Chapter 4: Completing the Accounting Cycle
158.
The end-of-period spreadsheet (work sheet) for the current year for Jamal Company shows Balance Sheet
columns with a debit total of $614,210 and a credit total of $630,430. This is before the amount for net income
or
net loss has been included. In preparing the income statement from the work sheet, what is the amount of net
income or net loss?
159.
Hannah Roberts owns and operates Hannah‘s Pool Service Company. On January 1, Hannah Roberts, Capital had
a balance of $252,000. During the year Hannah invested an additional $32,000 and withdrew $52,400. For the
year
ended December 31 Hannah’s Pool Service Company reported a net income of $73,200. Prepare a statement
of
owner’s equity for the year ended December 31.
Chapter 4: Completing the Accounting Cycle
160.
The following accounts appear in an adjusted trial balance of Blaine Auto Service Company. Indicate whether
each account would be reported in the (a) current assets, (b) property, plant, and equipment, (c) current
liabilities, (d) long-term liabilities, or (e) owner’s equity section of the December 31 balance sheet of Blaine
Auto Service Company.
1.
Blaine Brock, Capital
2.
Accumulated Depreciation
3.
Unearned Revenues
4.
Mortgage Payable
5.
Equipment
6.
Notes Payable (due in two years)
7.
Cash
8.
Accounts Receivable
161.
Describe a classified balance sheet.
Chapter 4: Completing the Accounting Cycle
162.
The balances for the accounts listed below appeared in the Adjusted Trial Balance columns of the work sheet.
Indicate whether each balance should be extended to (a) the Income Statement columns or (b) the Balance Sheet
columns.
(1)
Salaries Payable
Felipe Ramos, Drawing
(2)
Fees Earned
Equipment
(3)
Accounts Payable
Accounts Receivable
(4)
Felipe Ramos, Capital
Accumulated Depreciation
(5)
Supplies Expense
Salary Expense
(6)
Unearned Rent
Depreciation Expense
Chapter 4: Completing the Accounting Cycle
163.
The following balance sheet contains errors.
Mark Brock Services Co.
Balance Sheet
For the Year Ended December 31
Assets
Liabilities
Current assets:
Current liabilities:
Cash
$ 7,170
Accounts receivable
$ 10,000
Accounts payable
7,500
Accum. depr.—building
12,525
Supplies
2,590
Accum. depr.—equipment
7,340
Prepaid insurance
800
Net income
11,500
Land
24,000
Total current assets
$ 42,060
Total liabilities
$ 41,365
Owner’s Equity
Property, plant, and
equipment:
Wages payable
$ 1,500
Building
$43,700
Brock Morton, capital
88,645
Equipment
29,250
Total owner’s equity
90,145
Total property, plant,
and equipment
72,950
Total assets
$131,510
Total liabilities and owner’s equity
$131,510
(a)
List the errors in the balance sheet above and (b) prepare a corrected balance sheet.
Chapter 4: Completing the Accounting Cycle
Chapter 4: Completing the Accounting Cycle
164.
Indicate whether each of the following would be reported in the financial statements as a(n) (a) current asset,
(b)
current liability, (c) revenue, or (d) expense:
(1)
Supplies
(5)
Supplies Expense
(2)
Unearned Fees
(6)
Prepaid Insurance
(3)
Prepaid Advertising
(7)
Accounts Payable
(4)
Advertising Expense
(8)
Fees Earned
Chapter 4: Completing the Accounting Cycle
165.
The following accounts were taken from the Adjusted Trial Balance columns of the end–of-period spreadsheet
for
April 30, for Finnegan Co.:
Accumulated Depreciation
$32,000
Fees Earned
78,000
Depreciation Expense
7,250
Rent Expense
34,000
Prepaid Insurance
6,000
Supplies
400
Supplies Expense
1,800
Prepare an income statement.
Chapter 4: Completing the Accounting Cycle
166.
