Whistler Corp. performed services for a customer but has not received payment, nor has it recorded any entry related to the work. Which of the following types of accounts are involved in the adjusting entry: (a) asset, (b) liability, (c) revenue, or (d) expense? For the accounts selected, indicate whether they would be debited or credited in the entry.
> What items are disclosed on a post-closing trial balance. What is its purpose?
> Describe the nature of the Income Summary account, and identify the types of summary data that may be posted to this account.
> Some companies employ technologies that allow them to do a so-called “virtual close.” This enables them to close their books nearly instantaneously any time during the year. What advantages does a “virtual close” provide?
> Compute interest and find the maturity date for the following notes. Date of Interest Note Principal Rate (%) Terms (a) June 10 (b) July 14 (c) April 27 $80,000 $50,000 $12,000 60 days 90 days 75 days 6% 7% 8%
> Identify the account(s) debited and credited in each of the four closing entries, assuming the company has net income for the year.
> Ross Music Inc. reported the following selected information at March 31.2017 Total current assets………………………….……………. $262,787 Total assets……………………………………………….……439,832 Total current liabilities………………………………….…293,625 Total liabilities…………………………………………………. 376
> What is the relationship, if any, between the amount shown in the adjusted trial balance column for an account and that account’s ledger balance?
> (a) What information do accrual-basis financial statements provide that cash-basis statements do not? (b) What information do cash-basis financial statements provide that accrual-basis statements do not?
> The adjusted trial balance for Ryan Company is given in E4-21. (given below) Instructions Prepare the closing entries for the temporary accounts at August 31. RYAN COMPANY Trial Balance August 31, 2017 Before After Adjustment Dr. Adjustment Dr. Cr.
> Why is it possible to prepare financial statements directly from an adjusted trial balance?
> The adjusted trial balance for Ryan Company is given below. Instructions Prepare the income and retained earnings statements for the year and the classified balance sheet at August 31. RYAN COMPANY Trial Balance August 31, 2017 Before After Adjustme
> Review the transactions listed in E3-3 for Persimmon Corp. Classify each transaction as either an operating activity, investing activity, or financing activity, or if no cash is exchanged, as a noncash event. Data from E3-3: 1. Issued shares of common st
> Two students are discussing the use of a trial balance. They wonder whether the following errors, each considered separately, would prevent the trial balance from balancing. What would you tell them? (a) The bookkeeper debited Cash for $600 and credited
> Which balance sheet account provides evidence that Apple records sales on an accrual basis rather than a cash basis? Explain.
> You are provided with the following information taken from Moynahan Inc.’s March 31, 2017, balance sheet. Cash $ 11,000 Accounts receivable 20,000 Inventory 36,000 Property, plant, and equipment, net of deprecia
> The trial balances shown below are before and after adjustment for Ryan Company at the end of its fiscal year. Instructions Prepare the adjusting entries that were made. RYAN COMPANY Trial Balance August 31, 2017 Before After Adjustment Dr. Adjustme
> Review the transactions listed in E3-1 for Thyme Advertising Company. Classify each transaction as an operating activity, investing activity, or financing activity, or if no cash is exchanged, as a noncash event. Data fromE3-1 given below: 1. Issued comm
> The following are financial statements of Ohara Company. Additional information: The net cash provided by operating activities for 2017 was $190,800. The cash used for capital expenditures was $92,000. The cash used for dividends was $31,000. The weight
> Brad Tyler is confused about how accounting information flows through the accounting system. He believes information flows in this order: (a) Debits and credits are posted to the ledger. (b) Accounting transaction occurs. (c) Information is entered in th
> “An adjusting entry may affect more than one balance sheet or income statement account.” Do you agree? Why or why not?
