Chapter 2 quiz for week 2 PDF

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Here is the quiz that you do n week 2 of the course...

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1. BE.04.02.ALGO (Algorithmic) Statement of stockholders’ equity Scott Lockhart owns and operates AAA Delivery Services. On January 1, 20Y7, Common Stock had a balance of $60,000, and Retained Earnings had a balance of $808,500. During the year, no additional common stock was issued, and $10,000 of dividends were paid. For the year ended December 31, 20Y7, AAA Delivery reported a net income of $69,250. Prepare a statement of stockholders’ equity for the year ended December 31, 20Y7. If a net loss is incurred or dividends were paid, enter that amount as a negative number using a minus sign. AAA Delivery Services Statement of Stockholders’ Equity For the Year Ended December 31, 20Y7 Common Stock

Retained Earnings

Total

$

$

$

$

$

$

2. EX.04.05.ALGO (Algorithmic) Income Statement The following account balances were taken from the adjusted trial balance for Urgent Messenger Service, a delivery service firm, for the fiscal year ended November 30, 20Y1: Depreciation Expense Fees Earned Insurance Expense Miscellaneous Expense Rent Expense Salaries Expense

$7,700 408,900 1,460 3,080 58,500 205,600

Supplies Expense

2,620

Utilities Expense

22,300

Prepare an income statement for Urgent Messenger Service. Urgent Messenger Service Income Statement For the Year Ended November 30, 20Y1 $ Expenses: $

Total expenses $

3. BE.04.01 Flow of Accounts into Financial Statements The balances for the accounts that follow appear in the Adjusted Trial Balance columns of the end-of-period spreadsheet. Indicate whether each account would flow into the income statement, statement of stockholders' equity, or balance sheet. 1. Accumulated Depreciation—Building 2. Cash 3. Fees Earned 4. Insurance Expense 5. Prepaid Rent

6. Supplies 7. Dividends 8. Wages Expense

4. BE.03.06.BLANKSHEET.ALGO (Algorithmic) Adjustment for prepaid expense

Instructions The prepaid insurance account had a beginning balance of $3,755 and was debited for $6,755 of premiums paid during the year.

Journalize the adjusting entry required at the end of the year, assuming the amount of unexpired insurance related to future periods is $2,640. Refer to the Chart of Accounts for exact wording of account ti

Chart of Accounts

CHART OF ACCOUNTS General Ledger

ASSETS

REVENUE

11 Cash

41 Fees Earned

12 Accounts Receivable 13 Supplies

EXPENSES

14 Prepaid Insurance

51 Advertising Expense

15 Land

52 Insurance Expense

16 Equipment

53 Rent Expense

17 Accumulated Depreciation-Equipment

54 Salary Expense 55 Supplies Expense 56 Utilities Expense

LIABILITIES 21 Accounts Payable

57 Depreciation Expense

22 Unearned Fees

59 Miscellaneous Expense

23 Salaries Payable 24 Taxes Payable

EQUITY 31 Common Stock 32 Retained Earnings 33 Dividends

Journal

Journalize the adjusting entry required at the end of the year (December 31), assuming the amount of unexpired insurance related to future periods is $2,640. Refer to the Chart of Accounts for exact word

PAGE 10

JOURNAL DATE 1

DESCRIPTION

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Adjusting Entries

ACCOUNTING EQUATION POST. REF.



2



3



5. BE.04.04

DEBIT

CREDIT



ASSETS





LIABILITIES



EQUITY



Closing Entries After the accounts have been adjusted at November 30, the end of the fiscal year, the following balances were taken from the ledger of Diamond Landscaping Co.: Retained Earnings

$2,550,000

Dividends

25,000

Fees Earned

1,150,000

Wages Expense

613,750

Rent Expense

120,000

Supplies Expense

9,150

Miscellaneous Expense

11,000

Journalize the two entries required to close the accounts. If an amount box does not require an entry, leave it blank.

