial statements are prepared from the work sheet C. are not needed if adjusting entries are prepared D. must be journalized and posted
110. Closing entries are dated in the journal as of A. the date they are actually journalized, although they are generally prepared after the end of the accounting period B. the last day of the accounting period, although they are actually journalized after the end of the accounting period C. the first day of the accounting period, although they are actually journalized after the end of the accounting period D. the first day of the subsequent accounting period
111. Which of the accounts below would be closed by posting a debit to the account? A. Unearned Revenue B. Fees Earned C. Josh Morton, Drawing D. Miscellaneous Expense
112. Which of the following accounts should be closed to Income Summary at the end of the fiscal year? A. Supplies Expense B. Accumulated Depreciation C. Prepaid Insurance D. Unearned Rent
113. Which of the following accounts will not be closed to Income Summary at the end of the fiscal year? A. Salaries Expense B. Fees Earned C. Unearned Rent D. Depreciation Expense
114. Which of the following accounts will be closed to the Capital account at the end of the fiscal year? A. Rent Expense B. Fees Earned C. Income Summary D. Depreciation Expense
115. The entry to close the appropriate insurance account at the end of the accounting period is A. debit Income Summary; credit Prepaid Insurance B. debit Prepaid Insurance; credit Income Summary C. debit Insurance Expense; credit Income Summary D. debit Income Summary; credit Insurance Expense
116. Which of the following accounts ordinarily appears in the post-closing trial balance? A. Fees Earned B. Supplies Expense C. Zane White, Drawing D. Unearned Rent
117. The post-closing trial balance differs from the adjusted trial balance in that it A. does not take into account closing entries B. does not take into account adjusting entries C. does not include balance sheet accounts D. does not include income statement accounts
118. The following accounts were taken from the Adjusted Trial Balance columns of the work sheet:
Accumulated Depreciation $ 3,200 Fees Earned 17,400 Depreciation Expense 1,300 Insurance Expense 200 Prepaid Insurance 4,800 Supplies 900 Supplies Expense 3,800
Net income for the period is A. $3,200 B. $12,100 C. $17,400 D. $8,900
119. A summary of selected ledger accounts appear below for Alberto’s Plumbing Services for the current calendar year end.
Alberto, Capital 12/31 8,500 1/1 6,500 12/31 15,000 Alberto, Drawing 6/30 3,500 12/31 8,500 11/30 5,000 Income Summary 12/31 18,500 12/31 33,500 12/31 15,000 Net income for the period is A. $13,000 B. $33,500 C. $15,000 D. $18,500
120. Amir Designs purchased a one-year liability insurance policy on March 1st of this year for $7,200 and recorded it as a prepaid expense. Which of the following amounts would be recorded for insurance expense during the adjusting process at the end of Amir’s first month of operations on March 31st? A. $7,200 B. $720 C. $600 D. $6,600
121. The journal entry to close the Fees Earned, $750, and Rent Revenue, $175, accounts on December 31st during the closing process would be: A. Dec. 31 Fees Earned 750 Rent Revenue 175 Income Summary 925 B. Dec. 31 Income Summary 925 Fees Earned 750 Rent Revenue 175 C. Dec. 31 Revenues 925 Income Summary 925 D. Dec. 31 Income Summary 925 Revenues 925
122. Use the following worksheet to answer the following questions.
Finley Company Worksheet For the Year Ended December 31, 2014
Adjusted Trial Balance
Income Statement Balance Sheet
Account Title Debit Credit Debit Credit Debit Credit Cash 48,000 48,000 Accounts Receivable 18,000 18,000 Supplies 6,000 6,000 Equipment 57,000 57,000 Accumulated Depr-Equip 18,000 18,000 Accounts Payable 25,000 25,000 Wages Payable 6,000 6,000 C. Finley, Capital 33,000 33,000 C. Finley, Drawing 3,000 3,000 Fees Earned 155,000 155,000 Wages Expense 63,000 63,000 Rent Expense 27,000 27,000 Depreciation Expense 15,000 15,000 Totals 237,000 237,000 105,000 155,000 132,000 82,000 Net Income (Loss) 50,000 50,000 155,000 155,000 132,000 132,000 The journal entry to close revenues would be: A. debit Income Summary $155,000, credit Fees Earned $155,000 B. debit C. Finley, Capital $155,000, credit Fees Earned $155,000 C. debit Fees Earned $155,000; credit Income Summary $155,000 D. credit Fees Earned $155,000; credit C. Finley, Capital $155,000
123. Use the following worksheet to answer the following questions.
Finley Company Worksheet For the Year Ended December 31, 2014
Adjusted Trial Balance
Income Statement Balance Sheet
Account Title Debit Credit Debit Credit Debit Credit Cash 48,000 48,000 Accounts Receivable 18,000 18,000 Supplies 6,000 6,000 Equipment 57,000 57,000 Accumulated Depr-Equip 18,000 18,000 Accounts Payable 25,000 25,000 Wages Payable 6,000 6,000 C. Finley, Capital 33,000 33,000 C. Finley, Drawing 3,000 3,000 Fees Earned 155,000 155,000 Wages Expense 63,000 63,000 Rent Expense 27,000 27,000 Depreciation Expense 15,000 15,000 Totals 237,000 237,000 105,000 155,000 132,000 82,000 Net Income (Loss) 50,000 50,000 155,000 155,000 132,000 132,000 Based on the preceding trial balance, the entry to close expenses would be: A. Wages Expense 63,000 Rent Expense 27,000 Depreciation Expense 15,000 Income Summary 105,000 B. Expenses 105,000 Income Summary 105,000 C. Wages Expense 63,000 Rent Expense 27,000 Depreciation Expense 15,000 C. Finley, Drawing 105,000 D. Income Summary 105,000 Wages Expense 63,000 Rent Expense 27,000 Depreciation Expense 15,000
124. Use the following worksheet to answer the following questions.
Finley Company Worksheet For the Year Ended December 31, 2014
Adjusted Trial Balance
Income Statement Balance Sheet
Account Title Debit Credit Debit Credit Debit Credit Cash 48,000 48,000 Accounts Receivable 18,000 18,000 Supplies 6,000 6,000 Equipment 57,000 57,000 Accumulated Depr-Equip 18,000 18,000 Accounts Payable 25,000 25,000 Wages Payable 6,000 6,000 C. Finley, Capital 33,000 33,000 C. Finley, Drawing 3,000 3,000 Fees Earned 155,000 155,000 Wages Expense 63,000 63,000 Rent Expense 27,000 27,000 Depreciation Expense 15,000 15,000 Totals 237,000 237,000 105,000 155,000 132,000 82,000 Net Income (Loss) 50,000 50,000 155,000 155,000 132,000 132,000 Based on the preceding trial balance, the entry to close income summary would be: A. debit C. Finley, Capital $50,000; credit Income Summary $50,000 B. debit Income Summary $155,000; credit C. Finley, Capital $155,000 C. debit Income Summary $50,000, credit C. Finley, Capital $50,000 D. debit C. Finley, Capital $9,000; credit Income Summary $9,000
125. Use the following worksheet to answer the following questions.
Finley Company Worksheet For the Year Ended December 31, 2014
Adjusted Trial Balance
Income Statement Balance Sheet
Account Title Debit Credit Debit Credit Debit Credit Cash 48,000 48,000 Accounts Receivable 18,000 18,000 Supplies 6,000 6,000 Equipment 57,000 57,000 Accumulated Depr-Equip 18,000 18,000 Accounts Payable 25,000 25,000 Wages Payable 6,000 6,000 C. Finley, Capital 33,000 33,000 C. Finley, Drawing 3,000 3,000 Fees Earned 155,000 155,000 Wages Expense 63,000 63,000 Rent Expense 27,000 27,000 Depreciation Expense 15,000 15,000 Totals 237,000 237,000 105,000 155,000 132,000 82,000 Net Income (Loss) 50,000 50,000 155,000 155,000 132,000 132,000
Based on the preceding trial balance, the entry to close C. Finley, Drawing would be: A. debit C. Finley, Capital $3,000, credit C. Finley, Drawing $3,000 B. debit C. Finley, Capital $12,000, credit C. Finley, Drawing $12,000 C. debit C. Finley, Drawing $3,000; credit C. Finley, Capital $3,000 D. debit C. Finley, Drawing $12,000; credit C. Finley, Capital $12,000
126. Use the following worksheet to answer the following questions.
Finley Company Worksheet For the Year Ended December 31, 2014
Adjusted Trial Balance
Income Statement Balance Sheet
Account Title Debit Credit Debit Credit Debit Credit Cash 48,000 48,000 Accounts Receivable 18,000 18,000 Supplies 6,000 6,000 Equipment 57,000 57,000 Accumulated Depr-Equip 18,000 18,000 Accounts Payable 25,000 25,000 Wages Payable 6,000 6,000 C. Finley, Capital 33,000 33,000 C. Finley, Drawing 3,000 3,000 Fees Earned 155,000 155,000 Wages Expense 63,000 63,000 Rent Expense 27,000 27,000 Depreciation Expense 15,000 15,000 Totals 237,000 237,000 105,000 155,000 132,000 82,000 Net Income (Loss) 50,000 50,000 155,000 155,000 132,000 132,000 Based on the preceding trial balance, the ending balance in C. Finley, Capital is: A. $33,000 B. $80,000 C. $30,000 D. $83,000
127. The proper sequence of steps in the accounting cycle is as follows A. analyze and record transactions, post transaction to the ledger, prepare a trial balance, prepare financial statements, journalize closing entries, analyze adjustment data and prepare adjusting entries B. prepare a trial balance, analyze adjustment data, prepare adjusting entries, prepare financial statements, journalize closing entries and post to the ledger, analyze and record transactions, post transactions to the ledger C. analyze and record transactions, post transactions to the ledger, prepare a trial balance, analyze adjustment data, prepare adjusting entries, prepare financial statements, journalize closing entries and post to the ledger, and finally prepare a post-closing trial balance D. prepare financial statements, journalize closing entries and post to the ledger, analyze and record transactions, post transactions to the ledger, prepare a trial balance, analyze adjustment data, prepare adjusting entries
128. The following are steps to the accounting cycle. Of the following, which step should be done first? A. Closing entries are journalized and posted to the ledger. B. Transactions are posted to the ledger. C. Adjusting entries are journalized and posted to the ledger. D. Financial statements are prepared.
129. The following are steps in the accounting cycle. Of the following, which would be prepared last? A. An adjusted trial balance is prepared. B. Transactions are posted to the ledger. C. An unadjusted trial balance is prepared. D. Adjusting entries are journalized and posted to the ledger.
130. The accounting cycle requires three trial balances be done. In what order should they be prepared? A. Post-closing, unadjusted, adjusted B. Unadjusted, post-closing, adjusted C. Unadjusted, adjusted, post-closing D. Post-closing, adjusted, unadjusted
131. The fiscal year selected by companies A. is the same as the calendar year B. begins with the first day of the month and ends on the last day of the twelfth month C. must always begin on January 1 D. will change each year
132. A fiscal year A. ordinarily begins on the first day of a month and ends on the last day of the following twelfth month B. for a business is determined by the federal government C. always begins on January 1 and ends on December 31 of the same year D. should end at the height of the business's annual operating cycle
133. The natural business year A. is a fiscal year that ends when business activities are at its lowest point. B. is a calendar year that ends when business activities are at its lowest point. C. is a fiscal year that ends when business activities are at its highest point. D. is a calendar year that ends when business activities are at its highest point.
134. The worksheet A. is an integral part of the accounting cycle B. eliminates the need to rewrite the financial statements C. is a working paper that is required D. is used to summarize account balances and adjustments for the financial statements
135. Which one of the steps below is not aided by the preparation of the work sheet? A. preparing the adjusted trial balance B. posting to the general ledger C. preparing the financial statements D. preparing the closing entries
136. A work sheet includes columns for A. adjusting entries B. closing entries C. reversing entries D. adjusting and closing entries
137. When a work sheet is complete, the adjustment columns should have A. total credits greater than total debits if a net income was earned B. total debits greater than total credits if a net loss was incurred C. total debits greater than total credits if a net income was earned D. total debits equal total credits
138. The difference between the totals of the debit and credit columns of the Adjusted Trial Balance columns on a work sheet A. is the amount of net income or loss B. indicates there is an error on the work sheet C. is the amount of retained earnings D. is the difference between revenue and expenses
139. Net income appears on the work sheet in the A. debit column of the Balance Sheet columns B. debit column of the Adjustments columns C. debit column of the Income Statement columns D. credit column of the Income Statement columns
140. A net loss appears on the work sheet in the A. debit column of the Balance Sheet columns B. credit column of the Balance Sheet columns C. debit column of the Income Statement columns D. credit column of the Adjustments columns
141. After net income is entered on the work sheet, the Balance Sheet debit and credit columns must A. be the same amount as the total amount of the Income Statement debit and credit columns B. equal each other C. be the same amount as the total amount in the Adjusted Trial Balance debit and credit columns D. not be equal to each other and need not be the same total amounts as any other pair of columns on the work sheet
142. Which of the statements below indicates that a company earned a net income for the period? A. The sum of the credits exceeds the sum of the debits in the Balance Sheet columns on the work sheet. B. The sum of the credits exceeds the sum of the debits in the Income Statement columns on the work sheet. C. The sum of the debits exceeds the sum of the credits in the Income Statement columns on the work sheet. D. Cash inflows exceeded cash outflows.
143. Which of the items below would appear in the Income Statement columns of the work sheet? A. Equipment B. Unearned Fees C. Prepaid Expense D. Net Loss
144. Which of the accounts below would not appear in the balance sheet columns of the worksheet? A. Chad Daniels, Drawing B. Rent Earned C. Unearned Revenue D. Chad Daniels, Drawing and Unearned Revenue
145. Which of the accounts below would appear in the Balance Sheet columns of the work sheet? A. Service Revenue B. Prepaid Rent C. Supplies Expense D. None are correct
146. The work sheet at the end of July has $5,950 in the Balance Sheet credit column for Accumulated Depreciation. The work sheet at the end of August has $7,600 in the Balance Sheet credit column for Accumulated Depreciation. What was the amount of the depreciation expense adjustment for the month of August? A. amount can not be determined B. $7,600 C. $5,950 D. $1,650
147. Which of the items below does not appear on the work sheet? A. adjusting entries B. the unadjusted trial balance C. closing entries D. the drawing account
148. An indication that the work sheet columns are in balance and the work sheet is completed is A. the word "Total" is written at the bottom of each pair of columns B. each pair of columns is double underlined C. each pair of columns has the totals circled D. the final figures are written in ink
149. After all of the account balances have been extended to the Balance Sheet columns of the work sheet, the totals of the debit and credit columns are $38,755 and $32,735, respectively. What is the amount of net income or net loss for the period? A. $6,020 net income B. $38,755 net loss C. $6,020 net loss D. $32,735 net income
150. After all of the account balances have been extended to the Income Statement columns of the work sheet, the totals of the debit and credit columns are $77,500 and $83,900, respectively. What is the amount of the net income or net loss for the period? A. $6,400 net income B. $6,400 net loss C. $83,900 net income D. $77,500 net loss
151. On September 1, the company pays rent for twelve months in advance and debits an asset account. At year end, the adjusting entry on the work sheet would A. increase an expense account B. decrease a liability account C. increase an asset account D. decrease an expense account
152. On March 1, a company collects revenue in advance for the next twelve months and credits a liability account. The adjusting entry at year end on the work sheet would A. increase a liability account B. decrease an asset account C. decrease a revenue account D. decrease a liability account
153. Which of the following is not an essential part of the accounting records? A. The journal B. The ledger C. The chart of accounts D. The work sheet
154. After all of the account balances have been extended to the Balance Sheet columns of the work sheet, the totals of the debit and credit columns show debits of $37,686 and the credits of $41,101. This indicates that A. neither net income or loss can be calculated because it is found on the income statement B. the company has a net loss of $3,415 for the period C. the company has a net income of $3,415 for the period D. The amounts are out of balance and need to be corrected
155. The income statement columns in the worksheet show that debits are equal to $55,800 and credits are $67,520. What does this information mean to the accountant? A. Net income of $11,720 B. Net loss of $11,720 C. The accounts are out of balance, indicating an error has been made. D. The accounts have not been updated.
156. Bob Evans owns a business, Beachside Realty, that rents condominiums and furnishings. Below is the adjusted trial balance at December 31, 2014.
Debit Credit Cash $ 1,500 Accounts receivable 2,000 Interest receivable 100 Prepaid insurance 1,600 Notes receivable (long-term) 2,800 Equipment 15,000 Accumulated depreciation $3,000 Accounts payable 2,400 Accrued expenses payable 3,920 Income taxes payable 2,700 Unearned rent fees 500 Bob Evans, Capital 7,700 Bob Evans, Drawing 2,000 Rent fees earned 37,000 Furniture rental revenue 1,200 Interest revenue 100 Wages expense 19,000 Depreciation expense 1,800 Utilities expense 320 Insurance expense 700 Maintenance expense 9,000 Income tax expense 2,700 $58,520 $58,520 The entry required to close the revenue accounts at the end of the period includes a: A. debit to Income Summary for $37,000 B. credit to Income Summary for $38,300 C. debit to Income Summary for $38,200 D. credit to Income Summary for $37,000
157. Bob Evans owns a business, Beachside Realty, that rents condominiums and furnishings. Below is the adjusted trial balance at December 31, 2014.
