Chapter 13 – Financial Statements and Closing Procedures
76. Brianna Graham is the owner of a dress shop. The firm had a net loss of $9,000 for the
year. What accounts are debited and credited to transfer the net loss to the owner’s capital
account during the closing process?
77. Teresa Davis is the owner of a convenience shop. The firm had a net income of $4,500 for
the year. What accounts are debited and credited to transfer the net loss to the owner’s capital
account during the closing process?
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80. On December 31, 2013, the Income Statement section of the worksheet is shown below.
The balance of Ally Logan’s drawing account is $16,000. Record the necessary closing entries
on page 9 of a general journal.
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© 2012 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
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81. The data below concerns adjustments to be made at the Conner Company. Record the
adjusting entries on page 12 of a general journal as of December 31, 2013. On the same page
of the general journal, record the reversing entries as of January 1, 2014. Include descriptions.
Adjustment data:
(a) On October 1, 2013, the firm paid rent of $6,000 in advance for a 6-month period.
(b) A total of $5,000 should be recorded as depreciation of equipment for 2013.
(c) On December 31, 2013, the firm owed salaries of $4,000 that will not be paid until
January 2014.
(d) On December 31, 2013, the firm owed the employer’s social security (6.2%) and Medicare
(1.45%) taxes on all of the accrued salaries.
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© 2012 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
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82. The data below concerns adjustments to be made at the Tyson Company. Record the
adjusting entries on page 12 of a general journal as of December 31, 2013. On the same page
of the general journal, record the reversing entries as of January 1, 2014. Include descriptions.
Adjustment data:
(a) On October 1, 2013, the firm paid rent of $18,000 in advance for a 6-month period.
(b) A total of $15,000 should be recorded as depreciation of equipment for 2013.
(c) On December 31, 2013, the firm owed salaries of $12,000 that will not be paid until
January 2014.
(d) On December 31, 2013, the firm owed the employer’s social security (6.2%) and Medicare
(1.45%) taxes on all of the accrued salaries.
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© 2012 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
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83. A. Check all of the following accounts that would be classified as a current asset.
B. Check all of the following accounts that would be classified as a current liability.
Chapter 13 – Financial Statements and Closing Procedures
Matching Questions
84. Match the accounting terms with the description by entering the proper number.
1. The amount of gross profit from each dollar of sales
Single-step
income statement
8
2. A format by which revenues and expenses on the
income statement, and assets and liabilities on the
balance sheet, are divided into groups of similar accounts
and a subtotal is given for each group
Gross profit
6
3. The ease with which an item can be converted into
cash
Classified
financial statement
2
4. A type of income statement on which several subtotals
are computed before the net income is calculated
Multiple-step
income statement
4
5. Property that will be used in the business for longer
than one year
Gross profit
percentage
1
6. The difference between net sales and the cost of goods
sold
Inventory
turnover
13
7. Debts that must be paid within one year
Liquidity
3
8. A type of income statement where only one
computation is needed to determine the net income (total
revenue – total expenses = net income)
Plant and
equipment
5
9. A relationship between current assets and current
liabilities that provides a measure of a firm’s ability to
pay its current debts
Reversing entries
11
10. Debts of a business that are due more than one year
in the future
Current ratio
9
11. Journal entries made to reverse the effect of certain
adjusting entries involving accrued income or accrued
expenses to avoid problems in recording future payments
or receipts of cash in a new accounting period
Current assets
12
12. Assets consisting of cash, items that normally will be
converted into cash within one year, or items that will be
used up within one year
Long-term
liabilities
10
13. The number of times inventory is purchased and sold
during the accounting period
Current
liabilities
7
