1) QS 4-6 Preparing closing entries from the ledger LO P2
The ledger of Mai Company includes the following accounts with normal balances as of December 31: D. Mai, Capital $9,300; D. Mai, Withdrawals $950; Services Revenue $16,000; Wages Expense $9,900; and Rent Expense $2,200.
Prepare its December 31 closing entries.
2)Use the following information for Quick Studies below.
The following is the adjusted trial balance of Sierra Company.
| Account Title | Debit | Credit | ||||
| Cash | $ | 13,000 | ||||
| Prepaid insurance | 900 | |||||
| Notes receivable (due in 5 years) | 4,800 | |||||
| Buildings | 40,000 | |||||
| Accumulated depreciation–Buildings | $ | 16,000 | ||||
| Accounts payable | 4,500 | |||||
| Notes payable (due in 3 years) | 5,000 | |||||
| H. Sierra, Capital | 16,500 | |||||
| H. Sierra, Withdrawals | 3,000 | |||||
| Consulting revenue | 29,500 | |||||
| Wages expense | 3,900 | |||||
| Depreciation expense–Buildings | 4,000 | |||||
| Insurance expense | 1,900 | |||||
| Totals | $ | 71,500 | $ | 71,500 | ||
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QS 4-10 Preparing financial statements LO C2
Required
(1) Prepare an income statement for the year ended December 31.
(2) Prepare a statement of owner’s equity for the year ended December 31.
3) Use the following information for Quick Studies below.
The following is the adjusted trial balance of Sierra Company.
| Account Title | Debit | Credit | ||||
| Cash | $ | 13,000 | ||||
| Prepaid insurance | 900 | |||||
| Notes receivable (due in 5 years) | 4,800 | |||||
| Buildings | 40,000 | |||||
| Accumulated depreciation–Buildings | $ | 16,000 | ||||
| Accounts payable | 4,500 | |||||
| Notes payable (due in 3 years) | 5,000 | |||||
| H. Sierra, Capital | 16,500 | |||||
| H. Sierra, Withdrawals | 3,000 | |||||
| Consulting revenue | 29,500 | |||||
| Wages expense | 3,900 | |||||
| Depreciation expense–Buildings | 4,000 | |||||
| Insurance expense | 1,900 | |||||
| Totals | $ | 71,500 | $ | 71,500 | ||
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QS 4-11 Preparing a classified balance sheet LO C3
Use the information adjusted trial balance to prepare Sierra Company’s classified balance sheet as of December 31.
4) Exercise 4-2 Extending accounts in a work sheet LO P1
The Adjusted Trial Balance for Planta Company follows. Complete the work sheet by extending the account balances into the appropriate financial statement columns and by entering the amount of net income for the reporting period.
5) Exercise 4-6 Completing the income statement columns and preparing closing entries LO P1, P2
These Income Statement columns from a 10-column work sheet are for Brown’s Bike Rental Company.
| Account Title | Debit | Credit | ||
| Rent earned | 104,000 | |||
| Salaries expense | 46,176 | |||
| Insurance expense | 6,552 | |||
| Office supplies expense | 15,288 | |||
| Bike repair expense | 3,224 | |||
| Depreciation expense—Bikes | 19,864 | |||
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(1) Determine the amount that should be entered on the net income line of the work sheet.
(2) Prepare the company’s closing entries. The owner, H. Brown, did not make any withdrawals this period.
6) Exercise 4-7 Preparing a work sheet and recording closing entries LO P1, P2
The following unadjusted trial balance contains the accounts and balances of Dylan Delivery Company as of December 31.
- Unrecorded depreciation on the trucks at the end of the year is $5,761.
- The total amount of accrued interest expense at year-end is $8,000.
- The cost of unused office supplies still available at year-end is $1,700.
1. Use the above information about the company’s adjustments to complete a 10-column work sheet.
2a. Prepare the year-end closing entries for Dylan Delivery Company as of December 31.
2b. Determine the capital amount to be reported on the December 31, balance sheet. Note: S. Dylan, Capital was $227,329 on December 31 of the prior year.
7) Exercise 4-9 Preparing closing entries and a post-closing trial balance LO P2, P3
The following adjusted trial balance contains the accounts and year-end balances of Cruz Company as of December 31.
| No. | Account Title | Debit | Credit | ||||
| 101 | Cash | $ | 18,000 | ||||
| 126 | Supplies | 12,700 | |||||
| 128 | Prepaid insurance | 2,000 | |||||
| 167 | Equipment | 23,000 | |||||
| 168 | Accumulated depreciation—Equipment | $ | 6,500 | ||||
| 301 | A. Cruz, Capital | 44,853 | |||||
| 302 | A. Cruz, Withdrawals | 6,000 | |||||
| 404 | Services revenue | 44,900 | |||||
| 612 | Depreciation expense—Equipment | 2,000 | |||||
| 622 | Salaries expense | 26,177 | |||||
| 637 | Insurance expense | 1,886 | |||||
| 640 | Rent expense | 3,008 | |||||
| 652 | Supplies expense | 1,482 | |||||
| Totals | $ | 96,253 | $ | 96,253 | |||
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1. Prepare the December 31, closing entries for Cruz Company. Assume the account number for Income Summary is 901.
