A to Z Fabrication, Inc., engaged in the following business transactions during August 2016: A to Z Fabrication, Inc., uses the following accounts: Cash, Accounts Receivable, Supplies, Building, Accounts Payable, Notes Payable, Common Stock, Dividends, Service Revenue, Salaries Expense, and Property Tax Expense. Requirement 1. Journalize each transaction. Omit explanations.
> If a company had two units that cost $1 each in its beginning inventory and purchased two more units for $2 each, what would be the gross profit reported on the income statement under each of the following assumptions if three units were sold for $3 each
> Regal Spas, Inc., purchased $11,800 worth of inventory from the Pool Palace on account, terms of 2/10, n/30. Some of the goods are damaged in shipment, so Regal Spas, Inc., returns $2,300 of the merchandise to the Pool Palace. Journalize the following tr
> Suppose Riley Electronics, Inc., had sales of $280,000 and sales returns of $26,000. Cost of goods sold was $112,000. How much gross profit did Riley Electronics, Inc., report? a. $168,000 b. $142,000 c. $194,000 d. $254,000
> How many accounts are involved in recording the sale of merchandise on credit?
> Assume the unadjusted and adjusted trial balances for Affordable Pet Dental, Inc., at September 30, 2016, show the following data: Requirement 1. Journalize the adjusting entries that account for the differences between the two trial balances.
> Use the data for Lake City Industries, Inc., from P4-48B. Information P4-48B: The accounts for the year ended October 31, 2016, for Lake City Industries, Inc., are listed next: Requirements 1. Calculate the earnings per share for Lake City Industries
> Journalize the adjusting entries needed at December 31, the end of the current accounting year, for each of the following independent cases affecting Canyon Motorsports, Inc. No other adjusting entries have been made for the year. a. Prior to making the
> The accounts for the year ended October 31, 2016, for Lake City Industries, Inc., are listed next: Requirements 1. Prepare Lake City Industries, Inc.’s multi-step income statement. 2. Prepare Lake City Industries, Inc.’s statement of retained earning
> The September 30, 2016, adjusted trial balance of Java Hut, Inc., is shown next. Requirements 1. Prepare the September closing entries for Java Hut, Inc. 2. Calculate the ending balance in Retained Earnings. 3. Prepare a post-closing trial balance
> The adjusted trial balance Checker Flag Auto, Inc., as of January 31, 2016, is presented next: Requirements 1. Prepare the multi-step income statement for January for Checker Flag Auto, Inc. 2. Calculate the gross profits percentage for January for C
> The adjusted trial balance of Valley Realty, Inc., at December 31, 2016, follows: Requirements 1. Prepare Valley Realty’s income statement and statement of retained earnings for the year ending December 31, 2016, and year-end balance sheet. List expe
> The following transactions for Westcoast Tire, Co., occurred during July: Requirements 1. Journalize the transactions on the books of Westcoast Tire, Co. 2. What was Westcoast Tire’s gross proft for the month of July?
> Warren Enterprises, Inc., completed the following selected transactions and prepared these adjusting entries during March: Requirements 1. State whether the transaction would increase revenues, decrease revenues, increase expenses, decrease expenses,
> The following transactions occurred between Sasaki’s Fine Furnishings and C & C Furniture Warehouse during May of the current year: Requirements 1. Journalize these transactions on the books of Sasaki’s Fine Furnishings. 2. Journalize these transacti
> The trial balance of Designs by Jill, Inc., at September 30, 2016, and the data needed for the month-end adjustments follow: a. Insurance coverage still remaining at September 30, $1,950 b. Supplies used during the month, $900 c. Depreciation for the
> The following sale-related transactions for Olympia Hardware, Inc., occurred during the month of October. Requirement 1. Journalize the transactions for Olympia Hardware, Inc. Omit explanations.
> Assume the unadjusted and adjusted trial balances for Davis Chiropractic, Inc., at April 30, 2016, show the following data: Requirement 1. Journalize the adjusting entries that account for the differences between the two trial balances.
