Companies prepare balance sheets in order to know their financial position at a specific point in time. This enables them to make a comparison to their position at previous points in time, and gives them a basis for planning for the future. In order to evaluate your financial position, you need to prepare a personal balance sheet. Assume that you have compiled the following information regarding your finances. (Note: Some of the items might not be used in your personal balance sheet.) Amount owed on student loan balance (long-term) ………………………………. $ 5,000 Balance in checking account ……………………………….……………………………… 1,200 Certificate of deposit (6-month) ……………………………….………………………... 3,000 Annual earnings from part-time job ……………………………….…………………… 11,300 Automobile ……………………………….……………………………….……………………... 7,000 Balance on automobile loan (current portion) ……………………………………… 1,500 Balance on automobile loan (long-term portion) …………………………………. 4,000 Home computer ……………………………….……………………………….……………… 800 Amount owed to you by younger brother ……………………………….…………… 300 Balance in money market account ……………………………….……………………... 1,800 Annual tuition ……………………………….……………………………….………………… 6,400 Video and stereo equipment ……………………………….……………………………… 1,250 Balance owed on credit card (current portion) ……………………………….…… 150 Balance owed on credit card (long-term portion) ………………………………… 1,650 Instructions Prepare a personal balance sheet using the format you have learned for a classifi ed balance sheet for a company. For the capital account, use Owner’s Capital.
> At Raymond 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 $870 was recorded as a debit to Cash $870 and a credit to Serv
> The following selected accounts appear in the adjusted trial balance columns of the worksheet for Ashram Company: Accumulated Depreciation, Depreciation Expense, Owner’s Capital, Owner’s Drawings, Service Revenue, Supplies, and Accounts Payable. Indicate
> The ledger of Walters Company includes the following unadjusted balances: Prepaid Insurance $3,000, Service Revenue $60,000, and Salaries and Wages Expense $25,000. Adjusting entries are required for (a) expired insurance $1,800, (b) services performed
> The balance sheet debit column of the worksheet for Jolie Company includes the following accounts: Accounts Receivable $12,500, Prepaid Insurance $4,500, Cash $4,100, Supplies $5,200, and Debt Investments (short-term) $7,600. Prepare the current assets s
> Eckholm Company records all prepayments in income statement accounts. At April 30, the trial balance shows Supplies Expense $2,800, Service Revenue $9,200, and zero balances in related balance sheet accounts. Prepare the adjusting entries at April 30 ass
> Define two generally accepted accounting principles that relate to adjusting the accounts.
> Financial Statement Partial adjusted trial balance data for Miller Company is presented in BE3.9. The balance in Owner’s Capital is the balance as of January 1. Prepare an owner’s equity statement for the year assuming net income is $14,200 for the year.
> Financial Statement The adjusted trial balance of Miller Company at December 31, 2020, includes the following accounts: Owner’s Capital $16,400, Owner’s Drawings $7,000, Service Revenue $39,000, Salaries and Wages Expense $16,000, Insurance Expense $2,00
> Using the data in BE3.5, journalize and post the entry on July 1 and the adjusting entry on December 31 for Mesa Insurance Co. Mesa uses the accounts Unearned Service Revenue and Service Revenue.
> On July 1, 2019, Major Co. pays $15,120 to Mesa Insurance Co. for a 4-year insurance contract. Both companies have fi scal years ending December 31. For Major Co., journalize and post the entry on July 1 and the annual adjusting entry on December 31.
> At the end of its first year, the trial balance of Wolowitz Company shows Equipment $30,000 and zero balances in Accumulated Depreciation—Equipment and Depreciation Expense. Depreciation for the year is estimated to be $3,750. Prepare the annual adjustin
> Schramel Advertising Company’s trial balance at December 31 shows Supplies $6,700 and Supplies Expense $0. On December 31, there are $2,100 of supplies on hand. Prepare the adjusting entry at December 31, and using T-accounts, enter the balances in the a
> Gee Company accumulates the following adjustment data at December 31. Indicate (a) the type of adjustment (prepaid expense, accrued revenue, and so on), and (b) the status of accounts before adjustment (for example, “assets understated and revenues under
> The ledger of Althukair Company includes the following accounts. Explain why each account may require adjustment. a. Prepaid Insurance. b. Depreciation Expense. c. Unearned Service Revenue. d. Interest Payable.
