Question Details

ACCT/510 ACCT510 ACCT 510 CHAPTER 4 BRIEF EXERCISES PART 9

CHAPTER 4
COMPLETING THE ACCOUNTING CYCLE





BE 155
Use the following income statement for the year 2008 for J. S. Caper Company to prepare entries
to close the revenue and expense accounts for the company.
Service revenues $100,000
Expenses:
Wages Expense $40,000
Rent Expense 12,500
Advertising Expense 5,700
Total expenses 58,200
Net income (loss) $ 41,800



BE 156
T. Price Company earned net income of $43,000 during 2008. The company had owner drawings
totalling $30,000 during the period. Prepare the entries to close Income Summary and the Price,
Drawing account.



BE 157
At April 1, 2008, Clinton Company reported a balance of $22,000 in the Clinton, Capital account.
Clinton Company earned revenues of $50,000 and incurred expenses of $32,000 during April
2008. The company had owner drawings of $10,000 during the month.
(a) Prepare the entries to close Income Summary and the Clinton, Drawing acccount at April
30, 2008.
(b) What is the balance in Clinton, Capital on the April 30, 2008 post-closing trial balance?
Completing the Accounting Cycle 4 - 25


BE 158
Identify which of the following are temporary accounts of Renfro Company.
(1) Renfro, Capital
(2) Renfro, Drawing
(3) Equipment
(4) Accumulated Depreciation
(5) Depreciation Expense



BE 159
Identify which of the following accounts would have balances on a post-closing trial balance.
(1) Service Revenue
(2) Income Summary
(3) Notes Payable
(4) Interest Expense
(5) Cash


BE 160
Prepare the necessary correcting entry for each of the following.
a. A payment on account of $500 was debited to Accounts Payable $550 and credited to Cash
$550.
b. The collection of Accounts Receivable of $660 was recorded as a debit to Cash $660 and a
credit to Service Revenue $660.

4 - 26 Test Bank for Accounting Principles, Eighth Edition



BE 161
Prepare the necessary correcting entry for each of the following.
a. A payment of $5,000 for salaries was recorded as a debit to Supplies Expense and a credit to
Cash.
b. A purchase of supplies on account for $1,000 was recorded as a debit to Equipment and a
credit to Accounts Payable.



BE 162
The following accounts were included on Stacy- Style Consultants post-closing trial balance at
December 31, 2008:
Accounts payable $ 2,000
Accounts receivable 5,500
Cash 11,000
Stacy, Capital 40,000
Stacy, Drawing 10,000
Interest expense 3,000
Note payable, due 8/31/11 60,000
Supplies 1,000
Service revenue 39,000
Equipment 5,000
(a) What are total current assets?
(b) What are total current liabilities?



BE 163
The following items are taken from the adjusted trial balance of Salon Company for the month
ending July 31, 2008:
Accounts payable $ 2,000
Accounts receivable 3,000
Accumulated depreciation - equipment 8,000
Cash 2,200
Depreciation expense 2,000
Equipment 54,000
Salon, Capital 7/1/08 52,000
Service revenue 33,000
Supplies 1,200
Prepare the current assets section of Salon- classified balance sheet.



BE 164
The following information is available for Juxton Company for the year ended December 31,
2008:
Accounts payable $ 2,700
Accumulated depreciation, equipment 4,000
Juxton, Capital 7,800
Intangible assets 2,500
Notes payable (due in 5 years) 7,500
Accounts receivable 1,500
Cash 2,600
Short-term investments 1,000
Equipment 7,500
Long-term investments 6,900
Instructions
Use the above information to prepare a classified balance sheet for the year ended December 31,
2008.