> The accounts in the ledger of Rapid Delivery Service contain the following balances on July 31, 2017. Accounts Receivable………………………………$13,400 Prepaid Insurance………………………………….$ 2,200 Accounts Payable………………………………………8,400 Service Revenue……………………………………….15,50
> One-half of the adjusting entry is given below. Indicate the account title for the other half of the entry. (a) Salaries and Wages Expense is debited. (b) Depreciation Expense is debited. (c) Interest Payable is credited. (d) Supplies is credited. (e) Ac
> What is a trial balance and what are its purposes?
> Selected year-end account balances from the adjusted trial balance as of December 31, 2017, for Tippy Corporation is provided below. Instructions (a) Prepare closing entries (b) Determine the post-closing balance in Retained Earnings. Debit Credit Ac
> The bookkeeper for Birmingham Corporation made these errors in journalizing and posting. 1. A credit posting of $400 to Accounts Receivable was omitted. 2. A debit posting of $750 for Prepaid Insurance was debited to Insurance Expense. 3. A collection on
> The Public Company Accounting Oversight Board (PCAOB) was created as a result of the Sarbanes-Oxley Act. It has oversight and enforcement responsibilities over accounting firms in the United States. Address: http://www.pcaobus.org/, or go to www.wiley.co
> For each of the following items before adjustment, indicate the type of adjusting entry—prepaid expense, unearned revenue, accrued revenue, and accrued expense—that is needed to correct the misstatement. If an item could result in more than one type of a
> (a) What is a ledger? (b) Why is a chart of accounts important?
> A partial adjusted trial balance for Ramon Company is given below in E4-15. Instructions Prepare the closing entries at January 31, 2017. RAMON COMPANY Adjusted Trial Balance January 31, 2017 Debit Credit $ 700 1,560 Supplies Prepaid Insurance Salari
> The financial statements of Louis Vuitton are presented in Appendix F. Instructions for accessing and using the company’s complete annual report, including the notes to its financial statements, are also provided in Appendix F. Instructions Identify five
> This information relates to Rice Co. 1. On April 5, purchased merchandise from Jax Company for $28,000, terms 2/10, n/30. 2. On April 6, paid freight costs of $700 on merchandise purchased from Jax. 3. On April 7, purchased equipment on account for $30,0
> Beyers Corporation provides security services. Selected transactions for Beyers are presented below. Oct. 1 Issued common stock in exchange for $66,000 cash from investors. 2 Hired part-time security consultant. Salary will be $2,000 per month. First day
> On January 9, a company pays $6,200 for salaries, of which $1,100 was reported as Salaries and Wages Payable on December 31. Give the entry to record the payment.
> Journalize these accounting transactions. (a) Stockholders invested $12,000 in the business in exchange for common stock. (b) Insurance of $800 is paid for the year. (c) Supplies of $1,800 are purchased on account. (d) Cash of $7,500 is received for serv
> Greenock Limited has the following information available for accruals for the year ended December 31, 2017. The company adjusts its accounts annually. 1. The December utility bill for $425 was unrecorded on December 31. Greenock paid the bill on January
> Here is the ledger for Kriscoe Co. Instructions (a) Reproduce the journal entries for only the transactions that occurred on October 1, 10, and 20, and provide explanations for each. (b) Prepare a trial balance at October 31, 2017. (Hint: Compute ending
> Farley Bains, an auditor with Nolls CPAs, is performing a review of Ryder Company’s Inventory account. Ryder did not have a good year, and top management is under pressure to boost reported income. According to its records, the inventory balance at year-
> A company makes an accrued revenue adjusting entry for $780 and an accrued expense adjusting entry for $510. How much was net income understated or overstated prior to these entries? Explain.
> (a) Should accounting transaction debits and credits be recorded directly in the ledger accounts? (b) What are the advantages of first recording transactions in the journal and then posting to the ledger?
> Action Quest Games Inc. adjusts its accounts annually. The following information is available for the year ended December 31, 2017. 1. Purchased a 1-year insurance policy on June 1 for $1,800 cash. 2. Paid $6,500 on August 31 for 5 months’ rent in advanc
> Selected transactions from the journal of Baylee Inc. during its first month of operations are presented here. Instructions (a) Post the transactions to T-accounts. (b) Prepare a trial balance at August 31, 2017. Date Account Titles Debit Credit Cash
> (a) When entering a transaction in the journal, should the debit or credit be written first? (b) Which should be indented, the debit or the credit?
