At Pleasonton Delivery and Courier Service, the following items were found to cause a difference between the bank statement and the firm’s records. Indicate whether each item will affect the bank balance or the book balance when the bank reconciliation statement is prepared. Also indicate which items will require an accounting entry after the bank reconciliation is completed: 1. A deposit in transit. 2. A debit memorandum for a dishonored check. 3. A credit memorandum for a promissory note that the bank collected for Pleasonton. 4. An error found in Pleasonton’s records that involves the amount of a check. The firm’s checkbook and general journal indicate $808 as the amount, but the canceled check itself and the listing on the bank statement show that $880 was the actual sum. 5. An outstanding check. 6. A bank service charge. 7. A check issued by another firm that was charged to Pleasonton’s account by mistake.
> The following accounts and transactions are for Vincent Sutton, Landscape Consultant. INSTRUCTIONS Analyze the transactions. Record each in the appropriate T accounts. Identify each entry in the T accounts by writing the letter of the transaction next to
> The following occurred during June at Brown Financial Planning. INSTRUCTIONS Analyze each transaction. Use T accounts to record these transactions and be sure to put the name of the account on the top of each account. Record the effects of the transactio
> The following transactions took place at Willis Counseling Services, a business established by Raymond Willis. INSTRUCTIONS For each transaction, set up T accounts from this list: Cash; Office Furniture; Office Equipment; Automobile; Accounts Payable; Ra
> The following transactions occurred at several different businesses and are not related. INSTRUCTIONS Analyze each of the transactions. For each, decide what accounts are affected and set up T accounts. Record the effects of the transaction in the T acco
> The accountant for the firm owned by Vincent Sutton prepares financial statements at the end of each month. INSTRUCTIONS Use the figures in the T accounts for Problem 3.4A to prepare a trial balance, an income statement, a statement of owner’s equity, an
> The following equation shows the transactions of Cotton Cleaning Service during May. The business is owned by Taylor Cotton. INSTRUCTIONS Analyze each transaction carefully. Prepare an income statement and a statement of owner’s equity
> Oil Field Equipment Repair Service is owned by Jack Phillips. INSTRUCTIONS Use the following figures to prepare a balance sheet dated February 28, 20X1. (You will need to compute the owner’s equity.) Analyze: What is the net worth, or o
> The Fashion Rack is a retail merchandising business that sells brand-name clothing at discount prices. The firm is owned and managed by Teresa Lojay, who started the business on April 1, 20X1. This project will give you an opportunity to put your knowled
> This project will give you an opportunity to apply your knowledge of accounting principles and procedures by handling all the accounting work of Eli’s Consulting Services for the month of January 2020. Assume that you are the chief acco
> Indicate the impact of each of the transactions below on the fundamental accounting equation (Assets = Liabilities + Owner’s Equity) by placing an “I” to indicate an increase and a “
> There are many approvals needed to create a paycheck for an employee. Divide into groups of five to identify the jobs necessary to create a paycheck for an employee. Describe the function and, if necessary, the journal entry for each job.
> The fundamental accounting equations for several businesses follow. Supply the missing amounts.
> Just before Henderson Laboratories opened for business, Eugene Henderson, the owner, had the following assets and liabilities. Determine the totals that would appear in the firm’s fundamental accounting equation (Assets = Liabilities +
> The following selected accounts were taken from the financial records of Sonoma Valley Distributors at December 31, 20X1. All accounts have normal balances. Accounts Receivable at December 31, 20X0, was $52,550. Merchandise Inventory at December 31, 20X0
> The Adjusted Trial Balance section of the worksheet for Hendricks Janitorial Supplies follows. The owner made no additional investments during the year. Prepare a postclosing trial balance for the firm on December 31, 20X1. ACCOUNTS
> Examine the following adjusting entries and determine which ones should be reversed. Show the reversing entries that should be recorded in the general journal as of January 1, 20X2. Include appropriate descriptions.
