Balance sheet data: Accounts payable 194,300 Accounts receivable 545,000 Accumulated depreciation–office buildings and equipment Accumulated depreciation-store buildings and equipment Allowance for doubtful accounts 1,580,000 4,126,000 8,450 Bonds payable Cash 500,000 217,650 Common stock, $20 par (400,000 shares authorized; 85,000 shares issued, 94,600 outstanding 1,700,000 Cash dividends - common stock 50,000 Cash dividends - preferred stock Dividends Payable - common stock Dividends Payable - preferred stock Goodwill 40,000 700,000 Income tax payable Interest receivable 44,000 1,200 Merchandise Inventory Land 778,000 2,000,000 Office buildings Office Equipment Paid-in capital - Treasury Stock Paid-in capital in excess of par-common stock Paid-in capital in excess of par-preferred stock Preferred 5% stock, $80 par (30,000 shares authorized; 16,000 shares issued) Premium on bonds payable Prepaid Insurance Retained earnings Store buildings Store Equipment Treasury stock Unearned Revenues 4,000,000 320,000 13,000 736,800 170,000 1,280,000 19,000 30,000 10,409,433 9,000,000 3,560,000 178,200 112,000

Balance sheet data: Accounts payable 194,300 Accounts receivable 545,000 Accumulated depreciation–office buildings and equipment Accumulated depreciation-store buildings and equipment Allowance for doubtful accounts 1,580,000 4,126,000 8,450 Bonds payable Cash 500,000 217,650 Common stock, $20 par (400,000 shares authorized; 85,000 shares issued, 94,600 outstanding 1,700,000 Cash dividends - common stock 50,000 Cash dividends - preferred stock Dividends Payable - common stock Dividends Payable - preferred stock Goodwill 40,000 700,000 Income tax payable Interest receivable 44,000 1,200 Merchandise Inventory Land 778,000 2,000,000 Office buildings Office Equipment Paid-in capital - Treasury Stock Paid-in capital in excess of par-common stock Paid-in capital in excess of par-preferred stock Preferred 5% stock, $80 par (30,000 shares authorized; 16,000 shares issued) Premium on bonds payable Prepaid Insurance Retained earnings Store buildings Store Equipment Treasury stock Unearned Revenues 4,000,000 320,000 13,000 736,800 170,000 1,280,000 19,000 30,000 10,409,433 9,000,000 3,560,000 178,200 112,000

