Chapter 05 – Adjustments and the Worksheet
5-40
© 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.
5-41
81. The balances of the ledger accounts for Buffet Services on September 30, 2013, and the
information needed for adjustments are shown below. Prepare the Trial Balance section,
record the adjustments, and complete the worksheet.
Adjustment information:
(a) The supplies were purchased on September 1, 2013. An inventory of supplies showed
$1,200 on hand on September 30, 2013.
(b) The amount of Prepaid Insurance represents a payment made September 1, 2013, for a six-
month insurance policy.
(c) The equipment, purchased September 1, 2013, has an estimated useful life of 5 years with
no salvage value. The firm uses the straight-line method of depreciation.
Chapter 05 – Adjustments and the Worksheet
5-42
Chapter 05 – Adjustments and the Worksheet
5-43
Chapter 05 – Adjustments and the Worksheet
5-44
5-45
© 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.
5-46
82. The balances of the ledger accounts for Lance’s Landscaping Design on March 31, 2013,
and the information needed for adjustments are shown below. Prepare the Trial Balance
section, record the adjustments, and complete the worksheet.
Adjustment information:
(a) The supplies were purchased on March 1, 2013. An inventory of supplies showed $300 on
hand on March 31, 2013.
(b) The amount of Prepaid Insurance represents a payment made March 1, 2013, for a six-
month insurance policy.
(c) The equipment, purchased March 1, 2013, has an estimated useful life of 5 years with no
salvage value. The firm uses the straight-line method of depreciation.
Chapter 05 – Adjustments and the Worksheet
5-47
Chapter 05 – Adjustments and the Worksheet
5-48
Chapter 05 – Adjustments and the Worksheet
5-49
5-50
© 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.
5-51
83. The partial worksheet for the Lorado Insurance Agency for the month ended October 31,
2013, is shown below. Using this data, prepare an income statement, a statement of owner’s
equity, and a balance sheet. The owner made no additional investments during the month.
Chapter 05 – Adjustments and the Worksheet
5-52
© 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.
5-54
84. The partial worksheet for the Marion Consulting Services for the month ended January 31,
2013, is shown below. Using this data, prepare an income statement, a statement of owner’s
equity, and a balance sheet. The owner made no additional investments during the month.
Chapter 05 – Adjustments and the Worksheet
5-55
Chapter 05 – Adjustments and the Worksheet
Matching Questions
85. Match the accounting terms with the description by entering the proper number.
1. A balance sheet that lists assets on the left and
liabilities and owner’s equity on the right
Straight-line
depreciation
8
2. Journal entries made to update accounts for items
that were used or expired during the accounting
period
Adjusting entries or
adjustments
2
3. An asset account with a credit balance, which is
contrary to the normal balance of an asset account
Salvage value
4
4. An estimate of the amount that could be received
by selling or disposing of an asset at the end of its
useful life
Account form
balance sheet
1
5. That portion of an asset’s original cost that has not
yet been depreciated
Contra account
10
6. Expense items acquired, recorded, and paid for in
advance of their use
Worksheet
7
7. A form used to gather all data needed at the end of
an accounting period to prepare financial statements
Book value
5
8. Allocation of an asset’s cost in equal amounts to
each accounting period of the asset’s useful life
Prepaid expenses
6
9. A balance sheet that lists the asset accounts first,
followed by liabilities and owner’s equity
Contra asset account
3
10. An account with a normal balance that is opposite
that of a related account
Report form balance
sheet
9
11. Allocation of the cost of a long-term asset to
operations during its expected useful life
Depreciation
11