This exercise continues the accounting process for Sensations Salon, Inc., from the Continuing Exercise in Chapter 2. Refer to the T-accounts and the trial balance that you prepared for Sensations Salon, Inc., at May 31, 2018. Requirements 1. Open these additional T-accounts: Accumulated Depreciation, Equipment; Depreciation Expense, Equipment; and Supplies Expense. 2. A physical count shows $88 of supplies on hand at May 31, 2018. Depreciation of equipment for the month totals $53. Journalize any required adjusting journal entries and post to the T-accounts, identifying all items by date. 3. Prepare the adjusted trial balance at May 31, 2018. 4. Journalize and post the closing entries at May 31. Denote each closing amount as Clo and an account balance as Bal. 5. Prepare a post-closing trial balance at May 31, 2018.
> Record the following petty cash transactions of Apex, Inc., in the journal. Explanations are not required.
> Record the following petty cash transactions of Wilson Supply in the journal. Explanations are not required.
> Wilson’s Auto Repair ended 2017 with Accounts Receivable of $85,000 and a credit balance of $11,000 in Allowance for Uncollectible Accounts. During 2018, Wilson’s Auto Repair had the following activity: a. Service revenue earned on account, $545,000 b. C
> During its first year of operations, World Wide Travel earned revenue of $620,000 on account. Industry experience suggests that World Wide Travel’s uncollectible accounts will amount to 3 percent of revenues. On December 31, 2018, accounts receivable tot
> Clocktower Cleaning, Inc., had the following transactions for the month of March 2018: The following T-accounts have been set up for Clocktower Cleaning, Inc., with their beginning balances as of March 1, 2018: Requirements 1. Journalize the transact
> The T-account for Cash and the bank statement of Sinclair Food Services for the month of October 2018 follow: Prepare Sinclair Food Services’ bank reconciliation at October 31.
> Calculate accounts receivable turnover for the following two companies:
> Calculate the quick assets and the quick ratio for each of the following companies:
> For each of the following notes receivable, compute the amount of interest revenue earned during 2018. Use a 360-day year, and round to the nearest dollar.
> Umbrella.com had the following balances on December 31, 2018, before the year-end adjustments: The aging of receivables yields these data: Journalize Umbrella’s entry to adjust the allowance account to its correct balance on Decembe
> Bright Smile Dental Group started 2018 with Accounts Receivable of $134,000 and a credit balance of $9,000 in Allowance for Uncollectible Accounts. The following information relates to Bright Smile Dental’s 2018 operations: a. Credit sales, $322,000 b. C
> Assume Bob’s Boards has the following LIFO perpetual inventory record for skateboards for the month of March: At March 31, the accountant for Bob’s Boards determines that the current replacement cost of the ending in
> Match the terms with the definitions. ____ 1. A company must perform strictly proper accounting only for items significant to the business’s financial statements. ____ 2. Reporting the least favorable figures in the financial statements. ____ 3. A busine
> Swanson, Incorporated’s sales for the year ended March 31, 2018, were $1,275,000, and cost of goods sold amounted to $728,000. Beginning inventory was $55,000, and ending inventory was $68,000. Compute Swanson, Incorporated’s rate of inventory turnover f
> Inland Industrial Supply’s income statement data for the year ended December 31, 2018, follow. Assume the ending inventory was accidentally overstated by $3,200 in 2018. How would the inventory error affect Inland Industrial Supply&ac
> The transactions for Zane’s Creations, Inc., for the month of January 2018 are posted in the following T-accounts: Requirements 1. Calculate account balances at January 31, 2018. 2. Prepare the trial balance for Zane’
> Inland Industrial Supply’s income statement data for the year ended October 31, 2018, follow. Assume the ending inventory was accidentally overstated by $2,800. What are the correct amounts for cost of goods sold and gross profit?
