CHAPTER 4
Completing the Accounting Cycle
ASSIGNMENT CLASSIFICATION TABLE
Learning Objectives
Questions
Brief
Exercises
Do It!
A
Problems
B
Problems
*1. Prepare a worksheet.
1, 2, 3,
4, 5
1, 2, 3
1
1A, 2A, 3A,
4A, 5A
1B, 2B, 3B,
4B, 5B
*2. Explain the process
of closing the books.
6, 7, 11
4, 5, 6
2
1A, 2A, 3A,
4A, 5A
1B, 2B, 3B,
4B, 5B
*3. Describe the content and
purpose of a post-closing
trial balance.
8, 9
7
1A, 2A, 3A,
4A, 5A
1B, 2B, 3B,
4B, 5B
*4. State the required steps in
the accounting cycle.
10, 11, 12
8
5A
5B
*5. Explain the approaches
to preparing correcting
entries.
13
9
6A
*6. Identify the sections of a
classified balance sheet.
14, 15, 16,
17, 18, 19
10, 11
3, 4
1A, 2A, 3A,
4A, 5A
1B, 2B, 3B,
4B, 5B
*7. Prepare reversing entries.
10, 20, 21
12
18, 19
chapter.
ASSIGNMENT CHARACTERISTICS TABLE
Problem
Number
Description
Difficulty
Level
Time Allotted
(min.)
1A
Prepare worksheet, financial statements, and adjusting
and closing entries.
Simple
40–50
2A
Complete worksheet; prepare financial statements,
closing entries, and post-closing trial balance.
Moderate
50–60
3A
Prepare financial statements, closing entries, and post-
closing trial balance.
Moderate
40–50
4A
Complete worksheet; prepare classified balance sheet,
entries, and post-closing trial balance.
Moderate
50–60
5A
Complete all steps in accounting cycle.
Complex
70–90
6A
Analyze errors and prepare correcting entries and trial
balance.
Moderate
40–50
1B
Prepare worksheet, financial statements, and adjusting
and closing entries.
Simple
40–50
2B
Complete worksheet; prepare financial statements,
closing entries, and post-closing trial balance.
Moderate
50–60
3B
Prepare financial statements, closing entries, and post-
closing trial balance.
Moderate
40–50
4B
Complete worksheet; prepare classified balance sheet,
entries, and post-closing trial balance.
Moderate
50–60
5B
Complete all steps in accounting cycle.
Complex
70–90
Comprehensive Problem: Chapters 2 to 4
WEYGANDT FINANCIAL ACCOUNTING 9E
CHAPTER 4
COMPLETING THE ACCOUNTING CYCLE
Number
LO
BT
Difficulty
Time (min.)
BE1
1
K
Simple
2–4
BE2
1
AN
Moderate
6–8
BE3
1
C
Simple
3–5
BE4
2
AP
Simple
3–5
BE5
2
AP
Simple
4–6
BE6
2
AP
Simple
6–8
BE7
3
C
Simple
2–4
BE8
4
K
Simple
3–5
BE9
5
AN
Moderate
4–6
BE10
6
AP
Simple
4–6
BE11
6
C
Simple
3–5
BE12
7
AN
Moderate
4–6
DI1
1
C
Simple
4–6
DI2
2
AP
Simple
2–4
DI3
6
AP
Simple
6–8
DI4
6
C
Simple
4–6
EX1
1
AP
Simple
12–15
EX2
1
AP
Simple
10–12
EX3
1, 6
AP
Simple
12–15
EX4
2, 3
AP
Simple
12–15
EX5
1
AN
Simple
10–12
EX6
1
AN
Moderate
12–15
EX7
2, 3
AP
Simple
8–10
EX8
2, 3
AP
Simple
10–12
EX9
6
AP
Simple
12–15
EX10
4
C
Simple
3–5
EX11
2
AP
Simple
6–8
EX12
5
AN
Moderate
8–10
EX13
5
AN
Moderate
4–6
EX14
6
AP
Moderate
10–12
EX15
6
C
Simple
5–8
EX16
6
AP
Simple
8–10
COMPLETING THE ACCOUNTING CYCLE (Continued)
Number
LO
BT
Difficulty
Time (min.)
