College Accounting A Contemporary Approach 4Th Edition by David Haddock – Test Bank

 

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Chapter 05 Adjustments and the Worksheet

 

MULTIPLE CHOICE QUESTIONS

• Prepaid expenses, such as prepaid rent and prepaid insurance, represent assets for a business until they are

A)  True

1. False

 

 

• The cost of a long-term asset, such as equipment, is transferred to expense as it is used during its useful

A)  True

1. False

 

 

• If the adjustment for supplies used is not recorded, the firm’s assets will be
  1. True
  2. False

 

 

• If the adjustment for expired rent is not recorded, the firm’s expenses will be
  1. True
  2. False

 

 

• The normal balance of a contra asset account is a
  1. True
  2. False

 

 

• Letters are used to label the corresponding debit and credit transactions of an adjustment on the

A)  True

1. False

 

 

• Land is a long-term asset that is not subject to
  1. True
  2. False

 

 

• The balances of the revenue accounts are recorded in the Trial Balance Credit column, the Adjusted Trial Balance Credit column, and the Balance Sheet Credit column of the

A)  True

1. False

 

• Preparation of a worksheet eliminates the necessity of preparing an income statement and a balance

A)  True

1. False

 

 

• In the Adjusted Trial Balance section of the worksheet the total debits should equal the total

A)  True

1. False

 

 

• The balance of the owner’s drawing account is extended to the Income Statement Debit column of the

A)  True

1. False

 

 

• The balance of a liability account is extended to the Balance Sheet Credit column of the
  1. True
  2. False

 

 

• The statement of owner’s equity is prepared from the data in the Balance Sheet section of the

A)  True

1. False

 

 

• If adjustments are entered on a worksheet, it is not necessary to record them in the journal or the

A)  True

1. False

 

 

• Which of the following need not be completed separately if a worksheet is prepared?
  1. a trial balance B) a balance sheet
  2. C) an income statement D) a statement of owner’s equity

 

 

• When a trial balance is in balance,
  1. adjusting entries are not
  2. the company has earned a net
  3. the general ledger is free of
  4. the debit account balances equal the credit account

 

• A total of $2,800 in supplies was purchased during the At the end of the year $700 of the supplies were left. The adjusting entry needed at the end of the year is:

A)  debit Supplies Expense $700; credit Supplies $700

1. debit Supplies Expense $2,800; credit Supplies $2,800
2. debit Supplies Expense $2,100; credit Supplies $2,100
3. debit Supplies $2,100; credit Supplies Expense $2,100

 

 

• A total of $3,700 in supplies was purchased during the By the end of the year, the company had used $2,200 of the supplies. The adjusting entry needed at the end of the year is:

A)  debit Supplies $2,200; credit Supplies Expense $2,200

1. debit Supplies Expense $3,700; credit Supplies $3,700
2. debit Supplies Expense $1,500; credit Supplies $1,500
3. debit Supplies Expense $2,200; credit Supplies $2,200

 

 

• MacGyver Company bought equipment on January 3, 2019, for $52,000. At the time of purchase, the equipment was estimated to have a useful life of five years and a salvage value of $4,000. Using the straight-line method, the amount of one year’s depreciation is:

A) $1,200.                         B) $4,000.                        C) $9,600.                        D) $10,400.

 

 

• Adjusting Entries are:
  1. updating entries for previously unrecorded expenses or
  2. corrections of
  3. not
  4. will always affect

 

 

• Equipment costing $27,000 with an estimated salvage value of $2,040 and an estimated life of 4 years was purchased on October 31, Using the straight-line depreciation method, what is the amount of depreciation expense to be recorded at December 31, 2019?

A) $520                             B) $1,560                         C) $1,125                         D) $1,040

 

 

• Which of the following entries records the depreciation on equipment for the fiscal year-end adjustment?