> Suppose Paul’s Hardware sells merchandise on account, terms 1/10, n/45, for $920 (the cost of the inventory is $550) on March 17, 2018. Paul’s Hardware later received $290 of goods (cost, $175) as sales returns on March 21, 2018. The customer paid the ba
> Suppose Peter’s Hardware sells merchandise on account, terms 2/10, n/30, for $640 (the cost of the inventory is $360) on March 17, 2018. Peter’s Hardware later received $185 of goods (cost, $110) as sales returns on March 21, 2018. The customer paid the
> Use the data from S4-11 to calculate the gross profit percentage and the net income percentage for 2018 for The Skate Shed, Inc. S4-11: The accounting records for The Skate Shed, Inc., reflected the following amounts at the end of January 2018: Prepar
> Use the data from S4-11 to prepare the classified balance sheet for The Skate Shed, Inc., at January 31, 2018. Use the report format. S4-11: The accounting records for The Skate Shed, Inc., reflected the following amounts at the end of January 2018: P
> The accounting records for The Skate Shed, Inc., reflected the following amounts at the end of January 2018: Prepare The Skate Shed’s multistep income statement for the fiscal year ended January 31, 2018.
> Selected account balances for Maria’s Mocha at the end of the month are listed below in random order: Identify or compute the following amounts for Maria’s Mocha: a. Total current assets b. Total current liabilities
> After closing its accounts at July 31, 2018, Anderson Realty, Inc., had the following account balances: Prepare Anderson Realty’s post-closing trial balance at July 31, 2018. List the accounts in proper order.
> For the following series of journal entries, indicate whether each is an adjusting entry (ADJ) or a closing entry (CL).
> The following selected accounts and balances appear on the adjusted trial balance for Waverly, Inc., on July 31, 2018: 1. What is the net income or net loss? 2. What is the change in Retained Earnings? 3. Journalize the closing entries required.
> Wu & Associates, Inc., completed the following transactions during March 2018, its first month of operations: Requirement 1. Using the steps outlined in the five-step transaction analysis, journalize the transactions of Wu & Associates, Inc. Li
> From the following list of accounts from the adjusted trial balance, identify each as an asset, liability, stockholders’ equity, revenue, or expense. Use the most detailed account type appropriate. Also, state whether each account is a
> Complete the following table. For each account listed, identify the type of account, how the account is increased (debit or credit), and how the account is decreased (debit or credit). Use the most detailed account type appropriate.
> To the left of each account listed on the trial balance, indicate the financial statement that will include the account: income statement (IS), statement of retained earnings (RE), or balance sheet (BS).
> The accounting records for Audio Masters Corp., contain the following amounts on April 30, 2018. The accounts appear in no particular order. Prepare the trial balance for Audio Masters at April 30, 2018. List the accounts in proper order.
> After operating for a month, Rosa Anderson’s dental practice completed the following transactions during September: Using the steps outlined in the five-step transaction analysis, record the transactions in the journal
> Rosa Anderson opened a dental practice as a corporation in Spokane, Washington. The following transactions took place in August: Using the steps outlined in the five-step transaction analysis, record the transactions in the journal.
> Haskins, Inc., began operations on January 1, 2018. The seven transactions recorded during January by the company accountant are shown in the following T-accounts: Complete the following table. For each transaction shown, determine the accounts affecte
> Sanchez Towing Service, Inc. earns service revenue by towing vehicles for AAA. Sanchez Towing Service’s main expenses are the salaries paid to its employees. Account for the following transactions in the expanded accounting equation: a. Sanchez Towing Se
> Calculate each account balance.
> Resto Motors, Inc., restores antique automobiles. The retained earnings balance of the corporation was $22,400 at December 31, 2017. During 2018, the corporation paid $85,000 in dividends to its stockholders. At December 31, 2018, the businessâ
> Using the steps outlined in the five-step transaction analysis, record the following transactions in the general journal for Gulaine Plumbing, Inc. Explanations are not required.
> Dori Cruz started an interior design company called Interiors by Design, Inc., on April 1, 2018. The following amounts summarize the financial position of her business on April 14, 2018, after the first two weeks of operations: During the remainder of
> Shanna Peters worked as an accountant at a local accounting firm for five years after graduating from college. She recently opened her own accounting practice, which she operates as a corporation. The name of the new entity is Peters and Associates, Inc.