Debit Credit Cash $ 1,500 Accounts receivable 2,000 Interest receivable 100 Prepaid insurance 1,600 Notes receivable (long-term) 2,800 Equipment 15,000 Accumulated depreciation $3,000 Accounts payable 2,400 Accrued expenses payable 3,920 Income taxes payable 2,700 Unearned rent fees 500 Bob Evans, Capital 7,700 Bob Evans, Drawing 2,000 Rent fees earned 37,000 Furniture rental revenue 1,200 Interest revenue 100 Wages expense 19,000 Depreciation expense 1,800 Utilities expense 320 Insurance expense 700 Maintenance expense 9,000 Income tax expense 2,700 $58,520 $58,520 The entry required to close the expense accounts at the end of the period includes a: A. a debit to Income Summary for $35,520 B. a credit to Income Summary for $35,520 C. a debit to Income Summary for $33,520 D. a credit to Income Summary for $33,520
158. The balances for the accounts listed below appear in the Adjusted Trial balance columns of the end-of-period spreadsheet (work sheet). Indicate whether each balance should be extended to an Income Statement column or (b) a Balance Sheet column. 1. Dobson, Capital 2. Dobson, Drawing 3. Depreciation Expense 4. Accumulated Depreciation 5. Fees earned 6. Unearned Fees 7. Supplies 8. Supplies Expense
159. The end-of-period spreadsheet (work sheet) for the current year for Jamal Company shows Balance Sheet columns with a debit total of $630,430 and a credit total of $614,210. This is before the amount for net income or net loss has been included. In preparing the income statement from work sheet, what is the amount of net income or net loss?
160. Morgan Olsen owns and operates Crystal Pool Service Company. On January 1, 2014, Morgan Olsen, Capital had a balance of $252,000. During the year Morgan invested an additional $32,000 and withdrew $52,400. For the year ended December 31, 2014 Crystal Pool Service Company reported a net income of $73,200. Prepare a Statement of Owner’s Equity for the year ended December 31, 2014.
161. The following accounts appear in an adjusted trial balance of Brock Pool Service Company. Indicate whether each account would be reported in the (a) current assets, (b) property, plant, and equipment, (c) current liabilities, (d) long-term liabilities, or (e) owner’s equity section of the December 31, 2010, balance sheet of Brock Pool Service Company.
1. Taylor Brock, Capital 2. Accumulated Depreciation 3. Unearned Revenues 4. Mortgage Payable 5. Equipment 6. Notes Payable (due in 2012) 7. Cash 8. Accounts Receivable
162. Describe a classified balance sheet.
163. List and describe the purpose of the four closing entries.
164. After the accounts have been adjusted at January 31, 2014, the end of the fiscal year, the following balances are taken from the ledger of Taylor Pool Service Company:
Hope Taylor, Capital $349,000 Hope Taylor, Drawing 5,000 Fees Earned 124,600 Wages Expense 29,000 Rent Expense 43,000 Supplies Expense 7,300 Miscellaneous Expense 5,700 Journalize the four entries required to close the accounts
165. Prior to adjustment at August 31, 2014, Salary Expense has a debit balance of $298,500. Salaries owed but not paid as of the same date total $7,200.
Present the entries to record the following:
(1) Accrued salaries as of August 31. (2) Closing of Salary Expense as of August 31.
166. The following are all the steps in the accounting cycle. List them in the order in which they should be done. - Closing entries are journalized and posted to the ledger. - An unadjusted trial balance is prepared. - An optional end-of-period spreadsheet (work sheet) is prepared. - A post-closing trial balance is prepared. - Adjusting entries are journalized and posted to the ledger. - Transactions are analyzed and recorded in the journal. - Adjustment data are assembled and analyzed. - Financial statements are prepared. - An adjusted trial balance is prepared. - Transactions are posted to the ledger.
167. If working papers are not considered part of the formal accounting records, then why are they used?
168. Explain how net income or loss is determined by using the work sheet.
169. You evaluate loan requests as part of your job at Beach Front National Bank. One loan request you received is from Surfer Dude Supplies, a small proprietorship. Tracy Roberts, the owner, is requesting $75,000 and brings you a trial balance (or Statement of Accounts) for his first year of operations ended December 31, 2010. REQUIRED: While you are willing to work with Tracy, how would you explain to him that a complete set of financial statements from his accountant would be more useful for evaluating the loan request?
170. You have just accepted your first job out of college, which requires you to evaluate loan requests at Beach Front National Bank. The first loan request you receive is from Surfer Dude Enterprises, a small proprietorship. Marty Monroe, the owner, is requesting $75,000 and brings you the following trial balance (or Statement of Accounts) for his first year of operations ended December 31, 2010. What three accounts do you think should be relabeled for greater clarity?
Surfer Dude Enterprises Statement of Accounts December 31, 2010 Cash 2,050 Billings Due from Others 15,070 Office Supplies 7,470 Trucks 26,370 Equipment 8,090 Amounts Owed to Others 2,850 Investment in Business 23,500 Service Revenues 73,650 Wages Expense 30,050 Rent Expense 7,330 Insurance Expense 2,400 Utilities Expenses 700 Miscellaneous Expenses 470 100,000 100,000
171. You have just accepted your first job out of college, which requires you to evaluate loan requests at Beach Front National Bank. The first loan request you receive is from Surfer Dude Enterprises, a small proprietorship. Marty Monroe, the owner, is requesting $75,000 and brings you the following trial balance (or Statement of Accounts) for his first year of operations ended December 31, 2010. Which of the following accounts do you think might need to be adjusted before an accurate set of financial statements could be prepared?
Surfer Dude Enterprises Statement of Accounts December 31, 2010
Cash 2,050 Billings Due from Others 15,070 Office Supplies 7,470 Trucks 26,370 Equipment 8,090 Amounts Owed to Others 2,850 Investment in Business 23,500 Service Revenues 73,650 Wages Expense 30,050 Rent Expense 7,330 Insurance Expense 2,400 Utilities Expense 700 Miscellaneous Expenses 470 100,000 100,000
172. Hakik Enterprises offers rug cleaning services to business clients. Below is the trial balance for Hakik Enterprises, which was prepared on the end of period spreadsheet (work sheet) for the year ended July 31, 2010.
Hakik Enterprises End of Period Spreadsheet (Work Sheet) For the Year Ended July 31, 2010 Trial Balance Adjustments Adjusted
Trial Balance Debit Credit Debit Credit Debit Credit Cash 36 Prepaid Insurance 12 Fees Receivable 56 Supplies 12 Equipment 60 Accum. Depreciation 12 Unearned Revenue 20 Accounts Payable 32 Wages Payable Ramon Hakik, Capital 84 Ramon Hakik, Drawings 4 Service Revenue 80 Advertising Expense 28 Wage Expense 20 Insurance Expense Supplies Expense Depreciation Expense Totals 228 228 REQUIRED: Enter the adjustment data in the work sheet for the transactions shown below and place the balances in the Adjusted Trial Balance columns. a) The equipment is estimated to last for 5 years with no salvage value. The asset will be depreciated evenly over its useful life. Record one month’s depreciation. b) Accrued Wages $2. c) Unused supplies on hand $8. d) Of the unearned revenue, 75% has been earned. e) Unexpired insurance remaining at the end of the month, $9.
173. Hakik Enterprises offers rug cleaning services to business clients. Below are the adjustments data for the year ended July 31, 2010. REQUIRED: Using this information along with the spreadsheet below, record the adjusting entries in proper general journal form. Adjustments: a) The equipment is estimated to last for 5 years with no salvage value. The asset will be depreciated evenly over its useful life. Please record one month’s depreciation. b) Accrued Wages $2. c) Unused supplies on hand $8. d) Of the unearned revenue, 75% has been earned. e) Unexpired insurance remaining at the end of the month, $9.
Hakik Enterprises End of Period Spreadsheet (Work Sheet) For the Year Ended July 31, 2010 Trial Balance Adjustments Adjusted
Trial Balance
Debit Credit Debit Credit Debit Credit Cash 36 Prepaid Insurance 12 Fees Receivable 56 Supplies 12 Equipment 60 Accum. Deprec. - Equip 12 Unearned Revenue 20 Accounts Payable 32 Wages Payable Ramon Hakik, Capital 84 Ramon Hakik, Drawings 4 Service Revenue 80 Advertising Expense 28 Wage Expense 20 Insurance Expense Supplies Expense Depreciation Expense Totals 228 228
174. Bob Evans owns a business, Beachside Realty, that rents condominiums and furnishings. Below is the adjusted trial balance at December 31, 2010.
Debit Credit Cash $ 1,500 Accounts receivable 2,000 Interest receivable 100 Prepaid insurance 1,600 Notes receivable (long-term) 2,800 Equipment 15,000 Accumulated depreciation $3,000 Accounts payable 2,400 Accrued expenses payable 3,920 Income taxes payable 2,700 Unearned rent fees 500 Bob Evans, Capital 7,700 Bob Evans, Drawing 2,000 Rent fees earned 37,000 Furniture rental revenue 1,200 Interest revenue 100 Wages expense 19,000 Depreciation expense 1,800 Utilities expense 320 Insurance expense 700 Maintenance expense 9,000 Income tax expense 2,700 Total $ 58,520 $ 58,520 Prepare the entry required to close the revenue accounts at the end of the period.
175. Bob Evans owns a business, Beachside Realty, that rents condominiums and furnishings. Below is the adjusted trial balance at December 31, 2010.
Debit Credit Cash $ 1,500 Accounts receivable 2,000 Interest receivable 100 Prepaid insurance 1,600 Notes receivable (long-term) 2,800 Equipment 15,000 Accumulated depreciation $3,000 Accounts payable 2,400 Accrued expenses payable 3,920 Income taxes payable 2,700 Unearned rent fees 500 Bob Evans, Capital 7,700 Bob Evans, Drawing 2,000 Rent fees earned 37,000 Furniture rental revenue 1,200 Interest revenue 100 Wages expense 19,000 Depreciation expense 1,800 Utilities expense 320 Insurance expense 700 Maintenance expense 9,000 Income tax expense 2,700 $ 58,520 $ 58,520 Prepare the entry required to close the expense accounts at the end of the period.
176. Bob Evans owns a business, Beachside Realty, that rents condominiums and furnishings. Below is the adjusted trial balance at December 31, 2010.
Debit Credit Cash $ 1,500 Accounts receivable 2,000 Interest receivable 100 Prepaid insurance 1,600 Notes receivable (long-term) 2,800 Equipment 15,000 Accumulated depreciation $3,000 Accounts payable 2,400 Accrued expenses payable 3,920 Income taxes payable 2,700 Unearned rent fees 500 Bob Evans, Capital 7,700 Bob Evans, Drawing 2,000 Rent fees earned 37,000 Furniture rental revenue 1,200 Interest revenue 100 Wages expense 19,000 Depreciation expense 1,800 Utilities expense 320 Insurance expense 700 Maintenance expense 9,000 Income tax expense 2,700 $ 58,520 $ 58,520 Prepare the closing entry required to transfer the income or loss at the end of the period.
177. Bob Evans owns a business, Beachside Realty, that rents condominiums and furnishings. Below is the adjusted trial balance at December 31, 2010.
Debit Credit Cash $ 1,500 Accounts receivable 2,000 Interest receivable 100 Prepaid insurance 1,600 Notes receivable (long-term) 2,800 Equipment 15,000 Accumulated depreciation $3,000 Accounts payable 2,400 Accrued expenses payable 3,920 Income taxes payable 2,700 Unearned rent fees 500 Bob Evans, Capital 7,700 Bob Evans, Drawing 2,000 Rent fees earned 41,000 Furniture rental revenue 1,200 Interest revenue 100 Wages expense 19,000 Depreciation expense 1,800 Utilities expense 320 Insurance expense 700 Maintenance expense 9,000 Income tax expense 2,700 $ 58,520 $ 58,520 Prepare the entry required to close the Drawing account at the end of the period.
178. Each of the following transactions for Morrison Company requires an adjusting entry, which if omitted, will overstate or understate assets, liabilities, owner’s equity, revenues, expenses, or net income. Indicate the amount and direction of the misstatement that would result if the end of period adjusting entry suggested by the transaction was omitted. Place your results in the table following the transactions and use (+) for overstate, (-) for understate, and (NE) for no effect. 1. Morrison purchased supplies on December 1 for $900. On December 31, $350 of supplies were on hand. 2. Prepaid insurance had a debit balance of $5,400 on December 1, which represented a prepayment for 2 years of insurance. 3. The unearned rent revenue account has a credit balance of $390 on December 1, which represents 3 months rent.
Transaction Assets Liabilities Owner’s Equity Revenues Expenses Net Income 1. 2. 3.
179. The end-of-period spreadsheet (work sheet) for the current year for Jamal Company shows Balance Sheet columns with a debit total of $614,210 and a credit total of $630,430. This is before the amount for net income or net loss has been included. In preparing the income statement from work sheet, what is the amount of net income or net loss?
180. Identify which of the following accounts should be closed with a debit or a credit to Income Summary at the end of the fiscal year. If it is not closed to Income Summary, mark as n/a. 1. Utilities Payable 2. Utilities Expense 3. Supplies 4. Supplies Expense 5. Fees Earned 6. Unearned Fees 7. Accounts Receivable 8. Jason Hill, Drawing 9. Jason Hill, Capital 10. Accumulated Depreciation - Equipment 11. Depreciation Expense - Equipment 12. Equipment 13. Prepaid Insurance 14. Insurance Expense
181. The balances for the accounts listed below appeared in the Adjusted Trial Balance columns of the work sheet. Indicate whether each balance should be extended to (a) the Income Statement columns or (b) the Balance Sheet columns.
(1) Salaries Payable (7) Felipe Ramos, Drawing (2) Fees Earned (8) Equipment (3) Accounts Payable (9) Accounts Receivable (4) Felipe Ramos, Capital (10) Accumulated Depreciation (5) Supplies Expense (11) Salary Expense (6) Unearned Rent (12) Depreciation Expense
182. Indicate whether each of the following would be reported in the financial statements as a(n) (a) current asset, (b) current liability, (c) revenue, or (d) expense:
(1) Supplies (5) Supplies Expense (2) Unearned Fees (6) Prepaid Insurance (3) Prepaid Advertising (7) Accounts Payable (4) Advertising Expense (8) Fees Earned
183. The following accounts were taken from the Adjusted Trial Balance columns of the work sheet for April 30, 2010 for Finnegan Co.:
Accumulated Depreciation $ 32,000 Fees Earned 78,000 Depreciation Expense 7,250 Rent Expense 34,000 Prepaid Insurance 6,000 Supplies 400 Supplies Expense 1,800 Prepare an income statement.
184. The following revenue and expense account balances were taken from the Income Statement columns of the work sheet for Fraser Services Co. for December 31, 2010:
Depreciation Expense $ 4,950 Insurance Expense 2,900 Miscellaneous Expense 1,200 Rent Expense 24,000 Service Revenue 92,500 Supplies Expense 3,150 Utilities Expense 5,000 Wages Expense 63,750
Prepare an income statement.
185. The following data were taken from the Balance Sheet columns of the work sheet for April 30, 2010 for Mackenzie Company:
Accumulated Depreciation-Trucks $42,400 Prepaid Rent 6,800 Supplies 850 Unearned Fees 7,310 Trucks 49,300 Cash 3,400 Mackenzie, Capital ? Prepare a classified balance sheet.
186. Indicate whether each of the following would be reported in the section of financial statements identified as (a) current asset, (b) property, plant, and equipment, (c) current liability, (d) revenue, or (e) expense:
(1) Automobile (2) Accumulated depreciation (3) Rent expense (4) Fees earned (5) Salaries payable (6) Prepaid rent (7) Store supplies (8) Advertising expense (9) Unearned rent
187. The following balance sheet contains errors.
Brock Morton Services Co. Balance Sheet For the Year Ended December 31, 2010 Assets Liabilities Current assets: Current liabilities: Cash $ 7,170 Accounts receivable $ 10,000 Accounts payable 7,500 Accum. depr-building 12,525 Supplies 2,590 Accum. depr-equipment 7,340 Prepaid insurance 800 Net income 11,500 Land 24,000 Total current assets $ 42,060 Total liabilities $ 41,365 Owner's Equity Property, plant, and equipment: Wages payable $ 1,500 Building $43,700 Brock Morton, Capital 88,645 Equipment 29,250 Total owner's equity $ 90,145 Total property, plant, and equipment
72,950
Total liabilities and Total assets $131,510 owner's equity $131,510 (a) List the errors in the balance sheet above and (b) prepare a corrected balance sheet.
