Question: Corlett Company has the following merchandise

> Mendoza Company accumulates the following adjustment data at December 31. 1. Services performed but unbilled total $3,000. 2. Supplies of $300 have been used. 3. Utility expenses of $552 are unpaid. 4. Services performed of $260 collected in advance. 5.

> Devin Wolf Company has the following balances in selected accounts on December 31, 2020. All the accounts have normal balances. The information below has been gathered at December 31, 2020. 1. Devin Wolf Company borrowed $10,000 by signing a 9%, one-ye

> Luong Corporation encounters the following situations: 1. Luong collects $1,300 from a customer in 2020 for services to be performed in 2021. 2. Luong incurs utility expense which is not yet paid in cash or recorded. 3. Luong’s employees worked 3 days in

> Carillo Industries collected $108,000 from customers in 2020. Of the amount collected, $25,000 was for services performed in 2019. In addition, Carillo performed services worth $36,000 in 2020, which will not be collected until 2021. Carillo Industries a

> The adjusted trial balance columns of the worksheet for Auburn Company are as follows. Instructions Complete the worksheet. Auburn Company Worksheet (partial) For the Month Ended April 30, 2020 Adjusted Trial Balance Income Statement Balance Sheet

> Chloe Davis has prepared the following list of statements about the time period assumption. 1. Adjusting entries would not be necessary if a company’s life were not divided into artifi cial time periods. 2. The IRS requires companies to fi le annual tax

> Financial Statement Presented below is information for Kaila Company for the month of March 2020. Cost of goods sold $215,000 Rent expense $ 30,000 Freight-out 7,000 Sales discounts 8,000 Insurance expense 6,000 Sales returns and allo

> Presented below is information related to Hoerl Co. for the month of January 2020. Instructions a. Prepare the necessary adjusting entry for inventory. b. Prepare the necessary closing entries. $ 12,000 Ending inventory per perpetual records Ending

> Tim Jarosz Company had the following account balances at year-end: Cost of Goods Sold $60,000, Inventory $15,000, Operating Expenses $29,000, Sales Revenue $115,000, Sales Discounts $1,200, and Sales Returns and Allowances $1,700. A physical count of inv

> The completed financial statement columns of the worksheet for Bray Company are shown as follows. Instructions a. Prepare an income statement, an owner’s equity statement, and a classified balance sheet. b. Prepare the closing entries

> The following accounts were taken from the financial statements of Giles Company. ________ Interest revenue ________ Owner’s capital ________ Utilities payable ________ Accumulated depreciation—equipment ________ Accounts payable ________ Equipment

> Hanson Company has an inexperienced accountant. During the first month on the job, the accountant made the following errors in journalizing transactions. All entries were posted as made. 1. The purchase of supplies for $650 cash was debited to Equipment

> Paloma Company shows the following balances in selected accounts of its adjusted trial balance. Prepare the closing entries at December 31. Supplies $32,000 Service Revenue $108,000 Supplies Expense 6,000 Salaries and Wages Expense 40,000 Accounts R

> Ming Company was organized on April 1, 2020. The company prepares quarterly financial statements. The adjusted trial balance amounts at June 30 are as follows. a. Determine the net income for the quarter April 1 to June 30. b. Determine the total asset

> Fiske Computer Services began operations in July 2020. At the end of the month, the company prepares monthly financial statements. It has the following information for the month. 1. At July 31, the company owed employees $1,300 in salaries that the compa

> The ledger of Milton, Inc. on March 31, 2020, includes the following selected accounts before adjusting entries. An analysis of the accounts shows the following. 1. Insurance expires at the rate of $400 per month. 2. Supplies on hand total $1,600. 3. T

> Jordan Carr is preparing a worksheet. Explain to Jordan how he should extend the following adjusted trial balance accounts to the financial statement columns of the worksheet. Service Revenue Accounts Receivable Notes Payable Accumulated Depreciation

> Financial Statement The following information is available for Berlin Corp. for the year ended -December 31, 2020: Other revenues and gains $ 12,700 Sales revenue $592,000 Other expenses and losses 13,300 Operating expenses 186,000 Co

> The trial balance of Beads and Bangles at December 31 shows Inventory $21,000, Sales Revenue $156,000, Sales Returns and Allowances $4,000, Sales Discounts $3,000, Cost of Goods Sold $92,400, Interest Revenue $5,000, Freight-Out $1,800, Utilities Expense

> Assume information similar to that in DO IT! 5.2. On October 5, Wang Company buys merchandise on account from Davis Company. The selling price of the goods is $4,800, and the cost to Davis Company is $3,100. On October 8, Wang returns defective goods wit

> Susan Hardy, a lawyer, accepts a legal engagement in March, performs the work in April, and is paid in May. If Hardy’s law firm prepares monthly financial statements, when should it recognize revenue from this engagement? Why?

> On October 5, Wang Company buys merchandise on account from Davis Company. The selling price of the goods is $4,800, and the cost to Davis Company is $3,100. On October 8, Wang returns defective goods with a selling price of $650 and a fair value of $100

> Indicate whether the following statements are true or false. If false, indicate how to correct the statement. 1. A merchandising company reports gross profi t but a service company does not. 2. Under a periodic inventory system, a company determines the

> Presented below is the format of the worksheet using the periodic inventory system presented in Appendix 5B. Indicate where the following items will appear on the worksheet: (a) Cash, (b) Beginning inventory, (c) Accounts payable, and (d) Ending invent

> Assume the same information as in BE5.12 and also that Morgan Company has beginning inventory of $60,000, ending inventory of $90,000, and net sales of $730,000. Determine the amounts to be reported for cost of goods sold and gross profit. Information t

> Assume Kupfer Company has the following reported amounts: Sales revenue $510,000, Sales returns and allowances $15,000, Cost of goods sold $330,000, and Operating expenses $90,000. Compute the following: (a) net sales, (b) gross profit, (c) income from o

> 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.

> 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

> 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 e

> 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