> On August 1, City Delivery creates a petty cash fund with a balance of $450. During August, Eva Unger, the fund custodian, signs the following petty cash tickets: On August 31, before replenishment, the fund contains these tickets plus cash of $209. Th
> On March 1, The Party Place creates a petty cash fund with a balance of $325. During March, Sue Bemis, the fund custodian, signs the following petty cash tickets: On March 31, before replenishment, the fund contains these tickets plus cash of $23. The
> The classified balance sheet and selected income statement data for Amarillo Auto Supply, Inc., as of December 31, 2018, are presented next. Requirements 1. Calculate Amarillo Auto Supply’s debt ratio and interest coverage ratio as o
> The accounting records of Boardman Corp. include the following items at December 31, 2018: Requirement 1. Report these liabilities on Boardman’s balance sheet at December 31, 2018, including headings.
> On March 1, 2018, Rock Canyon Golf Course issued $750,000 of 10-year, 9 percent bonds payable. The bonds were sold for $765,000. The bonds pay interest each August 31 and February 28, and any discount or premium is amortized using straight-line amortizat
> Assume that on April 1, 2018, Yukon Corp. issued 10 percent, 10-year bonds payable with maturity value of $800,000. The bonds pay interest on March 31 and September 30, and Yukon amortizes any premium or discount using the straight-line method. Yukon’s f
> Kamin Corp. completed the following transactions in 2018: Requirements 1. Complete the following amortization schedule for the first four payments on the $150,000 mortgage note, assuming semiannual payments of $10,897. Round amounts to the nearest doll
> Following are pertinent facts about events during the current year at Zepher Snowboards. a. December sales totaled $216,000, and Zepher collected sales tax of 6 percent. The sales tax will be sent to the state of Montana early in January. b. Zepher owes
> Presented here is information for Eliason, Inc., for the year ended August 31, 2018. Requirements 1. What is the beginning stockholders’ equity of Eliason, Inc.? 2. What is the ending stockholders’ equity of Eliason,
> The following transactions of Brewton’s Marine Supply occurred during 2018 and 2019: Requirement 1. Record the transactions in the company’s journal. Explanations are not required.
> The classified balance sheet and selected income statement data for Shreveport Auto, Inc., as of December 31, 2018, are presented next. Requirements 1. Calculate Shreveport Auto, Inc.’s debt ratio and interest coverage ratio as of Dec
> The accounting records of Azul Industries, Inc., include the following items at December 31, 2018: Requirement 1. Report these liabilities on Azul Industries’ balance sheet at December 31, 2018, including headings.
> On May 1, 2018, Hudson Theatres issued $600,000 of 25-year, 10 percent bonds payable. The bonds were sold for $552,000. The bonds pay interest each October 31 and April 30, and any discount or premium is amortized using straight-line amortization. Requi
> Assume that on February 1, 2018, Sierra Corp. issues 7 percent, 10-year bonds payable with a maturity value of $500,000. The bonds pay interest on January 31 and July 31, and Sierra amortizes any premium or discount using the straight-line method. Sierra
> Paiscik Corp. completed the following transactions in 2018: Requirements 1. Complete the following amortization schedule for the first four payments on the $190,000 mortgage note, assuming semiannual payments of $12,360. Round amounts to the nearest do
> Following are pertinent facts about events during the current year at Sun Mountain Snowboards. a. December sales totaled $207,000, and Sun Mountain collected sales tax of 5 percent. The sales tax will be sent to the state of Oregon early in January. b. S
> The following transactions of Newport Marine Supply occurred during 2018 and 2019 Requirement 1. Record the transactions in the company’s journal. Explanations are not required.
> The following are selected data for Patina Industries: Requirements 1. Calculate the return on assets (ROA) and the fixed asset turnover ratio for Patina Industries for 2017 and 2018. Round your answers to two decimal places. 2. Have the ratios improve
> The Log Cabin Cafe acquired Hungry Boy Diners. The financial records of Hungry Boy Diners included: Book Value of Assets ....................................................................................... $440,000 Market Value of Assets ............
> If a company with a December 31 year-end were to borrow money in the form of a fourmonth note on November 1, what accounts would be debited on March 1 when it pays the note off?
