Chapter 4: Completing the Accounting Cycle
Insurance
Expense
Depreciation
Expense
Miscellaneous
Expense
725
50
Chapter 4: Completing the Accounting Cycle
Chapter 4: Completing the Accounting Cycle
Chapter 4: Completing the Accounting Cycle
Chapter 4: Completing the Accounting Cycle
191.
Kirk Enterprises offers rug cleaning services to business clients. Below is the trial balance for Kirk
Enterprises,
which was prepared on the end–of-period spreadsheet (work sheet) for the year ended July 31.
Kirk Enterprises
End-of-Period Spreadsheet
For the Year Ended July 31
Trial Balance
Adjustments
Adjusted Trial
Balance
Debit
Credit
Debit
Credit
Debit
Credit
Cash
36
Prepaid Insurance
12
Fees Receivable
56
Supplies
12
Equipment
60
Accumulated Depreciation
12
Unearned Revenue
20
Accounts Payable
32
Wages Payable
Ruben Ramon, Capital
84
Ruben Ramon, Drawing
4
Service Revenue
80
Advertising Expense
28
Wage Expense
20
Insurance Expense
Supplies Expense
Depreciation Expense
Totals
228
228
REQUIRED: Enter the adjustment data in the work sheet for the transactions shown below and place the balances
in the Adjusted Trial Balance columns.
a. The equipment is estimated to last for 5 years with no salvage value. The asset will be depreciated evenly over its
useful life. Record one month’s depreciation.
b. Accrued wages, $2.
c. Unused supplies on hand, $8.
d. Of the unearned revenue, 75% has been earned.
e. Unexpired insurance remaining at the end of the month, $9.
Chapter 4: Completing the Accounting Cycle
Chapter 4: Completing the Accounting Cycle
192.
Kirk Enterprises offers rug cleaning services to business clients. Below are the adjustments data for the year
ended July 31. Using this information along with the spreadsheet below, record the adjusting entries in
proper
general journal form.
Adjustments:
(a)
The equipment is estimated to last for 5 years with no salvage value. The asset will be depreciated evenly over
its useful life. Record one month’s depreciation.
(b)
Accrued wages, $2.
(c)
Unused supplies on hand, $8.
(d)
Of the unearned revenue, 75% has been earned.
(e)
Unexpired insurance remaining at the end of the month, $9.
Kirk Enterprises
End-of-Period Spreadsheet
For the Year Ended July 31
Trial Balance
Adjustments
Adjusted Trial
Balance
Debit
Credit
Debit
Credit
Debit
Credit
Cash
36
Prepaid Insurance
12
Fees Receivable
56
Supplies
12
Equipment
60
Accumulated Depreciation
12
Unearned Revenue
20
Accounts Payable
32
Wages Payable
Ruben Ramon, Capital
84
Ruben Ramon, Drawing
4
Service Revenue
80
Advertising Expense
28
Wage Expense
20
Insurance Expense
Supplies Expense
Depreciation Expense
Totals
228
228
Chapter 4: Completing the Accounting Cycle
Chapter 4: Completing the Accounting Cycle
193.
The balances in the ledger of Good Landscape Services as of January 31 before adjustments are as follows:
Cash
$ 6,750
Dalton Good, Capital
$29,775
Supplies
3,900
Dalton Good, Drawing
3,425
Prepaid Insurance
8,400
Service Revenue
56,300
Equipment
41,750
Salary Expense
24,300
Accumulated
Rent Expense
6,000
Depreciation
9,950
Miscellaneous Expense
1,500
Adjustment data are as follows: supplies on hand, January 31, $900; insurance expired for January, $1,100;
depreciation on equipment for January, $1,600; salaries accrued, January 31, $1,650.
(a)
Prepare a ten-column end-of-period spreadsheet for Good Landscape Services for January.
(b)
On the basis of the work sheet in (a), present the following in good order: (1) income statement, (2)
statement of owner’s equity (assume no additional owner investments were made during the
month),
and (3) balance sheet.
(c)
On the basis of the work sheet in (a) journalize the closing entries as of January 31.
Chapter 4: Completing the Accounting Cycle
Chapter 4: Completing the Accounting Cycle
Chapter 4: Completing the Accounting Cycle
194.
Complete the following end–of-period spreadsheet for Danilo Enterprises.
Danilo Enterprises
End-of-Period Spreadsheet
For the Year Ended December 31
Adjusted Trial
Balance
Income Statement
Balance Sheet
Account Title
Debit
Credit
Debit
Credit
Debit
Credit
Cash
14,500
Accounts Receivable
7,500
Supplies
500
Equipment
20,500
Accumulated Depr.—Equip.
15,000
Accounts Payable
9,500
Wages Payable
3,060
Tony Danilo, Capital
18,240
Tony Danilo, Drawing
1,000
Fees Earned
34,000
Wages Expense
18,000
Rent Expense
9,300
Depreciation Expense
8,500
Totals
79,800
79,800
Net Income (Loss)
Chapter 4: Completing the Accounting Cycle
Chapter 4: Completing the Accounting Cycle
195.
Explain how net income or loss is determined by using the end–of-period spreadsheets.
196.
If end-of-period spreadsheets are not considered part of the formal accounting records, then why are they used?
Chapter 4: Completing the Accounting Cycle
Match each journal entry that follows as one of the types of journal entries (a-c) below.
a.
Journal entries
b.
Adjusting journal entries
c.
Closing journal entries
DIFFICULTY: Moderate
Bloom’s: Remembering
LEARNING OBJECTIVES: ACCT.WARD.16.04-05 – 04–05
ACCREDITING STANDARDS: ACCT.ACBSP.APC.06 – Recording Transactions
ACCT.ACBSP.APC.07 – Adjusting Entries
ACCT.ACBSP.APC.08 – Closing Entries
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
197. Cash
Fees Earned
450
450
198. Income Summary
ABC, Capital
650
650
199. Utilities Expense
Cash
430
430
200. Wages Expense
Wages Payable
870
870
201. Unearned Revenue
985
Fees Earned
985
202. Income Summary
597
Rent Expense
200
Supplies Expense
180
Utilities Expense
110
Miscellaneous Exp.
107
203.
RS, Drawing 215
Cash 215
204.
Accounts Receivable 325
Fees Earned 325
(Customer billed for services performed)