> The following purchase-related transactions for Chandler Industries, Inc., occurred during the month of March Requirement 1. Journalize the transactions for Chandler Industries, Inc. Omit explanations
> The following errors occurred in the accounting records of Wilburton Electronics, Inc.: a. The company accountant recorded the receipt of cash for service revenue by debit ing Cash for $1,640 instead of the correct amount of $1,460. Service Revenue was a
> Use the data for River City Fabrication, Inc., from P4-41A. Information P4-41A: The account balances for the year ended December 31, 2016, for River City Fabrication, Inc., are listed next: Requirements 1. Calculate the earnings per share for River C
> Journalize the adjusting entry needed at December 31, the end of the current accounting year, for each of the following independent cases affecting Premier Powersports, Inc. No other adjusting entries have been made for the year. a. Prior to making the a
> The accounts of Wellington Electronics Repair, Inc., follow with their normal balances at October 31, 2016. The accounts are listed in no particular order. Requirements 1. Prepare the company’s trial balance at October 31, 2016, listing accounts in t
> The account balances for the year ended December 31, 2016, for River City Fabrication, Inc., are listed next: Requirements 1. Prepare River City Fabrication, Inc.’s multi-step income statement. 2. Prepare River City Fabrication, Inc.’s statement of r
> The following is the adjusted trial balance of Health Services, Inc., for December 31, 2016. Requirement 1. Journalize the closing entries at December 31.
> The IT manager of Highland Realty, Inc., prepared the balance sheet of the company while the accountant was ill. The balance sheet contains numerous errors. In particular, the IT manager knew that the balance sheet should balance, so she plugged in the r
> The adjusted trial balance for Motion Auto, Inc., as of June 30, 2016, is presented next: Requirements 1. Prepare the multi-step income statement for June for Motion Auto, Inc. 2. Calculate the gross profit percentage for June for Motion Auto, Inc. 3
> The following post-closing trial balance was prepared for Speedy Prints, Inc., but some balances were entered in the wrong column. Prepare a corrected post-closing trial balance. Assume all accounts have normal balances and the amounts are correct.
> The trial balance for Security Systems, Inc., at May 15, 2016, follows: During the remainder of May, Security Systems, Inc., completed the following transactions: Requirements 1. Journalize the transactions that occurred May 16 to May 31 on page
> What are some reasons why accounting has adopted “historical” financial statements asthe model? What are some disadvantages associated with presenting “historical” financial statements?
> Julie’s Flower Shop’s Prepaid Rent balance is $4,500 on July 1. This prepaid rent represents six months’ rent. Journalize and post the adjusting entry on July 31 to record one month’s rent. Compute the balances of the two accounts involved on July 31.
> Assume the weekly payroll of ASR, Inc., is $4,500. Employees work five days per week, Monday through Friday. December 31, the end of the year, falls on Wednesday, but the company won’t pay employees for the full week until its usual payday, Friday. What
> What is a deferral? Under which basis of accounting, cash or accrual, would deferrals come into play? Under what circumstances would a company record a deferral?
> For each of the following accounts, indicate the account type by labeling it as an asset (A), liability (L), stockholders’ equity (SE), revenue (R), or expense (E). Also give the digiteach account number would begin with in the chart of accounts. Use the
> Cathy’s Catering, Inc., purchased $200 of supplies on account. The journal entry to recordthis transaction is denoted by which of the following?
> Distinguish between an event and a transaction. Are all transactions events? Are all events transactions? Why or why not? What are the implications of your answers with respect to journal entries?
> Determine the missing amounts in the following accounting equations.
