Sunday, 5 August 2012


Exercise 4-8
Apachi Company ended its fiscal year on July 31, 2010. The company's adjusted trial balance as of the end of its fiscal year is as shown below.
APACHI COMPANY
Adjusted Trial Balance
July 31, 2010
No.
Account Titles
Debits
Credits
101
Cash
$14,840

112
Accounts Receivable
8,780

157
Equipment
15,900

167
Accumulated Depreciation

$7,400
201
Accounts Payable

4,220
208
Unearned Rent Revenue

1,800
301
B. J. Apachi, Capital

45,200
306
B. J. Apachi, Drawing
16,000

404
Commission Revenue

65,000
429
Rent Revenue

6,500
711
Depreciation Expense
4,000

720
Salaries Expense
55,700

732
Utilities Expense
14,900



$130,120
$130,120
Instructions
(a) Prepare the closing entries. (For multiple debit/credit entries, list amounts from largest to smallest eg 10, 5, 3, 2.)
(b) Post to B.J. Apachi, Capital and No. 350 Income Summary accounts. (If answer is zero, please enter 0. Do not leave any fields blank. If balance is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45).)
(c) Prepare a post-closing trial balance at July 31. (If answer is zero, please enter 0. Do not leave any fields blank.)


Exercise 4-8
Apachi Company ended its fiscal year on July 31, 2010. The company's adjusted trial balance as of the end of its fiscal year is as shown below.
APACHI COMPANY
Adjusted Trial Balance
July 31, 2010
No.
Account Titles
Debits
Credits
101
Cash
$14,840

112
Accounts Receivable
8,780

157
Equipment
15,900

167
Accumulated Depreciation

$7,400
201
Accounts Payable

4,220
208
Unearned Rent Revenue

1,800
301
B. J. Apachi, Capital

45,200
306
B. J. Apachi, Drawing
16,000

404
Commission Revenue

65,000
429
Rent Revenue

6,500
711
Depreciation Expense
4,000

720
Salaries Expense
55,700

732
Utilities Expense
14,900



$130,120
$130,120
Instructions
(a) Prepare the closing entries. (For multiple debit/credit entries, list amounts from largest to smallest eg 10, 5, 3, 2.)
(b) Post to B.J. Apachi, Capital and No. 350 Income Summary accounts. (If answer is zero, please enter 0. Do not leave any fields blank. If balance is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45).)
(c) Prepare a post-closing trial balance at July 31. (If answer is zero, please enter 0. Do not leave any fields blank.)


Exercise 4-7

Emil Skoda Company had the following adjusted trial balance.

                                        EMIL SKODA COMPANY
                                        Adjusted Trial Balance
                                             June 30, 2008


                                                         Adjusted Trial Balance
Account Titles                                     Debits            Credits
Cash                                                  $3,712 
Accounts Receivable                             3,904 
Supplies                                                  480 
Accounts Payable                                                      $1,792
Unearned Revenue                                                         160
Emil Skoda, Capital                                                      5,760
Emil Skoda, Drawing                                300
Service Revenue                                                          4,064
Salaries Expense                                   1,344 
Miscellaneous Expense                             256 
Supplies Expense                                  2,228 
Salaries Payable                                                             448


                                                          $12,224          $12,224

Instructions

(a) Prepare closing entries at June 30, 2008. 
(b) Prepare a post-closing trial balance.



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Exercise 4-7

Emil Skoda Company had the following adjusted trial balance.

                                        EMIL SKODA COMPANY
                                        Adjusted Trial Balance
                                             June 30, 2008


                                                         Adjusted Trial Balance
Account Titles                                     Debits            Credits
Cash                                                  $3,712 
Accounts Receivable                             3,904 
Supplies                                                  480 
Accounts Payable                                                      $1,792
Unearned Revenue                                                         160
Emil Skoda, Capital                                                      5,760
Emil Skoda, Drawing                                300
Service Revenue                                                          4,064
Salaries Expense                                   1,344 
Miscellaneous Expense                             256 
Supplies Expense                                  2,228 
Salaries Payable                                                             448


                                                          $12,224          $12,224

Instructions

(a) Prepare closing entries at June 30, 2008. 
(b) Prepare a post-closing trial balance.