2. Prepare the December 31, post-closing trial balance for Cruz Company. Note: A. Cruz, Capital was $44,853 on December 31 of the prior year.
8) Exercise 4-11 Preparing financial statements LO C3
The following adjusted year-end trial balance at December 31 of Wilson Trucking Company.
| Account Title | Debit | Credit | ||||
| Cash | $ | 5,100 | ||||
| Accounts receivable | 16,500 | |||||
| Office supplies | 2,000 | |||||
| Trucks | 162,000 | |||||
| Accumulated depreciation—Trucks | $ | 33,372 | ||||
| Land | 75,000 | |||||
| Accounts payable | 9,100 | |||||
| Interest payable | 3,000 | |||||
| Long-term notes payable | 52,000 | |||||
| K. Wilson, Capital | 156,253 | |||||
| K. Wilson, Withdrawals | 19,000 | |||||
| Trucking fees earned | 120,000 | |||||
| Depreciation expense—Trucks | 21,525 | |||||
| Salaries expense | 56,280 | |||||
| Office supplies expense | 6,000 | |||||
| Repairs expense—Trucks | 10,320 | |||||
| Totals | $ | 373,725 | $ | 373,725 | ||
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The K. Wilson, Capital account balance was $156,253 at December 31 of the prior year.
(1) Prepare the income statement for the year ended December 31.
(2) Prepare the statement of owner’s equity for the year ended December 31.
9) GL0401 – Based on… LO C3, P2, P3
The Kitchen Solutions Company began operations on December 1, 2019. The unadjusted trial balance of the Kitchen Solutions Company as of December 31, 2019 is found on the trial balance tab. The following information is required to prepare the necessary adjusting entries for the Kitchen Solutions Company found in chapter 3.
- 1) The balance in Prepaid insurance represents a 24-month policy that went into effect on December 1, 2019. Review the unadjusted balance in Prepaid insurance, and prepare the necessary adjusting entry, if any.
- 2) Based on a physical count, supplies on hand total $4,950. Review the unadjusted balance in Supplies, and prepare the necessary adjusting entry, if any.
- 3) The equipment is expected to have a 4-year useful life, and be worth about $12,000 at the end of four years. Review the unadjusted balance in Accumulated depreciation, and prepare the necessary adjusting entry, if any.
- 4) On December 26, the client paid a $10,200 60-day fee in advance, covering December 27 to February 24. Review the unadjusted balance in Unearned Consulting Revenue, and prepare the necessary adjusting entry, if any.
- 5) Kitchen Solutions’s sole employee earns $180 per day for a five-day workweek beginning on Monday and ending on Friday. The employee was last paid on Friday, December 26. Review the unadjusted balance in Salaries payable, and prepare the necessary adjusting entry, if any.
- 6) In the second week of December, Kitchen Solutions agreed to provide 30 days of consulting services to a local fitness club for a fixed fee of $4,380. The terms of the initial agreement call for Kitchen Solutions to provide services from December 12, 2019, through January 10, 2020, or 30 days of service. The club agrees to pay Kitchen Solutions $4,380 on January 10, 2020, when the service period is complete. Review the unadjusted balance in Consulting revenue, and prepare the necessary adjusting entry, if any.
Prepare the required adjusting and closing entries for the Kitchen Solutions Company.
10) GL0404 – Based on Problem 4-6A LO P4
The unadjusted trial balance for Home Health Plus as December 31 is provided on the trial balance tab.
Information for adjustments is as follows:
- As of December 31, employees had earned $1,400 of unpaid and unrecorded salaries. The next payday is January 4, at which time $1,750 of salaries will be paid.
- The cost of supplies still available at December 31 is $1,800.
- The notes payable requires an interest payment to be made every three months. The amount of unrecorded accrued interest at December 31 is $2,000. The next interest payment, at an amount of $2,400, is due on January 15.
- Analysis of the unearned member fees account shows $2,600 remaining unearned at December 31.
- In addition to the member fees included in the revenue account balance, the company has earned another $11,300 in unrecorded fees that will be collected on January 31. The company is also expected to collect $12,000 on that same day for new fees earned in January.
- Depreciation expense for the year is $21,800.
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