> Wave Rider is famous for custom skateboards. At the end of a recent year, Wave Rider’stotal assets added up to $884,000 and stockholders’ equity was $187,000. How muchdid Wave Rider owe creditors? a. $1,071,000 b. $884,000 c. $697,000 d. $187,000
> Assume BAL, Inc., began March with 95 units of inventory that cost a total of $1,710. During March, BAL, Inc., purchased and sold goods as follows: BAL, Inc., uses perpetual inventory. Under the FIFO inventory method, how much is BAL’s cost of goods
> If a company had two units that cost $1 each in its beginning inventory and purchased two more units for $2 each, what would be the cost of goods sold associated with a sale of three units under each of the following assumptions? a. FIFO b. LIFO c. Avera
> Regal Spas, Inc., purchased $17,400 worth of inventory from the Pool Palace on account, terms of 1/10, n/30. Some of the goods are damaged in shipment, so Regal Spas, Inc., returns $1,600 of the merchandise to the Pool Palace. How much must Regal Spas, I
> Water Works Pool Supply, Inc., purchased inventory for $2,700 and paid $70 freight to have the inventory delivered. Water Works Pool Supply, Inc., returned $125 of the goods to the seller and later took a 3 percent purchase discount. What is the final co
> What do the terms 2/10, n/30 mean? If you were advising a company that bought goods under these terms, what would you advise it to do with respect to payment? Why?
> Presented here are the amounts of Assets, Liabilities, Stockholders’ Equity, Revenues,and Expenses of The Fitness Guru, Inc., at August 31, 2016. The items are listed inalphabetical order. Requirements 1. Identify each amount shown as an asset, liabi
> The following transactions for Quality Tire, Inc., occurred during November: Requirements 1. Journalize the transactions on the books of Quality Tire, Inc. 2. What was Quality Tire, Inc.’s gross profit for the month of November?
> From the following accounts of Done Right Auto Detail, Inc., prepare the business’s statement of retained earnings for the year ended March 31, 2016:
> Thao Le opened an accounting frm on March 1, 2016. During the month of March, the business completed the following transactions: Requirements 1. Open or set up the following T-accounts: Cash, Accounts Receivable, Supplies, Furniture, Land, Accounts P
> Classic Cars, Inc., restores antique automobiles. The retained earnings balance of the corporation was $22,300 at December 31, 2015. During 2016, the corporation paid $20,000 in dividends to its stockholders. At December 31, 2016, the business’s accounti
> The following transactions occurred between Retro Furnishings and DM Furniture Warehouse during July of the current year: Requirements 1. Journalize these transactions on the books of Retro Furnishings. 2. Journalize these transactions on the books o
> Requirements 1. Using the following selected accounts of McGinty Electrical, Inc., at June 30, 2016, prepare the entity’s closing entries: 2. What is McGintyElectrical’s ending Retained Earnings balance at June 30, 2016?
> Breanna Baxter started an interior design company called Interiors on Demand, Inc., on June 1, 2016. The following amounts summarize the financial position of her business on June 14, 2016, after the first two weeks of operations: During the remainde
> The following sale-related transactions for New Brunswick Hardware, Inc., occurred during the month of September Requirement 1. Journalize the transactions for New Brunswick Hardware, Inc. Omit explanations.
> The adjusted trial balance for Sweet Home Catering, Inc., is presented next. Prepare the income statement and statement of retained earnings for Sweet Home Catering, Inc., for the month ended March 31, 2016. Also, prepare the balance sheet at March 31, 2
> Tim Collett practices law under the business title Tim Collett, Attorney at Law, Inc. During November, his law practice engaged in the following transactions: Collett’s business uses the following accounts: Cash, Accounts Receivable, Supplies, Land,
> Darin Oliver worked as an accountant at a local accounting firm for five years after graduating from college. Recently, he opened his own accounting practice, which he operates as a corporation. The name of the new entity is Oliver and Associates, Inc.
> The following purchase-related transactions for Terroso, Inc., occurred during the month of April. Requirement 1. Journalize the transactions for Terroso, Inc. Omit explanations.