A)  Debit Depreciation; credit Depreciation Expense

1. Debit Depreciation Expense; credit Equipment
2. Debit Depreciation Expense; credit Accumulated Depreciation
3. Debit Accumulated Depreciation; credit Depreciation Expense

 

• On January 1, ABC Catering purchased an oven for $5,000. The oven is expected to last five years and have no salvage Select the adjusting entry made on December 31, to record the depreciation of the oven for one year.

A)

Depreciation Expense                                                                   $ 500

Accumulated Depreciation–Equipment                                                      $ 500

 

 

 

B)

Accumulated Depreciation-Equipment                                         $ 500 Equipment                                                                                                  $ 500

 

 

 

C)

Depreciation Expense                                                             $ 1,000

Equipment                                                                                               $ 1,000

 

 

 

D)

Depreciation Expense                                                             $ 1,000

Accumulated Depreciation-Equipment                                                    $ 1,000

 

 

 

 

 

• On January 1, 2019, Johnson Consulting purchased a truck for $18,000. The truck is expected to last 60 months and have no salvage Calculate the book value of the truck on December 31, 2020.

A) $3,600                          B) $14,400                       C) $7,200                         D) $10,800

 

 

• On September 1, 2019, Jay Walker Company purchased a one-year insurance policy for $1,320. The correct adjusting entry on December 31, 2019, is:

A)  debit Prepaid Insurance $110; credit Insurance Expense $110

1. debit Insurance Expense $330; credit Prepaid Insurance $330
2. debit Prepaid Insurance $1,320; credit Insurance Expense $1,320
3. debit Insurance Expense $440; credit Prepaid Insurance $440

 

• On November 1, 2019, Peaches Consulting Service paid $4,800 for 12 months of advance rent on its office The correct adjusting entry on December 31, 2019, to show the amount of rent that had expired would include:

A)  debit Rent Expense $4,800; credit Prepaid Rent $4,800

1. debit Rent Expense $800; credit Prepaid Rent $800
2. debit Rent Expense $400; credit Prepaid Rent $400
3. debit Prepaid Rent $4,000; credit Rent Expense $4,000

 

 

• Equipment cost $36,000 and is expected to be useful for 5 years and have no salvage Under the straight-line method, monthly depreciation will be:

A) $12.                              B) $600.                           C) $60.                             D) $720.

 

 

• B. Consulting purchased a machine for $6,000 on August 1, 2019. The company expects the useful life of the machine to be 5 years and no salvage value is expected. If the company uses the straight-line method to depreciate the machine, what will be the depreciation adjustment for the year ending December 31, 2019?
  500. Debit Depreciation Expense $500 and Credit Equipment $500.
  501. Debit Depreciation Expense $400 and Credit Accumulated Depreciation $400.
  502. Debit Depreciation Expense $500 and Credit Accumulated Depreciation $500.
  503. Debit Accumulated Depreciation $100 and Credit Depreciation Expense $100.

 

 

29)   On a worksheet, the adjusting entry to account for depreciation of equipment consists of:

1. a debit to Accumulated Depreciation and a credit to
2. a debit to Depreciation Expense and a credit to Accumulated
3. a debit to Depreciation Expense and a credit to
4. a debit to Accumulated Depreciation and a credit to Depreciation

 

 

• If the prepaid expenses are not adjusted, assets on the balance sheet:
  1. will be B) will be overstated.
  2. C) may be either overstated or D) will not be affected.

 

 

• If long-term assets are not adjusted, expenses on the income statement:
  1. will be B) will be understated.
  2. C) will not be D) may be either overstated or understated.

 

 

• On October 25, 2019, the company paid $24,000 rent in advance for the six-month period (November 2019 through April 2020). On December 31, 2019, the adjustment for expired rent would include:

A)  a $4,000 credit to Prepaid Rent.                           B) a $8,000 credit to Rent Expense.

1. C) a $8,000 debit to Rent D) a $24,000 credit to Cash.

 

• On March 1, 2019, the company paid $6,000 rent in advance for a 12-month On December 31, 2019, the company’s adjustment for expired rent would include:

A)  a $6,000 debit to Prepaid Rent; a $6,000 credit to Rent Expense.