> Suppose the following information was reported by Gap, Inc. (a) Determine the overall percentage decrease in Gap’s total assets from 2013 to 2017. What was the average decrease per year? (b) Comment on the change in Gapâ€
> A company fails to recognize an expense incurred but not paid. Indicate which of the following types of accounts is debited and which is credited in the adjusting entry: (a) asset, (b) liability, (c) revenue, or (d) expense.
> On December 31, 2017, Waters Company prepared an income statement and balance sheet, but failed to take into account three adjusting entries. The balance sheet showed total assets $150,000, total liabilities $70,000, and stockholders’ e
> The required steps in the accounting cycle are listed in random order below. List the steps in proper sequence. (a) Prepare a post-closing trial balance (b) Prepare an adjusted trial balance. (c) Analyze business transactions. (d) Prepare a trial balance
> What are the basic steps in the recording process?
> Suppose the following items are taken from the 2017 balance sheet of Yahoo! Inc. (All dollars are in millions.) Goodwill………………………………………………..$3,927 Common stock………………………………………..6,283 Equipment……………………………………………….1,737 Accounts payable………………………………………..152 P
> The financial statements of Louis Vuitton are presented in Appendix F. Instructions for accessing and using the company’s complete annual report, including the notes to its financial statements, are also provided in Appendix F. Instructions Use the compa
> The T-accounts below summarize the ledger of Salvador’s Gardening Company, Inc. at the end of the first month of operations. Instructions (a) Prepare the journal entries (including explanations) that resulted in the amounts posted to t
> This is a partial adjusted trial balance of Ramon Company. Instructions Answer these questions, assuming the year begins January 1. (a) If the amount in Supplies Expense is the January 31 adjusting entry and $300 of supplies was purchased in January, wha
> The income statement for the Bonita Pines Golf Club Inc. for the month ended July 31 shows Service Revenue $16,000, Salaries and Wages Expense $8,400, Maintenance and Repairs Expense $2,500, and Income Tax Expense $1,000. The statement of retained earnin
> What are the normal balances for the following ac- counts of Apple? (a) Accounts Receivable, (b) Accounts Payable, (c) Sales, and (d) Selling, General, and Administrative Expenses.
> BeneMart, a large national retail chain, is nearing its fiscal year-end. It appears that the company is not going to hit its revenue and net income targets. The company’s marketing manager, Ed Mellon, suggests running a promotion selling $50 gift cards f
> Jolson Company has the following internal control procedures over cash receipts. Identify the internal control principle that is applicable to each procedure. (a) All over-the-counter receipts are entered in cash registers. (b) All cashiers are bonded. (
> Selected accounts of Villa Company are shown here. Instructions After analyzing the accounts, journalize (a) the July transactions and (b) the adjusting entries that were made on July 31. (Hint: July transactions were for cash.) Supplies Expense Sala
> Transaction data and journal entries for McCall Real Estate Agency are presented in E3-8 and E3-9. From E3-8 and E3-9 Oct. 1 Stockholders invest $30,000 in exchange for common stock of the corporation. 2 Hires an administrative assistant at an annual sal
> Using the data in BE4-12, identify the accounts that would be included in a post closing trial balance. Data from BE-12 (a) Accumulated Depreciation. (b) Depreciation Expense. (c) Retained Earnings (beginning). (d) Dividends. (e) Service Revenue. (f) Sup
> In a recent newspaper release, the president of Magnusson Company asserted that something has to be done about depreciation. The president said, “Depreciation does not come close to accumulating the cash needed to replace the asset at the end of its usef
> For each account listed here, indicate whether it generally will have debit entries only, credit entries only, or both debit and credit entries. (a) Cash. (b) Accounts Receivable. (c) Dividends. (d) Accounts Payable. (e) Salaries and Wages Expense. (f) S
> Abe Technologies provides maintenance service for computers and office equipment for companies throughout the Northeast. The sales manager is elated because she closed a $300,000, 3-year maintenance contract on December 29, 2016, two days before the comp
> The income statement of Norski Co. for the month of July shows net income of $2,000 based on Service Revenue $5,500, Salaries and Wages Expense $2,100, Supplies Expense $900, and Utilities Expense $500. In reviewing the statement, you discover the follow
> An inexperienced bookkeeper prepared the following trial balance that does not balance. Prepare a correct trial balance, assuming all account balances are normal. BIRELLIE COMPANY Trial Balance December 31, 2017 Debit Credit Cash $20,800 Prepaid Insu
> For the following transactions, indicate the account debited and the account credited. (a) Supplies are purchased on account. (b) Cash is received on signing a note payable. (c) Employees are paid salaries in cash.
