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E4-25 Preparing closing entries from an adjusted trial balance; preparing a post-closing trial
balance; and calculating the current ratio
Learning Objectives 3, 4, 6
Mark’s Bowling Alley’s adjusted trial balance as of December 31, 2018, is presented below:
Requirements
1. Prepare the closing entries for Mark’s Bowling Alley.
2. Prepare a post-closing trial balance.
3. Compute the current ratio for Mark’s Bowling Alley.
SOLUTION
Requirement 1
E4-25, cont.
Requirement 2
Requirement 3
E4-26 Preparing a worksheet, closing entries, and a post-closing trial balance
Learning Objectives 2, 3, 4
1. Net Loss $(12,150)
Houston Veterinary Hospital completed the following worksheet as of December 31, 2018.
Requirements
1. Complete the worksheet for Houston Veterinary Hospital.
2. Prepare the closing entries.
3. Prepare a post-closing trial balance.
SOLUTION
E4-26, cont.
Requirement 2
Requirement 3
E4A-27 Journalizing reversing entries
Learning Objective 7 Appendix 4A
Lucas Architects recorded the following adjusting entries as of December 31:
a. Service Revenue accrued, $2,600.
b. Unearned Revenue that has been earned, $1,300.
c. Office Supplies on hand, $530. The balance of the Office Supplies account was $880.
d. Salaries owed to employees, $600.
e. One month of Prepaid Rent has expired, $3,100.
f. Depreciation on equipment, $1,075.
Journalize any necessary reversing entries for Lucas Architects.
SOLUTION
Date Accounts and Explanation Debit Credit
E4A-28 Journalizing reversing entries
Learning Objective 7 Appendix 4A
Mountain View Services had the following unadjusted balances at December 31, 2018: Salaries
Payable, $0; and Salaries Expense, $1,900. The following transactions have taken place at the
end of 2018 and beginning of 2019:
2018
Dec. 31 Accrued Salaries Expense at December 31, $8,000.
31 Closed the Salaries Expense account.
2019
Jan. 1 Reversed the accrued salaries. (Requirement 3 only)
4 Paid salaries of $8,500. This payment included the Salaries Payable amount, plus $500 for the first
few days of January.
Requirements
1. Open T-accounts for Salaries Payable and Salaries Expense using their unadjusted balances at
December 31, 2018.
2. Journalize the entries assuming Mountain View Services does not use reversing entries. Do
not record the reversing entry on Jan. 1. Post to the accounts.
3. Open new T-accounts for Salaries Payable and Salaries Expense using their unadjusted
balances at December 31, 2018. Journalize the entries assuming Mountain View Services
uses reversing entries. Don’t forget to record the reversing entry on Jan. 1. Post to the
accounts. Compare the balances on January 4, 2019 with Requirement 2 balances on January
4, 2019.
SOLUTION
Requirement 1