> On December 31, 20X1, the Income Statement columns of the worksheet for The Sax Shop contained the following information. Give the entries that should be made in the general journal to close the revenue, cost of goods sold, expense, and other temporary a
> The worksheet of Lantz’s Office Supplies contains the following asset and liability accounts. The balance of the Notes Payable account consists of notes that are due within a year. Prepare a balance sheet dated December 31, 20X1. Obtain
> The worksheet of Lantz’s Office Supplies contains the following owner’s equity accounts. Use this data and the net income determined in Exercise 13.3 to prepare a statement of owner’s equity for the y
> The worksheet of Lantz’s Office Supplies contains the following revenue, cost, and expense accounts. Prepare a classified income statement for this firm for the year ended December 31, 20X1. The merchandise inventory amounted to $59,775
> The Home Depot, Inc., reported the following data in its FY 2018 10-K (for the fiscal year ended February 3, 2019): Analyze: 1. What percentage of total current liabilities is made up of accrued salaries and related expenses at February 3, 2019? 2. By wh
> Selected accounts and other information from the records of Calderone Company for the year ended December 31 follow: 1. Compute the following items that would appear on a classified income statement. The company combines both selling and general and admi
> Tsang Company reports the following in its most recent year of operations: ■ Net sales, $2,000,000 (all on account) ■ Cost of goods sold, $977,500 ■ Gross profit, $1,022,500 ■ Accounts receivable, beginning of year, $220,000 ■ Accounts receivable, end of
> The accounts listed below appear on the worksheet of Commonwealth Crafts. Indicate the section of the classified income statement in which each account will be reported. SECTIONS OF CLASSIFIED INCOME STATEMENT a. Operating Revenue b. Cost of Goods Sold c
> For each of the following independent situations, prepare the adjusting entry that must be made at December 31, 20X1. Omit descriptions. a. On December 31, 20X1, the Notes Receivable account at Sufen Materials Corporation had a balance of $25,000, which
> On December 31, 20X1, the Notes Payable account at Cherie’s Boutique Shop had a balance of $72,000. This amount represented funds borrowed on a six-month, 6 percent note from the firm’s bank on December 1. Prepare the adjusting journal entry for interest
> On December 1, 20X1, Jenny’s Java Joint borrowed $50,000 from its bank in order to expand its operations. The firm issued a four-month, 9 percent note for $50,000 to the bank and received $48,500 in cash because the bank deducted the interest for the ent
> For each of the following independent situations, prepare the adjusting entry that must be made on December 31, 20X1. Omit descriptions. a. On December 31, 20X1, the Notes Payable account at Tsang Manufacturing Company had a balance of $18,000. This bala
> For each of the following independent situations, prepare the adjusting entry that must be made at December 31, 20X1. Omit descriptions. a. During the year 20X1, Alenikov Company had net credit sales of $2,020,000. Past experience shows that 1.5 percent
> The Income Statement section of the Johnson Company worksheet for the year ended December 31, 20X1, has $201,000 recorded in the Debit column and $216,250 in the Credit column on the line for the Income Summary account. What were the beginning and ending
> The beginning inventory of SoCal Wholesalers was $121,000, and the ending inventory is $116,500. What entries are needed at the end of the fiscal period to adjust Merchandise Inventory?