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Exercise 4-6 


Selected worksheet data for Nicholson Company are presented below.
Account Titles Trial Balance Trial Balance

Dr. Cr. Dr. Cr.
Accounts Receivable ? 34,000
Prepaid Insurance 26,000 20,000
Supplies 7,000 ?
Accumulated Depreciation 12,000 ?
Salaries Payable ? 5,000
Service Revenue 88,000 97,000
Insurance Expense ?
Depreciation Expense 10,000
Supplies Expense 5,000
Salaries Expense ? 49,000

Instructions
(a) Fill in the missing amounts.

(b) Prepare the adjusting entries that were made


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Exercise 4-6 


Selected worksheet data for Nicholson Company are presented below.
Account Titles Trial Balance Trial Balance

Dr. Cr. Dr. Cr.
Accounts Receivable ? 34,000
Prepaid Insurance 26,000 20,000
Supplies 7,000 ?
Accumulated Depreciation 12,000 ?
Salaries Payable ? 5,000
Service Revenue 88,000 97,000
Insurance Expense ?
Depreciation Expense 10,000
Supplies Expense 5,000
Salaries Expense ? 49,000

Instructions
(a) Fill in the missing amounts.

(b) Prepare the adjusting entries that were made


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Exercise 4-5 


The adjustments columns of the worksheet for Mears Company are shown below.

Adjustments
Account Titles Debit Credit
Accounts Receivable 600
Prepaid Insurance 400
Accumulated Depreciation 900
Salaries Payable 500
Service Revenue 600
Salaries Expense 500
Insurance Expense 400
Depreciation Expense 900
2,400 2,400

Instructions

(a) Prepare the adjusting entries.

(b) Assuming the adjusted trial balance amount for each account is normal, indicate the financial
statement column to which each balance should be extended


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Exercise 4-5 


The adjustments columns of the worksheet for Mears Company are shown below.

Adjustments
Account Titles Debit Credit
Accounts Receivable 600
Prepaid Insurance 400
Accumulated Depreciation 900
Salaries Payable 500
Service Revenue 600
Salaries Expense 500
Insurance Expense 400
Depreciation Expense 900
2,400 2,400

Instructions

(a) Prepare the adjusting entries.

(b) Assuming the adjusted trial balance amount for each account is normal, indicate the financial
statement column to which each balance should be extended




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Exercise 4-2
The adjusted trial balance columns of the worksheet for Goode Company are as follows
GOODE COMPANY
Worksheet (partial)
For the Month Ended April 30, 2008

Adjusted Trial Income
Balance Statement Balance Sheet
Account Titles Dr. Cr. Dr. Cr. Dr. Cr.

Cash 13,752
Accounts Receivable 7,840
Prepaid Rent 2,280
Equipment 23,050
Accumulated Depreciation 4,921
Notes Payable 5,700
Accounts Payable 5,672
Common Stock 25,000
Retained Earnings 5,960
Dividends 3,650
Service Revenue 15,590
Salaries Expense 10,840
Rent Expense 760
Depreciation Expense 671
Interest Expense 57
Interest Payable 57
Totals 62,900 62,900

Instructions

Complete the worksheet.
Exercise 4-3
Worksheet data for Goode Company are presented in E4-2. No common stock was issued
during April.
Instructions
Prepare an income statement, an owner's equity statement, and a classified balance sheet.
Exercise 4-4
Worksheet data for Goode Company are presented in E4-2.
Instructions
(a) Prepare a post-closing trial balance at April 30
(b)Post the closing entries to Income Summary and Retained Earnings. Use T accounts
(c)Journalize the closing entries at April 30.