1. a $1,000 debit to Rent Expense; a $1,000 credit to Prepaid
2. a $5,000 debit to Rent Expense; a $5,000 credit to Prepaid
3. a $5,000 debit to Prepaid Rent; a $5,000 credit to Rent

 

 

• On July 1, Sidney Consulting Services paid $18,000 for 12 months of advance rent on its office Select the adjusting entry made on December 31, to record the amount of rent that had expired during the year.

A)

Rent Expense                                                                    $   10,500

Prepaid Rent                                                                                         $   10,500

 

 

 

B)

Prepaid Rent                                                                      $   18,000

Rent Expense                                                                                        $   18,000

 

 

 

C)

Prepaid Rent                                                                      $   10,500

Rent Expense                                                                                        $   10,500

 

 

 

D)

Rent Expense                                                                    $     9,000

Prepaid Rent                                                                                         $     9,000

 

• The balance in the Prepaid Rent account before adjustment at the end of the year is $12,000, which represents 12 months rent paid on November 1. The adjusting entry required on December 31 to show the amount of rent that had expired is:

A)

Rent Expense                                                                    $ 1,000

Prepaid Rent                                                                                         $ 1,000

 

 

 

B)

Rent Expense                                                                    $ 2,000

Prepaid Rent                                                                                         $ 2,000

 

 

 

C)

Rent Expense                                                                    $ 12,000

Cash                                                                                                     $ 12,000

 

 

 

D)

Prepaid Rent                                                                      $ 12,000

Rent Expense                                                                                        $ 12,000

 

 

 

 

 

36)   The adjusting entry to account for the use of supplies consists of:

1. a debit to Supplies and a credit to Accumulated
2. a debit to Accumulated Depreciation and a credit to
3. a debit to Supplies and a credit to Supplies
4. a debit to Supplies Expense and a credit to

 

• On December 31, Treats Catering ‘s trial balance shows a $1,000 balance in the Supplies account. However, a physical count of the supplies determined that only $350 of supplies actually remain in the supply cabinet. Select the adjusting entry made on December 31, to record the amount of supplies that had been used during the year.

A)

Supplies Expense.                                                                       $ 350

Supplies                                                                                                    $ 350

 

 

 

B)

Supplies                                                                                      $ 350

Supplies Expense                                                                                      $ 350

 

 

 

C)

Supplies Expense                                                                        $ 650

Supplies                                                                                                    $ 650

 

 

 

D)

Supplies                                                                                      $ 650

Supplies Expense                                                                                      $ 650

 

 

 

 

 

• During its first year of business, XYZ purchased $1,600 of supplies. By the end of the year, only $500 of supplies remain in the supply cabinet. Determine the amount to be reported in the Supplies account in the Adjusted Trial Balance section of the worksheet prepared on December 31.

A) $500                             B) $1,600                         C) $1,100                         D) $2,100

 

 

• Adjusting entries can be journalized:
  1. only once per accounting
  2. only once a
  3. as often as
  4. only once a year at the end of the accounting

 

 

• The adjusting entry to account for the expiration of prepaid insurance consists of:
  1. a debit to Accumulated Depreciation and a credit to Prepaid
  2. a debit to Insurance Expense and a credit to Prepaid
  3. a debit to Insurance Expense and a credit to Accumulated
  4. a debit to Prepaid Insurance and a credit to Accumulated

 

41)   The adjusting entry to account for the expiration of prepaid advertising consists of:

1. a debit to Prepaid Advertising and a credit to Accumulated
2. a debit to Prepaid Advertising and a credit to Advertising
3. a debit to Advertising Expense and a credit to Accumulated
4. a debit to Advertising Expense and a credit to Prepaid

 

 

• Which of the following statements is not correct?
  1. The book value of a long-term asset is reduced each year as depreciation is
  2. Buildings and trucks are examples of long-term
  3. Salvage value is computed by subtracting the accumulated depreciation from the cost of a long-term
  4. Generally accepted accounting principles require that the original cost of a long-term asset continue to appear in the asset account until the disposition of the

 

43)   On a worksheet, the adjusted balance of the Accumulated Depreciation account is extended to:

1. the Balance Sheet Credit B) the Income Statement Debit column.
2. C) the Income Statement Credit D) the Balance Sheet Debit column.