> What types of accounts are debited and credited in an unearned revenue adjusting entry?
> On April 1, Adventures Travel Agency, Inc. began operations. The following transactions were completed during the month. 1. Issued common stock for $24,000 cash. 2. Obtained a bank loan for $7,000 by issuing a note payable. 3. Paid $11,000 cash to buy eq
> How do current liabilities differ from long-term liabilities?
> The ledger of Armour Lake Lumber Supply on July 31, 2017, includes the selected accounts below before adjusting entries have been prepared. An analysis of the company’s accounts shows the following. 1. The investment in the notes recei
> The following selected accounts appear in the adjusted trial balance for Deane Company. Indicate the financial statement on which each account would be reported. (a) Accumulated Depreciation. (b) Depreciation Expense. (c) Retained Earnings (beginning). (
> Victor Mineli, the new controller of Santorini Company, has reviewed the expected useful lives and salvage values of selected depreciable assets at the beginning of 2017. Here are his findings: All assets are depreciated by the straight-line method. San
> From the ledger balances below, prepare a trial balance for Peete Company at June 30, 2017. All account balances are normal. Accounts Payable………………………..……….$1,000 Service Revenue………………………..………..$8,600 Cash…………………………………………………….5,400 Accounts Receivable………
> Indicate whether each account is an asset, a liability, or a stockholders’ equity account, and whether it would have a normal debit or credit balance. (a) Accounts Receivable. (b) Accounts Payable. (c) Equipment. (d) Dividends. (e) Supplies.
> Steele Company purchased equipment for $15,000. By the current balance sheet date, the company had depreciated $7,000. Indicate the balance sheet presentation of the data.
> Selected transactions for Sophie’s Dog Care are as follows during the month of March. March 1 Paid monthly rent of $1,200. 3 Performed services for $140 on account. 5 Performed services for cash of $75. 8 Purchased equipment for $600. The company paid
> The unadjusted trial balance for Sierra Corp. is shown in Illustration 4-4 (page 155). Instead of the adjusting entries shown in the text at October 31, assume the following adjustment data. 1. Supplies on hand at October 31 total $500. 2. Expired insura
> In their annual reports to stockholders, companies must report or disclose information about all liabilities, including potential liabilities related to environmental clean-up. There are many situations in which you will be asked to provide personal fina
> Partial adjusted trial balance data for Levin Corporation are presented in BE4-10. The balance in Retained Earnings is the balance as of January 1. Prepare a retained earnings statement for the year assuming net income is $10,400.
> Selected transactions for Montes Company are presented below in journal form (without explanations). Post the transactions to T-accounts. Date Account Title Debit Credit May Accounts Receivable 3,800 Service Revenue 3,800 12 Cash 1,600 Accounts Recei
> Lance Morrow cannot understand why the cash realizable value does not decrease when an uncollectible account is written off under the allowance method. Clarify this point for Lance.
> What is the normal balance for each of these accounts? (a) Accounts Receivable. (b) Cash. (c) Dividends. (d) Accounts Payable. (e) Service Revenue. (f) Salaries and Wages Expense. (g) Common Stock.