College Accounting (Book Only): A Career Approach

12th Edition

ISBN:9781305084087

Author:Cathy J. Scott

Publisher:Cathy J. Scott

Chapter12: Financial Statements, Closing Entries, And Reversing Entries

Section: Chapter Questions

Problem 3E

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Determine on which financial statement each account listed below is reported. Use the following abbreviations: Income Statement (IS), Statement of Owners Equity (OE), and Balance Sheet (BS). a. M. James, Capital b. Cash c. Rent Expense d. Accumulated Depreciation, Equipment e. Wages Payable f. M. James, Drawing g. Equipment h. Office Supplies i. Depreciation Expense j. Office Supplies k. Income from Services l. Accounts Receivable
CASH, MODIFIED CASH, AND ACCRUAL BASES OF ACCOUNTING Prepare the entry for each of the following transactions, using the (a) cash basis, (b) modified cash basis, and (c) accrual basis of accounting. 1. Purchase supplies on account. 2. Make payment on asset previously purchased. 3. Purchase supplies for cash. 4. Purchase insurance for cash. 5. Pay cash for wages. 6. Pay cash for phone expense. 7. Pay cash for new equipment. End-of-Period Adjusting Entries: 8. Wages earned but not paid. 9. Prepaid item purchased, partly used. 10. Depreciation on long-term assets.
Indicate the work sheet columns (Income Statement Debit, Income Statement Credit, Balance Sheet Debit, Balance Sheet Credit) in which the balances of the following accounts should appear: a. S. Moon, Drawing b. Utilities Expense c. Merchandise Inventory (ending) d. Purchases Discounts e. Unearned Rent f. Sales Returns and Allowances g. Accumulated Depreciation, Equipment h. Income Summary i. Service Income j. Prepaid Insurance
Selling Expenses and General and Administrative Expenses Operating expenses are subdivided between selling expenses and general and administrative expenses when a multiple-step income statement is prepared. Identify each of the following items as a selling expense (S) or general and administrative expense (G$A). ______ 1. Advertising expense ______ 2. Depreciation expenseâ€”store furniture and fixtures ______ 3. Office rent expense ______ 4. Office salaries expense ______ 5. Store rent expense ______ 6. Store salaries expense ______ 7. Insurance expense ______ 8. Supplies expense ______ 9. Utilities expense
List the classification of each of the following accounts as A (asset), L (liability), OE (owners equity), R (revenue), or E (expense). Write Debit or Credit to indicate the increase side, the decrease side, and the normal balance side. PART 1: The Accounting Cycle for a Service Business: Analyzing Business Transactions
Indicate on which financial statement the following accounts (from the adjusted trial balance) would appear: (A) Sales Revenue; (B) Unearned Rent Revenue; (C) Prepaid Advertising; (D) Advertising Expense; (E) Dividends; (F) Cash.
FINANCIAL STATEMENT ACCOUNTS Label each of the following accounts as an asset (A), liability (L), owners equity (OE), revenue (R), or expense (E). Indicate the financial statement on which the account belongsincome statement (IS), statement of owners equity (SOE), or balance sheet (BS)in a format similar to the following.
Read each definition below and write the number of the definition in the blank beside the appropriate term. The quiz solutions appear at the end of the chapter. Recognition Historical cost Current value Cash basis Accrual basis Revenues Revenue recognition principle Matching principle Expenses Adjusting entries Straight-line method Contra account Deferral Deferred expense Deferred revenue Accrual Accrued liability Accrued asset Accounting cycle Work sheet Real accounts Nominal accounts Closing entries Interim statements A device used at the end of the period to gather the information needed to prepare financial statements without actually recording and posting adjusting entries. Inflows of assets or settlements of liabilities from delivering or producing goods, rendering services, or conducting other activities. Journal entries made at the end of a period by a company using the accrual basis of accounting. Journal entries made at the end of the period to return the balance in all nominal accounts to zero and transfer the net income or loss and the dividends to Retained Earnings. A liability resulting from the receipt of cash before the recognition of revenue. The name given to balance sheet accounts because they are permanent and are not closed at the end of the period. An asset resulting from the recognition of a revenue before the receipt of cash. The amount of cash or its equivalent that could be received by selling an asset currently. The assignment of an equal amount of depreciation to each period. Cash has been paid or received but expense or revenue has not yet been recognized. A system of accounting in which revenues are recognized when a performance obligation is satisfied and expenses are recognized when incurred. Cash has not yet been paid or received but expense has been incurred or revenue recognized. Financial statements prepared monthly, quarterly, or at other intervals less than a year in duration. Revenues are recognized in the income statement when a performance obligation is satisfied. The process of recording an item in the financial statements as an asset, a liability, a revenue, an expense, or the like. An asset resulting from the payment of cash before the incurrence of expense. The name given to revenue, expense, and dividend accounts because they are temporary and are closed at the end of the period. A system of accounting in which revenues are recognized when cash is received and expenses are recognized when cash is paid. A liability resulting from the recognition of an expense before the payment of cash. The association of revenue of a period with all of the costs necessary to generate that revenue. An account with a balance that is opposite that of a related account. The amount paid for an asset and used as a basis for recognizing it on the balance sheet and carrying it on later balance sheets. Outflows of assets or incurrences of liabilities resulting from delivering goods, rendering services, or carrying out other activities. A series of steps performed each period and culminating with the preparation of a set of financial statements.
WORK SHEET, ADJUSTING ENTRIES, AND FINANCIAL STATEMENTS Lundberg Company had the following trial balance columns on its work sheet: Data for adjusting the accounts are as follows: Additional information needed to prepare the financial statements is as follows: REQUIRED 1. Prepare a work sheet. 2. Prepare the following financial statements and schedule: (a) income statement (b) schedule of cost of goods manufactured (c) statement of retained earnings (d) balance sheet
Chart of accounts Monet Paints Co. is a newly organized retail business with a list of accounts arranged in alphabetical order, as follows: Accounts Payable Land Accounts Receivable Miscellaneous Administrative Accumulated DepreciationOffice Equipment Expense Accumulated DepreciationStore Equipment Miscellaneous Selling Expense Advertising Expense Notes Payable Cash Office Equipment Common Stock Office Salaries Expense Cost of Goods Sold Office Supplies Customer Refunds Payable Office Supplies Expense Delivery Expense Prepaid Insurance Depreciation ExpenseOffice Equipment Rent Expense Depreciation ExpenseStore Equipment Retained Earnings Dividends Salaries Payable Estimated Returns Inventory Sales Insurance Expense Sales Salaries Expense Interest Expense Store Equipment Interest Revenue Store Supplies Inventory Store Supplies Expense Construct a chart of accounts, assigning account numbers and arranging the accounts in balance sheet and income statement order, as illustrated in Exhibit 2. Each account number is three digits: the first digit is to indicate the major classification (1 for assets, and so on); the second digit is to indicate the subclassification (11 for current assets, and so on); and the third digit is to identify the specific account (110 for Cash, 112 for Accounts Receivable, 114 for Inventory, 115 for Estimated Returns Inventory, and so on).
FINANCIAL STATEMENT ACCOUNTS Label each of the following accounts as an asset (A), liability (L), owners equity (OE), revenue (R), or expense (E). Indicate the financial statement on which the account belongsincome statement (IS), statement of owners equity (SOE), or balance sheet (BS)in a format similar to the following.
Label each of the following accounts as asset (A), liability (L), owners equity (OE), revenue (R), or expense (E). a. Office Supplies b. Professional Fees c. Prepaid Insurance d. R. Baker, Drawing e. Accounts Payable f. Service Income g. R. Baker, Capital h. Rent Expense i. Accounts Receivable j. Wages Expense