> Susie’s Sweater Factory employs two managers for the factory. These managers work 12 hours per day at $16 per hour. After eight hours, they receive overtime pay. Management is trying to cut costs. They have decided to promote the managers to a salary pos
> Meri Medical Supplies estimates that its office employees will earn $175,000 next year and its factory employees will earn $600,000. The firm pays the following rates for workers’ compensation insurance: $0.60 per $100 of wages for the office employees a
> On January 31, AC Gourmet Shop prepared its Employer’s Annual Federal Unemployment Tax Return, Form 940. During the previous year, the business paid total wages of $462,150 to its 14 employees. Of this amount, $98,000 was subject to FUTA tax. Using a rat
> On April 30, Quality Furniture Company prepared its state unemployment tax return for the first quarter of the year. The firm had taxable wages of $85,000. Because of a favorable experience rating, Quality pays SUTA tax at a rate of 1.4 percent. How much
> At the end of the weekly payroll period on June 30, the payroll register of Known Consultants showed employee earnings of $50,000. Determine the firm’s payroll taxes for the period. Use a social security rate of 6.2 percent, Medicare rate of 1.45 percent
> Given the following scenario, choose the best answer. At the end of the quarter, the business owed $2,000 in total payroll taxes. The amount due must be deposited: a. on the last business day of the quarter. b. on the last day of the quarter. c. on the d
> On July 31, the payroll register for Red Company showed the following totals for the month: gross earnings, $38,950; social security tax, $2,414.90; Medicare tax, $564.78; income tax, $5,842.00; and net amount due, $30,128.32. Of the total earnings, $30,
> Private Investigations has two office employees. A summary of their earnings and the related taxes withheld from their pay for the week ending June 7, 20X1, follows. 1. Prepare the general journal entry to record the company’s payroll f
> 1. Why should managers check the amount spent for overtime? 2. The new controller for CAR Company, a manufacturing firm, has suggested to management that the business change from paying the factory employees in cash to paying them by check. What reasons
> Data about the marital status, withholding allowances, and weekly salaries of the four office workers at Ollie’s Office Supply Company follow. Use the tax tables in Figure 10.2 to find the amount of federal income tax to be deducted fro
> Using the earnings data given in Exercise 10.3, determine the amount of Medicare tax to be withheld from each employee’s gross pay for December. Assume a 1.45 percent Medicare tax rate and that all salaries and wages are subject to the tax.
> During one week, four production employees of Morgan Manufacturing Company worked the hours shown below. All these employees receive overtime pay at one and one-half times their regular hourly rate for any hours worked beyond 40 in a week. Determine the
> The hourly rates of four employees of European Enterprises follow, along with the hours that these employees worked during one week. Determine the gross earnings of each employee.
> After returning from a three-day business trip, the accountant for Southeast Sales, Johanna Estrada, checked bank activity in the company’s checking account online. The activity for the last three days follows. After matching these tran
> Flores Company received a bank statement showing a balance of $13,000 on November 30, 20X1. During the bank reconciliation process, Flores Company’s accountant noted the following bank errors: 1. A check for $153 issued by Flora, Inc., was mistakenly cha
> Venturi Office Supplies received a bank statement showing a balance of $73,047 as of March 31, 20X1. The firm’s records showed a book balance of $72,987 on March 31. The difference between the two balances was caused by the following items. Prepare a ban
> Johnson Corporation received a bank statement showing a balance of $15,900 as of October 31, 20X1. The firm’s records showed a book balance of $15,572 on October 31. The difference between the two balances was caused by the following items. Prepare the a
> You and four friends have decided to create a new service company called Unpacking for You. Your company unpacks for families once they have moved into a new house. Your business is primarily a cash business. Each family will pay you $100 for each room t
> On January 2, 20X1, The Orange Legal Clinic issued Check 2108 for $400 to establish a petty cash fund. Indicate how this transaction would be recorded in a general journal. Use 1 as the journal page number.
> Southern Gift Shop, a retail business, started business on April 29, 20X1. It keeps a $300 change fund in its cash register. The cash receipts for the period from April 29 to April 30, 20X1, are shown below. Record the cash receipts on April 29 and April
> 1. Use the final balances of the vendor accounts after completing Exercise 8.8 to prepare a schedule of accounts payable for GeekAuto Supplies, Inc., as of January 31, 20X1. 2. Does the total of your accounts payable schedule agree with the balance of th
> Post the entries in the general journal below to the accounts payable account in the general ledger and to the appropriate accounts in the accounts payable ledger. Assume the following account balances at January 1, 20X1, for GeekAuto Supplies, Inc.: Use
> On June 30 the general ledger of Kisling, Inc., had the following balances:
> Bae Company (buyer) and Johnson, Inc. (seller), engaged in the following transactions during February 20X1: Journalize the transactions above in a general journal for both Bae Company and Johnson, Inc. Use 20 as the journal page for both companies.