> On January 1, 2017, Harvee Company had Accounts Receivable of $54,200 and Allowance for Doubtful Accounts of $3,700. Harvee Company prepares fi nancial statements annually. During the year, the following selected transactions occurred. Jan. 5 Sold $4,000
> Explain the differences between depreciation expense and accumulated depreciation.
> The May transactions of Chulak Corporation were as follows. May 4 Paid $700 due for supplies previously purchased on account. 7 Performed advisory services on account for $6,800. 8 Purchased supplies for $850 on account. 9 Purchased equipment for $1,000
> Al Medina, D.D.S., opened an incorporated dental practice on January 1, 2017. During the first month of operations, the following transactions occurred. 1. Performed services for patients who had dental plan insurance. At January 31, $760 of such service
> The July 28, 2007, issue of the Wall Street Journal includes an article by Kathryn Kranhold entitled “GE’s Accounting Draws Fresh Focus on News of Improper Sales Bookings.” Instructions Read the article and answer the following questions. (a) What improp
> The adjusted trial balance of Levin Corporation at December 31, 2017, includes the following accounts: Retained Earnings $17,200, Dividends $6,000, Service Revenue $32,000, Salaries and Wages Expense $14,000, Insurance Expense $1,800, Rent Expense $3,900
> Use the data in BE3-8 and journalize the transactions. (You may omit explanations.) Data from BE3-8: Aug. 1 Issues shares of common stock to investors in exchange for $10,000. 4 Pays insurance in advance for 3 months, $1,500. 16 Receives $900 from client
> State the rules of debit and credit as applied to (a) asset accounts, (b) liability accounts, and (c) the Common Stock account.
> “Depreciation is a process of valuation that results in the reporting of the fair value of the asset.” Do you agree? Explain.
> Transaction data for McCall Real Estate Agency are presented in E3-8.(given below) Oct. 1 Stockholders invest $30,000 in exchange for common stock of the corporation. 2 Hires an administrative assistant at an annual salary of $36,000. 3 Buys office furni
> Internal control is concerned only with enhancing the accuracy of the accounting records.” Do you agree? Explain.
> On December 31, 2016, when its Allowance for Doubtful Accounts had a debit balance of $1,400, Dallas Co. estimates that 9% of its accounts receivable balance of $90,000 will become uncollectible and records the necessary adjustment to Allowance for Doubt
> The ledger of Howard Rental Agency on March 31 of the current year includes the selected accounts below before adjusting entries have been prepared. An analysis of the accounts shows the following. 1. The equipment depreciates $280 per month. 2. Half of
> Vanessa Jones is the assistant chief accountant at IBT Company, a manufacturer of computer chips and cellular phones. The company presently has total sales of $20 million. It is the end of the first quarter and Vanessa is hurriedly trying to prepare a tr
> The trial balance of Woods Company includes the following balance sheet accounts. Identify the accounts that might require adjustment. For each account that requires adjustment, indicate (1) the type of adjusting entry (prepaid expense, unearned revenue,
> Tilton Corporation has the following transactions during August of the current year. Indicate (a) the basic analysis and (b) the debit–credit analysis illustrated on pages 111–116. Aug. 1 Issues shares of common stock to investors in exchange for $10,000
> Misty Reno, a beginning accounting student, believes debit balances are favorable and credit balances are unfavorable. Is Misty correct? Discuss.
> What types of accounts does a company debit and credit in a prepaid expense adjusting entry?
> This information relates to McCall Real Estate Agency. Oct. 1 Stockholders invest $30,000 in exchange for common stock of the corporation. 2 Hires an administrative assistant at an annual salary of $36,000. 3 Buys office furniture for $3,800, on account.
> Wang Company accumulates the following adjustment data at December 31. (a) Services performed but unbilled total $600. (b) Store supplies of $160 are on hand. The supplies account shows a $1,900 balance. (c) Utility expenses of $275 are unpaid. (d) Servi