The following revenue and expense account balances were taken from the Income Statement columns of the
work
sheet for Fraser Services Co. for December 31:
Depreciation Expense
$ 4,950
Insurance Expense
2,900
Miscellaneous Expense
1,200
Rent Expense
24,000
Service Revenue
92,500
Supplies Expense
3,150
Utilities Expense
5,000
Wages Expense
63,750
Prepare an income statement.
Chapter 4: Completing the Accounting Cycle
167.
The following data were taken from the Adjusted Trial Balance columns of the end–of-period spreadsheet for
April
30, for Abigail Company:
Accumulated Depreciation
$42,400
Prepaid Rent
6,800
Supplies
850
Unearned Fees
7,310
Trucks
49,300
Cash
3,400
Abigail, Capital
?
Prepare a classified balance sheet.
Current assets:
Current liabilities:
equipment:
Total assets
Chapter 4: Completing the Accounting Cycle
168.
Indicate whether each of the following would be reported in the section of financial statements identified as (a)
current asset, (b) property, plant, and equipment, (c) current liability, (d) revenue, or (e) expense:
(1)
Truck
(2)
Accumulated depreciation
(3)
Telephone expense
(4)
Fees earned
(5)
Wages payable
(6)
Prepaid insurance
(7)
Office supplies
(8)
Dining expense
(9)
Unearned rent
Chapter 4: Completing the Accounting Cycle
169.
The following is the adjusted trial balance for Nadia Company.
Nadia Company
Adjusted Trial Balance
December 31
Cash
5,130
Accounts Receivable
3,300
Prepaid Expenses
420
Equipment
12,400
Accumulated Depreciation
2,200
Accounts Payable
700
Notes Payable (due on June 30)
3,070
Nadia Porter, Capital
13,000
Nadia Porter, Drawing
700
Fees Earned
10,930
Wages Expense
2,450
Rent Expense
1,900
Utilities Expense
1,475
Depreciation Expense
1,150
Miscellaneous Expense
975
Totals
29,900
29,900
Prepare an income statement, balance sheet, and statement of owner’s equity. Assume that the capital account
started with a beginning balance of $10,000 and that the owner made an additional investment of $3,000 during
the
period.
Chapter 4: Completing the Accounting Cycle
Chapter 4: Completing the Accounting Cycle
170.
Selected T accounts appear below for the current year for Linda’s Surveying Services.
Linda Winter, Capital
Linda Winter, Drawing
12/31
25,000
1/1
20,000
3/31
12,000
12/31
25,000
12/31
48,000
12/22
13,000
Income Summary
12/31
19,000
12/31
67,000
12/31
48,000
Prepare a statement of owner’s equity.
171.
List and describe the purpose of the four closing entries.
Chapter 4: Completing the Accounting Cycle
172.
Robert Evans owns a business, Beachside Realty that rents condominiums and furnishings. Below is the
adjusted
trial balance at December 31.
Debit
Credit
Cash
1,500
Accounts Receivable
2,000
Interest Receivable
100
Prepaid Insurance
1,600
Notes Receivable (long-term)
2,800
Equipment
15,000
Accumulated Depreciation
3,000
Accounts Payable
2,400
Accrued Expenses Payable
3,920
Income Taxes Payable
2,700
Unearned Rent Fees
500
Robert Evans, Capital
7,700
Robert Evans, Drawing
2,000
Rent Fees Earned
37,000
Furniture Rental Revenue
1,200
Interest Revenue
100
Wages Expense
19,000
Depreciation Expense
1,800
Utilities Expense
320
Insurance Expense
700
Maintenance Expense
9,000
Income Tax Expense
2,700
58,520
58,520
Prepare the entry required to close the expense accounts at the end of the period.
Dec. 31
Income Summary
1,800
9,000
2,700
Chapter 4: Completing the Accounting Cycle
173.
Prior to adjustment at August 31, Salary Expense has a debit balance of $298,500. Salaries owed but not paid
as of
the same date total $4,200.
Present the entries to record the following:
(1)
Accrued salaries as of August 31.
(2)
Closing of Salary Expense as of August 31.
Chapter 4: Completing the Accounting Cycle
174.
Robert Evans owns a business, Beachside Realty, that rents condominiums and furnishings. Below is the
adjusted
trial balance at December 31.
