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Chapter 4: 4-20RQ (page 216)
What is the current ratio, and how is it calculated?
Current ratio is a measure which calculates the ability to repay the current liabilities by the current assets. It is calculated by dividing current assets by current liabilities.
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For each account listed, identify whether the account would appear in either the income statement section or the balance sheet section of the worksheet. Assuming normal balances, identify if the account would be recorded in the debit (DR) or credit (CR)
column.
9. Accounts Payable
What are reversing entries? Are they required by GAAP?
The unadjusted trial balance and adjustment data of Myla鈥檚 Motors at December 31, 2018, follow: Adjustment data at December 31, 2018: a. Depreciation on equipment, \(1,700. b. Accrued Wages Expense, \)1,300. c. Office Supplies on hand, \(400. d. Prepaid Insurance expired during December, \)250. Learning Objective 7 Appendix 4A Account Title Office Supplies Cash Debit Credit Accounts Receivable Prepaid Insurance Equiment Accumulated Depreciation鈥擡quipment Accounts Payable Wages Payable Unearned Revenue Dividends Common Stock Service Revenue Depreciation Expense鈥擡quipment Wages Expense Insurance Expense Utilities Expense Supplies Expense Total Balance \( 4,500 \) 90,900 5,700 4,300 19,300 17,200 26,100 1,000 1,500 \( 35,000 13,700 50,500 1,200 1,800 MYLA鈥橲 MOTORS Unadjusted Trial Balance December 31, 2018 \) 90, e. Unearned Revenue earned during December, \(4,200. f. Accrued Service Revenue, \)1,000. 2019 transactions: a. On January 4, Myla鈥檚 Motors paid wages of \(1,900. Of this, \)1,300 related to the accrued wages recorded on December 31. b. On January 10, Myla鈥檚 Motors received \(1,700 for Service Revenue. Of this, \)1,000 related to the accrued Service Revenue recorded on December 31. Requirements 1. Journalize adjusting entries. 2. Journalize reversing entries for the appropriate adjusting entries. 3. Refer to the 2019 data. Journalize the cash payment and the cash receipt that occurred in 2019.
Benson Auto Repair had the following account balances after adjustments. Assume all accounts had normal balances.
Cash \( 4,000 Common Stock \) 20,000
Accounts Receivable 3,200 Retained Earnings, January 1 15,700
Prepaid Rent 1,900 Dividends 2,100
Office Supplies 3,000 Service Revenue 1,600
Equipment 34,800 Depreciation Expense鈥擡quipment 300
Accumulated Depreciation鈥擡quipment 1,600 Salaries Expense 800
Accounts Payable 5,400 Rent Expense 500
Notes Payable (long-term) 7,000 Utilities Expense 600
Supplies Expense 100
14. Prepare the closing entries for Benson at December 31.
15. What is the balance of Retained Earnings after closing entries have been recorded? (Use a T-account to determine the balance.)
Refer to the data in Short Exercise S4-1. Prepare Dalton鈥檚 unclassified balance sheet at December 31, 2018. Use the account form.
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