> On January 4, 2018, Crux Systems, Inc., paid $281,200 for equipment used in manufacturing automotive supplies. In addition to the basic purchase price, the company paid $2,800 for transportation charges; $1,100 for insurance for the equipment while in tr
> Brown Freightway provides freight service. The company’s balance sheet includes Land, Buildings, and Motor-Carrier Equipment. Brown Freightway uses a separate accumulated depreciation account for each depreciable asset. During 2018, Bro
> Zenith Manufacturing incurred the following costs in acquiring land, making land improvements, and constructing and furnishing a new building: Zenith Manufacturing depreciates buildings over 35 years, land improvements over 15 years, and furniture over
> The following are selected data for Armada Industries: Requirements 1. Calculate the return on assets (ROA) and the fixed asset turnover ratio for Armada Industries for 2017 and 2018. Round your answers to two decimal places. 2. Have the ratios improve
> Tico’s Restaurants acquired Dave’s Diner. The financial records of Dave’s Diner included: a. $8,000 loss b. $2,000 gain c. $3,000 gain d. $3,500 loss Book Value of Assets ..................................................................................
> Allen Construction, Inc., had a piece of equipment that cost $32,000 and had accumulated depreciation of $24,000. Requirement 1. Record the disposition of the equipment assuming the following independent situations: a. Allen Construction discarded the e
> On January 3, 2018, Grey Enterprises, Inc., paid $280,600 for equipment used in manufacturing automotive supplies. In addition to the basic purchase price, the company paid $500 for transportation charges, $300 for insurance for the equipment while in tr
> Regal Freightway provides freight service. The company’s balance sheet includes Land, Buildings, and Motor-Carrier Equipment. Regal Freightway uses a separate accumulated depreciation account for each depreciable asset. During 2018, Reg
> Arrow Manufacturing incurred the following costs in acquiring land, making land improvements, and constructing and furnishing a new building. Arrow Manufacturing depreciates buildings over 40 years, land improvements over 20 years, and furniture over 1
> The comparative financial statements of Appleway Flowers, Inc., for 2018, 2017, and 2016 include the following selected data: Requirements 1. Compute these ratios for 2018 and 2017: a. Quick ratio b. Current ratio c. Accounts receivable turnover (assum
> If a company with a December 31 year end lends money in the form of a six-month note on November 1, which accounts will be credited when the note is paid off on April 30?
> Record the following transactions in the journal of Sounds on Wheels, Inc. Explanations are not required. Use a 360-day year for interest computations and round to the nearest dollar.
> KJ Auto Sales, Inc., received the following notes during 2018: Requirements 1. Identifying each note by number, compute the total interest on each note over the note term using a 360-day year, and determine the due date and maturity value of each note.
> Checker Flag Auto Parts, Inc., completed the following selected transactions during 2018: Requirements 1. Open T-accounts for Allowance for Uncollectible Accounts and Bad Debt Expense. These accounts have beginning balances of $1,100 (cr.) and $0, resp
> The March bank statement of Sparky’s Sub Shop just arrived from Inland Bank. To prepare the bank reconciliation, you gather the following additional data: a. The following checks are outstanding on March 31: b. On March 31, Sparky&a
> The May cash records of Van Brunt Coffee, Inc., follow: Van Brunt Coffee, Inc.’s Cash account shows a balance of $6,191 on May 31. On May 31, Van Brunt Coffee, Inc., received the following bank statement: Additional data for the ban
> The comparative financial statements of O’Doherty’s Irish Grille for 2018, 2017, and 2016 include the following selected data: Requirements 1. Compute these ratios for 2018 and 2017: a. Quick ratio b. Current ratio c
> Record the following transactions in the journal of Redmond Printing Supply, Inc. Explanations are not required. Use a 360-day year for interest computations and round to the nearest dollar.
> Titan Truck, Inc., received the following notes during 2018: Requirements 1. Identifying each note by number, compute the total interest on each note over the note term using a 360-day year, and determine the due date and maturity value of each note. R
> Turyin Auto Parts, Inc., completed the following selected transactions during 2018: Requirements 1. Open T-accounts for Allowance for Uncollectible Accounts and Bad Debt Expense. These accounts have beginning balances of $1,200 (cr.) and $0, respective
> The December bank statement of Charly’s Burger Haven, Inc., just arrived from United Bank. To prepare the bank reconciliation, you gather the following additional data: a. The following checks are outstanding at December 31: b. On D
> Financial statements are defined as “historical reports that communicate financial information about a business to people or organizations outside the company.” Why is the word historical used?
