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158)
Explain the purpose of reversing entries.
159)
In the table below, indicate with an "X" in the proper column whether the account is a temporary
(nominal) account or a permanent (real) account.
Account
Temporary
(Nominal)
Permanent
(Real)
a.
Cash
b.
Prepaid rent
c.
Unearned revenue
d.
Accounts receivable
e.
Insurance expense
f.
S. Holder, Capital
g.
S. Holder, Withdrawals
h.
Rent expense
i.
Fees earned
j.
Supplies
k.
Supplies expense
l.
Depreciation expense–Equipment
m.
Accumulated depreciation–Equipment…..
82
160)
A number of accounts are listed below. Use the table to classify each account by indicating whether
it is a temporary or permanent account, whether it is included in the Income Statement or Balance
sheet, and if it is closed at the end of the accounting period, and, if so, whether it is closed with a
debit or credit. The first one is done as an example.
Account
Permanent (P)
or
Temporary (T)
Income
Statement (IS)
or Balance
Sheet (BS)
Closed (C)
or
Not
Closed (NC)
Closed
with
Debit (Dr)
or
Credit (CR)
a.
Accounts payable.
P
BS
NC
b.
Accounts receivable..
c.
Accumulated
depreciation,
Building
d.
Marketing expense.
e.
Cash
f.
Unearned revenues.
g.
Depreciation expense–
Building
h.
Owner, Withdrawals.
i.
Building.
j.
Insurance expense
k.
Interest expense.
l.
Miscellaneous expense
m
Notes payable
n.
Store supplies.
o.
Store supplies expense.
p.
Prepaid rent.
q.
Rent expense.
r.
Owner, Capital.
s.
Salaries expense
t.
Salaries payable
u.
Service revenue...
84
161)
The steps in the accounting cycle are shown below. List them in the correct order in which they are
completed:
Prepare adjusted trial balance
Post transactions
Prepare an unadjusted trial balance
Journalize transactions
Prepare the financial statements
Close the temporary accounts
Adjust the ledger accounts
Prepare a post-closing trial balance
Analyze transactions
162)
a) Prepare a classified balance sheet for Martin Air Freight based on the adjusted trial balance shown
below. b) Prepare the required closing entries.
* $2,000 of the long-term note payable is due during the next year.
163)
The calendar year-end adjusted trial balance for Blessinger Co. follows:
Cash
$ 112,000
Accounts receivable
27,000
Prepaid rent
15,000
Prepaid Insurance
9,000
Office supplies
3,300
Office equipment
38,000
Accumulated depreciation–Equipment
$3,200
Building
288,000
Accumulated depreciation–Building
42,000
Land
700,000
Accounts payable
25,800
Salaries payable
14,500
Interest payable
2,500
Long-term note payable
72,000
P. Blessinger, Capital
910,000
P. Blessinger, Withdrawals
200,500
Service fees earned
430,800
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 $9,000 installment on the long-term note
payable is due within one year.)
(b) Prepare the required closing entries.
164)
The calendar year-end adjusted trial balance for Blessinger Co. follows:
BLESSINGER CO.
Adjusted Trial Balance
December 31
Cash
$ 112,000
Accounts receivable
27,000
Prepaid rent
15,000
Prepaid Insurance
9,000
Office supplies
3,300
Office equipment
38,000
Accumulated depreciation–Equipment
$3,200
Building
288,000
Accumulated depreciation–Building
42,000
Land
700,000
Accounts payable
25,800
Salaries payable
14,500
Interest payable
2,500
Long-term note payable
72,000
P. Blessinger, Capital
910,000
P. Blessinger, Withdrawals
200,500
Service fees earned
430,800
Salaries expense
90,000
Insurance expense
5,200
Rent expense 89
5,000
Rent expense
5,000
Depreciation expense–Equipment
800
Depreciation expense–Building
7,000
Totals
$1,500,800
$1,500,800
Required:
(a) Determine the amounts of current assets and current liabilities. (Note: A $9,000 installment on the
long-term note payable is due within one year.)
(b) Calculate the current ratio. Comment on the ability of Blessinger Co. to meets its short-term
debts.
165)
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
166)
Calculate the current ratio for each of the following companies and identify the company with the
strongest liquidity position.
Current Assets
Current Liabilities
Company A
$1,752,000
$1,267,000
Company L
$863,500
$481,000
Company T
$366,800
$419,000
167)
Use the following partial work sheet from Carmelo Bowl 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.)
CARMELO
BOWL
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
G. Carmelo, Capital......................
50,000
G. Carmelo, 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...............................................
137,67
5
137,675
193,650
193,650
92
94
168)
The unadjusted trial balance of R. Tryon, 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.
169)
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.
170)
Shown below are selected data taken from the unadjusted and adjusted trial balances for the Dryer
Company for the current year ended December 31. Determine the items A through H below.
Cash
$ 1,170
Supplies
1,930
Prepaid insurance
600
Computer equipment
20,600
Accumulated depreciation–Computer equipment
$ 5,400
Accounts payable
325
C. Gaines, Capital
13,925
171)
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.
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
172)
The adjusted trial balance of Carson's Internet Services follows:
CARSON’S INTERNET SERVICES
Adjusted Trial Balance
December 31
98
C. Gaines, Capital
13,925
C. Gaines, 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 four closing entries necessary.
(b) What is the balance of Carson Gaines' capital account after the closing entries are posted?
173)
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.)
L. Storm, Capital………
$30,000
L. Storm, 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.
174)
The adjusted trial balance of the Waterstone Company follows:
Waterstone Company
Adjusted Trial Balance
December 31
Debit
Credit
Cash
8,000
Prepaid insurance
2,400
Equipment
18,000
Accumulated depreciation–Eq
1
u
0i
0
pment
3,600
Accumulated depreciation–Equipment
3,600
Salaries payable
2,000
Unearned repair fees
1,200
T. Waterstone, Capital
11,400
T. Waterstone, 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 Waterstone Company.
175)
The Income Statement columns of the work sheet prepared for Crawford Delivery Service at
current year-end are shown below. In addition, L. Crawford, Capital had a credit balance of
$117,000 and L. Crawford, 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 101
14,400