EX17
6
AP
Simple
12–15
EX18
7
AN
Moderate
5–7
EX19
2, 4, 7
AN
Moderate
10–12
P1A
1-3, 6
AN
Simple
40–50
P2A
1-3, 6
AP
Moderate
50–60
P3A
1-3, 6
AP
Moderate
40–50
P4A
1-3, 6
AN
Moderate
50–60
P5A
1-4, 6
AN
Complex
70–90
P6A
5
AN
Moderate
40–50
P1B
1-3, 6
AN
Simple
40–50
P2B
1-3, 6
AP
Moderate
50–60
P3B
1-3, 6
AP
Moderate
40–50
P4B
1-3, 6
AN
Moderate
50–60
P5B
1-4, 6
AN
Complex
70–90
BYP1
6
AN
Simple
10–12
BYP2
6
AN
Simple
8–10
BYP3
6
AN
Simple
8–10
BYP4
—
E
Simple
10–12
BYP5
6
AN
Moderate
15–20
BYP6
4
C
Simple
15–20
BYP7
—
E
Moderate
10–15
BYP8
6
AP
Moderate
12–16
BYP9
—
AP
Moderate
10–15
BLOOM’S TAXONOMY TABLE
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only) 4-5
Correlation Chart between Bloom’s Taxonomy, Learning Objectives and End–of-Chapter Exercises and Problems
Learning Objective
Knowledge
Comprehension
Application
Analysis
Synthesis
Evaluation
*1. Prepare a worksheet.
BE4-1
Q4-1
Q4-2
Q4-3
Q4-4
Q4-5
BE4-3
DI4-1
E4-1
E4-2
E4-3
P4-2A
P4–3A
P4–2B
P4–3B
BE4-2
E4-5
E4-6
P4–1A
P4–4A
P4–5A
P4–1B
P4–4B
P4–5B
*2. Explain the process of closing
the books.
Q4-6
Q4–11
Q4-7
BE4-4
BE4-5
BE4-6
DI4-2
E4-4
E4-7
E4-8
E4–11
P4–2A
P4–3A
P4–2B
P4–3B
E4–19
P4–1A
P4–4A
P4–5A
P4–1B
P4–4B
P4–5B
*3. Describe the content and
purpose of a post-closing trial
balance.
Q4-8
Q4-9
BE4-7
E4-4
E4-7
E4-8
P4–2A
P4–3A
P4–2B
P4–3B
P4–1A
P4–4A
P4–5A
P4–1B
P4–4B
P4–5B
*4. State the required steps in
the accounting cycle.
Q4–11
Q4–12
BE4-8
Q4–10
E4–10
E4–19
P4-5A
P4–5B
*5. Explain the approaches to
preparing correcting entries.
Q4–13
BE4-9
E4–12
E4–13
P4–6A
*6. Identify the sections of
a classified balance sheet.
Q4–14
Q4–15
Q4–16
Q4–17
Q4–18
BE4-11
DI4-4
E4–15
Q4–19
BE4-10
DI4-3
E4-3
E4-9
E4–14
E4-16
E4–17
P4–2A
P4–3A
P4–2B
P4–3B
P4–1A
P4–4A
P4–5A
P4–1B
P4–4B
P4–5B
*7. Prepare reversing entries.
Q4–10
Q4–20
Q4–21
BE4-12
E4–18
E4–19
Broadening Your Perspective
Communication
All About You
FASB Codification
Financial Reporting
Comparative
Analysis
Decision Making
Across the
Organization
Real-World
Focus
Ethics Case
ANSWERS TO QUESTIONS
1. No. A worksheet is not a permanent accounting record. The use of a worksheet is an optional
step in the accounting cycle.
2. The worksheet is merely a device used to make it easier to prepare adjusting entries and the
financial statements.
3. The amount shown in the adjusted trial balance column for an account equals the account
4. The net income of $12,000 will appear in the income statement debit column and the balance
balance sheet debit column.
5. Formal financial statements are needed because the columnar data are not properly arranged
6. (1) (Dr) Individual revenue accounts and (Cr) Income Summary.
(4) (Dr) Retained Earnings and (Cr) Dividends.
7. Income Summary is a temporary account that is used in the closing process. The account is
8. The post-closing trial balance contains only balance sheet accounts. Its purpose is to prove the
period.
9. The accounts that will not appear in the post-closing trial balance are Depreciation Expense;
Dividends; and Service Revenue.
