Wilson Corp. issued 6.5 percent, 10-year bonds payable with a maturity value of $30,000 on January 1, 2018. Journalize the following transactions and include an explanation for each entry. The market rate of interest equaled the stated rate at the date of issuance. a. Issuance of the bond payable at par on January 1, 2018 b. Payment of semiannual interest on July 1, 2018 c. Payment of the bonds payable at maturity (give the date)
> The following is the adjusted trial balance of Inland Home Health, Inc., for December 31, 2018. Requirement 1. Journalize the closing entries at December 31, 2018.
> The following post-closing trial balance was prepared for Sepia Studios, Inc., but some balances were entered in the wrong column. Prepare a corrected post-closing trial balance. Assume all accounts have normal balances and the amounts are correct.
> From the following accounts of Classy Restorations, Inc., prepare the business’s statement of retained earnings for the year ended November 30, 2018:
> 1. Prepare Ramirez Electrical, Inc.’s closing entries using the following selected accounts at November 30, 2018: 2. What is Ramirez Electrical, Inc.’s ending Retained Earnings balance at November 30, 2018?
> The adjusted trial balance for Chef on Demand Catering, Inc., is presented below. Prepare the income statement and statement of retained earnings for Chef on Demand Catering, Inc., for the month ended January 31, 2018. Also prepare a balance sheet at Jan
> The adjusted trial balances of Allied Coatings, Inc., at October 31, 2018, and October 31, 2019, include these amounts: Analysis of the accounts at October 31, 2019, reveals these transactions for the past 12 months: Purchase of supplies â€
> Sentry Alarm, Inc., began the year with $19,000 of common stock and $22,600 of retained earnings. On June 5, investors bought $12,000 of additional stock in the business. On September 22, the business purchased land valued at $65,000. The income statemen
> This exercise continues the Sensations Salon, Inc., exercise begun in Chapter 1. Consider the June transactions for Sensations Salon presented in Chapter 4. (Cost data have been removed from the sale transactions.) Refer to the T-accounts for Sensation
> The accountant for Specialty Painting, Inc., posted adjusting entries (a) through (e) to the accounts at May 31, 2018. Selected balance sheet accounts and all the revenues and expenses of the entity follow in T-account form. Requirements 1. Explain the
> The accounting records of Travel Time, Inc., include the following unadjusted balances at November 30: Accounts Receivable, $900; Supplies, $650; Prepaid Insurance, $2,000; Accumulated Depreciation, Equipment, $2,800; Salaries Payable, $0; Unearned Servi
> The adjusting entries for the following adjustments were omitted at period-end: a. Prepaid rent expired, $1,300 b. Depreciation, $1,000 c. Employee salaries owed for Monday through Wednesday of a five-day workweek, $2,200 d. Supplies used during the peri
> Calculate the missing amounts for each of the following Prepaid Insurance situations. For situation A, journalize the adjusting entry. Consider each situation separately.
> James Cyr has trouble keeping his debits and credits equal. During a recent month, James made the following errors: a. James recorded a $750 rent payment by debiting Rent Expense for $75 and crediting Cash for $75. b. In recording a $300 payment on accou
> McGuire Construction, Inc., completed the following transactions during September 2018, its first month of operations: Requirements 1. Open or set up T-accounts in the ledger for the following accounts: Cash, Accounts Receivable, Supplies, Equipment, F
> Julie Denend started a mobile DJ business named Mobile Music, Inc., on November 1, 2018. In the month of November, before providing services to customers, the business incurred six transactions, which have been posted to the accounts as follows: Requir
> White Glove Cleaning, Inc. had the following transactions for the month of September 2018: The following T-accounts have been set up for White Glove Cleaning, Inc., with their beginning balances as of September 1, 2018: Requirements 1. Journalize the
> The transactions for Inspired Design, Inc., for the month of March 2018 are posted in the following T-accounts: Requirements 1. Calculate account balances at March 31, 2018. 2. Prepare the trial balance for Inspired Design, Inc., at March 31, 2018.
