accounting

there are more documents I need to upload once you accept just cant do it all at once -_-

A
e.
C.
d. A term used in reference to accounts that are not closed at year-end.
A document prepared to assist management in detecting whether any errors occurred in pos
ing the closing entries.
f. A policy decision by a corporation to distribute a portion of its income to stockholders.
g.
The process by which the Retained Earnings account is updated at year-end.
Entries made during the accounting period to correct errors in the original recording of com-
h.
plex transactions.
Green Lawns, Inc., performs adjusting entries every month, but closes its accounts only at year-
end. The following is the company’s year-end adjusted trial balance dated December 31, current
year.
LO5-1, LO5-2, L05-6
EXERCISE 5.2
Financial Statement
Preparation
* Supplemental Topic, “The Worksheet.”
ated trial balance at
reas closing entries
Exercises
225
$140,000
450,000
680,000
$ 218,640
10,800
720
28,800
GREEN LAWNS, INC.
ADJUSTED TRIAL BALANCE
DECEMBER 31, CURRENT YEAR
Cash
Accounts receivable
Supplies .
Equipment
Accumulated depreciation: equipment
Accounts payable …
Income taxes payable
Capital stock.
Retained earnings
Dividends..
Lawn care revenue earned .
Salary expense
Supply expense.
Advertising expense..
Depreciation expense: equipment
Income taxes expense
$ 12,000
3,600
8,400
60,000
108,000
4,800
In the com-
rial balance
230,400
110,000
40,000
30,000
124,800
2,880
720
2,400
27,840
$ 422,400
$422,400
Prepare an income statement and statement of retained earnings for the year ended December
31, current year. Also prepare the company’s balance sheet dated December 31, current year.
3. Does the company appear to be liquid? Defend your answer.
Has the company been profitable in the past? Explain.
Debit
month but clocos its accounts only at
237
atement
e com-
Problem Set A
5. At December 31, current year, $3,000 of previously unearned client fees had been earned.
6. Accrued, but unrecorded and uncollected client fees earned total $690 at December 31, current year.
7. Accrued, but unrecorded and unpaid salary expense totals $750 at December 31, current year.
8. Accrued income taxes expense for the entire year ending December 31, current year, total
$7,000. The full amount is due early in the next year.
sy of
nber
ng
Instructions
Prepare the necessary adjusting journal entries on December 31, current year. Prepare also an
adjusted trial balance dated December 31, current year.
b.
From the adjusted trial balance prepared in part a, prepare an income statement and statement
of retained earnings for the year ended December 31, current year. Also prepare the com-
pany’s balance sheet dated December 31, current year.
c. Prepare the necessary year-end closing entries.
d. Prepare an after-closing trial balance.
Has the studio’s monthly rent remained the same throughout the year? If not, has it gone up or
down? Explain.
S
e.
Refer to the Demonstration Problem illustrated in the previous chapter. Prepare a 10-column work-
sheet for Internet Consulting Service, Inc., dated December 31, current year. At the bottom of your
worksheet, prepare a brief explanation keyed to each adjusting entry.
L05-8
*PROBLEM 5.7A
Short Comprehensive
Problem Including Adjusting
Entries, Closing Entries, and
Worksheet Preparation
A recent annual report issued by Best Buy revealed the following data.
L05-6
PROBLEM 5.8A
Evaluating Profitability and
Liquidity
End
of Year
Beginning
of Year
Current assets..
Current liabilities ..
$11,729 million $10,485 million
$7,777 million $7,436 million
$4,995 million $3,986 million
not
Preparing Financial Statements
nation.
e financial statements
OW certain events are
strate several methods
OVERNIGHT AUTO SERVICE
ADJUSTED TRIAL BALANCE
DECEMBER 31, 2018
EXHIBIT 5-1
Adjusted Trial Balan
ating the
ing cycle by illustrat
ents, (2) posted these
ance from its
cycle in Chapter 4
general
Cast
Accounts receivable
Shop supplies
Unexpired insurance
Tools and equipment
$ 18.592
7.250
1.200
3.000
12.000
company’s
Accumulated depreciation: tools and equipment
2.200
Pernight’s financial
company’s after-
36.000
$ 1.650
52.000
Balance sh
Building
Accumulated depreciation: building
Land
Notes payable
Accounts payable
Wages payable
Income taxes payable
Interest payable
4.000
2,690
have obligations
e public. These
1,950
ports.
5.580
30
rs and a wealth
Ons, and future
6,000
80,000
Inc., appear
Ist be audited
Unearned rent revenue
Capital stock
Retained earnings (Note: still must be
updated for transactions recorded in the accounts
listed below. Closing entries serve this purpose.)
Dividends.
Repair service revenue
Rent revenue earned
Stoter
earni
must file their
ecurities and
Public Com
0
14,000
172,000
3,000
tense as the
s before the
months of
the activi-
s, here we
Advertising expense
Wages expense
Supplies expense
Depreciation expense: building
Depreciation expense: tools and equipment
Utilities expense
e income
3.900
58.750
7.500
1.650
2,200
19,400
15,000
30
26,628
$279.100
Insurance expense
tly from
ve made
rnight’s
Interest expense
Income taxes expense
5-2.
$279.100
Income
ings is
in the
th the
locus
The revenue and expenses shown in Overnight’s income statement are taken directly from
the company’s adjusted trial balance. Overnight’s 2018 income statement shows that rev-