188. The following is the adjusted trial balance for Nadia Company.
Nadia Company Adjusted Trial Balance December 31, 2014 Cash 5,130 Accounts Receivable 3,300 Prepaid Expenses 420 Equipment 12,400 Accumulated Depreciation 2,200 Accounts Payable 700 Notes Payable - Due on June 30, 2011 3,070 Nadia Porter, Capital 13,000 Nadia Porter, Drawing 700 Fees Earned 10,930 Wages Expense 2,450 Rent Expense 1,900 Utilities Expense 1,475 Depreciation Expense 1,150 Miscellaneous Expense 975 Totals 29,900 29,900 Prepare an Income Statement, Balance Sheet, and Statement of Owner’s Equity. Assume that the capital account started with a beginning balance of $10,000.
189. Prepare an income statement and a statement of owner’s equity, for the month ended August 31, 2014, from the following T-Accounts of Marley Company.
Prepaid Insurance
Accounts Receivable
Unearned Revenues
Wages Payable
1,100 5,400 1,400 480 200 800 400
Marley, Capital
Marley, Drawing
Income Summary
Fees Earned
6,500 3,200 9,775 7,500 2,800 3,200 3,995 2,000 5,780 5,780 275 3,200 9,775 Wages Expense
Rent Expense
Insurance Expense
Utilities Expense
2,200 990 285 95 425 990 285 95 2,625
190. Prepare an income statement and a statement of owner’s equity for the month ended September 30, 2010 from the T-accounts below of Carson Company.
Prepaid Insurance
Accounts Receivable
Unearned Revenues
Wages Payable
1,400 1,600 1,200 435 120 400 200 Carson, Capital
Carson, Drawing
Income Summary
Fees Earned
6,800 2,400 4,150 3,300 2,500 2400 4,760 500 610 610 350 2,400 4,150
Wages Expense
Rent Expense
Insurance Expense
Utilities Expense
3,200 1,130 80 125 225 1,130 80 125 3,425
191. Selected ledger accounts appear below for Fulton Surveying Services for 2014.
Fulton, Capital
Fulton, Drawing
12/31 25,000 1/1 20,000 3/31 12,000 12/31 25,000 12/31 48,000 12/22 13,000 Income Summary 12/31 19,000 12/31 67,000 12/31 48,000 Prepare a statement of owner's equity.
192. On the basis of the following data taken from the Adjusted Trial Balance columns of the work sheet for the year ended March 31 for Boles Athletic Company, journalize the four closing entries.
Cash $ 30,000 Accounts Receivable 45,200 Supplies 5,000 Equipment 169,900 Accumulated Depreciation $ 32,000 Accounts Payable 12,500 Jason Boles, Capital 71,600 Jason Boles, Drawing 47,000 Fees Earned 510,000 Salary Expense 244,500 Rent Expense 48,000 Depreciation Expense 25,000 Supplies Expense 9,500 Miscellaneous Expense 2,000 $626,100 $626,100
193. After all adjustments have been made, but before the accounts have been closed, the following balances were taken from the ledger of Ramona’s Designs:
Accounts Payable $ 27,600 Rent Expense $ 32,700 Accounts Receivable 64,500 Salary Expense 41,390 Accumulated Depreciation 73,325 Salaries Payable 8,150 Cash 17,150 Service Revenue 186,000 Depreciation Expense 13,500 Supplies 1,500 Equipment 165,000 Supplies Expense 2,500 Insurance Expense 2,510 Ramona Cross, Capital 99,950 Prepaid Insurance 6,275 Ramona Cross, Drawing 48,000 Journalize the entries to close the appropriate accounts.
194. On the basis of the following information taken from the Adjusted Trial Balance columns of the work sheet for the month ended September 30th, journalize the closing entries for Perez Roofing Company.
Cash $22,500.00 Accounts Receivable 3,575.00 Office Supplies 2,850.00 Repair Parts 3,785.00 Machinery 17,750.00 Accumulated Depreciation 3,250.00 Accounts Payable 1,150.00 Notes Payable 6,500.00 Sam Perez, Capital 2,500.00 Sam Perez, Drawing 1,750.00 Service Revenue 47,200.00 Wages Expense 4,840.00 Office Supplies Expense 1,275.00 Repair Parts Expense 925.00 Depreciation Expense 1,350.00 $60,600.00 $60,600.00
195. The following adjusted trial balance is the result of the adjustments made at the end of the month of March for Erik Martin Company. Utilize these adjusted values to perform the closing entries for Erik Martin Company.
Cash $24,750.00 Accounts Receivable 5,750.00 Office Supplies 3,525.00 Store Supplies 4,785.00 Machinery 9,750.00 Accumulated Depreciation 2,150.00 Accounts Payable 3,550.00 Notes Payable 7,500.00 Erik Martin, Capital 19,725.00 Erik Martin, Drawing 6,250.00 Service Revenue 36,500.00 Wages Expense 6,425.00 Office Supplies Expense 1,465.00 Store Supplies Expense 5,150.00 Depreciation Expense 1, 575.00 ________ $69,425.00 $69,425.00
196. The following adjusted trial balance is the result of the adjustments made at the end of the month of July for Ladonna Douglas Company. Utilize these adjusted values to perform the closing entries for Ladonna Douglas Company.
Cash $34,750.00 Accounts Receivable 9,750.00 Office Supplies 2,525.00 Store Supplies 4,785.00 Machinery 10,750.00 Accumulated Depreciation 2,150.00 Accounts Payable 14,300.00 Notes Payable 11,500.00 Ladonna Douglas, Capital 53,725.00 Ladonna Douglas, Drawing 13,250.00 Service Revenue 41,500.00 Wages Expense 37,425.00 Rent Expense 3,000.00 Advertising Expense 2,750.00 Office Supplies Expense 1,465.00 Store Supplies Expense 2,150.00 Depreciation Expense 575.00 ________ $123,175.00 $123,175.00
197. Marcus Enterprises was started by Damien Marcus in 2010. During 2010, Damien Marcus invested $8,000 in the business. Based on the following worksheet, prepare an income statement, statement of owner’s equity, and balance sheet for Marcus Enterprises for the year ended December 31, 2010. Marcus Enterprises Worksheet For the Year Ended December 31, 2010
Adjusted Trial Balance
Income Statement Balance Sheet
Account Title Debit Credit Debit Credit Debit Credit Cash 26,500 26,500 Accounts Receivable 7,000 7,000 Supplies 1,000 1,000 Equipment 18,500 18,500 Accumulated Depr-Equip 5,000 5,000 Accounts Payable 11,000 11,000 Wages Payable 1,000 1,000 Damien Marcus, Capital 8,000 8,000 Damien Marcus, Drawing 2,000 2,000 Fees Earned 59,500 59,500 Wages Expense 19,000 19,000 Rent Expense 7,000 7,000 Depreciation Expense 3,500 3,500 Totals 84,500 84,500 29,500 59,500 55,000 25,000 Net Income (Loss) 30,000 30,000 59,500 59,500 55,000 55,000
198. Prepare closing entries from the following work sheet. Lakendra Enterprises Worksheet For the Year Ended December 31, 2010
Adjusted Trial Balance
Income Statement Balance Sheet
Account Title Debit Credit Debit Credit Debit Credit Cash 26,500 26,500 Accounts Receivable 7,000 7,000 Supplies 1,000 1,000 Equipment 18,500 18,500 Accumulated Depr-Equip 5,000 5,000 Accounts Payable 11,000 11,000 Wages Payable 1,000 1,000 Lakendra Thomas, Capital 8,000 8,000 Lakendra Thomas, Drawing 2,000 2,000 Fees Earned 59,500 59,500 Wages Expense 19,000 19,000 Rent Expense 7,000 7,000 Depreciation Expense 3,500 3,500 Totals 84,500 84,500 29,500 59,500 55,000 25,000 Net Income (Loss) 30,000 30,000 59,500 59,500 55,000 55,000
199. The following is the adjusted trial balance for Sandeep Company.
Sandeep Company Adjusted Trial Balance December 31, 2010 Cash 8,130 Accounts Receivable 3,300 Prepaid Expenses 2,750 Equipment 10,400 Accumulated Depreciation 2,200 Accounts Payable 2,700 Notes Payable 1,000 Rena Sandeep, Capital 11,200 Rena Sandeep, Drawing 4,870 Fees Earned 36,600 Wages Expense 12,450 Rent Expense 4,900 Utilities Expense 3,475 Depreciation Expense 2,150 Miscellaneous Expense 1,275 Totals 53,700 53,700 Prepare closing entries and the post closing trial balance.
200. Reconstruct the adjusting and closing entries from the following T-Accounts.
Prepaid Insurance
Accounts Receivable.
Unearned Revenues
Wages Payable
1,200 6,000 1,350 530 200 1,500 435 530 1,000 7,500 915 Madison Cox, Capital
Madison Cox, Drawing
Income Summary
Fees Earned
7,000 2,100 9,935 8,000 5,280 2,100 4,655 1,500 2,100 0 5,280 435 10,180 0 9,935 0 Wages Expense
Rent Expense
Insurance Expense
Utilities Expense
2,600 1,145 200 180 530 1,145 200 180 3,130 0 0 0 0
201. Reconstruct adjusting and closing entries for the month ended September 30, 2010 from the T-accounts below.
Prepaid Insurance
Accounts Receivable.
Unearned Revenues
Wages Payable
1,350 1,250 1,050 385 130 275 235 385 1,220 1,525 815
Mai Lui, Capital
Mai Lui, Drawing
Income Summary
Fees Earned
7,000 2,400 5,510 5,000 580 2,400 6,090 275 2,400 0 580 235 4,020 5,510 Wages Expense
Rent Expense
Insurance Expense
Utilities Expense
3,600 1,880 130 95 385 1,880 130 95 3,985 0 0 0 0
202.
1) Dana Bowen Company is completing its first year of operations on April 30, 2010. Reconstruct the entries for the year ended April 30, 2010 from the T-accounts below. Record them as follows:
A - L Journal Entries M- R Adjusting Journal Entries 2) Balance and
prepare the Income Statement, Statement of Owner’s Equity, and the Balance Sheet from the T-Accounts.
3) Prepare the four
closing entries (S - V).
4) Prepare the
Post-Closing Trial Balance.
Cash Accou
nts Receivable
Supplies Prepaid Insurance
6,500 1,250 870 1,940 900 385 540 725 400 420 1,940 2,500 50 350 930 Equipment Accum
ulated Depreciation
Accounts Payable
Wages Payable
2,500 130 870 225
Unearned Revenues
Dana Bowen, Capital
Dana Bowen, Drawing
Income Summary
930 6,500 350 590 2,500 Fees Earned Wages
Expense
Rent Expense
Supplies Expense
900 420 400 540 1,250 225 2,500 385 590 Insurance Expense
Depreciation Expense
Miscellaneous Expense
725 130 50
203. The balances in the ledger of Good Landscape Services as of January 31, 2014 before adjustments, are as follows:
Cash $ 6,750 Dalton Good, Capital $29,775 Supplies 3,900 Dalton Good, Drawing 3,425 Prepaid Insurance 8,400 Service Revenue 56,300 Equipment 41,750 Salary Expense 24,300 Accumulated Rent Expense 6,000 Depreciation 9,950 Miscellaneous Expense 1,500 Adjustment data are as follows: supplies on hand, January 31, $900; insurance expired for January, $1,100; depreciation on equipment for January, $1,600; salaries accrued, January 31, $1,650. (a) Prepare a ten-column work sheet for Good Landscape Services for January, 2014. (b) On the basis of the work sheet in (a), present the following in good order: (1) income statement, (2) statement of owner's equity
(no additional investments were made during the month), and (3) balance sheet. (c) On the basis of the work sheet in (a), journalize the closing entries as of January 31, 2014.
204. Complete the following worksheet for Danilo Enterprises. Danilo Enterprises Worksheet For the Year Ended December 31, 2010
Adjusted Trial Balance
Income Statement Balance Sheet
Account Title Debit Credit Debit
Credit Debit Credit
Cash 14,500 Accounts Receivable 7,500 Supplies 500 Equipment 20,500 Accumulated Depr-Equip 15,000 Accounts Payable 9,500 Wages Payable 3,060 Tony Danilo, Capital 18,240 Tony Danilo, Drawing 1,000 Fees Earned 34,000 Wages Expense 18,000 Rent Expense 9,300 Depreciation Expense 8,500 Totals 79,800 79,800 Net Income (Loss)
Chapter 4--Completing the Accounting Cycle Key
1. After analyzing transactions, the next step would be to post the transactions in the ledger. FALSE
2. The most important output of the accounting cycle is the financial statements. TRUE
3. The work sheet is not considered a part of the formal accounting records. TRUE
4. Cross-referencing is useful in assuring that the debits and credits are in balance. FALSE
5. When accounts do not appear on the unadjusted trial balance but are needed to post adjustments, they are simply added to the account title column. TRUE
6. Once the adjusted trial balance is in balance, the flow of accounts will now go into the financial statements. TRUE
7. There is really no benefit in preparing financial statements in any particular order. FALSE
8. Round tripping is a fraudulent scheme where business A artificially inflates revenue by lending money to customer B who uses that money to buy products from A. TRUE
9. On the income statement, miscellaneous expenses are usually presented as the last item without regard to the dollar amount. TRUE
10. The usual presentation of the statement of owner's equity is (1) Beginning capital, (2) Net income or loss, (3) Drawing, (4) Owner's contributions, (5) Ending capital. FALSE
11. The difference between a classified balance sheet and one that is not classified is that the classified one has subheadings. TRUE
12. Cash and other assets that may reasonably be expected to be realized in cash, sold, or consumed through the normal operations of a business, usually longer than one year, are called current assets. FALSE
13. Prepaid Insurance is an example of a current asset. TRUE
14. Land is an example of a plant asset. TRUE
15. Liabilities that will be due within one year or less and that are to be paid out of current assets are called current liabilities. TRUE
16. The amount of the net income for a period appears on both the income statement and the balance sheet for that period. FALSE
17. Accrued taxes payable are generally reported on the balance sheet as a current liability. TRUE
18. At the end of the fiscal period, prepaid expenses are reported on the income statement as expenses. FALSE
19. Office Equipment is an example of a current asset account. FALSE
20. Capital and Drawing are reported in the owner's equity section of the balance sheet. FALSE
21. Deferred expenses that benefit a relatively short period of time are listed on the balance sheet as current assets. TRUE
22. Unearned revenues that will be earned in a relatively short period of time are listed on the balance sheet as current assets. FALSE
23. Accrued expenses are ordinarily listed on the balance sheet as current assets. FALSE
24. Accrued revenues are ordinarily listed on the balance sheet as current liabilities. FALSE
25. The income statement is prepared from the adjusted trial balance or the income statement columns on the work sheet. TRUE
26. Examples of temporary accounts are supplies and prepaid expenses which are in the ledger for just a short time before they expire. FALSE
27. Accumulated Depreciation is a permanent account. TRUE
28. The drawing account is a temporary account. TRUE
29. The balance sheet accounts are referred to as real or permanent accounts. TRUE
30. Journalizing and posting the adjustments and closing entries updates the ledger for the new accounting period. TRUE
31. The income summary account is closed to the owner's capital account. TRUE
32. The accumulated depreciation account is closed to the income summary account. FALSE
33. The drawing account is closed to the income summary account. FALSE
34. The trial balance prepared after all the closing entries have been posted is called a pre-closing trial balance. FALSE
35. Entries required to close the balances of the temporary accounts at the end of the period are called final entries. FALSE
36. Journalizing and posting closing entries must be completed before financial statements can be prepared. FALSE
37. During the closing process, some balance sheet accounts are closed and end the period with a zero balance. FALSE
38. Closing entries are entered directly on to the work sheet. FALSE
39. The post-closing trial balance will generally have fewer accounts than the trial balance. TRUE
40. A post-closing trial balance contains only asset and liability accounts. FALSE
41. A post-closing trial balance should be prepared before the financial statements are prepared. FALSE
42. Assets, liabilities, and owner’s capital are real accounts and do not get closed at the end of the period. TRUE
43. The income summary account is also known as the clearing account. TRUE
44. All income statement accounts will be closed at the end of the period. TRUE
45. Balance Sheet accounts are not considered real accounts. FALSE
46. It is not necessary to post the closing entries to the general ledger. FALSE
47. Once an account has been closed for the period, inserting a line in the balance columns zeros out the account, making it ready for the following period. TRUE
48. The last step of the accounting cycle is to prepare a post-closing trial balance. TRUE
49. The accounting cycle begins with preparing an unadjusted trial balance. FALSE
50. Financial statements should be prepared before the closing entries are journalized and posted. TRUE
51. The unadjusted, adjusted, and final trial balances are prepared during the accounting cycle of a period. FALSE
52. Any twelve-month accounting period adopted by a company is known as its fiscal year. TRUE
53. A fiscal year that ends when business activities have reached their lowest point is called the natural business year. TRUE
54. All companies must use a calendar year as their fiscal year. FALSE
55. The majority of businesses end their fiscal year on December 31. TRUE
56. The balances of the capital accounts from the Adjusted Trial Balance of the work sheet are extended to the Statement of Owner’s Equity columns. FALSE
57. The work sheet is a working paper that accountants can use to summarize adjusting entries and the account balances for the financial statements. TRUE
58. In a computerized accounting system, a work sheet may not be necessary because the software program automatically posts entries to the accounts and prepares financial statements. TRUE
59. The trial balance may be listed on the work sheet instead of being prepared separately. TRUE
60. The totals of the Adjusted Trial Balance columns on a work sheet will always be the sum of the Trial Balance column totals and the Adjustments column totals. FALSE
61. A work sheet heading is dated for a period of time. TRUE
62. On the work sheet, the capital and drawing account balances are extended to the Balance Sheet columns. TRUE
63. After the account balances have been extended from the Adjusted Trial Balance columns on the work sheet, the difference between the initial totals of the Balance Sheet debit and credit columns is Net Income or Net Loss. TRUE
64. After Net Income or Loss is entered on the work sheet, the debit column total must equal the credit column total for the Balance Sheet pair of columns. TRUE
65. A net loss is shown on the work sheet in the credit columns of both the Income Statement columns and the Balance Sheet columns. FALSE
66. Net income is shown on the work sheet in the Income Statement debit column and the Balance Sheet credit column. TRUE
67. If the totals of the Income Statement debit and credit columns of a work sheet are $27,000 and $29,000, respectively, after all account balances have been extended, the amount of the net loss is $2,000. FALSE
68. The worksheet and the financial statements both require dollar signs. FALSE
69. The balance in the capital account on the worksheet will equal the amount presented in the balance sheet. FALSE
70. Since the adjustments are entered on the work sheet, it is not necessary to record them in the journal or post them to the ledger. FALSE
71. The chart of accounts, the journal, and the ledger are essential parts of the accounting system. TRUE
72. The closing process is sometimes referred to as closing the books. TRUE
73. Accounts reported on the balance sheet that are carried forward from year to year are known as permanent accounts. TRUE
74. Real accounts are not permanent accounts. FALSE
75. In the accounting cycle, the last step is A. preparing the financial statements B. journalizing and posting the adjusting entries C. preparing a post-closing trial balance D. journalizing and posting the closing entries
76. During the end-of-period processing which of the following best describes the logical order of this process A. Preparation of adjustments, adjusted trial balance, financial statements B. Preparation of Income Statement, adjusted trial balance, Balance Sheet C. Preparation of adjusted trial balance, cross-referencing, journalizing D. Preparation of adjustments, adjusted trial balance, posting
77. What is the major difference between the Unadjusted Trial Balance and the Adjusted Trial Balance? A. The Adjusted Trial Balance will show the net income (loss) as an additional account. B. Unlike the Adjusted Trial Balance, the Unadjusted Trial Balance will continue with the end-of-period processing even if it is not in balance. C. The Adjusted Trial Balance includes the postings of the adjustments for the period in the balance of the accounts. D. The Adjusted Trial Balance will be used to record the adjustments for the period.