Exercise 4-2
The adjusted trial balance columns of the worksheet for Goode Company are as follows
GOODE COMPANY
Worksheet (partial)
For the Month Ended April 30, 2008

Adjusted Trial Income
Balance Statement Balance Sheet
Account Titles Dr. Cr. Dr. Cr. Dr. Cr.

Cash 13,752
Accounts Receivable 7,840
Prepaid Rent 2,280
Equipment 23,050
Accumulated Depreciation 4,921
Notes Payable 5,700
Accounts Payable 5,672
Common Stock 25,000
Retained Earnings 5,960
Dividends 3,650
Service Revenue 15,590
Salaries Expense 10,840
Rent Expense 760
Depreciation Expense 671
Interest Expense 57
Interest Payable 57
Totals 62,900 62,900

Instructions

Complete the worksheet.
Exercise 4-3
Worksheet data for Goode Company are presented in E4-2. No common stock was issued
during April.
Instructions
Prepare an income statement, an owner's equity statement, and a classified balance sheet.
Exercise 4-4
Worksheet data for Goode Company are presented in E4-2.
Instructions
(a) Prepare a post-closing trial balance at April 30
(b)Post the closing entries to Income Summary and Retained Earnings. Use T accounts
(c)Journalize the closing entries at April 30.


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Saturday, 4 August 2012


Exercise 4-1
The trial balance columns of the worksheet for Briscoe Company at June 30, 2008, are as follows.

BRISCOE COMPANY
Worksheet
For the Month Ended June 30, 2008
Trial Balance
Account Titles Dr. Cr.
Cash $2,320
Accounts Receivable 2,440
Supplies 1,880
Accounts Payable $1,120
Unearned Revenue 240
Common Stock 3,600
Service Revenue 2,400
Salaries Expense 560
Miscellaneous Expense 160
$7,360 $7,360
Other data:
1. A physical count reveals $300 of supplies on hand.
2. $100 of the unearned revenue is still unearned at month-end.
3. Accrued salaries are $280.
Instructions
Enter the trial balance on a worksheet and complete the worksheet.


Exercise 4-1
The trial balance columns of the worksheet for Briscoe Company at June 30, 2008, are as follows.

BRISCOE COMPANY
Worksheet
For the Month Ended June 30, 2008
Trial Balance
Account Titles Dr. Cr.
Cash $2,320
Accounts Receivable 2,440
Supplies 1,880
Accounts Payable $1,120
Unearned Revenue 240
Common Stock 3,600
Service Revenue 2,400
Salaries Expense 560
Miscellaneous Expense 160
$7,360 $7,360
Other data:
1. A physical count reveals $300 of supplies on hand.
2. $100 of the unearned revenue is still unearned at month-end.
3. Accrued salaries are $280.
Instructions
Enter the trial balance on a worksheet and complete the worksheet.


Breif Exercise 4-10

The balance sheet debit column of the worksheet for Diaz Company includes the following accounts:Accounts Receivable $12,500; Prepaid Insurance $3,600; Cash $15,400; Supplies $5,200, and Short-term Investments $6,700. Prepare the current assets section of the balance sheet, listing the accounts in proper sequence.


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Breif Exercise 4-10

The balance sheet debit column of the worksheet for Diaz Company includes the following accounts:Accounts Receivable $12,500; Prepaid Insurance $3,600; Cash $15,400; Supplies $5,200, and Short-term Investments $6,700. Prepare the current assets section of the balance sheet, listing the accounts in proper sequence.


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Breif Exercise 4-9

At Batavia Company, the following errors were discovered after the transactions had been journalized and posted. Prepare the correcting entries.

1. A collection on account from a customer for $780 was recorded as a debit to Cash $780 and a credit to Service Revenue $780.

2. The purchase of store supplies on account for $1,570 was recorded as a debit to Store Supplies $1,750 and a credit to Accounts Payable $1,750.
.