> Financial Statement Nelson Company provides the following information for the month ended October 31, 2020: sales on credit $280,000, cash sales $95,000, sales discounts $5,000, and sales returns and allowances $11,000. Prepare the sales section of the i
> Brueser Company has the following account balances: Sales Revenue $195,000, Sales Discounts $2,000, Cost of Goods Sold $117,000, and Inventory $40,000. Prepare the entries to record the closing of these items to Income Summary.
> a. How does the time period assumption affect an accountant’s analysis of business transactions? b. Explain the terms fiscal year, calendar year, and interim periods.
> At year-end, the perpetual inventory records of Gutierrez Company showed merchandise inventory of $98,000. The company determined, however, that its actual inventory on hand was $96,100. Record the necessary adjusting entry.
> From the information in BE5.4, prepare the journal entries to record these transactions on Opps Company’s books under a perpetual inventory system.
> Prepare the journal entries to record the following transactions on Novy Company’s books using a perpetual inventory system. a. On March 2, Novy Company sold $900,000 of merchandise on account to Opps Company, terms 2/10, n/30. The cost of the merchandis
> Cha Company buys merchandise on account from Wirtz Company. The selling price of the goods is $780, and the cost of the goods is $470. Both companies use perpetual inventory systems. Journalize the transaction on the books of both companies.
> Presented below are the components in Veasy Company’s income statement. Determine the missing amounts. Sales Cost of Gross Operating Net Revenue Goods Sold Profit Expenses Income a. $75,000 ? $28,000 ? $ 9,800 b. $108,000 $70,000 $
> Quinn Becker is president of Better Books. She has no accounting background. Becker cannot understand why fair value is not used as the basis for all accounting measurement and reporting. Discuss.
> Corlett Company has the following merchandise account balances: Sales Revenue $180,000, Sales Discounts $2,000, Purchases $120,000, and Purchases Returns and Allowances $30,000. In addition, it has a beginning inventory of $40,000 and an ending inventory
> Prepare the journal entries to record these transactions on Shabani Company’s books using a periodic inventory system. a. On March 2, Shabani Company purchased $900,000 of merchandise on account from Ballas Company, terms 2/10, n/30. b. On March 6, Shaba
> Dan Fineman, the president of King Company, is pleased. King substantially increased its net income in 2020 while keeping its unit inventory relatively the same. Howard Gross, chief accountant, cautions Dan, however. Gross says that since King changed it
> Assume that Morgan Company uses a periodic inventory system and has these account balances: Purchases $450,000, Purchase Returns and Allowances $13,000, Purchase Discounts $9,000, and Freight-In $18,000. Determine net purchases and cost of goods purchase
> Indicate the columns of the worksheet in a perpetual system in which (a) inventory and (b) cost of goods sold will be shown.
> Why is it possible to prepare financial statements directly from an adjusted trial balance?
> Using the data in BE4.3, identify the accounts that would be included in a post-closing trial balance.
> The income statement for Salt Creek Golf Club for the month ending July 31 shows Service Revenue $17,800, Salaries and Wages Expense $9,600, Maintenance and Repairs Expense $2,500, and Net Income $5,700. Prepare the entries to close the revenue and expen
> Using the data in BE4.4, enter the balances in T-accounts, post the closing entries, and underline and balance the accounts.
> The ledger of Pitt Company contains the following balances: Owner’s Capital $30,000, Owner’s Drawings $2,000, Service Revenue $58,000, Salaries and Wages Expense $39,000, and Supplies Expense $7,000. Prepare the closing entries at December 31.
> Stefan Page Company reports net sales of $800,000, gross profit of $370,000, and net income of $240,000. What are its operating expenses?
> Cupery Co. has net sales of $105,000, cost of goods sold of $70,000, and operating expenses of $20,000. What is its gross profit and its gross profit rate?
> The following are the major balance sheet classifications: Current assets (CA) Current liabilities (CL) Long-term investments (LTI) Long-term liabilities (LTL) Property, plant, and equipment (PPE) Owner’s equity (OE) Intangible assets (IA) Match ea
> What is the debit/credit effect of an unearned revenue adjusting entry?
> G. Phillips Company purchased equipment for $18,000. By the current balance sheet date, $6,000 had been depreciated. Indicate the balance sheet presentation of the data.