> Record the following transactions of LeCoz Fashions:
> Record the following transactions of Evelyn’s Designs in a general journal:
> Record the following transactions of Beach Bikes in a general journal:
> The following excerpt was taken from The Home Depot, Inc., 2018 Annual Report (for the fiscal year ended February 3, 2019): Analyze: 1. What percentage of total assets is made up of cash and cash equivalents at February 3, 2019? 2. Cash receipt and cash
> Lantz Corporation engaged in the following transactions during June. Record these transactions in a general journal.
> Bushnell Company (buyer) and Schiff, Inc. (seller), engaged in the following transactions during February 20X1: Both companies use the perpetual inventory system. Journalize the transactions above in a general journal for both Bushnell Company and Schif
> On April 1, Manning Meat Distributors sold merchandise on account to Fichman’s Franks for $3,700 on Invoice 1001, terms 2/10, n/30. The cost of merchandise sold was $2,200. Payment was received in full from Fichman’s Franks, less discount, on April 10. R
> Record the following transactions of Fashion Park in a general journal. Fashion Park must charge 8 percent sales tax on all sales. The company uses the perpetual inventory system.
> Wang Corporation operates in a state with no sales tax. The company uses the perpetual inventory system. Record the following transactions in a general journal:
> Record the following transactions of Evelyn’s Designs in a general journal. The company uses the perpetual inventory system.
> Lantz Corporation engaged in the following transactions during June. The company uses the perpetual inventory system. Record these transactions in a general journal.
> Identify the normal balance and type of account for the following. In identifying the normal balance, use “Dr” for debit or “Cr” for credit. The first one is done as an example.
> Identify the normal balance and type of account for the following. In identifying the normal balance, use “Dr” for debit or “Cr” for credit. The first one is done as an example.
> Post the entries in the general journal below to the Accounts Receivable account in the general ledger and to the appropriate accounts in the accounts receivable ledger for Valentino Company. Assume the following account balances at January 1, 20X1: Use
> Alec Rubino is the sole owner of Spectra Medical Instruments (Spectra), a small but successful distributor of medical supplies. Alec inherited the business from his father and is not really interested in running it on a day-to-day basis. Alec hired John
> On April 1, Moloney Musical Instruments sold merchandise on account to Fronke’s Flutes for $7,000 on Invoice 1001, terms 2/10, n/30. Payment was received in full from Fronke’s Flutes, less discount, on April 10. Required: Record the transactions on April
> Johnson Distributors, a wholesale firm, made sales using the following list prices and trade dis- counts. What amount should be recorded for each sale? 1. List price of $7,000 and trade discounts of 35 percent and 10 percent. 2. List price of $5,800 and
> Rivera Company made sales using the following list prices and trade discounts. What amount should be recorded for each sale? 1. List price of $900 and trade discount of 25 percent. 2. List price of $2,260 and trade discount of 30 percent. 3. List price o
> Record the following transactions of Urban Star Sporting Goods in a general journal. Urban Star Sporting Goods must charge 8 percent sales tax on all sales.
> Record the following transactions of Divine Divas Fashions in a general journal. Fashion Park must charge 8 percent sales tax on all sales.
> The following transactions took place at Animal World Amusement Park during May. Animal World Amusement Park must charge 8 percent sales tax on all sales.
> W. Tsang Distributors operates in a state with no sales tax. Record the following transactions in a general journal:
> 1. Use the final balances of the customer accounts after completing Exercise 7.9 to prepare a schedule of accounts receivable for Valentino Company at January 31, 20X1. 2. Should the total of your accounts receivable schedule agree with the balance of th
> Identify the normal balance and type of account for the following. In identifying the normal balance, use “Dr” for debit or “Cr” for credit. The first one is done as an example.
> Complete a chart of the accounting cycle by writing the steps of the cycle in their proper sequence.