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Breif Exercise 4-9

At Batavia Company, the following errors were discovered after the transactions had been journalized and posted. Prepare the correcting entries.

1. A collection on account from a customer for $780 was recorded as a debit to Cash $780 and a credit to Service Revenue $780.

2. The purchase of store supplies on account for $1,570 was recorded as a debit to Store Supplies $1,750 and a credit to Accounts Payable $1,750.
.

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Breif Exercise 4-6

 The income statement for Crestwood Golf Club for the month ending July 31 shows Green Fee Revenue $13,600, Salaries Expense $8,200, Maintenance Expense $2,500, and Net Income $2,900. Prepare the entries to close the revenue and expense accounts. Post the entries to the revenue and expense accounts, and complete the closing process for these accounts using the three-column form of account.


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Breif Exercise 4-6

 The income statement for Crestwood Golf Club for the month ending July 31 shows Green Fee Revenue $13,600, Salaries Expense $8,200, Maintenance Expense $2,500, and Net Income $2,900. Prepare the entries to close the revenue and expense accounts. Post the entries to the revenue and expense accounts, and complete the closing process for these accounts using the three-column form of account.


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Breif Exercise 4-5

 Using the data in BE 4-4, enter the balances in T accounts post the closing entries, and rule and balance the accounts.



Breif Exercise 4-5

 Using the data in BE 4-4, enter the balances in T accounts post the closing entries, and rule and balance the accounts.


Breif Exercise 4-4

The ledger of Swann Company contains the following balances: Retained Earnings $30,000; Dividends $2,000; Service Revenue $50,000; Salaries Expense $27,000; and Supplies Expense $4,000. Prepare the closing entries at December 31. 



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Breif Exercise 4-4

The ledger of Swann Company contains the following balances: Retained Earnings $30,000; Dividends $2,000; Service Revenue $50,000; Salaries Expense $27,000; and Supplies Expense $4,000. Prepare the closing entries at December 31. 


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Breif Exercise 4-3

The following selected accounts appear in the adjusted trial balance columns of the worksheet for Batan Company: Accumulated Depreciation; Depreciation Expense; Common Stock; Dividends; Service Revenue; Supplies; and Accounts Payable. Indicate the financial statement column (income statement Dr., balance sheet Cr., etc.) to which each balance should be extended.

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Breif Exercise 4-3

The following selected accounts appear in the adjusted trial balance columns of the worksheet for Batan Company: Accumulated Depreciation; Depreciation Expense; Common Stock; Dividends; Service Revenue; Supplies; and Accounts Payable. Indicate the financial statement column (income statement Dr., balance sheet Cr., etc.) to which each balance should be extended.


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Breif Exercise 4-2

The ledger of Ley Company includes the following unadjusted balances: Prepaid Insurance $3,000, Service Revenue $58,000, and Salaries Expense $25,000. Adjusting entries are required for (a) expired insurance $1,200; (b) services provided $1,100, but unbilled and uncollected; and (c) accrued salaries payable $800. Enter the unadjusted balances and adjustments into a worksheet and complete the worksheet for all accounts. Note:You will need to add the following accounts: Accounts Receivable, Salaries Payable, and Insurance Expense.

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Breif Exercise 4-2

The ledger of Ley Company includes the following unadjusted balances: Prepaid Insurance $3,000, Service Revenue $58,000, and Salaries Expense $25,000. Adjusting entries are required for (a) expired insurance $1,200; (b) services provided $1,100, but unbilled and uncollected; and (c) accrued salaries payable $800. Enter the unadjusted balances and adjustments into a worksheet and complete the worksheet for all accounts. Note:You will need to add the following accounts: Accounts Receivable, Salaries Payable, and Insurance Expense.

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Thursday, 2 August 2012


Problem 3-5A
On September 1, 2010, the account balances of Rand Equipment Repair were as follows.
No.