Debit
Credit
Cash
1,500
Accounts Receivable
2,000
Interest Receivable
100
Prepaid Insurance
1,600
Notes Receivable (long-term)
2,800
Equipment
15,000
Accumulated Depreciation
3,000
Accounts Payable
2,400
Accrued Expenses Payable
3,920
Income Taxes Payable
2,700
Unearned Rent Fees
500
Robert Evans, Capital
7,700
Robert Evans, Drawing
2,000
Rent Fees Earned
37,000
Furniture Rental Revenue
1,200
Interest Revenue
100
Wages Expense
19,000
Depreciation Expense
1,800
Utilities Expense
320
Insurance Expense
700
Maintenance Expense
9,000
Income Tax Expense
2,700
Total
58,520
58,520
Prepare the entry required to close the revenue accounts at the end of the period.
Chapter 4: Completing the Accounting Cycle
175.
Robert Evans owns a business, Beachside Realty, that rents condominiums and furnishings. Below is the
adjusted
trial balance at December 31.
Debit
Credit
Cash
1,500
Accounts Receivable
2,000
Interest Receivable
100
Prepaid Insurance
1,600
Notes Receivable (long-term)
2,800
Equipment
15,000
Accumulated Depreciation
3,000
Accounts Payable
2,400
Accrued Expenses Payable
3,920
Income Taxes Payable
2,700
Unearned Rent Fees
500
Robert Evans, Capital
7,700
Robert Evans, Drawing
2,000
Rent Fees Earned
41,000
Furniture Rental Revenue
1,200
Interest Revenue
100
Wages Expense
19,000
Depreciation Expense
1,800
Utilities Expense
320
Insurance Expense
700
Maintenance Expense
9,000
Income Tax Expense
2,700
58,520
58,520
Prepare the entry required to close the Drawing account at the end of the period.
Chapter 4: Completing the Accounting Cycle
176.
Identify which of the following accounts should be closed with a debit or a credit to Income Summary at the
end of
the fiscal year. If it is not closed to Income Summary, mark as n/a.
1.
Utilities Payable
2.
Utilities Expense
3.
Supplies
4.
Supplies Expense
5.
Fees Earned
6.
Unearned Fees
7.
Accounts Receivable
8.
Jason Hill, Drawing
9.
Jason Hill, Capital
10.
Accumulated Depreciation—Equipment
11.
Depreciation Expense—Equipment
12.
Equipment
13.
Prepaid Insurance
14.
Insurance Expense
Chapter 4: Completing the Accounting Cycle
177.
Robert Evans owns a business, Beachside Realty, that rents condominiums and furnishings. Below is the
adjusted
trial balance at December 31.
Debit
Credit
Cash
1,500
Accounts Receivable
2,000
Interest Receivable
100
Prepaid Insurance
1,600
Notes Receivable (long-term)
2,800
Equipment
15,000
Accumulated Depreciation
3,000
Accounts Payable
2,400
Accrued Expenses Payable
3,920
Income Taxes Payable
2,700
Unearned Rent Fees
500
Robert Evans, Capital
7,700
Robert Evans, Drawing
2,000
Rent Fees Earned
37,000
Furniture Rental Revenue
1,200
Interest Revenue
100
Wages Expense
19,000
Depreciation Expense
1,800
Utilities Expense
320
Insurance Expense
700
Maintenance Expense
9,000
Income Tax Expense
2,700
58,520
58,520
Prepare the closing entry required to transfer the income or loss at the end of the period.
Chapter 4: Completing the Accounting Cycle
178.
After the accounts have been adjusted at January 31, the end of the fiscal year, the following balances are taken
from the ledger of Harrison’s Dog Walking Service Company:
Harrison Taylor, Capital
$349,000
Harrison Taylor, Drawing
6,000
Fees Earned
124,600
Wages Expense
29,000
Rent Expense
43,000
Supplies Expense
7,300
Miscellaneous Expense
5,700
Journalize the four entries required to close the accounts
Jan. 31
Fees Earned
31
Income Summary
Income Summary
Harrison Taylor, Capital