> If your school has a subscription to the FASB Codification, log in and prepare responses to the following. Instructions Access the glossary (“Master Glossary”) to answer the following. a. What is the definition of revenue? b. What is the definition of co
> Three years ago, Amy Hessler and her brother-in-law Jacob Seelig opened Family Department Store. For the first two years, business was good, but the following condensed income results for 2019 were disappointing. Amy believes the problem lies in the re
> At October 31, Miras Company made an accrued expense adjusting entry of $3,300 for salaries. Prepare the reversing entry on November 1, and indicate the balances in Salaries and Wages Payable and Salaries and Wages Expense after posting the reversing ent
> Companies must report or disclose in their financial statement information about all liabilities, including potential liabilities related to environmental cleanup. There are many situations in which you will be asked to provide personal financial informa
> In reviewing the accounts of Terri Kahn Co. at the end of the year, you discover that adjusting entries have not been made. Instructions Write a memo to Terri Kahn, the owner of Terri Kahn Co., that explains the following: the nature and purpose of adju
> Happy Camper Park was organized on April 1, 2019, by Erica Hatt. Erica is a good manager but a poor accountant. From the trial balance prepared by a part-time bookkeeper, Erica prepared the following income statement for the quarter that ended March 31,
> Amazon.com, Inc.’s financial statements are presented in Appendix D. Financial statements of Wal-Mart Stores, Inc. are presented in Appendix E. The complete annual reports of Amazon and Wal-Mart, including the notes to the financial sta
> PepsiCo, Inc.’s financial statements are presented in Appendix B. Financial statements of The Coca-Cola Company are presented in Appendix C. The complete annual reports of PepsiCo and Coca-Cola, including the notes to the financial stat
> The following situation is in chronological order. 1. Parker decides to buy a surfboard. 2. He calls Surfing USA Co. to inquire about its surfboards. 3. Two days later, he requests Surfing USA Co. to make a surfboard. 4. Three days later, Surfing USA Co.
> Russell Company is a pesticide manufacturer. Its sales declined greatly this year due to the passage of legislation outlawing the sale of several of Russell’s chemical pesticides. In the coming year, Russell will have environmentally safe and competitive
> If your school has a subscription to the FASB Codifi cation, log in and prepare responses to the following. Instructions a. Access the glossary (“Master Glossary”) at the FASB Codification website to answer the following. 1. What is the definition of cu
> Matilda Company reported the following amounts (in euros) in 2020: Net income, €150,000; Unrealized gain related to revaluation of buildings, €10,000; and Unrealized loss on non-trading securities, €(35,000). Determine Matilda’s total comprehensive incom
> Explain the differences between depreciation expense and accumulated depreciation.
> Explain the difference between the “nature-of-expense” and “function-of-expense” classifications.
> The financial statements of Louis Vuitton are presented in Appendix F. The complete annual report, including the notes to its financial statements, is available at the company’s website. Instructions Identify five differences in the fo
> The following information is available for Sutter Bowling Alley at December 31, 2020. Buildings $128,800 Owner’s Capital $115,000 Accounts Receivable 14,520 Accumulated Depreciation—Buildings 42,600 Prepaid Insurance 4,680 Account
> The statement of financial position for Wallby Company includes the following accounts (in British pounds): Accounts Receivable £12,500, Prepaid Insurance £3,600, Cash £15,400, Supplies £5,200, and Debt Investments (short-term) £6,700. Prepare the curren
> In what ways does the format of a statement of financial of position under IFRS often diff er from a balance sheet presented under GAAP?
> The financial statements of Louis Vuitton are presented in Appendix F. The complete annual report, including the notes to its financial statements, is available at the company’s website. Instructions Visit Louis Vuittonâ€&#
> At June 30, 2020, the end of its most recent fiscal year, Green River Computer Consultants’ post-closing trial balance was as follows: The company underwent a major expansion in July. New staff was hired and more fi nancing was obtain
> On August 1, 2020, the following were the account balances of B&B Repair Services. During August, the following summary transactions were completed. Aug. 1 Paid $400 cash for advertising in local newspapers. Advertising fl yers will be included w
> Lars Linken opened Lars Cleaners on March 1, 2020. During March, the following transactions were completed. Mar. 1 Owner invested $15,000 cash in the company. 1 Borrowed $6,000 cash by signing a 6-month, 6%, $6,000 note payable. Interest will be paid
> Mike Greenberg opened Kleene Window Washing Co. on July 1, 2020. During July, the following transactions were completed. July 1 Owner invested $12,000 cash in the company. 1 Purchased used truck for $8,000, paying $2,000 cash and the balance on accoun
> Celina Harris believes revenues from credit sales may be recorded before they are collected in cash. Do you agree? Explain.