78. Once the adjusting entries are posted, the Adjusted Trial Balance is prepared to A. verify that the debits and credits are in balance. B. verify that the net income correctly flows into the statement of owner’s equity from the income statement C. verify that the net income (loss) is correct for the period. D. verify the correct flow of accounts into the financial statements.
79. When preparing the statement of owner's equity, the beginning capital balance can always be found A. in the Income Statement columns of the work sheet B. in the statement of cash flows C. in the general ledger D. in the Balance Sheet columns of the work sheet
80. Accumulated Depreciation appears on the A. balance sheet in the current assets section B. balance sheet in the property, plant and equipment section C. balance sheet in the long-term liabilities section D. income statement as an operating expense
81. Notes Receivable due in 350 days appear on the A. balance sheet in the current assets section B. balance sheet in the fixed assets section C. balance sheet in the current liabilities section D. income statement as an expense
82. Unearned Fees appear on the A. balance sheet in the current assets section B. balance sheet as a current liability C. balance sheet in the owner's equity section D. income statement as revenue
83. Which one of the fixed asset accounts listed below will not have a related contra asset account? A. Office Equipment B. Land C. Delivery Equipment D. Building
84. Prepaid insurance is reported on the balance sheet as a A. current asset B. fixed asset C. current liability D. long-term liability
85. The income statement is prepared from: A. the adjusted trial balance. B. the income statement columns of the work sheet. C. either the adjusted trial balance or the income statement columns of the work sheet. D. both the adjusted trial balance and the income statement columns of the work sheet.
86. Round-tripping is when A. a selling company sells to a customer company with huge discounts. B. a selling company pretends to sell to a fictitious company with the intent of inflating revenues C. a selling company lends money to a customer company to increase assets. D. a selling company lends money to a customer company to be used to purchase goods from the selling company.
87. The Statement of Owner’s Equity should be prepared A. before the income statement and after the balance sheet B. before the income statement and balance sheet C. after the income statement and balance sheet D. after the income statement and before the balance sheet
88. The income statement should be prepared A. before the statement of owner’s equity and balance sheet B. after the statement of owner’s equity and before the balance sheet C. after the statement of owner’s equity and balance sheet D. after the balance sheet and before the statement of owner’s equity
89. Use the following information in the adjusted trial balance for Stockton Company to answer the following questions.
Stockton Company Adjusted Trial Balance For the Year ended December 31, 20XX Cash $ 6,530 Accounts Receivable 2,100 Prepaid Expenses 700 Equipment 13,700 Accumulated Depreciation $ 1,100 Accounts Payable 1,900 Notes Payable 4,300 Bob Steely, Capital 12,940 Bob Steely, Withdrawals 790 Fees Earned 9,250 Wages Expense 2,500 Rent Expense 1,960 Utilities Expense 775 Depreciation Expense 250 Miscellaneous Expense 185 Totals $29,490 $29,490
Determine the net income (loss) for the period. A. Net Income $9,250 B. Net Loss $790 C. Net Loss $5,670 D. Net Income $3,580
90. Use the following information in the adjusted trial balance for Stockton Company to answer the following questions.
Stockton Company Adjusted Trial Balance For the Year ended December 31, 20XX Cash $ 6,530 Accounts Receivable 2,100 Prepaid Expenses 700 Equipment 13,700 Accumulated Depreciation $ 1,100 Accounts Payable 1,900 Notes Payable 4,300 Bob Steely, Capital 12,940 Bob Steely, Withdrawals 790 Fees Earned 9,250 Wages Expense 2,500 Rent Expense 1,960 Utilities Expense 775 Depreciation Expense 250 Miscellaneous Expense 185 Totals $29,490 $29,490 Determine the Owner’s Equity ending balance for the period. A. $12,150 B. $15,730 C. $6,480 D. $21,400
91. Use the following information in the adjusted trial balance for Stockton Company to answer the following questions.
Stockton Company Adjusted Trial Balance For the Year ended December 31, 20XX Cash $ 6,530 Accounts Receivable 2,100 Prepaid Expenses 700 Equipment 13,700 Accumulated Depreciation $ 1,100 Accounts Payable 1,900 Notes Payable 4,300 Bob Steely, Capital 12,940 Bob Steely, Withdrawals 790 Fees Earned 9,250 Wages Expense 2,500 Rent Expense 1,960 Utilities Expense 775 Depreciation Expense 250 Miscellaneous Expense 185 Totals $29,490 $29,490 Determine total assets. A. $24,130 B. $15,830 C. $21,930 D. $23,030
92. Use the following information in the adjusted trial balance for Stockton Company to answer the following questions.
Stockton Company Adjusted Trial Balance For the Year ended December 31, 20XX Cash $ 6,530 Accounts Receivable 2,100 Prepaid Expenses 700 Equipment 13,700 Accumulated Depreciation $ 1,100 Accounts Payable 1,900 Notes Payable 4,300 Bob Steely, Capital 12,940 Bob Steely, Withdrawals 790 Fees Earned 9,250 Wages Expense 2,500 Rent Expense 1,960 Utilities Expense 775 Depreciation Expense 250 Miscellaneous Expense 185 Totals $29,490 $29,490
Determine the current assets. A. $23,030 B. $9,330 C. $21,930 D. $8,630
93. Use the following information in the adjusted trial balance for Stockton Company to answer the following questions.
Stockton Company Adjusted Trial Balance For the Year ended December 31, 20XX Cash $ 6,530 Accounts Receivable 2,100 Prepaid Expenses 700 Equipment 13,700 Accumulated Depreciation $ 1,100 Accounts Payable 1,900 Notes Payable 4,300 Bob Steely, Capital 12,940 Bob Steely, Withdrawals 790 Fees Earned 9,250 Wages Expense 2,500 Rent Expense 1,960 Utilities Expense 775 Depreciation Expense 250 Miscellaneous Expense 185 Totals $29,490 $29,490 Determine the total liabilities for the period. A. $1,900 B. $6,200 C. $4,300 D. $20,240
94. The Balance Sheet should be prepared A. before the income statement and the statement of owner’s equity B. before the income statement and after the statement of owner’s equity C. after the income statement and the statement of owner’s equity D. after the income statement and before the statement of owner’s equity
95. The Statement of Owner’s Equity begins with the beginning balance followed by A. plus Net Income (loss) less withdrawals B. plus Net Income (loss) plus investments C. plus investments less withdrawals D. plus investments plus Net Income (loss) less withdrawals
96. The Income Statement will include the following accounts A. Revenues less Expenses (ordered largest to smallest amount) with Miscellaneous Expense listed last B. Revenues less Expenses (ordered smallest to largest amounts) with Miscellaneous Expense listed last C. Revenues less Expenses (ordered in alphabetical order) D. Revenues less Expenses (order is not important)
97. The classified Balance Sheet will subsection the assets section as follows A. Current Assets and Other Assets B. Current Assets and Property, Plant, and Equipment C. Current Assets and Short-Term Assets D. Other Assets and Property, Plant and Equipment
98. The classified Balance Sheet will divide its Liabilities Section as the following subsections A. Current Liabilities and Long-Term Liabilities B. Current Liabilities and Other Liabilities C. Other Liabilities and Long-Term Liabilities D. Present Liabilities and Tomorrow’s Liabilities
99. Short-term liabilities are those liabilities that A. will be paid in less than one year B. are due to be paid in 5 to 10 years C. are due to be paid in more than one year D. are owed to the owner and will never be paid
100. Owner’s Equity is A. added to assets and the two are equal to liabilities B. added to liabilities and the two are equal to assets C. subtracted from liabilities and the net amount is equal to assets D. equal to the total of assets and liabilities
101. Balance sheet accounts A. represent amounts accumulated during a specific period of time B. are called real accounts C. have zero balances after the closing entries have been posted D. are not affected by adjustments
102. On which financial statement will Income Summary be shown? A. Statement of Owner’s Equity B. Balance Sheet C. Income Statement D. No financial statement
103. Which of the following is not true about closing entries? A. There are four closing entries that update the owner’s equity account. B. After the second closing entry, the income summary account is equal to the net income or (loss) for the period. C. All real accounts are closed at the end of the period. D. By closing nominal accounts at the end of the period to zero, it is possible to isolate next period’s information correctly.
104. The income summary account is also called A. the imprest account B. the clearing account C. the adjustments account D. the helpful account
105. After posting the second closing entry to the income summary account, the balance will be equal to A. zero. B. owner’s equity. C. revenues for the period D. the net income or (loss) for the period.
106. What is the last account that should be listed in the Post Closing Trial Balance? A. Income Summary B. Capital account C. Cash D. Fees Earned
107. Which of the following account groups are all considered nominal accounts? A. Cash, Owner’s Equity, Wages Payable B. Prepaid Insurance, Property, Plant & Equipment, Fees Earned C. Capital Account, Dividend Account, Income Summary D. Rent Revenue, Fees Earned, Miscellaneous Expense
108. There are four closing entries. The first one is to close ____, the second one is to close ____, the third one is to close ____, and the last one is to close ____. A. Revenues, expenses, income summary, drawing account B. Expenses, assets, income summary, capital account C. Capital account, drawing account, income summary, assets D. Drawing account, income summary, expenses, revenues
109. Closing entries A. need not be journalized if adjusting entries are prepared B. need not be posted if the financial statements are prepared from the work sheet C. are not needed if adjusting entries are prepared D. must be journalized and posted
110. Closing entries are dated in the journal as of A. the date they are actually journalized, although they are generally prepared after the end of the accounting period B. the last day of the accounting period, although they are actually journalized after the end of the accounting period C. the first day of the accounting period, although they are actually journalized after the end of the accounting period D. the first day of the subsequent accounting period
111. Which of the accounts below would be closed by posting a debit to the account? A. Unearned Revenue B. Fees Earned C. Josh Morton, Drawing D. Miscellaneous Expense
112. Which of the following accounts should be closed to Income Summary at the end of the fiscal year? A. Supplies Expense B. Accumulated Depreciation C. Prepaid Insurance D. Unearned Rent
113. Which of the following accounts will not be closed to Income Summary at the end of the fiscal year? A. Salaries Expense B. Fees Earned C. Unearned Rent D. Depreciation Expense
114. Which of the following accounts will be closed to the Capital account at the end of the fiscal year? A. Rent Expense B. Fees Earned C. Income Summary D. Depreciation Expense
115. The entry to close the appropriate insurance account at the end of the accounting period is A. debit Income Summary; credit Prepaid Insurance B. debit Prepaid Insurance; credit Income Summary C. debit Insurance Expense; credit Income Summary D. debit Income Summary; credit Insurance Expense
116. Which of the following accounts ordinarily appears in the post-closing trial balance? A. Fees Earned B. Supplies Expense C. Zane White, Drawing D. Unearned Rent
117. The post-closing trial balance differs from the adjusted trial balance in that it A. does not take into account closing entries B. does not take into account adjusting entries C. does not include balance sheet accounts D. does not include income statement accounts
118. The following accounts were taken from the Adjusted Trial Balance columns of the work sheet:
Accumulated Depreciation $ 3,200 Fees Earned 17,400 Depreciation Expense 1,300 Insurance Expense 200 Prepaid Insurance 4,800 Supplies 900 Supplies Expense 3,800
Net income for the period is A. $3,200 B. $12,100 C. $17,400 D. $8,900
119. A summary of selected ledger accounts appear below for Alberto’s Plumbing Services for the current calendar year end.
