Salaries and Wages Expense (1) Close revenue accounts Close expense accounts B Close net income/loss) (4) Close drawings Supplies Expense Service Revenue Owner's Drawings Income Summary Owner's Capital Current Attempt in Progress The ledger of Sandhill Company contains the following balances: Owner's Capital $29,600, Owner's Drawings $2,400, Service Revenue $51,000, Salaries and Wages Expense $28.900, and Supplies Expense $6,700. The closing entries are as follows Enter the balances in T-accounts, post the closing entries in the order presented in the problem and use the numbers as a reference

Salaries and Wages Expense (1) Close revenue accounts Close expense accounts B Close net income/loss) (4) Close drawings Supplies Expense Service Revenue Owner's Drawings Income Summary Owner's Capital Current Attempt in Progress The ledger of Sandhill Company contains the following balances: Owner's Capital $29,600, Owner's Drawings $2,400, Service Revenue $51,000, Salaries and Wages Expense $28.900, and Supplies Expense $6,700. The closing entries are as follows Enter the balances in T-accounts, post the closing entries in the order presented in the problem and use the numbers as a reference

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter5: Completing The Accounting Cycle

Section: Chapter Questions

Problem 3EB: For each of the following accounts, identify whether it would be closed at year-end (yes or no) and...

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Accruals and Deferrals For the following situations, indicate whether each involves a deferred expense (DE), a deferred revenue (DR), an accrued liability (AL), or an accrued asset (AA). Example: DE Office supplies purchased in advance of their use __________ 1. Wages earned by employees but not yet paid __________ 2. Cash collected from subscriptions in advance of publishing a magazine __________ 3. Interest on a customer loan for which principal and interest have not yet been collected __________ 4. One years premium on life insurance policy paid in advance __________ 5. Office building purchased for cash __________ 6. Rent collected in advance from a tenant __________ 7. State income taxes owed at the end of the year __________ 8. Rent owed by a tenant but not yet collected
STATEMENT OF OWNERS EQUITY REPORTING NET INCOME Betsy Ray started an accounting service on June 1, 20--, by investing 20,000. Her net income for the month was 10,000, and she withdrew 8,000. Prepare a statement of owners equity for the month of June. STATE MENT OF OWNER S EQUITY REPORTING NET LO SS Based on the information provided in Exercise 2-6A, prepare a statement of owners equity assuming Ray had a net loss of 3,000.
EFFECTS OF TRANSACTIONS (BALANCE SHEET ACCOUNTS) Jon Wallace started a business. During the first month (March 20--), the following transactions occurred. Show the effect of each transaction on the accounting equation: Assets= Liabilities + Owners Equity. After each transaction, show the new account totals. (a) Invested cash in the business, 30,000. (b) Bought office equipment on account, 4,500. (c) Bought office equipment for cash, 1,600. (d) Paid cash on account to supplier in transaction (b), 2,000. EFFECTS OF TRANSACTIONS (REVENUE, EXPENSE, WITHDRAWALS) This exercise is an extension of Exercise 2-3B. Lets assume Jon Wallace completed the following additional transactions during March. Show the effect of each transaction on the basic elements of the expanded accounting equation: Assets = Liabilities + Owners Equity (Capital Drawing + Revenues Expenses). After transaction (k), report the totals for each element. Demonstrate that the accounting equation has remained in balance. (e) Performed services and received cash, 3,000. (f) Paid rent for March, 1,000. (g) Paid March phone bill, 68. (h) Jon Wallace withdrew cash for personal use, 800. (i) Performed services for clients on account, 900. (j) Paid wages to part-time employee, 500. (k) Received cash for services performed on account in transaction (i), 500.
For each of the following accounts, identify whether it would be closed at year-end (yes or no) and on which financial statement the account would be reported (Balance Sheet, Income Statement, or Retained Earnings Statement). A. Retained Earnings B. Prepaid Rent C. Rent Expense D. Rent Revenue E. Salaries Expense F. Salaries Payable G. Supplies Expense H. Unearned Rent Revenue
Valley Realty acts as an agent in buying, selling, renting, and managing real estate. The unadjusted trial balance on July 31, 2019, follows: The following business transactions were completed by Valley Realty during August 2019: Aug. 1. Purchased office supplies on account, 3,150. 2.Paid rent on office for month, 7,200. 3.Received cash from clients on account, 83,900. 5.Paid insurance premiums, 12,000. 9.Returned a portion of the office supplies purchased on August 1, receiving full credit for their cost, 400. Analyzing Transactions Aug. 17. Paid advertising expense, 8,000. 23.Paid creditors on account, 13,750. Enter the following transactions on Page 19 of the two-column journal: 29.Paid miscellaneous expenses, 1,700. 30.Paid automobile expense (including rental charges for an automobile), 2,500. 31.Discovered an error in computing a commission during July; received cash from the salesperson for the overpayment, 2,000. 31.Paid salaries and commissions for the month, 53,000. 31.Recorded revenue earned and billed to clients during the month, 183,500. 31.Purchased land for a future building site for 75,000, paying 7,500 in cash and giving a note payable for the remainder. 