> What standard classifications are used in preparing a classified balance sheet?
> How do correcting entries differ from adjusting entries?
> Which of the following accounts would not appear in the post-closing trial balance? Interest Payable, Equipment, Depreciation Expense, Owner’s Drawings, Unearned Service Revenue, Accumulated Depreciation—Equipment, and Service Revenue.
> What are the content and purpose of a post-closing trial balance?
> It is the end of November and Natalie has been in touch with her grandmother. Her grandmother asked Natalie how well things went in her fi rst month of business. Natalie, too, would like to know if she has been profitable or not during November. Natalie
> Natalie had a very busy December. At the end of the month, after journalizing and posting the December transactions and adjusting entries, Natalie prepared the following adjusted trial balance. Instructions Using the information in the adjusted trial b
> The adjusted trial balance of Sang Company shows the following data pertaining to sales at the end of its fiscal year October 31, 2020: Sales Revenue $820,000, Freight-Out $16,000, Sales Returns and Allowances $25,000, and Sales Discounts $13,000. Instr
> Presented below are transactions related to R. Humphrey Company. 1. On December 3, R. Humphrey Company sold $570,000 of merchandise on account to Frazier Co., terms 1/10, n/30, FOB destination. R. Humphrey paid $400 for freight charges. The cost of the m
> On June 10, Diaz Company purchased $8,000 of merchandise on account from Taylor Company, FOB shipping point, terms 2/10, n/30. Diaz pays the freight costs of $400 on June 11. Damaged goods totaling $300 are returned to Taylor for credit on June 12. The f
> On September 1, Nixa Office Supply had an inventory of 30 calculators at a cost of $18 each. The company uses a perpetual inventory system. During September, the following transactions occurred. Sept. 6 Purchased 90 calculators at $22 each from York. 9
> What is the debit/credit eff ect of a prepaid expense adjusting entry?
> Presented below are selected accounts for T. Swift Company as reported in the worksheet at the end of May 2020. Ending inventory is $75,000. Instructions Complete the worksheet by extending amounts reported in the adjustment trial balance to the appro
> Presented below is information related to Chung Co. 1. On April 5, purchased merchandise on account from Jose Company for $21,000, terms 2/10, net/30, FOB shipping point. 2. On April 6, paid freight costs of $800 on merchandise purchased from Jose. 3. On
> This information relates to Nandi Co. 1. On April 5, purchased merchandise on account from Dion Company for $25,000, terms 2/10, net/30, FOB shipping point. 2. On April 6, paid freight costs of $900 on merchandise purchased from Dion Company. 3. On April
> Information related to Kerber Co. is presented below. 1. On April 5, purchased merchandise on account from Wilkes Company for $23,000, terms 2/10, net/30, FOB shipping point. 2. On April 6, paid freight costs of $900 on merchandise purchased from Wilkes.