4 - 28 Test Bank for Accounting Principles, Eighth Edition



BE 165
The following lettered items represent a classification scheme for a balance sheet, and the
numbered items represent accounts found on balance sheets. In the blank next to each account,
write the letter indicating to which category it belongs.
A. Current assets E. Current liabilities
B. Long-term investments F. Long-term liabilities
C. Property, plant, and equipment G. Owner- equity
D. Intangible assets H. Not on the balance sheet
_____ 1. Accumulated Depreciation _____ 6. Inventory
_____ 2. Jones, Capital _____ 7. Patents
_____ 3. Interest Expense _____ 8. Prepaid Rent
_____ 4. Salary Payable _____ 9. Mortgage Payable
_____ 5. Jones, Drawing _____ 10. Land Held for Investment
Completing the Accounting Cycle 4 - 29


aBE 166
J. Bishop Company prepared the following adjusting entries at year end on December 31, 2008:
(a) Interest Expense ........................................................................... 100
Interest Payable ................................................................... 100
(d) Interest Receivable ....................................................................... 250
Interest Revenue.................................................................. 250
(c) Salary Expense............................................................................. 4,000
Salary Payable ..................................................................... 4,000
In an effort to minimize errors in recording transactions, J. Bishop Company utilizes reversing
entries. Prepare reversing entries on January 1, 2009.


4 - 30 Test Bank for Accounting Principles, Eighth Edition


EXERCISES
Ex. 167
The worksheet for Kiner Company has been completed through the adjusted trial balance. You
are ready to extend each amount to the appropriate financial statement column. Indicate for each
account, the financial statement column to which the account should be extended by placing a
check mark (√) in the appropriate column.
———————————————————————————————————————————
Income Statement Balance Sheet
Account Title Dr. Cr. Dr. Cr.
———————————————————————————————————————————
(1) Cash
———————————————————————————————————————————
(2) Kiner, Capital
———————————————————————————————————————————
(3) Mortgage Payable
———————————————————————————————————————————
(4) Interest Receivable
———————————————————————————————————————————
(5) Supplies
———————————————————————————————————————————
(6) Accounts Payable
———————————————————————————————————————————
(7) Short-term Investments
———————————————————————————————————————————
(8) Repair Expense
———————————————————————————————————————————
(9) Unearned Service Revenue
———————————————————————————————————————————
(10) Equipment
———————————————————————————————————————————
(11) Depreciation Expense
———————————————————————————————————————————
(12) Interest Revenue
———————————————————————————————————————————
(13) Salaries Expense
———————————————————————————————————————————
(14) Kiner, Drawing
———————————————————————————————————————————
(15) Accum. Deprec.—Equipment
———————————————————————————————————————————
(16) Utilities Expense
———————————————————————————————————————————
(17) Salaries Payable
———————————————————————————————————————————
(18) Accounts Receivable
———————————————————————————————————————————
(19) Notes Payable
———————————————————————————————————————————
(20) Service Revenue
———————————————————————————————————————————
Completing the Accounting Cycle 4 - 31




4 - 32 Test Bank for Accounting Principles, Eighth Edition


Ex. 168
Indicate the worksheet column (income statement Dr., balance sheet Cr., etc.) to which each of
the following accounts would be extended.
Account Worksheet Column
a. Accounts Receivable ________________
b. Accumulated Depreciation ________________
c. Commission Revenue ________________
d. Interest Expense ________________
e. Smith, Drawing ________________
f. Unearned Revenue ________________



Ex. 169
The worksheet for Vietti Rental Company appears below. Using the adjustment data below,
complete the worksheet. Add any accounts that are necessary.
Adjustment data:
(a) Prepaid rent expired during August, $2.
(b) Depreciation expense on office equipment for the month of August, $8.
(c) Supplies on hand on August 31 amounted to $6.
(d) Salaries expense incurred at August 31 but not yet paid amounted to $10.
VIETTI RENTAL COMPANY
Worksheet
For the Month Ended August 31, 2008
Trial Balance Adjustments
Adjusted
Trial Balance
Income
Statement Balance Sheet
Account Titles Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit
Cash 20
Accounts Receivable 12
Prepaid Rent 8
Supplies 10
Office Equipment 50
Accum. Depreciation—
Equipment 10
Accounts Payable 20
Vietti, Capital 25
Vietti, Drawing 2
Rent Revenue 77
Depreciation Expense 6
Rent Expense 4
Salaries Expense 20
Totals 132 132
Supplies Expense
Salaries Payable
Totals
Net Income
Totals