> 1. The new accountant for Asheville Hardware Center, a large retail store, found the following weaknesses in the firm’s cash-handling procedures. How would you explain to management why each of these procedures should be changed? a. No cash register proo
> On December 31, the Income Summary account of Ballon Company has a debit balance of $222,000 after revenue of $234,000 and expenses of $456,000 were closed to the account. Kenneth Ballon, Drawing has a debit balance of $24,000 and Kenneth Ballon, Capital
> The ledger accounts of Aveeno Company appear as follows on March 31, 20X1: All accounts have normal balances. Journalize and post the closing entries. Use 4 as the page number for the general journal in journalizing the closing entries. Use account numbe
> The Income Summary and Violante Autro, Capital accounts for Autro Production Company at the end of its accounting period follow Complete the following statements: 1. Total revenue for the period is______. 2. Total expenses for the period are______. 3. Ne
> From the following list, identify the accounts that will appear on the postclosing trial balance. ACCOUNTS 1. Cash 2. Accounts Receivable 3. Supplies 4. Equipment 5. Accumulated Depreciation 6. Accounts Payable 7. Brianna Celina, Capital 8. Brianna Celin
> Following are the steps in the accounting cycle. Arrange the steps in the proper sequence. 1. Prepare a worksheet. 2. Journalize and post adjusting entries. 3. Analyze transactions. 4. Journalize the transactions. 5. Post the journal entries. 6. Journali
> On December 31, 20X1, the ledger of Hunter Company contained the following account balances: All the accounts have normal balances. Journalize the closing entries. Use 4 as the general journal page number.
> Lancaster Company must make three adjusting entries on December 31, 20X1. a. Supplies used, $11,000 (supplies totaling $18,000 were purchased on December 1, 20X1, and debited to the Supplies account). b. Expired insurance, $8,200; on December 1, 20X1, th
> Assume that a firm reports net income of $135,000 prior to making adjusting entries for the following items: expired rent, $10,500; depreciation expense, $12,300; and supplies used, $5,400. Assume that the required adjusting entries have not been made. W
> On January 31, 20X1, the general ledger of Johnson Company showed the following account balances. Prepare the worksheet through the Adjusted Trial Balance section. Assume that every account has the normal debit or credit balance. The worksheet covers the
> A company is developing objectives for paying bills on account. Some possible objectives follow: ■ Stretch cash flow as much as possible. ■ Develop a good reputation as a company that always pays bills on time. ■ Do not pay vendors until payment is recei
> Within a company’s annual report, a section called “Notes to Consolidated Financial Statements” offers general information about the company along with detailed notes related to its financial statements. Analyze Online: On the American Eagle Outfitters,
> For each of the following situations, determine the necessary adjustments. 1. A firm purchased a three-year insurance policy for $27,000 on July 1, 20X1. The $27,000 was debited to the Prepaid Insurance account. What adjustment should be made to record e
> Determine the necessary end-of-June adjustments for Conner Company. 1. On June 1, 20X1, Conner Company, a new firm, paid $16,800 rent in advance for a seven-month period. The $16,800 was debited to the Prepaid Rent account. 2. On June 1, 20X1, the firm b
> The following transactions took place at the Pimental Employment Agency during November 20X1. Record the general journal entries that would be made for these transactions. Use a compound entry for each transaction.
> Post the journal entries that you prepared for Exercise 4.2 to the general ledger. Use the account names shown in Exercise 4.2.
> Selected accounts from the general ledger of Martin Consulting Services follow. Record the general journal entries that would be made to record the following transactions. Be sure to include dates and descriptions in these entries. 101 Cash 111 Accounts
> The accounts that will be used by Metro Moving Company follow. Prepare a chart of accounts for the firm. Classify the accounts by type, arrange them in an appropriate order, and assign suitable account numbers.
> From the trial balance and the net income or net loss determined in Exercise 3.6, prepare a statement of owner’s equity and a balance sheet for Residential Relocators as of December 31, 20X1.
> The following financial statement excerpt is taken from the 2018 Annual Report (for the fiscal year ended February 3, 2019) for The Home Depot, Inc.: 1. The Cost of Sales amount on The Home Depot, Inc., consolidated statements of earnings rep- resents th