Alberto, Capital 12/31 8,500 1/1 6,500 12/31 15,000 Alberto, Drawing 6/30 3,500 12/31 8,500 11/30 5,000 Income Summary 12/31 18,500 12/31 33,500 12/31 15,000 Net income for the period is A. $13,000 B. $33,500 C. $15,000 D. $18,500
120. Amir Designs purchased a one-year liability insurance policy on March 1st of this year for $7,200 and recorded it as a prepaid expense. Which of the following amounts would be recorded for insurance expense during the adjusting process at the end of Amir’s first month of operations on March 31st? A. $7,200 B. $720 C. $600 D. $6,600
121. The journal entry to close the Fees Earned, $750, and Rent Revenue, $175, accounts on December 31st during the closing process would be: A. Dec. 31 Fees Earned 750 Rent Revenue 175 Income Summary 925 B. Dec. 31 Income Summary 925 Fees Earned 750 Rent Revenue 175 C. Dec. 31 Revenues 925 Income Summary 925 D. Dec. 31 Income Summary 925 Revenues 925
122. Use the following worksheet to answer the following questions.
Finley Company Worksheet For the Year Ended December 31, 2014
Adjusted Trial Balance
Income Statement Balance Sheet
Account Title Debit Credit Debit Credit Debit Credit Cash 48,000 48,000 Accounts Receivable 18,000 18,000 Supplies 6,000 6,000 Equipment 57,000 57,000 Accumulated Depr-Equip 18,000 18,000 Accounts Payable 25,000 25,000 Wages Payable 6,000 6,000 C. Finley, Capital 33,000 33,000 C. Finley, Drawing 3,000 3,000 Fees Earned 155,000 155,000 Wages Expense 63,000 63,000 Rent Expense 27,000 27,000 Depreciation Expense 15,000 15,000 Totals 237,000 237,000 105,000 155,000 132,000 82,000 Net Income (Loss) 50,000 50,000 155,000 155,000 132,000 132,000 The journal entry to close revenues would be: A. debit Income Summary $155,000, credit Fees Earned $155,000 B. debit C. Finley, Capital $155,000, credit Fees Earned $155,000 C. debit Fees Earned $155,000; credit Income Summary $155,000 D. credit Fees Earned $155,000; credit C. Finley, Capital $155,000
123. Use the following worksheet to answer the following questions.
Finley Company Worksheet For the Year Ended December 31, 2014
Adjusted Trial Balance
Income Statement Balance Sheet
Account Title Debit Credit Debit Credit Debit Credit Cash 48,000 48,000 Accounts Receivable 18,000 18,000 Supplies 6,000 6,000 Equipment 57,000 57,000 Accumulated Depr-Equip 18,000 18,000 Accounts Payable 25,000 25,000 Wages Payable 6,000 6,000 C. Finley, Capital 33,000 33,000 C. Finley, Drawing 3,000 3,000 Fees Earned 155,000 155,000 Wages Expense 63,000 63,000 Rent Expense 27,000 27,000 Depreciation Expense 15,000 15,000 Totals 237,000 237,000 105,000 155,000 132,000 82,000 Net Income (Loss) 50,000 50,000 155,000 155,000 132,000 132,000 Based on the preceding trial balance, the entry to close expenses would be: A. Wages Expense 63,000 Rent Expense 27,000 Depreciation Expense 15,000 Income Summary 105,000 B. Expenses 105,000 Income Summary 105,000 C. Wages Expense 63,000 Rent Expense 27,000 Depreciation Expense 15,000 C. Finley, Drawing 105,000 D. Income Summary 105,000 Wages Expense 63,000 Rent Expense 27,000 Depreciation Expense 15,000
124. Use the following worksheet to answer the following questions.
Finley Company Worksheet For the Year Ended December 31, 2014
Adjusted Trial Balance
Income Statement Balance Sheet
Account Title Debit Credit Debit Credit Debit Credit Cash 48,000 48,000 Accounts Receivable 18,000 18,000 Supplies 6,000 6,000 Equipment 57,000 57,000 Accumulated Depr-Equip 18,000 18,000 Accounts Payable 25,000 25,000 Wages Payable 6,000 6,000 C. Finley, Capital 33,000 33,000 C. Finley, Drawing 3,000 3,000 Fees Earned 155,000 155,000 Wages Expense 63,000 63,000 Rent Expense 27,000 27,000 Depreciation Expense 15,000 15,000 Totals 237,000 237,000 105,000 155,000 132,000 82,000 Net Income (Loss) 50,000 50,000 155,000 155,000 132,000 132,000 Based on the preceding trial balance, the entry to close income summary would be: A. debit C. Finley, Capital $50,000; credit Income Summary $50,000 B. debit Income Summary $155,000; credit C. Finley, Capital $155,000 C. debit Income Summary $50,000, credit C. Finley, Capital $50,000 D. debit C. Finley, Capital $9,000; credit Income Summary $9,000
125. Use the following worksheet to answer the following questions.
Finley Company Worksheet For the Year Ended December 31, 2014
Adjusted Trial Balance
Income Statement Balance Sheet
Account Title Debit Credit Debit Credit Debit Credit Cash 48,000 48,000 Accounts Receivable 18,000 18,000 Supplies 6,000 6,000 Equipment 57,000 57,000 Accumulated Depr-Equip 18,000 18,000 Accounts Payable 25,000 25,000 Wages Payable 6,000 6,000 C. Finley, Capital 33,000 33,000 C. Finley, Drawing 3,000 3,000 Fees Earned 155,000 155,000 Wages Expense 63,000 63,000 Rent Expense 27,000 27,000 Depreciation Expense 15,000 15,000 Totals 237,000 237,000 105,000 155,000 132,000 82,000 Net Income (Loss) 50,000 50,000 155,000 155,000 132,000 132,000
Based on the preceding trial balance, the entry to close C. Finley, Drawing would be: A. debit C. Finley, Capital $3,000, credit C. Finley, Drawing $3,000 B. debit C. Finley, Capital $12,000, credit C. Finley, Drawing $12,000 C. debit C. Finley, Drawing $3,000; credit C. Finley, Capital $3,000 D. debit C. Finley, Drawing $12,000; credit C. Finley, Capital $12,000
126. Use the following worksheet to answer the following questions.
Finley Company Worksheet For the Year Ended December 31, 2014
Adjusted Trial Balance
Income Statement Balance Sheet
Account Title Debit Credit Debit Credit Debit Credit Cash 48,000 48,000 Accounts Receivable 18,000 18,000 Supplies 6,000 6,000 Equipment 57,000 57,000 Accumulated Depr-Equip 18,000 18,000 Accounts Payable 25,000 25,000 Wages Payable 6,000 6,000 C. Finley, Capital 33,000 33,000 C. Finley, Drawing 3,000 3,000 Fees Earned 155,000 155,000 Wages Expense 63,000 63,000 Rent Expense 27,000 27,000 Depreciation Expense 15,000 15,000 Totals 237,000 237,000 105,000 155,000 132,000 82,000 Net Income (Loss) 50,000 50,000 155,000 155,000 132,000 132,000 Based on the preceding trial balance, the ending balance in C. Finley, Capital is: A. $33,000 B. $80,000 C. $30,000 D. $83,000
127. The proper sequence of steps in the accounting cycle is as follows A. analyze and record transactions, post transaction to the ledger, prepare a trial balance, prepare financial statements, journalize closing entries, analyze adjustment data and prepare adjusting entries B. prepare a trial balance, analyze adjustment data, prepare adjusting entries, prepare financial statements, journalize closing entries and post to the ledger, analyze and record transactions, post transactions to the ledger C. analyze and record transactions, post transactions to the ledger, prepare a trial balance, analyze adjustment data, prepare adjusting entries, prepare financial statements, journalize closing entries and post to the ledger, and finally prepare a post-closing trial balance D. prepare financial statements, journalize closing entries and post to the ledger, analyze and record transactions, post transactions to the ledger, prepare a trial balance, analyze adjustment data, prepare adjusting entries
128. The following are steps to the accounting cycle. Of the following, which step should be done first? A. Closing entries are journalized and posted to the ledger. B. Transactions are posted to the ledger. C. Adjusting entries are journalized and posted to the ledger. D. Financial statements are prepared.
129. The following are steps in the accounting cycle. Of the following, which would be prepared last? A. An adjusted trial balance is prepared. B. Transactions are posted to the ledger. C. An unadjusted trial balance is prepared. D. Adjusting entries are journalized and posted to the ledger.
130. The accounting cycle requires three trial balances be done. In what order should they be prepared? A. Post-closing, unadjusted, adjusted B. Unadjusted, post-closing, adjusted C. Unadjusted, adjusted, post-closing D. Post-closing, adjusted, unadjusted
131. The fiscal year selected by companies A. is the same as the calendar year B. begins with the first day of the month and ends on the last day of the twelfth month C. must always begin on January 1 D. will change each year
132. A fiscal year A. ordinarily begins on the first day of a month and ends on the last day of the following twelfth month B. for a business is determined by the federal government C. always begins on January 1 and ends on December 31 of the same year D. should end at the height of the business's annual operating cycle
133. The natural business year A. is a fiscal year that ends when business activities are at its lowest point. B. is a calendar year that ends when business activities are at its lowest point. C. is a fiscal year that ends when business activities are at its highest point. D. is a calendar year that ends when business activities are at its highest point.
134. The worksheet A. is an integral part of the accounting cycle B. eliminates the need to rewrite the financial statements C. is a working paper that is required D. is used to summarize account balances and adjustments for the financial statements
135. Which one of the steps below is not aided by the preparation of the work sheet? A. preparing the adjusted trial balance B. posting to the general ledger C. preparing the financial statements D. preparing the closing entries
136. A work sheet includes columns for A. adjusting entries B. closing entries C. reversing entries D. adjusting and closing entries
137. When a work sheet is complete, the adjustment columns should have A. total credits greater than total debits if a net income was earned B. total debits greater than total credits if a net loss was incurred C. total debits greater than total credits if a net income was earned D. total debits equal total credits
138. The difference between the totals of the debit and credit columns of the Adjusted Trial Balance columns on a work sheet A. is the amount of net income or loss B. indicates there is an error on the work sheet C. is the amount of retained earnings D. is the difference between revenue and expenses
139. Net income appears on the work sheet in the A. debit column of the Balance Sheet columns B. debit column of the Adjustments columns C. debit column of the Income Statement columns D. credit column of the Income Statement columns
140. A net loss appears on the work sheet in the A. debit column of the Balance Sheet columns B. credit column of the Balance Sheet columns C. debit column of the Income Statement columns D. credit column of the Adjustments columns
141. After net income is entered on the work sheet, the Balance Sheet debit and credit columns must A. be the same amount as the total amount of the Income Statement debit and credit columns B. equal each other C. be the same amount as the total amount in the Adjusted Trial Balance debit and credit columns D. not be equal to each other and need not be the same total amounts as any other pair of columns on the work sheet
142. Which of the statements below indicates that a company earned a net income for the period? A. The sum of the credits exceeds the sum of the debits in the Balance Sheet columns on the work sheet. B. The sum of the credits exceeds the sum of the debits in the Income Statement columns on the work sheet. C. The sum of the debits exceeds the sum of the credits in the Income Statement columns on the work sheet. D. Cash inflows exceeded cash outflows.
143. Which of the items below would appear in the Income Statement columns of the work sheet? A. Equipment B. Unearned Fees C. Prepaid Expense D. Net Loss
144. Which of the accounts below would not appear in the balance sheet columns of the worksheet? A. Chad Daniels, Drawing B. Rent Earned C. Unearned Revenue D. Chad Daniels, Drawing and Unearned Revenue
145. Which of the accounts below would appear in the Balance Sheet columns of the work sheet? A. Service Revenue B. Prepaid Rent C. Supplies Expense D. None are correct
146. The work sheet at the end of July has $5,950 in the Balance Sheet credit column for Accumulated Depreciation. The work sheet at the end of August has $7,600 in the Balance Sheet credit column for Accumulated Depreciation. What was the amount of the depreciation expense adjustment for the month of August? A. amount can not be determined B. $7,600 C. $5,950 D. $1,650
147. Which of the items below does not appear on the work sheet? A. adjusting entries B. the unadjusted trial balance C. closing entries D. the drawing account
148. An indication that the work sheet columns are in balance and the work sheet is completed is A. the word "Total" is written at the bottom of each pair of columns B. each pair of columns is double underlined C. each pair of columns has the totals circled D. the final figures are written in ink
149. After all of the account balances have been extended to the Balance Sheet columns of the work sheet, the totals of the debit and credit columns are $38,755 and $32,735, respectively. What is the amount of net income or net loss for the period? A. $6,020 net income B. $38,755 net loss C. $6,020 net loss D. $32,735 net income
150. After all of the account balances have been extended to the Income Statement columns of the work sheet, the totals of the debit and credit columns are $77,500 and $83,900, respectively. What is the amount of the net income or net loss for the period? A. $6,400 net income B. $6,400 net loss C. $83,900 net income D. $77,500 net loss
151. On September 1, the company pays rent for twelve months in advance and debits an asset account. At year end, the adjusting entry on the work sheet would A. increase an expense account B. decrease a liability account C. increase an asset account D. decrease an expense account
152. On March 1, a company collects revenue in advance for the next twelve months and credits a liability account. The adjusting entry at year end on the work sheet would A. increase a liability account B. decrease an asset account C. decrease a revenue account D. decrease a liability account
153. Which of the following is not an essential part of the accounting records? A. The journal B. The ledger C. The chart of accounts D. The work sheet
154. After all of the account balances have been extended to the Balance Sheet columns of the work sheet, the totals of the debit and credit columns show debits of $37,686 and the credits of $41,101. This indicates that A. neither net income or loss can be calculated because it is found on the income statement B. the company has a net loss of $3,415 for the period C. the company has a net income of $3,415 for the period D. The amounts are out of balance and need to be corrected
155. The income statement columns in the worksheet show that debits are equal to $55,800 and credits are $67,520. What does this information mean to the accountant? A. Net income of $11,720 B. Net loss of $11,720 C. The accounts are out of balance, indicating an error has been made. D. The accounts have not been updated.
156. Bob Evans owns a business, Beachside Realty, that rents condominiums and furnishings. Below is the adjusted trial balance at December 31, 2014.
Debit Credit Cash $ 1,500 Accounts receivable 2,000 Interest receivable 100 Prepaid insurance 1,600 Notes receivable (long-term) 2,800 Equipment 15,000 Accumulated depreciation $3,000 Accounts payable 2,400 Accrued expenses payable 3,920 Income taxes payable 2,700 Unearned rent fees 500 Bob Evans, Capital 7,700 Bob Evans, Drawing 2,000 Rent fees earned 37,000 Furniture rental revenue 1,200 Interest revenue 100 Wages expense 19,000 Depreciation expense 1,800 Utilities expense 320 Insurance expense 700 Maintenance expense 9,000 Income tax expense 2,700 $58,520 $58,520 The entry required to close the revenue accounts at the end of the period includes a: A. debit to Income Summary for $37,000 B. credit to Income Summary for $38,300 C. debit to Income Summary for $38,200 D. credit to Income Summary for $37,000
157. Bob Evans owns a business, Beachside Realty, that rents condominiums and furnishings. Below is the adjusted trial balance at December 31, 2014.
Debit Credit Cash $ 1,500 Accounts receivable 2,000 Interest receivable 100 Prepaid insurance 1,600 Notes receivable (long-term) 2,800 Equipment 15,000 Accumulated depreciation $3,000 Accounts payable 2,400 Accrued expenses payable 3,920 Income taxes payable 2,700 Unearned rent fees 500 Bob Evans, Capital 7,700 Bob Evans, Drawing 2,000 Rent fees earned 37,000 Furniture rental revenue 1,200 Interest revenue 100 Wages expense 19,000 Depreciation expense 1,800 Utilities expense 320 Insurance expense 700 Maintenance expense 9,000 Income tax expense 2,700 $58,520 $58,520 The entry required to close the expense accounts at the end of the period includes a: A. a debit to Income Summary for $35,520 B. a credit to Income Summary for $35,520 C. a debit to Income Summary for $33,520 D. a credit to Income Summary for $33,520
158. The balances for the accounts listed below appear in the Adjusted Trial balance columns of the end-of-period spreadsheet (work sheet). Indicate whether each balance should be extended to an Income Statement column or (b) a Balance Sheet column. 1. Dobson, Capital 2. Dobson, Drawing 3. Depreciation Expense 4. Accumulated Depreciation 5. Fees earned 6. Unearned Fees 7. Supplies 8. Supplies Expense
1. Balance sheet column 2. Balance sheet column 3. Income statement column 4. Balance sheet column 5. Income statement column 6. Balance sheet column 7. Balance sheet column 8. Income statement column
159. The end-of-period spreadsheet (work sheet) for the current year for Jamal Company shows Balance Sheet columns with a debit total of $630,430 and a credit total of $614,210. This is before the amount for net income or net loss has been included. In preparing the income statement from work sheet, what is the amount of net income or net loss?
A net income of $16,220
160. Morgan Olsen owns and operates Crystal Pool Service Company. On January 1, 2014, Morgan Olsen, Capital had a balance of $252,000. During the year Morgan invested an additional $32,000 and withdrew $52,400. For the year ended December 31, 2014 Crystal Pool Service Company reported a net income of $73,200. Prepare a Statement of Owner’s Equity for the year ended December 31, 2014.
Crystal Pool Service Company Statement of Owner’s Equity For the Year Ended December 31, 2014 Morgan Olsen, Capital January 1, 2014 $252,000 Additional investment during 2014 32,000 Total $284,000 Net Income $ 73,200 Less: Withdrawals (52,400) Increase in owner’s equity 20,800 Morgan Olsen, Capital, December 31, 2014 $304,800
161. The following accounts appear in an adjusted trial balance of Brock Pool Service Company. Indicate whether each account would be reported in the (a) current assets, (b) property, plant, and equipment, (c) current liabilities, (d) long-term liabilities, or (e) owner’s equity section of the December 31, 2010, balance sheet of Brock Pool Service Company.
1. Taylor Brock, Capital 2. Accumulated Depreciation 3. Unearned Revenues 4. Mortgage Payable 5. Equipment 6. Notes Payable (due in 2012) 7. Cash 8. Accounts Receivable
1. (e) Owner’s equity 2. (b) Property, plant and equipment 3. (c) Current liabilities 4. (d) Long-term liabilities 5. (b) Property, plant and equipment 6. (d) Long-term liabilities 7. (a) Current assets 8. (a) Current assets
162. Describe a classified balance sheet.
A classified balance sheet subsections assets as current assets and property, plant, and equipment. It also subsections liabilities as current liabilities and long-term liabilities. It also includes the owner's equity section.
163. List and describe the purpose of the four closing entries.
1. Close revenues to income summary. 2. Close expenses to income summary. 3. Close income summary to capital account. 4. Close drawing account to capital account. At the beginning of the next period, temporary accounts should have zero balances. To achieve a zero balance, temporary account balances are transferred to permanent accounts at the end of the accounting period. The entries that transfer these balances are called closing entries and the transfer process is called the closing process.