Debits
No.

Credits
101

Cash
$4,880

154

Accumulated Depreciation
$1,500
112

Accounts Receivable
  3,520

201

Accounts Payable
  3,400
126

Supplies
  2,000

209

Unearned Service Revenue
  1,400
153

Store Equipment
 15,000

212

Salaries Payable
    500





301

J. Rand, Capital
18,600



$25,400




$25,400
During September the following summary transactions were completed.
Sept.  8

Paid $1,400 for salaries due employees, of which $900 is for September.
10

Received $1,200 cash from customers on account.
12

Received $3,400 cash for services performed in September.
15

Purchased store equipment on account $3,000.
17

Purchased supplies on account $1,200.
20

Paid creditors $4,500 on account.
22

Paid September rent $500.
25

Paid salaries $1,250.
27

Performed services on account and billed customers for services provided $1,500.
29

Received $650 from customers for future service.
Adjustment data consist of:
  1. Supplies on hand $1,200.
  2. Accrued salaries payable $400.
  3. Depreciation is $100 per month.
  4. Unearned service revenue of $1,450 is earned.
Instructions
(a)
Enter the September 1 balances in the ledger accounts.
(b)
Journalize the September transactions.
(c)
Post to the ledger accounts. Use J1 for the posting reference. Use the following accounts: No. 407 Service Revenue, No. 615 Depreciation Expense, No. 631 Supplies Expense, No. 726 Salaries Expense, and No. 729 Rent Expense.
(d)
Prepare a trial balance at September 30.
(e)
Journalize and post adjusting entries.
(f)
Prepare an adjusted trial balance.
(g)
Prepare an income statement and an owner’s equity statement for September and a balance sheet at September 30.


Problem 3-4B

A review of the ledger of Yoda Company at December 31, 2008, produces the following data pertaining to the preparation of annual adjusting entries.

1. Prepaid Insurance $8,600. The company has separate insurance policies on its buildings and its motor vehicles. Policy B4564 on the building was purchased on July 1, 2007, for $6,000.The policy has a term of 3 years. Policy A2958 on the vehicles was purchased on January 1, 2008, for $3,600.This policy has a term of 2 years.

2. Unearned Subscriptions $49,000.The company began selling magazine subscriptions in 2008 on an annual basis. The magazine is published monthly. The selling price of a subscription is $50. A review of subscription contracts reveals the following. 

Subscription Date -----Number oSubscriptions
October 1 ---------------------200
November 1 -------------------300
December 1 -------------------480
    --------------------------------980

3. Notes Payable $60,000.This balance consists of a note for 6 months at an annual interest rate of 9%, dated September 1. 

4. Salaries Payable $0.There are eight salaried employees. Salaries are paid every Friday for the current week. Five employees receive a salary of $500 each per week, and three employees earn $750 each per week. December 31 is a Wednesday. Employees do not work weekends.Allemployees worked the last 3 days of December. 

Instructions
Prepare the adjusting entries at Dec 31, 2008


Problem 3-4A

 A review of the ledger of Remington Company at December 31, 2010, produces the
following data pertaining to the preparation of annual adjusting entries.
1. Salaries Payable $0.There are eight salaried employees. Salaries are paid every Friday for the
current week. Five employees receive a salary of $800 each per week, and three employees
earn $600 each per week. Assume December 31 is a Tuesday. Employees do not work weekends.
All employees worked the last 2 days of December.
2. Unearned Rent $324,000. The company began subleasing office space in its new building on
November 1. At December 31, the company had the following rental contracts that are paid
in full for the entire term of the lease.
Term Number of
Date (in months) Monthly Rent Leases
Nov. 1 6 $4,000 5
Dec. 1 6 $8,500 4
3. Prepaid Advertising $15,000.This balance consists of payments on two advertising contracts.
The contracts provide for monthly advertising in two trade magazines.The terms of the contracts
are as follows.