> Rudenko & Associates, Inc., completed the following transactions during July 2018, its first month of operations: Requirement 1. Using the steps outlined in the five-step transaction analysis, journalize the transactions of Rudenko & Associates
> Let’s continue our accounting for Sensations Salon, Inc., from Chapter 3. Starting in June, Sensations Salon, Inc., began selling its own brand of shampoo, which it purchases from a wholesaler. During June, Sensations Salon, Inc., compl
> Using the steps outlined in the five-step transaction analysis, record the following transactions in the general journal for Marx Plumbing, Inc. Explanations are not required.
> Advanced Auto, Inc., made six journal entries during the month of May: Requirement 1. For each transaction shown, determine the accounts affected, the type of account, whether the account increases or decreases, and whether it would be recorded in the
> A client notified you that she just closed a deal to purchase an existing business. It’s a pretty hefty purchase. As part of the purchase of the business, she receives the land, the building, all the equipment, and the entire merchandis
> Imagine you are Bill Conan, the owner of Conan Consultants. It’s the end of the month, and cash flow has been a little slow, as it usually is during this time of the accounting period. It just seems to be a little slower than usual this month. You know t
> You own a business, like the Millers of the Bold City Brewery. Your business is called BCS Consultants, Inc. However, your business does not brew beverages; rather, you help individuals start new businesses. It’s late on a Friday aftern
> Think about operating a business like the Millers did when they created the Bold City Brewery. Your business is called BCS Consultants, Inc. You just received your year-end financial statements from your CPA and you notice one very disturbing item. The n
> Like the Millers of the Bold City Brewery, you own a business. Your business has been doing pretty well since you first opened the doors five years ago. For the past six months or so, you’ve been thinking about expanding the business. Some property avail
> You’re the owner of a business, like the Millers of the Bold City Brewery. You’ve made an appointment to take your year-end financial statements to the bank. You know that your banker is usually concerned about two things: your net income and the amount
> You own a business. You are like the Millers of the Bold City Brewery. You’re pretty excited about your business’s cash balance at the end of the month, because you had planned to take a large bonus. With that bonus you were going to make a down payment
> Jill Conway has trouble keeping her debits and credits equal. During a recent month, Jill made the following errors: a. Jill recorded an $800 rent payment by debiting Rent Expense for $80 and crediting Cash for $80. b. In recording a $250 payment on acco
> Think about owning a business like the Bold City Brewery. It’s the end of the year, and your warehouse manager just finished taking a physical count of the inventory on hand. Because you use the perpetual inventory method with a relatively sophisticated
> You are the owner of a business, like the Millers of the Bold City Brewery. The end of the year is approaching. You’re going to meet with your CPA next week to do some end-of-the-year tax planning. In preparation for that meeting, you review last month’s
> Match the term with its definition by placing the corresponding letter in the space provided: ______ 1. A contra-account, related to accounts receivable, that holds the estimated amount of uncollectible receivables ______ 2. A method of accounting for un
> Prepare the current assets section of the balance sheet as of May 31, 2018, for Spices and More, Inc., using the following information: Accounts Receivable .............................................................................................. $5
> Make the necessary journal entries arising from Greenacres Auto Center’s bank reconciliation, presented next. Date each entry May 31 and include an explanation with each entry.
> Suppose A-1 Sports purchases $83,000 of sportswear on account from Outdoor Wear, Inc., on December 1, 2018. Credit terms are 2/10, n/45. A-1 Sports pays Outdoor Wear, Inc., on December 8, 2018. 1. Journalize the transactions for A-1 Sports on December 1,
> Match the accounting term with the corresponding definition. ____ 1. Accumulated depreciation ____ 2. Adjusted trial balance ____ 3. Adjusting entry ____ 4. Book value ____ 5. Contra-account ____ 6. Depreciation ____ 7. Long-term asset a. An account whos
> Match the accounting term with the corresponding definition. ____ 1. Accrual accounting ____ 2. Matching principle ____ 3. Revenue recognition principle ____ 4. Fiscal year a. Any consecutive 12-month period b. Records the impact of a business event as i
> Allison Supply, Inc., is planning to issue long-term bonds payable to fund a major expansion. For each of the following questions, identify whether the bond price involves a discount, a premium, or par value. a. The stated interest rate on the bonds is 6
> Determine whether the following bonds payable will be issued at par, at a premium, or at a discount: a. The market interest rate is 5 percent. Wilson Corp. issues bonds payable with a stated rate of 61∕2 percent. b. Apex, Inc., issued 61∕2 percent bonds
> Willis Construction, Inc., completed the following transactions during June 2018, its first month of operations: Requirements 1. Open, or set up, T-accounts in the ledger for the following accounts: Cash, Accounts Receivable, Supplies, Equipment, Furn
> McCormack Co. purchased a building and issued a $360,000, 6 percent mortgage note on January 1, 2018. Payments of $13,008 are made semiannually on June 30 and December 31 each year. Record the journal entries for (a) issuance of the note on January 1, 20
> Ling Company issued a $280,000, 4 percent mortgage note on January 1, 2018, to purchase a building. Payments of $8,055 are made semiannually. Complete the following amortization schedule (partial) for Ling Company. Round to the nearest dollar.