164. After the accounts have been adjusted at January 31, 2014, the end of the fiscal year, the following balances are taken from the ledger of Taylor Pool Service Company:
Hope Taylor, Capital $349,000 Hope Taylor, Drawing 5,000 Fees Earned 124,600 Wages Expense 29,000 Rent Expense 43,000 Supplies Expense 7,300 Miscellaneous Expense 5,700 Journalize the four entries required to close the accounts Jan 31 Fees Earned 124,600 Income Summary 124,600 31 Income
Summary 85,000
Wages Expense 29,000 Rent Expense 43,000 Supplies Expense 7,300 Miscellaneous Expense 5,700 31 Income
Summary 39,600
Hope Taylor, Capital 39,600 31 Hope Taylor,
Capital 5,000
Hope Taylor, Drawing 5,000
165. Prior to adjustment at August 31, 2014, Salary Expense has a debit balance of $298,500. Salaries owed but not paid as of the same date total $7,200.
Present the entries to record the following:
(1) Accrued salaries as of August 31. (2) Closing of Salary Expense as of August 31.
(1) Salary Expense 7,200 Salaries Payable 7,200 (2) Income Summary 305,700 Salary Expense 305,700
166. The following are all the steps in the accounting cycle. List them in the order in which they should be done. - Closing entries are journalized and posted to the ledger. - An unadjusted trial balance is prepared. - An optional end-of-period spreadsheet (work sheet) is prepared. - A post-closing trial balance is prepared. - Adjusting entries are journalized and posted to the ledger. - Transactions are analyzed and recorded in the journal. - Adjustment data are assembled and analyzed. - Financial statements are prepared. - An adjusted trial balance is prepared. - Transactions are posted to the ledger.
1. Transactions are analyzed and recorded in the journal. 2. Transactions are posted to the ledger. 3. An unadjusted trial balance is prepared. 4. Adjustment data are assembled and analyzed. 5. An optional end-of-period spreadsheet (work sheet) is prepared. 6. Adjusting entries are journalized and posted to the ledger. 7. An adjusted trial balance is prepared. 8. Financial statements are prepared. 9. Closing entries are journalized and posted to the ledger. 10. A post-closing trial balance is prepared.
167. If working papers are not considered part of the formal accounting records, then why are they used?
Working papers are tools used by accountants to collect and summarize data for for various analysis and reports.
168. Explain how net income or loss is determined by using the work sheet.
The difference between the debits and credits from the Income Statement columns are compared to the debits and credits from the Balance Sheet columns. They should be the same amounts but opposite from each other. If the debits are more than the credits on the income statement columns, signifying a net loss, then the credits should be higher than the debits on the balance sheet columns by the same amount. If the credits are more than the debits on the income statement columns, signifying a net income, then the debits should be higher than the credits on the balance sheet columns by the same amount.
169. You evaluate loan requests as part of your job at Beach Front National Bank. One loan request you received is from Surfer Dude Supplies, a small proprietorship. Tracy Roberts, the owner, is requesting $75,000 and brings you a trial balance (or Statement of Accounts) for his first year of operations ended December 31, 2010. REQUIRED: While you are willing to work with Tracy, how would you explain to him that a complete set of financial statements from his accountant would be more useful for evaluating the loan request?
A set of financial statements provides useful information concerning the economic condition of a company. For example, the balance sheet describes the financial condition of the company as of a given date and is useful in assessing the company’s financial soundness and liquidity. The income statement describes the results of operations for a period and indicates the profitability of the company. The statement of owner’s equity describes the changes in the owner’s interest in the company for a period. Each of these statements is useful in evaluating whether to extend credit to the company.
170. You have just accepted your first job out of college, which requires you to evaluate loan requests at Beach Front National Bank. The first loan request you receive is from Surfer Dude Enterprises, a small proprietorship. Marty Monroe, the owner, is requesting $75,000 and brings you the following trial balance (or Statement of Accounts) for his first year of operations ended December 31, 2010. What three accounts do you think should be relabeled for greater clarity?
Surfer Dude Enterprises Statement of Accounts December 31, 2010 Cash 2,050 Billings Due from Others 15,070 Office Supplies 7,470 Trucks 26,370 Equipment 8,090 Amounts Owed to Others 2,850 Investment in Business 23,500 Service Revenues 73,650 Wages Expense 30,050 Rent Expense 7,330 Insurance Expense 2,400 Utilities Expenses 700 Miscellaneous Expenses 470 100,000 100,000
· The following items should be relabeled for greater clarity: Billings Due from Others—Accounts Receivable Amounts Owed to Others—Accounts Payable Investment in Business—Marty Monroe, Capital
171. You have just accepted your first job out of college, which requires you to evaluate loan requests at Beach Front National Bank. The first loan request you receive is from Surfer Dude Enterprises, a small proprietorship. Marty Monroe, the owner, is requesting $75,000 and brings you the following trial balance (or Statement of Accounts) for his first year of operations ended December 31, 2010. Which of the following accounts do you think might need to be adjusted before an accurate set of financial statements could be prepared?
Surfer Dude Enterprises Statement of Accounts December 31, 2010
Cash 2,050 Billings Due from Others 15,070 Office Supplies 7,470 Trucks 26,370 Equipment 8,090 Amounts Owed to Others 2,850 Investment in Business 23,500 Service Revenues 73,650 Wages Expense 30,050 Rent Expense 7,330 Insurance Expense 2,400 Utilities Expense 700 Miscellaneous Expenses 470 100,000 100,000
The following adjustments might be necessary before an accurate set of financial statements could be prepared:
· No office supplies expense is shown. The office supplies account should be adjusted for the supplies used during the year. · No depreciation expense is shown for the trucks or equipment accounts. An adjusting entry should be prepared for depreciation
expense on each of these assets. · An inquiry should be made as to whether any accrued expenses, such as wages or utilities, exist at the end of the year. · An inquiry should be made as to whether any prepaid expenses, such as rent or insurance, exist at the end of the year. · An inquiry should be made as to whether any unearned revenue exist at the end of the year. · An inquiry should be made as to whether the owner withdrew any funds from the company during the year. No drawing account is
shown in the “Statement of Accounts.”
172. Hakik Enterprises offers rug cleaning services to business clients. Below is the trial balance for Hakik Enterprises, which was prepared on the end of period spreadsheet (work sheet) for the year ended July 31, 2010.
Hakik Enterprises End of Period Spreadsheet (Work Sheet) For the Year Ended July 31, 2010 Trial Balance Adjustments Adjusted
Trial Balance Debit Credit Debit Credit Debit Credit Cash 36 Prepaid Insurance 12 Fees Receivable 56 Supplies 12 Equipment 60 Accum. Depreciation 12 Unearned Revenue 20 Accounts Payable 32 Wages Payable Ramon Hakik, Capital 84 Ramon Hakik, Drawings 4 Service Revenue 80 Advertising Expense 28 Wage Expense 20 Insurance Expense Supplies Expense Depreciation Expense Totals 228 228
REQUIRED: Enter the adjustment data in the work sheet for the transactions shown below and place the balances in the Adjusted Trial Balance columns. a) The equipment is estimated to last for 5 years with no salvage value. The asset will be depreciated evenly over its useful life. Record one month’s depreciation. b) Accrued Wages $2. c) Unused supplies on hand $8. d) Of the unearned revenue, 75% has been earned. e) Unexpired insurance remaining at the end of the month, $9. Hakik Enterprises End of Period Spreadsheet (Work Sheet) For the Year Ended July 31, 2010 Trial Balance Adjustments Adjusted Trial
Balance Debit Credit Debit Credit Debit Credit Cash 36 36 Prepaid Insurance 12 (e) 3 9 Fees Receivable 56 56 Supplies 12 (c) 4 8 Equipment 60 60 Accum. Depreciation 12 (a) 1 13 Unearned Revenue 20 (d) 15 5 Accounts Payable 32 32 Wages Payable (b) 2 2 Ramon Hakik, Capital 84 84 Ramon Hakik, Drawings 4 4 Service Revenue 80 (d) 15 95 Advertising Expense 28 28 Wage Expense 20 (b) 2 22 Insurance Expense (e) 3 3 Supplies Expense (c) 4 4 Depreciation Expense (a) 1 1 Totals 228 228 25 25 231 231
173. Hakik Enterprises offers rug cleaning services to business clients. Below are the adjustments data for the year ended July 31, 2010. REQUIRED: Using this information along with the spreadsheet below, record the adjusting entries in proper general journal form. Adjustments: a) The equipment is estimated to last for 5 years with no salvage value. The asset will be depreciated evenly over its useful life. Please record one month’s depreciation. b) Accrued Wages $2. c) Unused supplies on hand $8. d) Of the unearned revenue, 75% has been earned. e) Unexpired insurance remaining at the end of the month, $9.
Hakik Enterprises End of Period Spreadsheet (Work Sheet) For the Year Ended July 31, 2010 Trial Balance Adjustments Adjusted
Trial Balance
Debit Credit Debit Credit Debit Credit Cash 36 Prepaid Insurance 12 Fees Receivable 56 Supplies 12 Equipment 60 Accum. Deprec. - Equip 12 Unearned Revenue 20 Accounts Payable 32 Wages Payable Ramon Hakik, Capital 84 Ramon Hakik, Drawings 4 Service Revenue 80 Advertising Expense 28 Wage Expense 20 Insurance Expense Supplies Expense Depreciation Expense Totals 228 228
GENERAL JOURNAL Page 1 DATE 2010
Description Post.Ref. Debit Credit
Adjusting Entries (a) Depreciation Expense 1 Accum. Deprec. - Equipment 1 (b) Wage Expense 2 Wages Payable 2 (c) Supplies Expense 4 Supplies 4 (d) Unearned Revenue 15 Service Revenue 15 (e) Insurance Expense 3 Prepaid Insurance 3
174. Bob Evans owns a business, Beachside Realty, that rents condominiums and furnishings. Below is the adjusted trial balance at December 31, 2010.
Debit Credit Cash $ 1,500 Accounts receivable 2,000 Interest receivable 100 Prepaid insurance 1,600 Notes receivable (long-term) 2,800 Equipment 15,000 Accumulated depreciation $3,000 Accounts payable 2,400 Accrued expenses payable 3,920 Income taxes payable 2,700 Unearned rent fees 500 Bob Evans, Capital 7,700 Bob Evans, Drawing 2,000 Rent fees earned 37,000 Furniture rental revenue 1,200 Interest revenue 100 Wages expense 19,000 Depreciation expense 1,800 Utilities expense 320 Insurance expense 700 Maintenance expense 9,000 Income tax expense 2,700 Total $ 58,520 $ 58,520
Prepare the entry required to close the revenue accounts at the end of the period.
Dec. 31 Rent fees earned 37,000 Furniture rental revenue 1,200 Interest revenue 100 Income Summary 38,300
175. Bob Evans owns a business, Beachside Realty, that rents condominiums and furnishings. Below is the adjusted trial balance at December 31, 2010.
Debit Credit Cash $ 1,500 Accounts receivable 2,000 Interest receivable 100 Prepaid insurance 1,600 Notes receivable (long-term) 2,800 Equipment 15,000 Accumulated depreciation $3,000 Accounts payable 2,400 Accrued expenses payable 3,920 Income taxes payable 2,700 Unearned rent fees 500 Bob Evans, Capital 7,700 Bob Evans, Drawing 2,000 Rent fees earned 37,000 Furniture rental revenue 1,200 Interest revenue 100 Wages expense 19,000 Depreciation expense 1,800 Utilities expense 320 Insurance expense 700 Maintenance expense 9,000 Income tax expense 2,700 $ 58,520 $ 58,520 Prepare the entry required to close the expense accounts at the end of the period.
Dec 31 Income Summary 33,520 Wages expense 19,000 Depreciation expense 1,800 Utilities expense 320 Insurance expense 700 Maintenance expense 9,000 Income tax expense 2,700
176. Bob Evans owns a business, Beachside Realty, that rents condominiums and furnishings. Below is the adjusted trial balance at December 31, 2010.
Debit Credit Cash $ 1,500 Accounts receivable 2,000 Interest receivable 100 Prepaid insurance 1,600 Notes receivable (long-term) 2,800 Equipment 15,000 Accumulated depreciation $3,000 Accounts payable 2,400 Accrued expenses payable 3,920 Income taxes payable 2,700 Unearned rent fees 500 Bob Evans, Capital 7,700 Bob Evans, Drawing 2,000 Rent fees earned 37,000 Furniture rental revenue 1,200 Interest revenue 100 Wages expense 19,000 Depreciation expense 1,800 Utilities expense 320 Insurance expense 700 Maintenance expense 9,000 Income tax expense 2,700 $ 58,520 $ 58,520 Prepare the closing entry required to transfer the income or loss at the end of the period.
Dec 31 Income Summary 4,780 Bob Evans, Capital 4,780
177. Bob Evans owns a business, Beachside Realty, that rents condominiums and furnishings. Below is the adjusted trial balance at December 31, 2010.
Debit Credit Cash $ 1,500 Accounts receivable 2,000 Interest receivable 100 Prepaid insurance 1,600 Notes receivable (long-term) 2,800 Equipment 15,000 Accumulated depreciation $3,000 Accounts payable 2,400 Accrued expenses payable 3,920 Income taxes payable 2,700 Unearned rent fees 500 Bob Evans, Capital 7,700 Bob Evans, Drawing 2,000 Rent fees earned 41,000 Furniture rental revenue 1,200 Interest revenue 100 Wages expense 19,000 Depreciation expense 1,800 Utilities expense 320 Insurance expense 700 Maintenance expense 9,000 Income tax expense 2,700 $ 58,520 $ 58,520 Prepare the entry required to close the Drawing account at the end of the period.
Dec 31 Bob Evans, Capital 2,000 Bob Evans, Drawing 2,000
178. Each of the following transactions for Morrison Company requires an adjusting entry, which if omitted, will overstate or understate assets, liabilities, owner’s equity, revenues, expenses, or net income. Indicate the amount and direction of the misstatement that would result if the end of period adjusting entry suggested by the transaction was omitted. Place your results in the table following the transactions and use (+) for overstate, (-) for understate, and (NE) for no effect. 1. Morrison purchased supplies on December 1 for $900. On December 31, $350 of supplies were on hand. 2. Prepaid insurance had a debit balance of $5,400 on December 1, which represented a prepayment for 2 years of insurance. 3. The unearned rent revenue account has a credit balance of $390 on December 1, which represents 3 months rent.
Transaction Assets Liabilities Owner’s Equity Revenues Expenses Net Income 1. 2. 3.
Transaction Assets Liabilities Owner’s Equity Revenues Expenses Net Income 1. +550 NE +550 NE -550 +550 2. +225 NE +225 NE -225 +225 3. NE +130 -130 -130 NE -130
179. The end-of-period spreadsheet (work sheet) for the current year for Jamal Company shows Balance Sheet columns with a debit total of $614,210 and a credit total of $630,430. This is before the amount for net income or net loss has been included. In preparing the income statement from work sheet, what is the amount of net income or net loss?
Net loss of $16,220
180. Identify which of the following accounts should be closed with a debit or a credit to Income Summary at the end of the fiscal year. If it is not closed to Income Summary, mark as n/a. 1. Utilities Payable 2. Utilities Expense 3. Supplies 4. Supplies Expense 5. Fees Earned 6. Unearned Fees 7. Accounts Receivable 8. Jason Hill, Drawing 9. Jason Hill, Capital 10. Accumulated Depreciation - Equipment 11. Depreciation Expense - Equipment 12. Equipment 13. Prepaid Insurance 14. Insurance Expense
1. Utilities Payable n/a 2. Utilities Expense debit 3. Supplies n/a 4. Supplies Expense debit 5. Fees Earned credit 6. Unearned Fees n/a 7. Accounts Receivable n/a 8. Jason Hill, Drawing n/a 9. Jason Hill, Capital n/a 10. Accumulated Depreciation - Equipment n/a 11. Depreciation Expense - Equipment debit 12. Equipment n/a 13. Prepaid Insurance n/a 14. Insurance Expense debit
181. The balances for the accounts listed below appeared in the Adjusted Trial Balance columns of the work sheet. Indicate whether each balance should be extended to (a) the Income Statement columns or (b) the Balance Sheet columns.
