Income Statement:
It is a financial statement that shows the
It is a financial statement that shows the amount of profit retained by the company for future unforeseen events.
Balance Sheet:
It shows the financial position of an enterprise. It consists of assets, liabilities, and
Closing Entries:
These entries are made for that item whose balance needs to be zero for the next accounting period otherwise data from two accounting periods will get mixed and we only want to see the data of one accounting period in it.
Accounting rules regarding journal entries:
- Balance increases when: Assets, losses, and expenses get debited and liabilities, gains, and revenue get credited.
- Balance decrease when: Assets, losses, and expenses get credited and liabilities, gains, and revenue get debited.
Return on Asset:
It tells about how much the company is earning from the total amount of assets it has. It is determined by dividing net income from total average assets into percentage terms.
Debt Ratio:
It shows how much of the company’s assets are bought using debt capital. The higher the debt ratio higher the financial risk, lower the debt ratio lower the financial risk. it comes after dividing debt capital by total assets.
Profit Margin Ratio:
It shows how much the company is earning for every dollar of its revenue. It comes after dividing net sales from revenue into percentage terms.
It shows whether the company will be able to pay its current liabilities out of its current asset or not. It comes after dividing current liabilities by current assets.
1.
To prepare: Income statement, statement of retained earnings, and classified balance sheet.
2.
To prepare: Closing entries
3.
a.
Return on assets ratio.
b.
Debt ratio.
c.
Profit margin ratio.
d.
Current ratio.
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FINANCIAL AND MANAGERIAL ACCTG W/ACC CRD
- The trial balance for Benner Hair Salon on March 31 is as follows: Data for month-end adjustments are as follows: a. Expired or used-up insurance, 300. b. Depreciation expense on equipment, 500. c. Wages accrued or earned since the last payday, 235 (owed and to be paid on the next payday). d. Supplies remaining at the end of the month, 65. Required 1. Complete a work sheet for the month. (Skip this step if using CLGL.) 2. Journalize the adjusting entries. 3. Prepare an income statement, a statement of owners equity, and a balance sheet. Assume that no additional investments were made during March.arrow_forwardThe trial balance of Clayton Cleaners for the month ended September 30 is as follows: Data for the adjustments are as follows: a. Expired or used-up insurance, 800. b. Depreciation expense on equipment, 2,700. c. Wages accrued or earned since the last payday, 585 (owed and to be paid on the next payday). d. Supplies remaining at the end of month, 230. Required 1. Complete a work sheet. (Skip this step if using CLGL.) 2. Journalize the adjusting entries. If you are using CLGL, use the year 2020 when recording transactions.arrow_forwardT accounts, adjusting entries, financial statements, and closing entries; optional end-of-period spreadsheet The unadjusted trial balance of La Mesa Laundry at August 31, 20Y5, the end of the fiscal year, follows: The data needed to determine year-end adjustments are as follows: (a) Wages accrued but not paid at August 31 are 2,200. (b) Depreciation of equipment during the year is 8,150. (c) Laundry supplies on hand at August 31 are 2,000. (d) Insurance premiums expired during the year are 5,300. Instructions 1. For each account listed in the unadjusted trial balance, enter the balance in a T account. Identify the balance as Aug. 31 Bal. In addition, add T accounts for Wages Payable, Depreciation Expense, Laundry Supplies Expense, and Insurance Expense. 2. (Optional) Enter the unadjusted trial balance on an end-of-period spreadsheet and complete the spreadsheet. Add the accounts listed in part (1) as needed. 3. Journalize and post the adjusting entries. Identify the adjustments by Adj. and the new balances as Adj. Bal. 4. Prepare an adjusted trial balance. 5. Prepare an income statement, a statement of stockholders equity, and a balance sheet. During the year ended August 31, 20Y5, common stock of 3,000 was issued. 6. Journalize and post the closing entries. Identify the closing entries by Clos. 7. Prepare a post-closing trial balance.arrow_forward
- The unadjusted trial balance of La Mesa Laundry at August 31, 2016, the end of the fiscal year, follows: The data needed to determine year-end adjustments are as follows: a. Wages accrued but not paid at August 31 are 2,200. b. Depreciation of equipment during the year is 8,150. c. Laundry supplies on hand at August 31 are 2,000. d. Insurance premiums expired during the year are 5,300. Instructions 1. For each account listed in the unadjusted trial balance, enter the balance in a T account. Identify the balance as Aug. 31 Bal. In addition, add T accounts for Wages Payable, Depreciation Expense, Laundry Supplies Expense, Insurance Expense, and Income Summary. 2. (Optional) Enter the unadjusted trial balance on an end-of-period spreadsheet and complete the spreadsheet. Add the accounts listed in part (1) as needed. 3. Journalize and post the adjusting entries. Identify the adjustments by Adj. and the new balances as Adj. Bal. 4. Prepare an adjusted trial balance. 5. Prepare an income statement, a statement of owners equity (no additional investments were made during the year), and a balance sheet. 6. Journalize and post the closing entries. Identify the closing entries by Clos. 7. Prepare a post-closing trial balance.arrow_forwardThe following partial work sheet covers the affairs of Ketcher and Company for the year ended June 30. Required 1. Journalize the six adjusting entries. 2. Journalize the closing entries. 3. Journalize the reversing entry as of July 1, for the salaries that were accrued in the June adjusting entry. Check Figure Reversing entry amount, 1,645arrow_forwardThe trial balance of Jillson Company as of December 31, the end of its current fiscal year, is as follows: Here are the data for the adjustments. ab. Merchandise Inventory at December 31, 54,845.00. c. Store supplies inventory (on hand), 488.50. d. Insurance expired, 680. e. Salaries accrued, 692. f. Depreciation of store equipment, 3,760. Required Complete the work sheet after entering the account names and balances onto the work sheet.arrow_forward