Nov. 30

Nov. 30

6. BE.03.08.ALGO (Algorithmic) Effect of Omitting Adjustments For the year ending April 30, Peck Medical Services Co. mistakenly omitted adjusting entries for (1) $6,600 of supplies that were used, (2) unearned revenue of $11,200 that was earned, and (3) insurance of $2,700 that expired. Indicate the combined effect of the errors on (a) revenues, (b) expenses, and (c) net income for the year ended April 30. $

(a) Revenues (b) Expenses

$

(c) Net income

$

7. BE.04.02 Statement of stockholders’ equity Scott Lockhart owns and operates AAA Delivery Services. On January 1, 20Y7, Common Stock had a balance of $40,000, and Retained Earnings had a balance of $815,500. During the year, no additional common stock was issued, and $10,000 of dividends were paid. For the year ended December 31, 20Y7, AAA Delivery reported a net income of $67,250. Prepare a statement of stockholders’ equity for the year ended December 31, 20Y7. If a net loss is incurred or dividends were paid, enter that amount as a negative number using a minus sign. AAA Delivery Services Statement of Stockholders’ Equity For the Year Ended December 31, 20Y7 $

Common Stock $

Retained Earnings

Total $

$

$

$

8. EX.04.02 Classifying Accounts Balances for each of the following accounts appear in an adjusted trial balance. Identify each as an asset, liability, revenue, or expense. 1. Accounts Receivable 2. Equipment

3. Fees Earned 4. Insurance Expense 5. Prepaid Advertising 6. Prepaid Rent 7. Rent Revenue 8. Salary Expense 9. Salary Payable 10. Supplies 11. Supplies Expense 12. Unearned Rent

9. BE.03.06.ALGO (Algorithmic) Adjustment for Prepaid Expense The prepaid insurance account had a beginning balance of $5,270 and was debited for $2,420 of premiums paid during the year. Journalize the adjusting entry required at the end of the year, assuming the amount of unexpired insurance related to future periods is $2,380. If an amount box does not require an entry, leave it blank.

10. BE.03.01 Accounts Requiring Adjustment Indicate with a Yes or No whether or not each of the following accounts normally requires an adjusting entry: a. Building b. Cash c. Wages Expense d. Miscellaneous Expense e. Common Stock f. Prepaid Insurance

11. BE.03.06 Adjustment for Prepaid Expense The prepaid insurance account had a beginning balance of $11,500 and was debited for $18,000 of premiums paid during the year. Journalize the adjusting entry required at the end of the year, assuming the amount of unexpired insurance related to future periods is $13,000. If an amount box does not require an entry, leave it blank.

12. BE.03.10 Vertical analysis Two income statements for Cornea Company follow: Cornea Company Income Statements For the Years Ended December 31 20Y9 Fees earned

20Y8

$1,640,000

$1,300,000

Expenses

(869,200)

(715,000)

Net income

$770,800

$585,000

Required: a. Prepare a vertical analysis of Cornea Company’s income statements. Cornea Company Income Statements For the Years Ended December 31 20Y9 Amount

Percent

20Y8 Amount

Percent

Fees earned

$1,640,000

% $1,300,000 %

(869,200)

Expenses

%

(715,000)

%

$585,000

$770,800

Operating income

%

%

b. Does the vertical analysis indicate a favorable or an unfavorable trend?

13. BE.04.03 Classified Balance Sheet The following accounts appear in an adjusted trial balance of Bridgewater Consulting. Indicate whether each account would be reported in the Current asset; property, plant, and equipment; Current liabilities; long-term liability; or stockholders' equity section of the December 31, 20Y0, balance sheet of Bridgewater Consulting. 1. Accounts Payable 2. Accounts Receivable 3. Accumulated Depreciation—Building 4. Cash 5. Common Stock 6. Note Payable (due in ten years) 7. Supplies 8. Wages Payable

14. BE.03.02 Type of Adjustment Classify the following items as (1) accrued revenue, (2) accrued expense, (3) unearned revenue, or (4) prepaid expense: a. Cash received for use of land next month b. Fees earned but not received c. Rent expense owed but not yet paid d. Supplies on hand

15. BE.04.06 Working capital and current ratio Current assets and current liabilities for Brimstone Company follow:

Current assets

20Y4

20Y3

$1,586,250

$1,210,000

705,000

550,000

Current liabilities

a. Determine the working capital and current ratio for 20Y4 and 20Y3. Round Current ratio to 2 decimal places. 20Y4 Working capital

$

20Y3 $

Current ratio

b. Does the change in the current ratio from 20Y3 to 20Y4 indicate a favorable or an unfavorable change?