(1) Salaries Payable (7) Felipe Ramos, Drawing (2) Fees Earned (8) Equipment (3) Accounts Payable (9) Accounts Receivable (4) Felipe Ramos, Capital (10) Accumulated Depreciation (5) Supplies Expense (11) Salary Expense (6) Unearned Rent (12) Depreciation Expense
(a) Income statement: 2, 5, 11, 12 (b) Balance sheet: 1, 3, 4, 6, 7, 8, 9, 10
182. Indicate whether each of the following would be reported in the financial statements as a(n) (a) current asset, (b) current liability, (c) revenue, or (d) expense:
(1) Supplies (5) Supplies Expense (2) Unearned Fees (6) Prepaid Insurance (3) Prepaid Advertising (7) Accounts Payable (4) Advertising Expense (8) Fees Earned
(1) current asset (2) current liability (3) current asset (4) expense (5) expense (6) current asset (7) current liability (8) revenue
183. The following accounts were taken from the Adjusted Trial Balance columns of the work sheet for April 30, 2010 for Finnegan Co.:
Accumulated Depreciation $ 32,000 Fees Earned 78,000 Depreciation Expense 7,250 Rent Expense 34,000 Prepaid Insurance 6,000 Supplies 400 Supplies Expense 1,800 Prepare an income statement. Finnegan Co. Income Statement For the Year Ended April 30, 2010 Fees earned $78,000 Expenses: Rent expense $34,000 Depreciation expense 7,250 Supplies expense 1,800 Total expenses 43,050 Net income $34,950
184. The following revenue and expense account balances were taken from the Income Statement columns of the work sheet for Fraser Services Co. for December 31, 2010:
Depreciation Expense $ 4,950 Insurance Expense 2,900 Miscellaneous Expense 1,200 Rent Expense 24,000 Service Revenue 92,500 Supplies Expense 3,150 Utilities Expense 5,000 Wages Expense 63,750 Prepare an income statement. Fraser Services Co. Income Statement For the Year Ended December 31, 2010 Service revenue $ 92,500 Operating expenses: Wages expense $63,750 Rent expense 24,000 Utilities expense 5,000 Depreciation expense 4,950 Supplies expense 3,150 Insurance expense 2,900 Miscellaneous expense 1,200 Total operating expenses 104,950 Net loss $ (12,450)
185. The following data were taken from the Balance Sheet columns of the work sheet for April 30, 2010 for Mackenzie Company:
Accumulated Depreciation-Trucks $42,400 Prepaid Rent 6,800 Supplies 850 Unearned Fees 7,310 Trucks 49,300 Cash 3,400 Mackenzie, Capital ?
Prepare a classified balance sheet. Mackenzie Company Balance Sheet April 30, 2010 Assets Liabilities Current assets: Cash $ 3,400 Current liabilities: Supplies 850 Unearned fees $ 7,310 Prepaid rent 6,800 Total current assets $ 11,050 Owner's Equity Property, plant, and equipment: Mackenzie, Capital 10,640 Trucks $49,300 Total liabilities and owner's
equity $17,950
Less accum. depreciation 42,400 Total property, plant and equipment 6,900 Total assets $17,950
186. Indicate whether each of the following would be reported in the section of financial statements identified as (a) current asset, (b) property, plant, and equipment, (c) current liability, (d) revenue, or (e) expense:
(1) Automobile (2) Accumulated depreciation (3) Rent expense (4) Fees earned (5) Salaries payable (6) Prepaid rent (7) Store supplies (8) Advertising expense (9) Unearned rent
(1) property, plant, and equipment (2) property, plant, and equipment (3) expense (4) revenue (5) current liability (6) current asset (7) current asset (8) expense (9) current liability
187. The following balance sheet contains errors.
Brock Morton Services Co. Balance Sheet For the Year Ended December 31, 2010 Assets Liabilities Current assets: Current liabilities: Cash $ 7,170 Accounts receivable $ 10,000 Accounts payable 7,500 Accum. depr-building 12,525 Supplies 2,590 Accum. depr-equipment 7,340 Prepaid insurance 800 Net income 11,500 Land 24,000 Total current assets $ 42,060 Total liabilities $ 41,365 Owner's Equity Property, plant, and equipment: Wages payable $ 1,500 Building $43,700 Brock Morton, Capital 88,645 Equipment 29,250 Total owner's equity $ 90,145 Total property, plant, and equipment
72,950
Total liabilities and Total assets $131,510 owner's equity $131,510 (a) List the errors in the balance sheet above and (b) prepare a corrected balance sheet.
(a) (1) Date of statement should be "December 31, 2010" and not "For the Year Ended December 31, 2010." (2) Accounts payable should be a current liability. (3) Land is a fixed asset and should be listed as Property, Plant and Equipment. (4) Accumulated depreciation should be deducted from the related fixed asset in the Property Plant, and Equipment section. (5) An adding error was made in determining the amount of total assets. (6) Accounts receivable should be a current asset. (7) Net income would be reported on the income statement. (8) Wages payable should be a current liability.
A corrected balance sheet would be as follows: Brock Morton Services Co. Balance Sheet December 31, 2010
Assets Current assets:
Cash $ 7,170
Accounts receivable
10,000
Supplies
2,590
Prepaid insurance
800
Total current assets
$20,560
Property, plant, and equipment:
Land $24,000
Building
$43,700
Less accum. depreciation
12,525 31,175
Equipment
29,250
Less accum. depreciation
7,340 21,910
Total property, plant, and equipment
77,085
Total assets
$97,645
Liabilities Current liabilities: Accounts payable $7,50
0
Wages payable 1,500 Total liabilities $ 9,000 Owner's Equity Brock Morton, Capital 88,645 Total liabilities and owner's equity $97,645
188. The following is the adjusted trial balance for Nadia Company.
Nadia Company Adjusted Trial Balance December 31, 2014 Cash 5,130 Accounts Receivable 3,300 Prepaid Expenses 420 Equipment 12,400 Accumulated Depreciation 2,200 Accounts Payable 700 Notes Payable - Due on June 30, 2011 3,070 Nadia Porter, Capital 13,000 Nadia Porter, Drawing 700 Fees Earned 10,930 Wages Expense 2,450 Rent Expense 1,900 Utilities Expense 1,475 Depreciation Expense 1,150 Miscellaneous Expense 975 Totals 29,900 29,900 Prepare an Income Statement, Balance Sheet, and Statement of Owner’s Equity. Assume that the capital account started with a beginning balance of $10,000. Nadia Company Income Statement For Year Ended December 31, 2014 Fees Earned $10,930 Expenses: Wages Expense $2,450 Rent Expense 1,900 Utilities Expense 1,475 Depreciation Expense 1,150 Miscellaneous Expense 975 Total Expenses 7,950 Net Income $2,980
Nadia Company Statement of Owner’s Equity For Year Ended December 31, 2014 Nadia Porter, Capital, January 1, 2014 $10,000 Additional investments during 2014 3,000 Total $13,000 Net Income 2,980 Sub-Total $15,980 Less Withdrawals 700 Nadia Porter, Capital, December 31, 2014 $15,280 Nadia Company Balance Sheet December 31, 2014 Assets Liabilities Current Assets Current Liabilities Cash $5,130 Accounts Payable $ 700 Accounts Receivable 3,300 Notes Payable 3,070 Prepaid Expenses 420 Total Liabilities $3,770 Total Current Assets $8,850 Property, Plant, & Equip.: Equipment $12,400 Owner’s Equity Less: Accum Depre. 2,200 Nadia Porter, Capital $15,280 Total Prop., Plant, & Equip $10,200 Total Liabilities Total Assets $19,050 and Owner’s Equity $19,050
189. Prepare an income statement and a statement of owner’s equity, for the month ended August 31, 2014, from the following T-Accounts of Marley Company.
Prepaid Insurance
Accounts Receivable
Unearned Revenues
Wages Payable
1,100 5,400 1,400 480 200 800 400 Marley, Capital
Marley, Drawing
Income Summary
Fees Earned
6,500 3,200 9,775 7,500 2,800 3,200 3,995 2,000 5,780 5,780 275 3,200 9,775
Wages Expense
Rent Expense
Insurance Expense
Utilities Expense
2,200 990 285 95 425 990 285 95 2,625 Marley Company Income Statement For the Month Ended August 31, 2014 Fees Earned $9,775 Expenses: Wages Expense $2,625 Rent Expense 990 Insurance Expense 285 Utilities Expense 95 Total Expenses $3,995 Net Income $5,780 Marley Company Statement of Owner’s Equity For the Month Ended August 31, 2014 Marley, Capital, August 1, 2014 $6,500 Add: Additional Investments during August, 2014 2,800 Sub-total $9,300 Add: Net Income Month Ended August 31, 2014 $5,780 Less: withdrawals 3,200 Increase in Owner’s Equity 2,580 Marley, Capital, August 31, 2014 $11,880
190. Prepare an income statement and a statement of owner’s equity for the month ended September 30, 2010 from the T-accounts below of Carson Company.
Prepaid Insurance
Accounts Receivable
Unearned Revenues
Wages Payable
1,400 1,600 1,200 435 120 400 200
Carson, Capital
Carson, Drawing
Income Summary
Fees Earned
6,800 2,400 4,150 3,300 2,500 2400 4,760 500 610 610 350 2,400 4,150 Wages Expense
Rent Expense
Insurance Expense
Utilities Expense
3,200 1,130 80 125 225 1,130 80 125 3,425 Carson Company Income Statement For the Month Ended September 30, 2010 Fees Earned $4,150 Expenses: Wages Expense $3,425 Rent Expense 1,130 Insurance Expense 80 Utilities Expense 125 Total Expenses $4,760 Net Loss ($610) Carson Company Statement of Owner’s Equity For the Month Ended September 30, 2010 Carson, Capital, September 1, 2010 $6,800 Add: Additional Investments during September, 2010 2,500 Sub-total $9,300 Less: Net Loss Month Ended September 30, 2010 $610 Withdrawals 2,400 Decrease in Owner’s Equity 3,010 Carson, Capital, September 30, 2010 $6,290
191. Selected ledger accounts appear below for Fulton Surveying Services for 2014.
Fulton, Capital
Fulton, Drawing
12/31 25,000 1/1 20,000 3/31 12,000 12/31 25,000 12/31 48,000 12/22 13,000
Income Summary 12/31 19,000 12/31 67,000 12/31 48,000 Prepare a statement of owner's equity. Fulton Surveying Services Statement of Owner's Equity For the Year Ended December 31, 2014 Fulton, Capital, 1/1/2014 $20,000 Net income $ 48,000 Less withdrawals 25,000 Increase in owner’s equity 23,000 Fulton, Capital, 12/31/2014 $43,000
192. On the basis of the following data taken from the Adjusted Trial Balance columns of the work sheet for the year ended March 31 for Boles Athletic Company, journalize the four closing entries.
Cash $ 30,000 Accounts Receivable 45,200 Supplies 5,000 Equipment 169,900 Accumulated Depreciation $ 32,000 Accounts Payable 12,500 Jason Boles, Capital 71,600 Jason Boles, Drawing 47,000 Fees Earned 510,000 Salary Expense 244,500 Rent Expense 48,000 Depreciation Expense 25,000 Supplies Expense 9,500 Miscellaneous Expense 2,000 $626,100 $626,100
Mar. 31 Fees Earned 510,000 Income Summary 510,000 31 Income Summary 329,000 Salary Expense 244,500 Rent Expense 48,000 Depreciation Expense 25,000 Supplies Expense 9,500 Miscellaneous Expense 2,000 31 Income Summary 181,000 Jason Boles, Capital 181,000 31 Jason Boles, Capital 47,000 Jason Boles, Drawing 47,000
193. After all adjustments have been made, but before the accounts have been closed, the following balances were taken from the ledger of Ramona’s Designs:
Accounts Payable $ 27,600 Rent Expense $ 32,700 Accounts Receivable 64,500 Salary Expense 41,390 Accumulated Depreciation 73,325 Salaries Payable 8,150 Cash 17,150 Service Revenue 186,000 Depreciation Expense 13,500 Supplies 1,500 Equipment 165,000 Supplies Expense 2,500 Insurance Expense 2,510 Ramona Cross, Capital 99,950 Prepaid Insurance 6,275 Ramona Cross, Drawing 48,000 Journalize the entries to close the appropriate accounts.
Service Revenue 186,000 Income Summary 186,000 Income Summary 92,600 Depreciation Expense 13,500 Insurance Expense 2,510 Rent Expense 32,700 Salary Expense 41,390 Supplies Expense 2,500 Income Summary 93,400 Ramona Cross, Capital 93,400 Ramona Cross, Capital 48,000 Ramona Cross, Drawing 48,000
194. On the basis of the following information taken from the Adjusted Trial Balance columns of the work sheet for the month ended September 30th, journalize the closing entries for Perez Roofing Company.
Cash $22,500.00 Accounts Receivable 3,575.00 Office Supplies 2,850.00 Repair Parts 3,785.00 Machinery 17,750.00 Accumulated Depreciation 3,250.00 Accounts Payable 1,150.00 Notes Payable 6,500.00 Sam Perez, Capital 2,500.00 Sam Perez, Drawing 1,750.00 Service Revenue 47,200.00 Wages Expense 4,840.00 Office Supplies Expense 1,275.00 Repair Parts Expense 925.00 Depreciation Expense 1,350.00 $60,600.00 $60,600.00
Sep 30 Service Revenue
47,200.00
Income Summary
47,200.00
Closing Entry - Service Revenue
Sep 30 Income
Summary 8,390.00
Wages Expense
4,840.00
Office Supplies Expense
1,275.00
Repair Parts Expense
925.00
Depreciation Expense
1,350.00
Closing Entry - Expenses
Sep 30 Income
Summary 38,810.00
Sam Perez, Capital
38,810.00
Closing Entry - Income Summary
Sep 30 Sam Perez,
Capital 1,750.00
Sam Perez, Drawing
1,750.00
Closing Entry - Drawing
195. The following adjusted trial balance is the result of the adjustments made at the end of the month of March for Erik Martin Company. Utilize these adjusted values to perform the closing entries for Erik Martin Company.
Cash $24,750.00 Accounts Receivable 5,750.00 Office Supplies 3,525.00 Store Supplies 4,785.00 Machinery 9,750.00 Accumulated Depreciation 2,150.00 Accounts Payable 3,550.00 Notes Payable 7,500.00 Erik Martin, Capital 19,725.00 Erik Martin, Drawing 6,250.00 Service Revenue 36,500.00 Wages Expense 6,425.00 Office Supplies Expense 1,465.00 Store Supplies Expense 5,150.00 Depreciation Expense 1, 575.00 ________ $69,425.00 $69,425.00
March 31 Service Revenue
36,500.00
Income Summary
36,500.00
Closing Entry - Service Revenue
March 31 Income
Summary 14,615.00
Wages Expense
6,425.00
Office Supplies Expense
1,465.00
Store Supplies Expense
5,150.00
Depreciation Expense
1,575.00
Closing Entry - Expenses
March 31 Income
Summary 21,885.00
Erik Martin, Capital
21,885.00
Closing Entry - Income Summary
March 31 Erik
Martin, Capital
6,250.00
Erik Martin, Drawing
6,250.00
Closing Entry - Drawing
196. The following adjusted trial balance is the result of the adjustments made at the end of the month of July for Ladonna Douglas Company. Utilize these adjusted values to perform the closing entries for Ladonna Douglas Company.