> The adjusted trial balances of Anderson Plating Services, Inc., at December 31, 2016, and December 31, 2017, include these amounts: Analysis of the accounts at December 31, 2017, reveals these transactions for the past 12 months: Requirement Comp
> The following errors occurred in the accounting records of Certifed Security, Inc.: a. The company accountant recorded the receipt of cash for service revenue by debiting Cash for $1,140 instead of the correct amount of $1,410. Service Revenue was also c
> The IT manager of Valley Realty, Inc., prepared the balance sheet of the company while the accountant was ill. The balance sheet contains numerous errors. In particular, the IT manager knew that the balance sheet should balance, so she plugged in the ret
> Sunshine Solar, Inc., had Sales Revenue of $470,000, Sales Returns and Allowances of $19,000, and Sales Discounts of $6,000 in 2016. Cost of goods sold was $193,000, and net income was $96,000 for the year. The average number of shares of common stock ou
> Certified Security, Inc., began the year with $35,000 of common stock and $32,400 of retained earnings. On May 5, investors bought $8,000 of additional stock in the business. On August 22, the business purchased land valued at $23,000. The income stateme
> The accounts of Hernandez Computer Repair, Inc., follow with their normal balances at March 31, 2016. The accounts are listed in no particular order. Requirements 1. Prepare the company’s trial balance at March 31, 2016, listing accounts in the prope
> Presented here are the amounts of Assets, Liabilities, Stockholders’ Equity, Revenues, and Expenses of Extreme Sports, Inc., at October 31, 2016. The items are listed in alphabetical order. The retained earnings balance of the business was $94,900 at
> Use the data for Grease Monkey Auto Supply, Inc., from E4-32B. Information E4-32B: The account balances for Grease Monkey Auto Supply, Inc., for the year ended December 31, 2016, are presented next in random order: Requirement 1. Prepare Grease Monke
> The accountant for Castile Construction, Inc., posted adjusting entries (a) through (e) to the accounts at August 31, 2016. Selected balance sheet accounts and all the revenues and expenses of the entity follow in T-account form. Requirements 1. Expl
> The trial balance for Security Solutions, Inc., at September 15, 2016, follows: During the remainder of September, Security Solutions, Inc., completed the following transactions: Requirements 1. Journalize the transactions that occurred September
> Gear Heads, Inc., restores antique automobiles. The retained earnings balance of the corporation was $19,700 at December 31, 2015. During 2016, the corporation paid $45,000 in dividends to its stockholders. At December 31, 2016, the business’s accounting
> Use the data for Grease Monkey Auto Supply, Inc., from E4-32B. Information E4-32B: The account balances for Grease Monkey Auto Supply, Inc., for the year ended December 31, 2016, are presented next in random order: Requirements 1. Prepare Grease Monk
> The accounting records of Pro Paint, Inc. include the following unadjusted balances at June 30: Accounts Receivable, $1,700; Supplies, $725; Salaries Payable, $0; Unearned Service Revenue, $900; Service Revenue, $4,800; Salaries Expense, $1,150; and Supp
> Braeden Miller opened an accounting firm on January 1, 2016. During the month of January, the business completed the following transactions: Requirements 1. Open or set up the following T-accounts: Cash, Accounts Receivable, Supplies, Furniture, Land
> Dori Cruz started an interior design company called Interiors by Design, Inc., on April 1, 2016. The following amounts summarize the financial position of her business on April 14, 2016, after the first two weeks of operations: During the remainder o
> The account balances for Grease Monkey Auto Supply, Inc., for the year ended December 31, 2016, are presented next in random order: Requirements 1. Prepare Grease Monkey Auto Supply, Inc.’s single-step income statement. 2. Would you recommend the use
> Journalize the adjusting entry needed at October 31, the fiscal year-end, for each of the following independent situations. No other adjusting entries have been made forthe year. a. On August 1, we collected $6,000 rent in advance. We debited Cash and cr
> First Choice Fabrication, Inc., engaged in the following business transactions during May 2016: First Choice Fabrication, Inc., uses the following accounts: Cash, Accounts Receivable, Supplies, Building, Accounts Payable, Notes Payable, Common Stock,
> Shanna Peters worked as an accountant at a local accounting firm for five years after graduating from college. Recently, she opened her own accounting practice, which she operates as a corporation. The name of the new entity is Peters and Associates, Inc
> Consider the following incomplete table of a merchandiser’s profit data: Requirement 1. Complete the table by computing the missing amounts.