> Phatboy Motorcycles, Inc., a motorcycle manufacturer, included the following note in its annual report: Requirements 1. Why are product liability losses considered contingent liabilities? 2. How can a contingent liability become a real liability for Ph
> On April 30, 2018, Dawson Co. borrowed $6,000 on a one-year, 9 percent note payable. What amounts would Dawson Co. report for the note payable and the related interest payable on its balance sheet at July 31, 2018, and on its income statement for the yea
> Wildflower Magazine, Inc., includes the following selected accounts in its general ledger at December 31, 2018: Requirement 1. Prepare the liabilities section of Wildflower Magazine’s balance sheet at December 31, 2018, to show how th
> Identify the section of the balance sheet in which the following accounts would be located: Current Assets (CA), Long-Term Assets (LTA), Current Liabilities (CL), or Long- Term Liabilities (LTL). _______ 1. Bonds Payable (due in 4 years) _______ 2. Inter
> Allied Corp. issued at par 8 percent, five-year bonds payable with a maturity value of $50,000 on May 1, 2018. Assume the fiscal year ends December 31. Journalize the following transactions and include an explanation for each entry. Round calculations to
> Allied Corp. issued 8 percent, five-year bonds payable at a price of $52,420 on January 1, 2018; the bonds have a maturity value of $50,000. Journalize the following transactions for Allied Corp. Include an explanation for each entry. a. Issuance of the
> Allied Corp. issued 8 percent, five-year bonds payable at a price of $48,200 on January 1, 2018; these bonds have a maturity value of $50,000. Journalize the following transactions for Allied Corp. Include an explanation for each entry. a. Issuance of th
> Chad Simpson started a mobile DJ business named Sounds on Wheels, Inc., on April 1, 2018. In the month of April, before providing services to customers, the business incurred six transactions, which have been posted to the accounts as follows: Requirem
> On August 31, 2018, Freemont Co. purchased $18,000 of inventory with a one-year, 8 percent note payable. Journalize the following for the company: 1. Accrual of interest expense on December 31, 2018 2. Payment of the note plus interest on August 31, 2019
> On March 31, 2018, Titan Trucking purchased a used Kenworth truck at a cost of $52,000. Titan Trucking expects to drive the truck for five years and to have a residual value of $10,000. Compute Titan Trucking’s depreciation expense on the truck for year
> Refer to the data for S8-7. Compute second-year depreciation expense on the truck using the following methods: a. Straight-line b. Units of production c. Double-declining balance S8-7: On January 1, Titan Trucking purchased a used Kenworth truck at a co
> Bargain Oil, a small Texas oil company, holds huge reserves of oil. Assume that at the end of 2018, Bargain Oil’s cost of oil reserves totaled approximately $14.4 million, representing 1.2 million barrels of oil reserves in the ground. Requirements 1. C
> When one media company buys another, goodwill is often the most costly asset acquired. TXL Publishing paid $925,000 to acquire the Thrifty Nickel, a weekly advertising paper. At the time of the acquisition, the Thrifty Nickel’s balance sheet reported tot
> Top Flight Airways purchased a baggage-handling truck for $64,000. Suppose Top Flight Airways sold the truck on December 31, 2018, for $42,000 cash, after using the truck for three full years and accumulating depreciation of $27,000. Make the journal ent
> 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.