31.Withdrew cash for personal use, 1,000. 31.Rented land purchased on August 31 to a local university for use as a parking lot during football season (September, October, and November); received advance payment of 5,000. Instructions 1. Record the August 1 balance of each account in the appropriate balance column of a four-column account, write Balance in the item section, and place a check mark () in the Posting Reference column. 2. Journalize the transactions for August in a two-column journal beginning on Page 18. Journal entry explanations may be omitted. 3. Post to the ledger, extending the account balance to the appropriate balance column after each posting. 4. Prepare an unadjusted trial balance of the ledger as of August 31, 2019. 5. Assume that the August 31 transaction for Cindy Getmans cash withdrawal should have been 10,000. (a) Why did the unadjusted trial balance in (4) balance? (b) Journalize the correcting entry. (c) Is this error a transposition or slide?
Identify which of the following accounts would be listed on the companys Post-Closing Trial Balance. A. Accounts Receivable B. Accumulated Depreciation C. Cash D. Office Expense E. Note Payable F. Rent Revenue G. Retained Earnings H. Unearned Rent Revenue
STATEMENT OF OWNERS EQUITY REPORTING NET LOSS Based on the information provided in Exercise 2-6B, prepare a statement of owners equity assuming Lopez had a net loss of 2,000. STATEMENT OF OWNERS EQUITY REPORTING NET INCOME Efran Lopez started a financial consulting service on June 1, 20--, by investing 15,000. His net income for the month was 6,000, and he withdrew 7,000 for personal use. Prepare a statement of owners equity for the month of June.
For each of the following accounts, identify whether it would be closed at year-end (yes or no) and on which financial statement the account would be reported (Balance Sheet, Income Statement, or Retained Earnings Statement). A. Accounts Payable B. Accounts Receivable C. Cash D. Dividends E. Fees Earned Revenue F. Insurance Expense G. Prepaid Insurance H. Supplies
Journal entries and trial balance On October 1, 20Y6, Jay Crowley established Affordable Realty, which completed the following transactions during the month: a. Jay Crowley transferred cash from a personal bank account to an account to be used for the business in exchange for common stock, 40,000. b. Paid rent on office and equipment for the month, 4,800. c. Purchased supplies on account, 2,150. d. Paid creditor on account, 1,100. e. Earned sales commissions, receiving cash, 18,750. f. Paid automobile expenses (including rental charge) for month, 1,580, and miscellaneous expenses, 800. g. Paid office salaries, 3,500. h. Determined that the cost of supplies used was 1,300. i. Paid dividends, 1,500. Instructions 1. Journalize entries for transactions (a) through (i), using the following account titles: Cash, Supplies, Accounts Payable, Common Stock, Dividends, Sales Commissions, Rent Expense, Office Salaries Expense, Automobile Expense, Supplies Expense, Miscellaneous Expense. Explanations may be omitted. 2. Prepare T accounts, using the account titles in (1). Post the journal entries to these accounts, placing the appropriate letter to the left of each amount to identify the transactions. Determine the account balances after all posting is complete. Accounts containing only a single entry do not need a balance. 3. Prepare an unadjusted trial balance as of October 31, 20Y6. 4. Determine the following: a. Amount of total revenue recorded in the ledger. b. Amount of total expenses recorded in the ledger. c. Amount of net income for October. 5. Determine the increase or decrease in retained earnings for October.
Transactions Interstate Delivery Service is owned and operated by Katie Wyer. The following selected transactions were completed by Interstate Delivery during May: 1. Received cash in exchange for common stock, 18,000. 2. Paid advertising expense, 4,850. 3. Purchased supplies on account, 2,100. 4. Billed customers for delivery services on account, 14,700. 5. Received cash from customers on account, 8,200. Indicate the effect of each transaction on the following accounting equation elements: Assets, Liabilities, Common Stock, Dividends, Revenue, and Expense. To illustrate, the answer to (1) follows: (1) Asset (Cash) increases by 18,000; Common Stock increases by 18,000.
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Accounting concepts Match each of the following statements with the appropriate accounting concept. Sonic concepts may he used more than once, while others may not be used at all. Use the notat ions shown to indicate the appropriate accounting concept. Statements 1. Assume that a business will continue forever. 2. Material litigation involving the corporation is described in a note. 3. Monthly utilities costs are reported as expenses along with the monthly revenues. 4. Personal transactions of owners are kept separate from the business. 5. This concept supports relying on an independent actuary (statistician), rather than the chief operating officer of the coq)ration, to estimate a pension liability. 6. Changes in the use of accounting methods from one period to the next are described in the notes to the financial statements. 7. Land worth $800,000 is reported at its original purchase price of $220,000. 8. This concept justifies recording only transactions that are expressed in dollars. 9. If this concept was ignored, the confidence of users in the financial statements could not be maintained. 10. The changes in financial condition are reported at the end of the month.