Number of
Magazine
Contract Date Amount Issues
A650 May 1 $5,400 12
B974 Oct. 1 9,600 24
The first advertisement runs in the month in which the contract is signed.
4. Notes Payable $120,000.This balance consists of a note for one year at an annual interest rate
of 9%, dated June 1.
Instructions
Prepare the adjusting entries at December 31, 2010. (Show all computations.)

Problem 3-3B


Ortega Co., Inc. was organized on July 1, 2008. Quarterly financial statements are prepared. The unadjusted and adjusted trial balances as of September 30 are shown below



Instructions 
(a) Journalize the adjusting entries that were made. 
(b) Prepare an income statement and a retained earnings statement for the 3 months ending September 30 and a balance sheet at September 30. 
(c) If the note bears interest at 12%, how many months has it been outstanding?


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Problem 3-3A

Fernetti Advertising Agency was founded by John Fernetti in January of 2009. Presented
on page 134 are both the adjusted and unadjusted trial balances as of December 31, 2010.

FERNETTI ADVERTISING AGENCY
Trial Balance
December 31, 2010
Unadjusted Adjusted
Dr. Cr. Dr. Cr.
Cash $ 11,000 $ 11,000
Accounts Receivable 20,000 22,500
Art Supplies 8,600 5,000
Prepaid Insurance 3,350 2,500
Printing Equipment 60,000 60,000
Accumulated Depreciation $ 28,000 $ 34,000
Accounts Payable 5,000 5,000
Interest Payable –0– 150
Notes Payable 5,000 5,000
Unearned Advertising Fees 7,200 5,600
Salaries Payable –0– 1,300
J. Fernetti, Capital 25,500 25,500
J. Fernetti, Drawing 12,000 12,000
Advertising Revenue 58,600 62,700
Salaries Expense 10,000 11,300
Insurance Expense 850
Interest Expense 350 500
Depreciation Expense 6,000
Art Supplies Expense 3,600
Rent Expense 4,000 4,000
$129,300 $129,300 $139,250 $139,250

Instructions
(a) Journalize the annual adjusting entries that were made.
(b) Prepare an income statement and a statement of owner’s equity for the year ending
December 31, 2010, and a balance sheet at December 31.
(c) Answer the following questions.
(1) If the note has been outstanding 6 months, what is the annual interest rate on that note?
(2) If the company paid $12,500 in salaries in 2010, what was the balance in Salaries Payable
on December 31, 2009?


Problem 3-2B


The Elston Motel, Inc. opened for business on May 1, 2008. Its trial balance before adjustment on May 31 is as follows. 



In addition to those accounts listed on the trial balance, the chart of accounts for Elston Motel also contains the following accounts and account numbers: No. 142 Accumulated Depreciation- Lodge, No. 150 Accumulated Depreciation-Furniture, No. 212 Salaries Payable,No. 230 Interest Payable,No. 320 Retained Earnings,No. 619 Depreciation Expense- Lodge, No. 621 Depreciation Expense-Furniture, No. 631 Supplies Expense, No. 718 Interest Expense, and No. 722 Insurance Expense.

Other data: 

1. Insurance expires at the rate of $200 per month. 

2. A count of supplies shows $500 of unused supplies on May 31. 

3. Annual depreciation is $3,600 on the lodge and $3,000 on furniture. 

4. The mortgage interest rate is 12%. (The mortgage was taken out on May 1.) 

5. Unearned rent of $2,500 has been earned. 

6. Salaries of $800 are accrued and unpaid at May 31. 

Instructions 

(a) Journalize the adjusting entries on May 31.
(b) Prepare a ledger using the three-column form of account. Enter the trial balance amounts and post the adjusting entries. (Use J1 as the posting reference.)
(c) Prepare an adjusted trial balance on May 31.
(d) Prepare an income statement and a retained earnings statement for the month of May and a balance sheet at May 31. 



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