- The trial balance of The New Decors for the month ended September 30 is as follows: Data for the adjustments are as follows: a. Expired or used-up insurance, 425. b. Depreciation expense on equipment, 2,750. c. Wages accrued or earned since the last payday, 475 (owed and to be paid on the next payday). d. Supplies remaining at end of month, 215. Required 1. Complete a work sheet. (Skip this step if using GL.) 2. Journalize the adjusting entries. If you are using CLGL, use the year 2020 when recording transactions.arrow_forwardAt the end of April, the first month of operations, the following selected data were taken from the financial statements of Shelby Crawford, an attorney: In preparing the financial statements, adjustments for the following data were overlooked: Supplies used during April, 2,750. Unbilled fees earned at April 30, 23,700. Depreciation of equipment for April, 1,800. Accrued wages at April 30, 1,400. Instructions 1. Journalize the entries to record the omitted adjustments. 2. Determine the correct amount of net income for April and the total assets, liabilities, and owners equity at April 30. In addition to indicating the corrected amounts, indicate the effect of each omitted adjustment by setting up and completing a columnar table similar to the following. The adjustment for supplies used is presented as an example.arrow_forwardEXPENSE METHOD OF ACCOUNTING FOR PREPAID EXPENSES Davidsons Food Mart paid 1,200 in advance to the local newspaper for advertisements that will appear monthly. The following entry was made: At the end of the year, December 31, 20--, Davidson received notification that advertisements costing 800 had been run. Prepare the adjusting entry.arrow_forward
- T accounts, adjusting entries, financial statements, and closing entries; optional end-of-period spreadsheet The unadjusted trial balance of Epicenter Laundry at June 30, 20Y6, the end of the fiscal year, follows: The data needed to determine year-end adjustments are as follows: (a) Laundry supplies on hand at June 30 are 8,600. (b) Insurance premiums expired during the year are 5,700. (c) Depreciation of laundry equipment during the year is 6,500. (d) Wages accrued but not paid at June 30 are 1,100. Instructions 1. For each account listed in the unadjusted trial balance, enter the balance in a T account. Identify the balance as June 30 Bal. In addition, add T accounts for Wages Payable, Depreciation Expense, Laundry Supplies Expense, and Insurance Expense. 2. (Optional) Enter the unadjusted trial balance on an end-of-period spreadsheet and complete the spreadsheet. Add the accounts listed in part (1) as needed. 3. Journalize and post the adjusting entries. Identify the adjustments by Adj. and the new balances as Adj. Bal. 4. Prepare an adjusted trial balance. 5. Prepare an income statement, a statement of stockholders equity, and a balance sheet. During the year ended June 30, 20Y6, additional common stock of 7,500 was issued. 6. Journalize and post the closing entries. Identify the closing entries by Clos. 7. Prepare a post-closing trial balance.arrow_forwardLedger accounts, adjusting entries, financial statements, and closing entries; optional spreadsheet The unadjusted trial balance of Lakota Freight Co. at March 31, 20Y4, the end of the year, follows: The data needed to determine year-end adjustments are as follows: (a) Supplies on hand at March 31 are 7,500. (b) Insurance premiums expired during year are 1,800. (c) Depreciation of equipment during year is 8,350. (d) Depreciation of trucks during year is 6,200. (e) Wages accrued but not paid at March 31 are 600. Instructions 1. For each account listed in the trial balance, enter the balance in the appropriate Balance column of a four-column account and place a check mark () in the Posting Reference column. 2. (Optional) Enter the unadjusted trial balance on an end-of-period spreadsheet and complete the spreadsheet. Add the accounts listed in part (3) as needed. 3. Journalize and post the adjusting entries, inserting balances in the accounts affected. Record the adjusting entries on Page 26 of the journal. The following additional accounts from Lakota Freight Co.s chart of accounts should be used: Wages Payable, 22; Supplies Expense, 52; Depreciation ExpenseEquipment, 55; Depreciation ExpenseTrucks, 56; Insurance Expense, 57. 4. Prepare an adjusted trial balance. 5. Prepare an income statement, a statement of stockholders equity, and a balance sheet. During the year ended March 31, 20Y4, additional common stock of 6,000 was issued. 6. Journalize and post the closing entries. Record the closing entries on Page 27 of the journal. Indicate closed accounts by inserting a line in both Balance columns opposite the closing entry. 7. Prepare a post-closing trial balance.arrow_forwardAdjusting entries and errors At the end of August, the first month of operations, the following selected data were taken from the financial statements of Tucker Jacobs, an attorney: In preparing the financial statements, adjustments for the following data were overlooked: Unbilled fees earned at August 31, 31,900. Depreciation of equipment for August, 7,500. Accrued wages at August 31, 5,200. Supplies used during August, 3,000. Instructions 1. Journalize the entries to record the omitted adjustments. 2. Determine the correct amount of net income for August and the total assets, liabilities, and stockholders equity at August 31. In addition to indicating the corrected amounts, indicate the effect of each omitted adjustment by setting up and completing a columnar table similar to the following. The first adjustment is presented as an example.arrow_forward
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