16. EX.04.03.ALGO (Algorithmic) Financial Statements from the End-of-Period Spreadsheet Demo Consulting is a consulting firm owned and operated by Jesse Flatt. The following end-of-period spreadsheet was prepared for the year ended August 31, 20Y9: Demo Consulting End-of-Period Spreadsheet For the Year Ended August 31, 20Y9 Unadjusted

Adjusted

Trial Balance Adjustments Trial Balance Account Title Cash Accounts Receivable Supplies

Dr.

Cr.

Dr.

Cr.

8,310 19,780 2,100

Dr. 8,310 19,780

1,760

340

Land

17,010

17,010

Office Equipment

16,020

16,020

Cr.

Accumulated Depreciation

2,200

Accounts Payable

5,340

1,050

3,250 5,340

Salaries Payable

260

Common Stock

260

6,700

Retained Earnings

6,700

13,480

Dividends

13,480

2,570

Fees Earned

2,570 54,290

Salary Expense

54,290

14,640

260

14,900

Supplies Expense

1,760

1,760

Depreciation Expense

1,050

1,050

3,070

3,070 83,320 83,320

Miscellaneous Expense

1,580

1,580

82,010 82,010

Based on the preceding spreadsheet, prepare an income statement for Demo Consulting. Demo Consulting Income Statement For the Year Ended August 31, 20Y9 $ Expenses: $

Total expenses $

Based on the preceding spreadsheet, prepare a statement of stockholders’ equity for Demo Consulting. During the year ended August 31, 20Y9, $2,600 of additional common stock was issued. If an amount box does not require an entry, leave it blank. If a net loss is incurred or dividends were paid, enter that amount as a negative number using a minus sign. Demo Consulting Statement of Stockholders’ Equity For the Year Ended August 31, 20Y9 Common Stock

Retained Earnings

Total

$

$

$

$

$

$

Based on the preceding spreadsheet, prepare a balance sheet for Demo Consulting. Demo Consulting Balance Sheet August 31, 20Y9 Assets Current assets: $

$

Total current assets Property, plant, and equipment: $ $

Total property, plant, and equipment $

Total assets Liabilities Current liabilities: $

$

Total liabilities Stockholders' Equity $

Total stockholders' equity $

Total liabilities and stockholders' equity

17. EX.04.04.ALGO (Algorithmic) Financial Statements from the End-of-Period Spreadsheet Triton Consulting is a consulting firm owned and operated by Jayson Neese. The following end-of-period spreadsheet was prepared for the year ended April 30, 20Y3: Triton Consulting End-of-Period Spreadsheet For the Year Ended April 30, 20Y3 Unadjusted

Adjusted

Trial Balance Adjustments Account Title

Dr.

Cr.

Dr.

Cr.

Trial Balance Dr.

Cash

12,780

12,780

Accounts Receivable

30,430

30,430

Supplies

3,230

Office Equipment

2,710

24,950 3,380

Accounts Payable

8,220

1,610

400

400

10,000

Retained Earnings

10,000

21,040

21,040

3,960

Fees Earned Salary Expense

4,990 8,220

Salaries Payable

Dividends

520 24,950

Accumulated Depreciation

Common Stock

3,960 57,350

22,210

57,350 400

22,610

Supplies Expense

2,710

2,710

Depreciation Expense

1,610

1,610

Miscellaneous Expense

Cr.

2,430

2,430

99,990 99,990 4,720 4,720 102,000

102,000

Based on the preceding spreadsheet, prepare an income statement for Triton Consulting. Triton Consulting Income Statement For the Year Ended April 30, 20Y3 $ Expenses: $

Total expenses

$

Based on the preceding spreadsheet, prepare a statement of stockholders’ equity for Triton Consulting. During the year ended April 30, 20Y3, common stock of $3,000 was issued. If an amount box does not require an entry, leave it blank. If a net loss is incurred or dividends were paid, enter that amount as a negative number using a minus sign. Triton Consulting Statement of Stockholders’ Equity For the Year Ended April 30, 20Y3 Common Stock

