247.
Calculate the current ratio in each of the following separate cases and identify the
company case with the strongest liquidity position.
Current Assets
Current Liabilities
Case 1
$55,000
$30,000
Case 2
$141,500
$85,000
Case 3
$45,000
$59,000
248.
Use the following partial work sheet from Carmelo Bowl, Inc. to prepare its income
statement, statement of retained earnings and a classified balance sheet (Assume the
stockholders did not make any investments in the business this year.)
CARMELO BOWL, Inc.
Work Sheet
For Year Ended June 30
Account
Income
Statement
Balance Sheet
Dr.
Cr.
Dr.
Cr.
Cash
11,275
Accounts
Receivable
1,750
Office
Supplies
800
Prepaid
Insurance
3,400
Scoring
Equipment
130,000
Accumulated
depreciation—
Scoring
equipment
21,700
Salaries
payable
200
Common stock
1,000
Retained
earnings
49,000
Dividends
46,425
Bowling
revenue
137,675
Depreciation
expense—
Scoring
10,825
equipment
Salaries
expense
1,800
Insurance
expense
200
Rent expense
1,600
Office supplies
expense
400
Repairs
expense
350
Telephone
expense
750
Totals
15,925
137,675
193,650
71,900
Net income
121,750
121,750
Total
137,675
137,675
193,650
193,650
Bowling Revenue
$137,675
Expenses:
Depreciation expense—
Salaries expense
1,800
Insurance expense
Rent expense
1,600
Office supplies expense
249.
A partially completed work sheet is shown below. The unadjusted trial balance columns
are complete. Complete the adjustments, adjusted trial balance, income statement, and
balance sheet and statement of retained earnings columns.
Dustin Company, Inc.
Work Sheet
For the year ended December 3l
Account
Unadjusted
Trial
Balance
Adjustments
Adjusted
Trial
Balance
Income
Statement
Balance
Sheet
Debit
Credit
Debit
Credit
Debit
Credit
Debit
Credit
Debit
Credit
Cash
40
Accounts
receivable
Prepaid
insurance
25
Supplies
14
8
Office
equipment
340
340
Accum.
Depr.,
Office
equipment
45
Accounts
payable
57
57
Rent
payable
Common
stock
132
132
Dividends
35
35
Fees
earned
300
380
Rent
expense
60
90
Utilities
expense
20
Insurance
expense
10
Supplies
expense
Deprec.
exp.,
Office
equipment
45
Totals
534
534
Net
income
Total
Cash
Accounts
receivable
Supplies
250.
A company’s December 31 work sheet appears below with summary amounts in the
Income Statement and Balance Sheet columns. Prepare the four necessary closing entries.
Income
Statement
Balance
Sheet
Debit
Credit
Debit
Credit
Assets
12,000
Liabilities
3,000
Common stock
1,000
Retained
earnings
6,500
Dividends
1,500
Revenue
19,500
Salaries
expense
11,250
Other operating
expenses
5,250
Totals
16,500
19,500
13,500
10,500
Net income
3,000
3,000
Total
19,500
19,500
13,500
13,500
Revenue
Income Summary
Income Summary
Salaries Expense
Other Operating Expenses
Income Summary
251.
The adjusted trial balance of Carson’s Internet Services, Inc. follows:
CARSON’S INTERNET SERVICES, Inc.
Adjusted Trial Balance
December 31
Cash
$1,170
Supplies
1,930
Prepaid insurance
600
Computer equipment
20,600
Accumulated depreciation—
Computer equipment
$5,400
Accounts payable
325
Common stock
1,000
Retained earnings
12,925
Dividends
4,800
Services revenue
21,720
Salaries expense
6,920
Depreciation expense
2,000
Rent expense
1,200
Supplies expense
800
Utilities expense
950
Insurance expense
400
Total
$41,370
$41,370
(a) Prepare the four closing entries necessary.
(b) What is the balance of the Retained Earnings account after the closing entries are
posted?
252.
Following are selected accounts and their balances for a company after the adjustments
made on May 31, the end of its fiscal year. (All accounts have normal balances.)
Retained earnings
$30,000
Dividends
6,000
Fees earned
20,000
Salaries expense
7,000
Insurance expense
350
Utilities expense
75
Supplies expense
500
Supplies payable
400
Salaries payable
300
Depreciation expense
425
Prepare all the necessary closing entries for this company.
Fees Earned
Income Summary
Salaries Expense
Insurance Expense
Utilities Expense
Supplies Expense
Depreciation Expense
Income Summary
Retained Earnings
Retained Earnings
Dividends
253.
The Income Statement columns of the work sheet prepared for Jolly Auto Service, Inc. at
current year-end are shown below. In addition, Retained Earnings had a credit balance of
$235,000 and Dividends had a debit balance of $40,000 at year end. Prepare closing
journal entries for this company.
Income
Statement
Dr.
Cr.
Service revenue
$130,200
Wages expense
$43,100
Rent expense
16,200
Insurance expense
1,800
Shop supplies expense
3,500
Depreciation expense—Shop
equipment
7,000
Totals
$71,600
$130,200
Net income
58,600
Total
$130,200
$130,200
Service Revenue
Income Summary
Income Summary
71,600
Wages Expense
Rent Expense
Insurance Expense
