144. The calendar year-end adjusted trial balance for Acosta Co. follows:
ACOSTA CO.
Adjusted Trial Balance
December 31
Cash $ 100,000
Accounts receivable 7,000
Prepaid rent 15,000
Prepaid Insurance 9,000
Office supplies 3,300
Office equipment 8,000
Accumulated depreciation—Equipment $ 3,200
Building 350,000
Accumulated depreciation—Building 42,000
Land 700,000
Accounts payable 5,800
Salaries payable 14,500
Interest payable 2,500
Long-term note payable 52,000
Margarita Acosta, Capital 1,010,000
Margarita Acosta, Withdrawals 200,500
Service fees earned 370,800
Salaries expense 90,000
Insurance expense 5,200
Rent expense 5,000
Depreciation expense—Equipment 800
Depreciation expense—Building 7,000
Totals $1,500,800 $1,500,800
Required:
(a) Prepare a classified year-end balance sheet. (Note: A $7,000 installment on the long-term note
payable is due within one year.)
(b) Calculate the current ratio. Comment on the ability of Acosta Co. to meets its short-term debts.
(a)
145. Calculate the current ratio in each of the following separate cases.
Current
Assets
Current
Liabilities
Case
1
$
75,000
$ 30,000
Case
2
$161,500
$ 85,000
Case
3
$
45,000
$ 53,000
Case
4
$132,000
$127,000
Case 5 $
99,000
$110,000
4-64
146. Use the following partial work sheet from Matthews Lanes to prepare its income statement,
statement of owner’s equity and a classified balance sheet (Assume the owner did not make any
investments in the business this year.)
MATTHEWS LANES
Work Sheet
For Year Ended June 30
Balance
Sheet
and Statement of
Owner’s Equity
Account Income Statement
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
M. Matthews, Capital…………………. 50,000
M. Matthews, Withdrawals…………. 46,425
Bowling revenue ..…………..…………. 137,675
Depreciation expense-
Scoring equipment ………………… 10,825
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
Totals………………..……………………… 137,675 137,675 193,650 193,650
147. The unadjusted trial balance of E. Pace, Consultant is entered on the partial work sheet below.
Complete the work sheet using the following information:
(a) Salaries earned by employees that are unpaid and unrecorded, $500.
(b) An inventory of supplies showed $800 of unused supplies still on hand.
(c) Depreciation on equipment, $1,300.
E. Pace, Consulting
Work Sheet
For the year ended December 31
Account Unadjusted Trial
Balance Adjustments Adjusted Trial
Balance Income
Statement Balance Sheet
and Statement of
Owner’s Equity
Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit
Cash $14,000
Supplies 1,000
Equipment 11,000
Accum. Depr. — Equip. $ 2,000
Accounts payable 500
Salaries payable
E. Pace, Capital 6,500
E. Pace, Withdrawals 1,500
Fees earned 30,000
Salary expense 7,500
Rent expense 4,000
Supplies expense
Depreciation expense
Totals S39,000 $39,000
4-68
148. 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 owner’s equity columns.
Platen Company
Work Sheet
For the year ended December 3 l
Account Unadjusted Trial
Balance Adjustments Adjusted Trial
Balance Income Statement Balance Sheet and
Statement of
Owner’s Equity
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
C. Platen, Capital 132
132
C. Platen, Withdrawals 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
Totals
149. Shown below are selected data taken from the unadjusted and adjusted trial balances for the
Simonson Company for the current year ended December 31. Determine the items A through H
below.
Simonson Company
Trial Balances
December 31
Account Unadjusted Trial Balance Adjusted Trial Balance
Debit Credit Debit Credit
Cash 10,000 (A)
Accounts receivable 88,270 90,770
Office supplies 700 (B)
Prepaid insurance (C) 2,500
Office equipment 49,600 (D)
Accumulated depreciation — Office equipment (E) 10,260
Accounts payable 36,400 36,400
Salaries payable 0 2,700
J. Simonson, Capital (F) 76,370
Revenue earned (G) 542,500
Advertising expense 15,000 15,000
Depreciation expense — Office equipment 0 2,160
Insurance expense 0 4,300
Office supplies expense 0 480
Rent expense 28,500 28,500
Salaries expense 462,000 (H)
Totals
150. The summary amounts below appear in the Income Statement and Balance Sheet columns of
a company’s December 31 work sheet. Prepare the necessary closing entries.
