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Title: Exercise 4-2
QA_Ori:
1.
2013
31-Dec Services Revenue 404 44,000
Income Summary 901 44,000
To close the revenue account.
31-Dec Income Summary 901 33,100
To close the withdrawals account.
2.
Cruz company
Post-Closing Trial Balance
31-Dec-13
Debit Credit
Cash $19,000
Supplies 13,000
2.
Title: Exercise 4-3
QA_Ori:
Salonika Marketing Company
Work Sheet
Adjusted
Trial Balance
Closing Entry Information
Post-Closing
Trial Balance
No. Account Title Dr. Cr. Dr. Cr. Dr. Cr.
101 Cash............................... 9,200 9,200
106 Accounts receivable........... 25,000 25,000
153 Equipment....................... 42,000 42,000
)
Totals.............................. 188,800
188,800
175,400
175,400
107,200
107,200
Title: Exercise 4-4
QA_Ori:
WILSON TRUCKING COMPANY
Income Statement
For Year Ended December 31, 2013
Trucking fees earned $130,000
Expenses
Depreciation expense—Trucks $23,500
WILSON TRUCKING COMPANY
Statement of Owner’s Equity
For Year Ended December 31, 2013
Title: Exercise 4-5
QA_Ori:
WILSON TRUCKING COMPANY
Balance Sheet
December 31, 2013
Assets
Current assets
Cash $8,000
Accounts receivable 17,500
Liabilities
Current liabilities
Accounts payable $12,000
Interest payable 4,000
*From Exercise 4-4
* K. Wilson Capital is computed as:
Title: Exercise 4-6
QA_Ori:
Current assets:
Cash $8,000
Current liabilities:
Interpretation: Wilson Trucking Company’s current ratio of 1.78 exceeds the
industry average of 1.5. This implies the company is in a slightly better liquidity
Title: Exercise 4-7
QA_Ori:
Current
Assets
Current
Liabilities
Current
Ratio
Case 1 $ 79,040 / $ 32,000 = 2.47
Analysis: Company 1 is in the strongest liquidity position. It has about $2.47 of
current assets for each $1 of current liabilities. The only potential concern is that
Title: Exercise 4-8
QA_Ori:
1. B 5. D 9. C
13.
C
QA_Edit:
1. B 5. D 9. C
13.
C
Title: Exercise 4-9
QA_Ori:
Planta Company
Work Sheet
Adjusted
Trial Balance
Income Statement
Balance Sheet &
Statement of
Owner’s Equity
No. Account Dr. Cr. Dr. Cr. Dr. Cr.
101 Cash.................................. 7,000 7,000
106 Accounts receivable.............. 27,200 27,200
401 Plumbing fees earned........... 84,000 84,000
611 Depreciation expense—
Trucks...............................
6,500 6,500
Title: Exercise 4-10
QA_Ori:
Instructor note: Entries are shown without an account reference column because no posting is required.
(a) Insurance Expense—Office Equipment 332
Insurance Expense—Store Equipment 568
Prepaid Insurance 900
To record expired insurance.
(b
To record accrued salaries.
Title: Exercise 4-11
QA_Ori:
1.
Work Sheet
Account Title Debit Credit
Rent earned 120,000
46,300
Insurance expense 7,400
Office supplies expense 16,000
2. Closing entries
1 Rent Earned 120,000
Income Summary 120,000
To close the revenue account.
To close Income Summary.