> Below is a series of cost of goods sold sections for companies B, F, L, and R. Instruction Fill in the lettered blanks to complete the cost of goods sold sections. B F R $ 180 1,620 40 $ 70 $1,000 (g) $ Beginning inventory Purchases (j) 43,590 (k)
> On January 1, 2020, Brooke Hanson Corporation had inventory of $50,000. At December 31, 2020, Brooke Hanson had the following account balances. At December 31, 2020, Brooke Hanson determines that its ending inventory is $60,000. Instructions a. Comput
> The trial balance of A. Wiencek Company at the end of its fiscal year, August 31, 2020, includes these accounts: Inventory $19,500; Purchases $149,000; Sales Revenue $190,000; Freight-In $5,000; Sales Returns and Allowances $3,000; Freight-Out $1,000; an
> The trial balance columns of the worksheet using a perpetual inventory system for Balistreri Company at June 30, 2020, are as follows. Other data: Operating expenses incurred on account, but not yet recorded, total $1,500. Instructions Enter the trial
> The following are selected accounts for McPhan Company as reported in the worksheet using a perpetual inventory system at the end of May 2020. Instructions Complete the worksheet by extending amounts reported in the adjusted trial balance to the approp
> Financial information is presented below for three different companies. Instructions Determine the missing amounts. Hardy Wang Wholesalers Yee Cosmetics Grocery Sales revenue $90,000 $ (e) $122,000 Sales returns and allowances (a) 86,000 56,000 5,0
> The trial balance of Beowulf Company includes the following balance sheet accounts, which may require adjustment. For each account that requires adjustment, indicate (a) the type of adjusting entry (prepaid expense, unearned revenue, accrued revenue, or
> Presented below is financial information for two different companies. Instructions a. Determine the missing amounts. b. Determine the gross profit rates. (Round to one decimal place.) Summer Company Winter Company Sales revenue $92,000 (d) $ 5,000
> Financial Statement In 2020, Laquen Company had net sales of $900,000 and cost of goods sold of $522,000. Operating expenses were $225,000, and interest expense was $11,000. Laquen prepares a multiple-step income statement. Instructions a. Compute Laque
> An inexperienced accountant for Stahr Company made the following errors in recording merchandising transactions. 1. A $210 refund to a customer for faulty merchandise was debited to Sales Revenue $210 and credited to Cash $210. 2. A $180 credit purchase
> Financial Statement In its income statement for the year ended December 31, 2020, Anhad Company reported the following condensed data. Operating expenses $ 725,000 Interest revenue $ 28,000 Cost of goods sold 1,289,000 Loss on disposa
> Mr. McKenzie has prepared the following list of statements about service companies and merchandisers. 1. Measuring net income for a merchandiser is conceptually the same as for a service company. 2. For a merchandiser, sales less operating expenses is ca
> The adjusted trial balance for Phoebe Company is presented in E4.8. Instructions a. Prepare an income statement and an owner’s equity statement for the year. Phoebe did not make any capital investments during the year. b. Prepare a cla
> Phoebe Company ended its fiscal year on July 31, 2020. The company’s adjusted trial balance as of the end of its fiscal year is as follows. Instructions a. Prepare the closing entries using page J15. b. Post to Owner’
> Victoria Lee Company had the following adjusted trial balance. Instructions a. Prepare closing entries at June 30, 2020. b. Prepare a post-closing trial balance. Victoria Lee Company Adjusted Trial Balance For the Month Ended June 30, 2020 Adjusted
> Selected worksheet data for Bonita Company are presented below. Instructions a. Fill in the missing amounts. b. Prepare the adjusting entries that were made. Adjusted Account Titles Trial Balance Trial Balance Dr. Cr. Dr. Cr. Accounts Receivable 34
> The adjustments columns of the worksheet for Becker Company are shown below. 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
> The bookkeeper for Abduli Company asks you to prepare the following accrued adjusting entries at December 31. 1. Interest on notes payable of $400 is accrued. 2. Services performed but not recorded total $2,300. 3. Salaries earned by employees of $900 ha
> Worksheet data for Auburn Company are presented in E4.2. Instructions a. Journalize the closing entries at April 30. b. Post the closing entries to Income Summary and Owner’s Capital. Use T-accounts. c. Prepare a post-closing trial bal
> Worksheet data for Auburn Company are presented in E4.2. The owner did not make any additional investments in the business in April. Instructions Prepare an income statement, an owner’s equity statement, and a classified balance sheet.
> On December 31, the adjusted trial balance of Shihata Employment Agency shows the following selected data. Accounts Receivable $24,500 Service Revenue $92,500 Interest Expense 7,700 Interest Payable 2,200 Analysis shows that adjusting entries were m
> Krantz Company pays salaries of $15,000 every Monday for the preceding 5-day week (Monday through Friday). Assume December 31 falls on a Tuesday, so Krantz’s employees have worked 2 days without being paid at the end of the fiscal year. Instructions a.
> These financial statement items are for Basten Company at yearend, July 31, 2020. Salaries and wages payable $ 2,080 Notes payable (long-term) $ 1,800 Salaries and wages expense 48,700 Cash 14,200 Utilities expense 22,600 Accounts receivable 9,780