> The adjusting entries for the following adjustments were omitted at period-end: a. Prepaid rent expired, $1,250 b. Depreciation, $1,100 c. Employee salaries owed for Monday through Wednesday of a five-day workweek, $4,250 d. Supplies used during the peri
> Amanda Bradford practices law under the business title Amanda Bradford, Attorney at Law, Inc. During June, her law practice engaged in the following transactions: Bradford’s business uses the following accounts: Cash, Accounts Receivable, Supplies, L
> Presented here is information for Eliason, Inc., for the year ended August 31, 2016. Requirements 1. What is the beginning stockholders’ equity of Eliason, Inc.? 2. What is the ending stockholders’ equity of Eliason, Inc.? 3. What is the net income o
> The following transactions occurred during November 2016 for Specialty T-Shirts, Inc.: Requirement 1. Journalize the November transactions for Specialty T-Shirts, Inc. Omit explanations.
> Journalize the adjusting entries at November 30, the end of the accounting period. Omit explanations. a. Employee salaries owed for Monday through Thursday of a five-day workweek, $7,500 b. Unearned service revenue now earned, $1,250 c. Depreciation, $1,
> James Cyr has trouble keeping his debits and credits equal. During a recent month, James made the following errors: a. James recorded a $750 payment of rent by debiting Rent Expense for $75 and crediting Cash for $75.90 b. In recording a $300 payment on
> Financial statements are defined as “historical reports that communicate financial informationabout a business to people or organizations outside the company.” Why is theword historical used?
> The trial balance of Allen & Associates includes the following balance sheet account For each account, identify the type of adjusting entry typically made for the account (deferred expense, deferred revenue, accrued expense, or accrued revenue), and give
> Which of the following terms describes the types of adjusting entries? a. Expenses and revenues b. Prepaid expenses and prepaid revenues c. Deferrals and accruals d. Deferrals and depreciation
> Why does the time period in which revenue is recognized matter?
> The following list names the activities involved in the accounting process of recordingand summarizing business transactions. Place the number corresponding with the orderthe activity occurs next to the activity, starting with 1. 1 The transaction occurs
> Suppose Green Products, Inc., has cash of $41,000, receivables of $37,000, and furnitureand fixtures totaling $174,000. Green Products, Inc., owes $64,000 on account and has a$125,000 note payable. How much is the stockholders’ equity? a. $127,000 b. $18
> How is revenue related to retained earnings?
> Place the corresponding letter of the definition next to the term. ______ 1. Liabilities ______ 2. Assets ______ 3. Corporation ______ 4. Dividends ______ 5. Sole proprietorship ______ 6. Partnership ______ 7. Transaction a. Any event that affect
> Which accounting principle specifically states that we should record transactions atamounts that can be verified? a. Business entity principle b. Cost principle c. Reliability principle d. Going-concern principle
> Which inventory costing method results in the lowest net income during a period of declining inventory costs? a. Last-in, first-out (LIFO) b. Specific-unit cost c. Average cost d. First-in, first-out (FIFO)
> What is a cost-flow assumption? Why is a cost-flow assumption necessary in accounting for inventory?
> Suppose A-1 Sports purchases $83,000 of sportswear on account from Outdoor Wear, Inc., on December 1, 2016. Credit terms are 2/10, net 45. A-1 Sports pays Outdoor Wear, Inc., on December 8, 2016. 1. Journalize the transactions for A-1 Sports on December
> Which of the following represents the journal entry to record the purchase of $1,500 of inventory on account?
> Why do businesses use subsidiary ledgers?
> Selected accounts of Andover Consulting, Inc., a financial services business, have the following balances at December 31, 2016, the end of its first year of operations. During the year, Lynne Andover, the only stockholder, bought $15,000 of stock in th
> Journalize the following transactions for Luna’s Wholesale, Inc., that occurred during the month of September. Luna’s Wholesale, Inc.’s cost of inventory is 45 percent of the sales price.
> Calculate the missing amounts for each of the Prepaid Insurance situations. For situation A, journalize the adjusting entry. Consider each situation separately.
> McGuire Construction, Inc., completed the following transactions during September 2016, its first month of operations: Requirements 1. Open or set up T-accounts in the ledger for the following accounts: Cash, Accounts Receivable, Supplies, Equipment,
> The following are the balances of the assets, liabilities, and equity of Jerome’s Coffee Shop at March 31, 2016: Requirements 1. What type of business organization is Jerome’s Coffee Shop? 2. Prepare the balance sheet of the business at March 31, 201