10. A reversing entry is the exact opposite, both in amount and in account titles, of an adjusting entry
11. The steps that involve journalizing are: (1) journalize the transactions, (2) journalize the adjusting
entries, and (3) journalize the closing entries.
12. The three trial balances are the: (1) trial balance, (2) adjusted trial balance, and (3) post-closing
trial balance.
Questions Chapter 4 (Continued)
*14. The standard classifications in a balance sheet are:
Assets
Liabilities and Stockholders’ Equity
Current Assets
Current Liabilities
Long-term Investments
Long-term Liabilities
Property, Plant, and Equipment
Stockholders’ Equity
Intangible Assets
*16. Current assets are assets that a company expects to convert to cash or use up in one year. Some
companies use a period longer than one year to classify assets and liabilities as current because they
*17. Long-term investments are generally investments in stocks and bonds of other companies that
*18. (a) The owner’s equity section for a corporation is called stockholders’ equity.
*19.. Apple’s current liabilities at September 24, 2011 and September 25, 2010 were $27,970 million
and $20,722 million respectively. Apple’s current liabilities were significantly lower than its current
assets in both years.
*20. After reversing entries have been made, the balances will be Interest Payable, zero balance;
Interest Expense, a credit balance.
*21. (a) Jan. 10 Salaries and Wages Expense …………………………………………… 8,000
Cash …………………………………………………………………….. 8,000
Because of the January 1 reversing entry that credited Salaries and Wages Expense for
Note that Salaries and Wages Expense will again have a debit balance of $4,500.
SOLUTIONS TO BRIEF EXERCISES
BRIEF EXERCISE 4-1
The steps in using a worksheet are performed in the following sequence:
(1) prepare a trial balance on the worksheet, (2) enter adjustment data,
The solution to BRIEF EXERCISE 4-2 is on page 4-9.
BRIEF EXERCISE 4-3
Income Statement
Balance Sheet
Account
Dr.
Cr.
Dr.
Cr.
Accumulated Depr.–Equipment
X
Depreciation Expense
X
Common Stock
X
Dividends
X
Service Revenue
X
Supplies
X
Accounts Payable
X
BRIEF EXERCISE 4-4
Dec. 31 Service Revenue ……………………………………… 50,000
31 Income Summary …………………………………….. 34,000
31 Income Summary …………………………………….. 16,000
31 Retained Earnings……………………………………. 2,000
BRIEF EXERCISE 4-2
CLAYTON COMPANY
Worksheet
Trial Balance
Adjustments
Adjusted
Trial Balance
Income
Statement
Balance
Sheet
Account Titles
Dr.
Cr.
Dr.
Cr.
Dr.
Cr.
Dr.
Cr.
Dr.
Cr.
Prepaid Insurance
Service Revenue
Salaries and Wages
Expense
Accounts Receivable
Salaries and Wages
Payable
Insurance Expense
3,000
25,000
58,000
(c) 800
(b) 1,100
(a) 1,800
(a) 1,800
(b) 1,100
(c) 800
1,200
25,800
1,100
1,800
59,100
800
25,800
1,800
59,100
1,200
1,100
800
Copyright © 2014 John Wiley & Sons, Inc. Weygandt, Financial Accounting, 9/e, Solutions Manual (For Instructor Use Only) 4-9
BRIEF EXERCISE 4-5
Salaries and Wages
Expense
Income Summary
Service Revenue
Bal. 27,000
(2) 27,000
(2) 34,000
(1) 50,000
(1) 50,000
Bal. 50,000
(3) 16,000
50,000
50,000
Supplies Expense
Retained Earnings
Dividends
Bal. 7,000
(2) 7,000
(4) 2,000
Bal. 30,000
Bal. 2,000
(4) 2,000
(3) 16,000
Bal. 44,000
BRIEF EXERCISE 4-6
July 31 Service Revenue ………………………………………. 16,400
31 Income Summary ……………………………………… 10,700
Service Revenue
Date
Explanation
Ref.
Debit
Credit
Balance
7/31
Balance
16,400
16,400
7/31
Closing entry
16,400
0
Salaries and Wages Expense
Date
Explanation
Ref.
Debit
Credit
Balance
7/31
Balance
8,200
8,200
7/31
Closing entry
8,200
0