Cash $34,750.00 Accounts Receivable 9,750.00 Office Supplies 2,525.00 Store Supplies 4,785.00 Machinery 10,750.00 Accumulated Depreciation 2,150.00 Accounts Payable 14,300.00 Notes Payable 11,500.00 Ladonna Douglas, Capital 53,725.00 Ladonna Douglas, Drawing 13,250.00 Service Revenue 41,500.00 Wages Expense 37,425.00 Rent Expense 3,000.00 Advertising Expense 2,750.00 Office Supplies Expense 1,465.00 Store Supplies Expense 2,150.00 Depreciation Expense 575.00 ________ $123,175.00 $123,175.00
July 31 Service Revenue
41,500.00
Income Summary
41,500.00
Closing Entry - Service Revenue
July 31 Income
Summary 47,365.00
Wages Expense
37,425.00
Rent Expense
3,000.00
Advertising Expense
2,750.00
Office Supplies Expense
1,465.00
Store Supplies Expense
2,150.00
Depreciation Expense
575.00
Closing Entry - Expenses
July 31 Ladonna
Douglas, Capital
5,865.00
Income Summary
5,865.00
Closing Entry - Income Summary
July 31 Ladonna
Douglas, Capital
13,250.00
Ladonna Douglas, Drawing
13,250.00
Closing Entry - Drawing
197. Marcus Enterprises was started by Damien Marcus in 2010. During 2010, Damien Marcus invested $8,000 in the business. Based on the following worksheet, prepare an income statement, statement of owner’s equity, and balance sheet for Marcus Enterprises for the year ended December 31, 2010. Marcus Enterprises Worksheet For the Year Ended December 31, 2010
Adjusted Trial Balance
Income Statement Balance Sheet
Account Title Debit Credit Debit Credit Debit Credit Cash 26,500 26,500 Accounts Receivable 7,000 7,000 Supplies 1,000 1,000 Equipment 18,500 18,500 Accumulated Depr-Equip 5,000 5,000 Accounts Payable 11,000 11,000 Wages Payable 1,000 1,000 Damien Marcus, Capital 8,000 8,000 Damien Marcus, Drawing 2,000 2,000 Fees Earned 59,500 59,500 Wages Expense 19,000 19,000 Rent Expense 7,000 7,000 Depreciation Expense 3,500 3,500 Totals 84,500 84,500 29,500 59,500 55,000 25,000 Net Income (Loss) 30,000 30,000 59,500 59,500 55,000 55,000
Marcus Enterprises Income Statement For the Year Ended December 31, 2010
Fees Earned $ 59,500 Expenses: Wages Expense $ 19,000 Rent Expense 7,000 Depreciation Expense 3,500 Total Expenses 29,500 Net Income $ 30,000 Marcus Enterprises Statement of Owner’s Equity For the Year Ended December 31, 2010 Damien Marcus, Capital, January 1, 2010 $ 0 Investment during the year $ 8,000 Net income for the Year Ended December 31, 2010 30,000 $38,000 Less Withdrawals 2,000 Increase in Owner’s Equity 36,000 Damien Marcus, Capital, December 31, 2010 $ 36,000
Marcus Enterprises Balance Sheet December 31, 2010 Assets Liabilities Current Assets: Current Liabilities Cash $26,500 Accounts Payable $ 11,000 Accounts Receivable 7,000 Wages Payable 1,000 Supplies 1,000 Total Liabilities $12,000 Total current assets $ 34,500 Property, Plant and Equipment Equipment $18,500 Less accum depr 5,000 Owner’s Equity Total property, plant and equipment
13,500
Damien Marcus, Capital $36,000
Total Assets $48,000 Total Liabilities and Owner’s Equity
$48,000
198. Prepare closing entries from the following work sheet. Lakendra Enterprises Worksheet For the Year Ended December 31, 2010
Adjusted Trial Balance
Income Statement Balance Sheet
Account Title Debit Credit Debit Credit Debit Credit Cash 26,500 26,500 Accounts Receivable 7,000 7,000 Supplies 1,000 1,000 Equipment 18,500 18,500 Accumulated Depr-Equip 5,000 5,000 Accounts Payable 11,000 11,000 Wages Payable 1,000 1,000 Lakendra Thomas, Capital 8,000 8,000 Lakendra Thomas, Drawing 2,000 2,000 Fees Earned 59,500 59,500 Wages Expense 19,000 19,000 Rent Expense 7,000 7,000 Depreciation Expense 3,500 3,500 Totals 84,500 84,500 29,500 59,500 55,000 25,000 Net Income (Loss) 30,000 30,000 59,500 59,500 55,000 55,000
Journal
Date
Description
Post Ref Debit
Credit
Dec 31 Fees Earned 59,500 Income Summary 59,500 Dec 31 Income Summary 29,500 Wages Expense 19,000 Rent Expense 7,000 Depreciation Expense 3,500 Dec 31 Income Summary 30,000 Lakendra Thomas, Capital 30,000 Dec 31 Lakendra Thomas, Capital 2,000 Lakendra Thomas, Drawing 2,000
199. The following is the adjusted trial balance for Sandeep Company.
Sandeep Company Adjusted Trial Balance December 31, 2010 Cash 8,130 Accounts Receivable 3,300 Prepaid Expenses 2,750 Equipment 10,400 Accumulated Depreciation 2,200 Accounts Payable 2,700 Notes Payable 1,000 Rena Sandeep, Capital 11,200 Rena Sandeep, Drawing 4,870 Fees Earned 36,600 Wages Expense 12,450 Rent Expense 4,900 Utilities Expense 3,475 Depreciation Expense 2,150 Miscellaneous Expense 1,275 Totals 53,700 53,700
Prepare closing entries and the post closing trial balance.
Fees Earned 36,600 Income Summary 36,600 Income Summary 24,250 Wages Expense 12,450 Rent Expense 4,900 Utilities Expense 3,475 Depreciation Expense 2,150 Miscellaneous Expense 1,275 Income Summary 12,350 Rena Sandeep, Capital 12,350 Rena Sandeep, Capital 4,870 Rena Sandeep, Drawing 4,870 Sandeep Company Post Closing Trial Balance December 31, 2010 Cash 8,130 Accounts Receivable 3,300 Prepaid Expenses 2,750 Equipment 10,400 Accumulated Depreciation 2,200 Accounts Payable 2,700 Notes Payable 1,000 Rena Sandeep, Capital 18,680 Total $24,580 $24,580
200. Reconstruct the adjusting and closing entries from the following T-Accounts.
Prepaid Insurance
Accounts Receivable.
Unearned Revenues
Wages Payable
1,200 6,000 1,350 530 200 1,500 435 530 1,000 7,500 915
Madison Cox, Capital
Madison Cox, Drawing
Income Summary
Fees Earned
7,000 2,100 9,935 8,000 5,280 2,100 4,655 1,500 2,100 0 5,280 435 10,180 0 9,935 0 Wages Expense
Rent Expense
Insurance Expense
Utilities Expense
2,600 1,145 200 180 530 1,145 200 180 3,130 0 0 0 0
Adjusting Entries:
1) Insurance Expense
200
Prepaid Insurance
200
2) Accounts Receivable
1,500
Fees Earned
1,500
3) Unearned Revenue
435
Fees Earned
435
4) Wages Expense
530
Wages Payable
530
Closing Entries: 1) Fees
Earned 9,935
Income Summary
9,935
2) Income Summary
4,655
Wages Expense
3,130
Rent Expense
1,145
Insurance Expense
200
Utilities Expense
180
3) Income Summary
5,280
Madison Cox, Capital
5,280
4) Madison Cox, Capital
2,100
Madison Cox, Drawing
2,100
201. Reconstruct adjusting and closing entries for the month ended September 30, 2010 from the T-accounts below.
Prepaid Insurance
Accounts Receivable.
Unearned Revenues
Wages Payable
1,350 1,250 1,050 385 130 275 235 385 1,220 1,525 815 Mai Lui, Capital
Mai Lui, Drawing
Income Summary
Fees Earned
7,000 2,400 5,510 5,000 580 2,400 6,090 275 2,400 0 580 235 4,020 5,510
Wages Expense
Rent Expense
Insurance Expense
Utilities Expense
3,600 1,880 130 95 385 1,880 130 95 3,985 0 0 0 0
Adjusting Entries:
1) Insurance Expense
130
Prepaid Insurance
130
2) Accounts Receivable
275
Fees Earned
275
3) Unearned Revenue
235
Fees Earned
235
4) Wages Expense
385
Wages Payable
385
Closing Entries: 1) Fees
Earned
5,510
Income Summary
5,510
2) Income Summary
6,090
Wages Expense
3,985
Rent Expense
1,880
Insurance Expense
130
Utilities Expense
95
3) Mai Lui, Capital
580
Income Summary
580
4) Mai Lui, Capital
2,400
Mai Lui, Drawing
2,400
202.
1) Dana Bowen Company is completing its first year of operations on April 30, 2010. Reconstruct the entries for the year ended April 30, 2010 from the T-accounts below. Record them as follows:
A - L Journal Entries M- R Adjusting Journal Entries 2) Balance and
prepare the Income Statement, Statement of Owner’s Equity, and the Balance Sheet from the T-Accounts.
3) Prepare the four
closing entries (S - V).
4) Prepare the
Post-Closing Trial Balance.
Cash Accou
nts Receivable
Supplies Prepaid Insurance
6,500 1,250 870 1,940 900 385 540 725 400 420 1,940 2,500 50 350 930 Equipment Accum
ulated Depreciation
Accounts Payable
Wages Payable
2,500 130 870 225
Unearned Revenues
Dana Bowen, Capital
Dana Bowen, Drawing
Income Summary
930 6,500 350 590 2,500 Fees Earned Wages
Expense
Rent Expense
Supplies Expense
900 420 400 540 1,250 225 2,500 385 590 Insurance Expense
Depreciation Expense
Miscellaneous Expense
725 130 50
1) Journal Entries:
a) Cash
6,500
Dana Bowen, Capital
6,500
b) Equipment
2,500
Dana Bowen, Capital
2,500
c) Rent Expense
400
Cash 400 d) C
ash
900
Fees Earned 900
e) Accounts Receivable
1,250
Fees Earned 1,250
f) Supplies
870
Accounts Payable
870
g) Wages Expense
420
Cash 420
h) Prepaid Insurance
1,940
Cash 1,940
i) Cash
2,500
Fees Earned 2,500
j) Miscellaneous Expense
50
Cash 50
k) Dana Bowen, Drawing
350
Cash 350
l) Cash
930
Unearned Revenue
930
Adjusting Entries: m) Supplies
Expense 540
Supplies 540 n) Accounts
Receivable 385
Fees Earned 385 o) Insurance
Expense 725
Prepaid Insurance 725 p) Depreciation
Expense 130
Accumulated Depreciation 130 q) Wages
Expense 225
Wages Payable 225 r) Unearned
Revenues 590
Fees Earned 590 2) Dana Bowen Company Income Statement For the Year Ended April 30, 2010 Fees Earned $5,625 Expenses: Wages Expense $645 Rent Expense 400 Supplies Expense 540 Insurance Expense 725 Depreciation Expense 130 Miscellaneous Expense 50 Total Expenses 2,490 Net Income $3,135
Dana Bowen Company Statement of Owner’s Equity For the Year Ended April 30, 2010 Dana Bowen Capital, May 1, 2009 $0 Add: Investments 9,000 Sub-Total 9,000 Net Income for the Period $3,135 Less: withdrawals 350 Increase in Owner’s Equity 2,785 Dana Bowen, Capital, April 20, 2010 $11,785 Dana Bowen Company Balance Sheet April 30, 2010 Assets: Liabilities: Current Assets: Cash $7,670 Accounts Payable $870 Accounts Receivable 1,635 Wages Payable 225 Supplies 330 Unearned Revenues 340 Prepaid Insurance 1,215 Total Liabilities 1,435 Total Current Assets $10,850 Property, Plant, & Equipment Equipment $2,500 Owner’s Equity Less: Accum Depre 130 2,370 Dana Bowen, Capital 11,785 Total Assets $13,220 Total Liabilities and
Owner’s Equity $13,220
3) Closing Entries: s) Fees Earned 5,625 Inc
ome Summary
5,625
t) Income Summary
2,490
Wages Expense
645
Rent Expense
400
Supplies Expense
540
Insurance Expense
725
Depreciation Expense
130
Miscellaneous Expense
50
u) Income Summary
3,135
Dana Bowen, Capital
3,135
v) Dana Bowen, Capital
350
Dana Bowen, Drawing
350
4) Dana Bowen Company Post-Closing Trial Balance For the Year Ended April 30, 2010 Cash $7,670 Accounts Receivable 1,635 Supplies 330 Prepaid Insurance 1,215 Equipment 2,500 Accumulated Depreciation $ 130 Accounts Payable 870 Wages Payable 225 Unearned Revenues 340 Dana Bowen, Capital 11,785 Total $13,350 $13,350
203. The balances in the ledger of Good Landscape Services as of January 31, 2014 before adjustments, are as follows:
Cash $ 6,750 Dalton Good, Capital $29,775 Supplies 3,900 Dalton Good, Drawing 3,425 Prepaid Insurance 8,400 Service Revenue 56,300 Equipment 41,750 Salary Expense 24,300 Accumulated Rent Expense 6,000 Depreciation 9,950 Miscellaneous Expense 1,500 Adjustment data are as follows: supplies on hand, January 31, $900; insurance expired for January, $1,100; depreciation on equipment for January, $1,600; salaries accrued, January 31, $1,650. (a) Prepare a ten-column work sheet for Good Landscape Services for January, 2014. (b) On the basis of the work sheet in (a), present the following in good order: (1) income statement, (2) statement of owner's equity
(no additional investments were made during the month), and (3) balance sheet. (c) On the basis of the work sheet in (a), journalize the closing entries as of January 31, 2014.
(a) Good Landscape Services Work Sheet For the Month Ended January 31, 2014
)
) ) )
Trial Balance
Adjustments
)
Account Title Dr. Cr. Dr. Cr. ) Cash 6,750 ..... ..... ..... ) Supplies 3,900 ..... ..... (a) 3,000 ) Prepaid Insurance 8,400 ..... ..... (b) 1,100 ) Equipment 41,750 ..... ..... ..... ) Accumulated Depreciation ..... 9,950 ..... (c) 1,600 ) Dalton Good, Capital ..... 29,775 ..... ..... ) Dalton Good, Drawing 3,425 ..... ..... ..... ) Service Revenue ..... 63,200 ..... ..... ) Salary Expense 24,300 ..... (d) 1,650 ..... ) Rent Expense 6,000 ..... ..... ..... ) Miscellaneous Expense 1,500 ..... ..... ..... ) 96,025 96,025 ) ) Supplies Expense ..... ..... (a) 3,000 ..... ) Insurance Expense ..... ..... (b) 1,100 ..... ) Depreciation Expense ..... ..... (c) 1,600 ..... ) Salaries Payable ..... ..... ..... d) 1,650 ) 7,350 7,350 ) Net Income ) ( (
Adjusted Trial Balance
Income Statement
Balance Sheet
( Dr. Cr. Dr. Cr. Dr. Cr. ( ( 6,750 ..... ..... ..... 6,750 ..... ( 900 ..... ..... ..... 900 ..... ( 7,300 ..... ..... ..... 7,300 ..... ( 41,750 ..... ..... ..... 41,750 ..... ( ..... 11,550 ..... ..... ..... 11,550 ( ..... 29,775 ..... ..... ..... 29,275 ( 3,425 ..... ..... ..... 3,425 ..... ( ..... 56,300 ..... 56,300 ..... ..... ( 25,950 ..... 25,950 ..... ..... ..... ( 6,000 ..... 6,000 ..... ..... ..... ( 1,500 ..... 1,500 ..... ..... ..... ( 3,000 ..... 3,000 ..... ..... ..... ( 1,100 ..... 1,100 ..... ..... ..... ( 1,600 ..... 1,600 ..... ..... ..... ( ........... 1,650 ........... ........... ........... 1,650 ( 99,275 99,275 39,150 56,300 60,125 43,875 ( 17,150 ........... ........... 17,150 ( 56,,300 56,300 60,125 60,125
(b) (1) Good Landscape Services Income Statement For the Month Ended January 31, 2014 Service revenue $56,300 Operating expenses: Salary expense $25,950 Rent expense 6,000 Supplies expense 2,100 Insurance expense 1,100 Depreciation expense 2,500 Miscellaneous expense 1,500 Total operating expenses 39,150 Net income $17,150 (b) (2) Good Landscape Services Statement of Owner's Equity For the Month Ended January 31, 2014 Dalton Good, Capital, January 1, 2014 $29,775 Net income for the month $17,150 Less withdrawals 3,425 Increase in owner's equity 13,725 Dalton Good, Capital, January 31, 2014 $43,500 (b) (3) Good Landscape Services Balance Sheet January 31, 2014 Assets Liabilities Current assets: Cash $ 6,750 Current liabilities: Supplies 1,800 Salaries payable $ 1,650 Prepaid insurance 7,300 Total current assets $15,850 Owner's Equity Dalton Good, Capital 43,500 Property, plant, and equipment:
Total liabilities and owner's equity
$45,150
Equipment $41,750 Less accumulated depreciation 12,450 Total property, plant, and equipment 29,300 Total assets $45,150
(c) Closing Entries Jan. 31 Service Revenue 56,300 Income Summary 56,300 31 Income Summary 39,150 Salary Expense 25,950 Rent Expense 6,000 Miscellaneous Expense 1,500 Supplies Expense 2,100 Insurance Expense 1,100 Depreciation Expense 2,500 31 Income Summary 17,150 Dalton Good, Capital 17,150 31 Dalton Good, Capital 3,425 Dalton Good, Drawing 3,425
204. Complete the following worksheet for Danilo Enterprises. Danilo Enterprises Worksheet For the Year Ended December 31, 2010
Adjusted Trial Balance
Income Statement Balance Sheet
Account Title Debit Credit Debit
Credit Debit Credit
Cash 14,500 Accounts Receivable 7,500 Supplies 500 Equipment 20,500 Accumulated Depr-Equip 15,000 Accounts Payable 9,500 Wages Payable 3,060 Tony Danilo, Capital 18,240 Tony Danilo, Drawing 1,000 Fees Earned 34,000 Wages Expense 18,000 Rent Expense 9,300 Depreciation Expense 8,500 Totals 79,800 79,800 Net Income (Loss)
Danilo Enterprises Worksheet For the Year Ended December 31, 2010 Adjusted Trial
Balance Income Statement B
alance Sheet
Account Title Debit Credit Debit
Credit Debit Credit
Cash 14,500 14,500 Accounts Receivable 7,500 7,500 Supplies 500 500 Equipment 20,500 20,500 Accumulated Depr-Equip 15,000 15,000 Accounts Payable 9,500 9,500 Wages Payable 3,060 3,060 Tony Danilo, Capital 18,240 18,240 Tony Danilo, Drawing 1,000 1,000 Fees Earned 34,000 34,000 Wages Expense 18,000 1
8,000
Rent Expense 9,300 9,300
Depreciation Expense 8,500 8,500
Totals 79,800 79,800 35,800
34,000 44,000 45,800
Net Loss 1,800 1,800 3
5,800
35,800 45,800 45,800