> The September cash records of Povich Industrial, Inc., follow: Povich Industrial’s Cash account shows a balance of $5,941 on September 30. On September 30, Povich Industrial, Inc., received the following bank statement: Additional d
> Sundance Marine Supply, Inc., lost its entire inventory in a hurricane that occurred on March 31, 2018. Over the past five years, gross profit has averaged 35 percent of net sales. The company’s records reveal the following data for the
> Savemore Supply, Co., shows the following financial statement data for 2016, 2017, and 2018: Before issuing the 2018 statements, auditors found that the ending inventory for 2016 was overstated by $4,000 and that the ending inventory for 2018 was under
> Because of a nationwide recession, Computer World, Inc.’s merchandise inventory is gathering dust. It is now October 31, 2018, and the $66,800 that Computer World, Inc., paid for its ending inventory is $2,300 higher than current replacement cost. Before
> Titan Truck Parts, Inc., uses the LIFO inventory method and values its inventory using the lower-of-cost-or-market (LCM) rule. Titan Truck Parts, Inc., has the following account balances at December 31, 2018, before releasing its financial statements for
> Monitor Industries, Inc., completed the following inventory transactions during the month of March: Requirements 1. Without resorting to calculations, determine which inventory method will result in Monitor Industries, Inc., paying the lowest income ta
> Refer to the data for Star Line Equipment, Inc., in P5-48B. However, assume Star Equipment, Inc., uses the average cost method. Requirements 1. Prepare a perpetual inventory record using average cost. Round the average unit cost to the nearest cent and
> Star Equipment, Inc., sells hand-held engine analyzers to automotive service shops. Star Equipment, Inc., started April with an inventory of 75 units that cost a total of $10,500. During the month, Star Equipment, Inc., purchased and sold merchandise on
> Pugliese Whole Foods, Inc., has the following information for the years ending December 31, 2018, and December 31, 2017: Requirements 1. Compute the rate of inventory turnover for Pugliese Whole Foods, Inc., for the years ended December 31, 2018, and D
> This problem continues the accounting process for Fitness Equipment Doctor, Inc., from the Continuing Problem in Chapter 2. The trial balance for Fitness Equipment Doctor, Inc., at April 30, 2018, should look like this: The following transactions occur
> Gallinger Enterprises, Inc., lost its entire inventory in a hurricane that occurred on May 31, 2018. Over the past five years, gross profit has averaged 38 percent of net sales. The company’s records reveal the following data for the mo
> Build Right Supply, Co., shows the following financial statement data for 2016, 2017, and 2018. Before issuing the 2018 statements, auditors found the ending inventory for 2016 was understated by $1,000 and that the ending inventory for 2018 was overstat
> Because of a nationwide recession, Liquidation Universe, Inc.’s merchandise inventory is gathering dust. It is now November 30, 2018, and the $162,750 that Liquidation Universe, Inc., paid for its ending inventory is $3,125 higher than the current replac
> Mid Valley Sporting Goods, Inc., uses the LIFO inventory method and values its inventory using the lower-of-cost-or-market (LCM) rule. Mid Valley Sporting Goods, Inc., has the following account balances at December 31, 2018, before releasing its financia
> MAC Industries, Inc., completed the following inventory transactions during the month of July: Requirements 1. Without resorting to calculations, determine which inventory method will result in MAC Industries, Inc., paying the lowest income taxes. 2. Pr
> Refer to the data for Inland Equipment Sales, Inc., in P5-40A. However, assume Inland Equipment Sales, Inc., uses the average cost method. Requirements 1. Prepare a perpetual inventory record using average cost. Round the average unit cost to the neares
> Inland Equipment Sales, Inc., sells hand-held engine analyzers to automotive service shops. Inland Equipment Sales, Inc., started November with an inventory of 55 units that cost a total of $8,470. During the month, Inland Equipment Sales, Inc., purchase
> Use the data for Lake City Industries, Inc., from P4-50B. Requirements 1. Calculate the earnings per share for Lake City Industries for the year. Assume an average of 25,000 common shares were outstanding during the year. Round to the nearest cent. 2. T