Assets Income Statement Balance Sheet
Debit Credit Debit Credit
12,000
Liabilities 3,000
Kate Smith, Capital 7,500
Kate Smith, Withdrawals 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
Totals 19,500 19,500 13,500 13,500
151. The adjusted trial balance of Sara’s Web Services follows:
SARA’ S WEB SERVICES
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
Sara Pollis, Capital 13,925
Sara Pollis, Withdrawals 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
Totals $41,370 $41,370
(a) Prepare the closing entries for Sara’s Web Services.
(b) What is the balance of Sara’s capital account after the closing entries are posted?
152. Following are selected accounts and their balances for a company after the adjustments as of
May 31, the end of its fiscal year. (All accounts have normal balances.)
J. Mark, Capital $30,000
J. Mark, Withdrawals 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.
4-74
153. The adjusted trial balance of the Thomas Company follows:
T h o m a s C o m p a n y
A d j u s t e d T r i a l B a l a n c e
December 31
Debit Credit
Cash 8,000
Prepaid insurance 2,400
Equipment 18,000
Accumulated depreciation—Equipment 3,600
Salaries payable 2,000
Unearned repair fees 1,200
Thomas, Capital 11,400
Thomas, Withdrawals 4,000
Repair fees earned 27,500
Salaries expense 10,000
Depreciation expense 1,800
Insurance expense 1,500
Totals 45,700 45,700
Prepare the closing entries for Thomas Company.
154. The items that follow appeared in the Income Statement columns of the work sheet prepared
for Armstrong Delivery Service at current year-end. In addition, L. Armstrong, Capital had a credit
balance of $117,000 and L. Armstrong, Withdrawals had a debit balance of $30,000 at year end.
Prepare closing journal entries for this company.
Income Statement
Dr. Cr.
Delivery Revenue $98,900
Office salaries expense $28,100
Rent expense 14,400
Insurance expense 1,200
Office supplies expense 1,900
Depreciation expense—Office equipment 6,000
Totals $51,600 $98,900
Net income 47,300
Totals $98,900 $98,900
155. Presented below are the year-end balances at December 31 of Laura‘s Laundry Service. (All
accounts have normal balances.)
Accounts receivable $ 12,000
Accounts payable 25,000
Accumulated depreciation—Catering equipment 30,000
Advertising expense 4,000
Cash 42,000
Depreciation expense—Catering equipment 12,000
Insurance expense 3,000
Catering equipment 125,000
Catering service revenue 200,000
Notes payable 65,000
Laura Bow, Capital 17,000
Laura Bow, Withdrawals 18,000
Prepaid insurance 1,500
Salaries payable 4,000
Salary expense 97,000
Supplies 1,500
Supplies expense 9,000
Repair expense 7,000
Unearned catering service revenues 500
Utilities expense 9,500
(a) Prepare the necessary closing entries at December 31.
(b) Prepare a post-closing trial balance at December 31.
4-78
156. Shown below is Adventure Travel’s adjusted trial balance as of the end of its annual
accounting period:
A d v e n t u r e T r a v e l
A d j u s t e d T r i a l B a l a n c e
December 31
Dr. Cr.
Cash $ 25,000
Accounts receivable 15,000
Office supplies 4,300
Office equipment 29,600
Accumulated depreciation—Office equipment $ 5,000
Long-term notes payable 25,000
Brady, Capital 30,260
Brady, Withdrawals 1,000
Fees earned 75,000
Salaries expense 32,800
Rent expense 16,800
Depreciation expense—Office equipment 3,960
Advertising expense 4,000
Office supplies expense 2,800
Totals $135,260 $135,260
(a) Prepare the necessary closing entries.
(b) Prepare a post-closing trial balance.