4 - 34 Test Bank for Accounting Principles, Eighth Edition



Ex. 170
The account balances appearing on the trial balance (below) were taken from the general ledger
of Mann's Copy Shop at September 30.
Additional information for the month of September which has not yet been recorded in the
accounts is as follows:
(a) A physical count of supplies indicates $300 on hand at September 30.
(b) The amount of insurance that expired in the month of September was $200.
(c) Depreciation on equipment for September was $400.
(d) Rent owed on the copy shop for the month of September was $600 but will not be paid until
October.
Instructions
Using the above information, complete the worksheet on the following page for Mann's Copy
Shop for the month of September.
MANN’S COPY SHOP
Worksheet
For the Month Ended September 30, 2008
Trial Balance Adjustments
Adjusted
Trial Balance
Income
Statement Balance Sheet
Account Titles Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit
Cash 1,000
Supplies 1,100
Prepaid Insurance 2,200
Equipment 24,000
Accum. Depreciation—
Equipment 4,500
Accounts Payable 2,400
Notes Payable 4,000
Mann, Capital 15,300
Mann, Drawing 2,400
Copy Revenue 4,900
Utilities Expense 400
Totals 31,100 31,100
Supplies Expense
Insurance Expense
Depreciation Expense
Rent Expense
Rent Payable
Totals
Net Income
Totals

4 - 36 Test Bank for Accounting Principles, Eighth Edition



Ex. 171
Prepare the necessary closing entries based on the following selected accounts.
Accumulated Depreciation $10,000
Depreciation Expense 5,000
Kline, Capital 20,000
Kline, Drawing 12,000
Salaries Expense 18,000
Service Revenue 30,000



Ex. 172
All revenue and expense accounts have been closed at the end of the calendar year for Staley
Company. The Income Summary account has total debits of $520,000 and total credits of
$600,000. As of the same date, Ron Staley, Capital has a balance of $115,000, and Ron Staley,
Drawing has a balance of $48,000.
Instructions
(a) Journalize the entries required to complete the closing of the accounts.
(b) Prepare an owner's equity statement for the year ended December 31, 2008.


4 - 38 Test Bank for Accounting Principles, Eighth Edition




Ex. 173
At March 31, account balances after adjustments for Norton Cinema are as follows:
Account Balances
Accounts (After Adjustment)
Cash $ 6,000
Concession Supplies 4,000
Theatre Equipment 50,000
Accumulated Depreciation—Theatre Equipment 12,000
Accounts Payable 5,000
Norton, Capital 20,000
Norton, Drawing 12,000
Admission Ticket Revenues 60,000
Popcorn Revenues 32,000
Candy Revenues 19,000
Advertising Expense 12,000
Concession Supplies Expense 19,000
Depreciation Expense 4,000
Film Rental Expense 16,000
Rent Expense 12,000
Salaries Expense 18,000
Utilities Expense 5,000
Instructions
Prepare the closing journal entries for Norton Cinema.



Ex. 174
Presented below is an adjusted trial balance for Trent Company, at December 31, 2008.
Cash $12,700 Accounts payable $10,000
Accounts receivable 20,000 Notes payable 9,000
Prepaid insurance 15,000 Accumulated Depreciation—
Equipment 35,000 Equipment 14,000
Depreciation expense 7,000 Service revenue 25,000
M. Trent, Drawing 1,500 M. Trent, Capital 24,000
Advertising expense 1,400 Unearned revenue 16,000
Rent expense 800
Salary expense 3,000
Insurance expense 1,600
$98,000 $98,000
Instructions
(a) Prepare closing entries for December 31, 2008.
(b) Determine the balance in M. Trent's capital account after the entries have been posted.


4 - 40 Test Bank for Accounting Principles, Eighth Edition



Ex. 175
The adjusted account balances of the Fitness Center at July 31 are as follows:
Accounts Account Balances Accounts Account Balances
Cash $11,000 Service Revenue $100,000
Accounts Receivable 15,000 Interest Revenue 8,000
Supplies 4,000 Depreciation Expense 27,000
Prepaid Insurance 8,000 Insurance Expense 6,000
Buildings 300,000 Salary Expense 35,000
Accumulated Depreciation— Supplies Expense 9,000
Buildings 120,000 Utilities Expense 12,000
Accounts Payable 19,000
Utley, Capital 195,000
Utley, Drawing 15,000
Instructions
Prepare the end of the period closing entries for the Fitness Center.
Completing the Accounting Cycle 4 - 41