Retained Earnings

Total

$

$

$

$

$

$

Based on the preceding spreadsheet, prepare a balance sheet for Triton Consulting. Triton Consulting Balance Sheet April 30, 20Y3 Assets Current assets: $

$

Total current assets Property, plant, and equipment: $

Total property, plant, and equipment $

Total assets Liabilities Current liabilities: $

Total liabilities

$

Stockholders' Equity

Total stockholders' equity

Total liabilities and stockholders' equity

18. EX.04.19 Steps in the Accounting Cycle Rearrange the following steps in the accounting cycle in proper sequence: a. A post-closing trial balance is prepared. b. Adjustment data are asssembled and analyzed. c. Adjusting entries are journalized and posted to the ledger.

d. An adjusted trial balance is prepared. e. An optional end-of-period spreadsheet is prepared. f. An unadjusted trial balance is prepared. g. Closing entries are journalized and posted to the ledger. h. Financial statements are prepared. i. Transactions are analyzed and recorded in the journal. j. Transactions are posted to the ledger.

19. EX.04.01 Flow of Accounts into Financial Statements The balances for the accounts that follow appear in the Adjusted Trial Balance columns of the end-of-period spreadsheet. Indicate whether each account would flow into the income statement, statement of stockholders’ equity, or balance sheet. 1. Accounts Payable 2. Accounts Receivable 3. Cash 4. Dividends 5. Fees Earned 6. Supplies 7. Unearned Rent 8. Utilities Expense 9. Wages Expense 10. Wages Payable

20. EX.04.04 Financial Statements from the End-of-Period Spreadsheet Triton Consulting is a consulting firm owned and operated by Jayson Neese. The following end-of-period spreadsheet was prepared for the year ended April 30, 20Y3: During the year ended April 30, 20Y3, common stock of $5,000 was issued. Triton Consulting End-of-Period Spreadsheet For the Year Ended April 30, 20Y3 Unadjusted Trial Balance Account Title

Dr.

Cash

21,500

Accounts Receivable

51,150

Supplies

Cr.

Adjusted Adjustments Dr.

Dr.

Cr.

21,500 51,150

2,400

Office Equipment

Cr.

Trial Balance

1,650

32,000

750 32,000

Accumulated Depreciation

4,500

Accounts Payable

3,350

900

5,400

2,000

2,000

3,350

Salaries Payable Common Stock

20,000

20,000

Retained Earnings

52,200

52,200

Dividends

10,000

Fees Earned Salary Expense

10,000 279,000

240,000

Supplies Expense Depreciation Expense Miscellaneous Expense

279,000 2,000

242,000

1,650

1,650

900 2,000

900 2,000

359,050 359,050

4,550 4,550 361,950 361,950

Based on the preceding spreadsheet, prepare an income statement for Triton Consulting. Triton Consulting Income Statement For the Year Ended April 30, 20Y3 $ Expenses: $

Total expenses $

Based on the preceding spreadsheet, prepare statement of stockholders’ equity for Triton Consulting. If no entry is required, leave the amount box blank or "0". If a net loss is incurred or dividends were paid, enter that amount as a negative number using a minus sign. Triton Consulting Statement of Stockholders’ Equity For the Year Ended April 30, 20Y3 Common Stock

Retained Earnings

Total

$

$

$

$

$

$

Based on the preceding spreadsheet, prepare a balance sheet for Triton Consulting. Triton Consulting Balance Sheet April 30, 20Y3 Assets Current assets: $

$

Total current assets Property, plant, and equipment: $

Total property, plant, and equipment $

Total assets Liabilities Current liabilities: $

$

Total liabilities Stockholders' Equity $

Total stockholders' equity

Total liabilities and stockholders' equity

$

21. EX.04.08 Statement of stockholders’ equity Climate Control Systems Co. offers its services to residents in the Spokane area. Selected accounts from the ledger of Climate Control Systems for the fiscal year ended December 31, 20Y2, are as follows: Common Stock

Jan. 1

75,000

Feb. 15

25,000

Retained Earnings Dec. 31

160,000 Jan. 1 (20Y2) Dec. 31

Dividends 4,150,800

Mar. 31

40,000 Dec. 31

700,000

June 30

40,000

Sept. 30

40,000

...