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Chapter 4: Q4RQ (page 216)
What does the balance sheet report?
Balance sheet reports the assets, liabilities and stockholders鈥� equity as at the end of the accounting period.
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The unadjusted trial balance of Fleming Investment Advisers at December 31, 2018, follows: Adjustment data at December 31, 2018: a. Unearned Revenue earned during the year, \(700. b. Office Supplies on hand, \)3,000. c. Depreciation for the year, \(3,000. d. Accrued Salaries Expense, \)4,500. e. Accrued Service Revenue, \(9,000. Account Title Office Supplies Cash Debit Credit Accounts Receivable Equipment Accumulated Depreciation鈥擡quipment Accounts Payable Salaries Payable Unearned Revenue Notes Payable (long-term) Common Stock Dividends Service Revenue Insurance Expense Salaries Expense Supplies Expense Interest Expense Rent Expense Depreciation Expense鈥擡quipment Total Balance \) 25,000 \( 183,000 \) 183,000 26,000 4,500 15,000 Retained Earnings 5,500 28,000 99,000 51,000 7,500 26,000 $ 19,000 14,000 2,500 33,000 3,000 7,000 FLEMING INVESTMENT ADVISERS Unadjusted Trial Balance December 31, 2018 Requirements 1. Prepare a worksheet for Fleming Investment Advisers at December 31, 2018. 2. Prepare the income statement, the statement of retained earnings, and the classified balance sheet in account format. 3. Prepare closing entries.
The steps of the accounting cycle are presented below. Identify the correct order of the steps.
a. Journalize and post the closing entries.
b. Start with the beginning account balances.
c. Prepare the financial statements.
d. Compute the unadjusted balance in each account, and prepare the unadjusted trial balance.
e. Journalize and post adjusting entries.
f. Enter the unadjusted trial balance on the worksheet, and complete the worksheet (optional).
g. Prepare the adjusted trial balance.
h. Analyze and journalize transactions as they occur.
i. Post journal entries to the accounts.
j. Prepare the post-closing trial balance.
Refer to the Practice Set data provided in Chapters 2 and 3 for Crystal Clear Cleaning.
Requirements
1. Prepare a worksheet (optional) at November 30, 2018. Use the unadjusted trial balance from Chapter 2 and the adjusting entries from Chapter 3.
2. Prepare an income statement and statement of retained earnings for the month ended November 30, 2018. Also prepare a classified balance sheet at November 30, 2018, using the report format. Assume the Notes Payable is long-term. Use the worksheet prepared in Requirement 1 or the adjusted trial balance from Chapter 3.
3. Prepare closing entries at November 30, 2018, and post to the accounts. Open T-accounts for Income Summary and Retained earnings. Determine the ending balance in each account. Denote each closing amount as Clos. and each account balance as Balance.
4. Prepare a post-closing trial balance at November 30, 2018.
Kathy Wintz formed a lawn service business as a summer job. To start the corporationon May 1, 2018, she deposited \(1,000 in a new bank account in the name of the business. The \)1,000 consisted of a \(600 loan from Bank One to her company, Wintz Lawn Service, and \)400 of her own money. The company issued \(400 of common stock to Wintz. Wintz rented lawn equipment, purchased supplies, and hired other students to mow and trim customers鈥� lawns.
At the end of each month, Wintz mailed bills to the customers. On August 31, she was ready to dissolve the corporation and return to college. Because she was so busy, she kept few records other than the checkbook and a list of receivables from customers.
At August 31, the business鈥檚 checkbook shows a balance of \)2,000, and customers still owe \(750. During the summer, the business collected \)5,500 from customers. The business checkbook lists payments for supplies totaling \(400, and it still has gasoline, weed trimmer cord, and other supplies that cost a total of \)50.
The business paid employees \(1,800 and still owes them \)300 for the final week of the summer. Wintz rented some equipment from Ludwig鈥檚 Machine Shop. On May 1, the business signed a six-month rental agreement on mowers and paid \(600 for the full rental period in advance. Ludwig鈥檚 will refund the unused portion of the prepayment if the equipment is returned in good shape. In order to get the refund, Wintz has kept the mowers in excellent condition. In fact, the business had to pay \)300 to repair a mower.To transport employees and equipment to jobs, Wintz used a trailer that the business bought for \(300. The business estimates that the summer鈥檚 work used up one-third of the trailer鈥檚 service potential. The business checkbook lists a payment of \)500 for cash dividends paid during the summer. The business paid the loan back during August. (For simplicity, ignore any interest expense associated with the loan.)
Requirements
1. As a team, prepare the income statement and the statement of retained earnings of Wintz Lawn Service for the four months May 1 through August 31, 2018.
2. Prepare the classified balance sheet (report form) of Wintz Lawn Service at August 31, 2018.
3. Was Wintz鈥檚 summer work successful? Give your team鈥檚 reason for your answer.
Houston Veterinary Hospital completed the following worksheet as of December 31, 2018.
Requirements
1. Complete the worksheet for Houston Veterinary Hospital.
2. Prepare the closing entries.
3. Prepare a post-closing trial balance.
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