 

 

• On a worksheet, the adjusted balance of the Depreciation Expense account is extended to:
  1. the Income Statement Debit B) the Balance Sheet Debit column.
  2. C) the Income Statement Credit D) the Balance Sheet Credit column.

 

 

• On a worksheet, the adjusted balance of the Supplies account is extended to:
  1. the Income Statement Debit B) the Balance Sheet Credit column.
  2. C) the Income Statement Credit D) the Balance Sheet Debit column.

 

 

• On a worksheet, the adjusted balance of the Supplies Expense account is extended to:
  1. the Balance Sheet Debit B) the Income Statement Debit column.
  2. C) the Balance Sheet Credit D) the Income Statement Credit column.

 

 

• Which of the following statements is correct?
  1. Accumulated Depreciation–Equipment is presented in the Liabilities section of a balance

B)  The cost of supplies used is reported on the statement of owner’s equity.

1. The cost of supplies used represents an operating expense of the
2. At the time of their acquisition, prepaid expenses are recorded in expense

 

 

• On a worksheet, the adjusted balance of the Prepaid Rent account is extended to the:
  1. Income Statement Debit B) Balance Sheet Credit column.
  2. C) Balance Sheet Debit D) Income Statement Credit column.

 

• On a worksheet, the adjusted balance of the revenue account Fees Income would be extended to:
  1. the Balance Sheet Credit B) the Income Statement Debit column.
  2. C) the Income Statement Credit D) the Balance Sheet Debit column.

 

 

• On the worksheet, the Balance Sheet columns should balance:
  1. after the net income amount is added to the Balance Sheet Credit
  2. before the net income amount is added to the Balance Sheet Credit
  3. before the net income amount is added to the Balance Sheet Debit
  4. after the net income amount is added to the Balance Sheet Debit

 

 

• On a worksheet, the adjusted balance of a contra asset account would be extended to:
  1. the Income Statement Debit B) the Balance Sheet Debit column.
  2. C) the Income Statement Credit D) the Balance Sheet Credit column.

 

 

• On a worksheet, a net loss is:
  1. recorded in the Income Statement Debit
  2. not
  3. recorded in the Balance Sheet Credit
  4. recorded in the Balance Sheet Debit

 

 

• If a worksheet is prepared at the end of the accounting year,
  1. the financial statements are prepared using the worksheet
  2. preparation of the financial statements is not
  3. the adjusting entries do not need to be
  4. only a balance sheet is

 

 

• Which of the following statements is not correct?
  1. If an account has a debit balance in the Trial Balance section of the worksheet and there is a credit entry in the Adjustments section, the credit amount is added when computing the balance to be shown in the Adjusted Trial Balance section of the
  2. Net loss is recorded on the worksheet in the Income Statement Credit column and the Balance Sheet Debit
  3. Net income is recorded on the worksheet in the Income Statement Debit column and the Balance Sheet Credit
  4. The difference between the total of the Income Statement Debit column and the total of the Income Statement Credit column of the worksheet represents either net income or net

 

55)   On a balance sheet, Accumulated Depreciation—Equipment is reported:

1. as a contra-asset on the Balance B) as a liability on the Income Statement.
2. C) as an expense on the Income D) as owner’s equity on the Balance Sheet.

 

56)   The book value of long-term assets is reported on:

1. the B) the statement of owner’s equity.
2. C) the income statement. D) the balance

 

 

• The balance in the account Accumulated Depreciation, Equipment will:

A)  be reported on the Statement of Owner’s Equity.

1. will be reported on the Balance
2. not appear on any financial
3. be reported on the Income

 

 

• A consecutive, twelve-month accounting period is called a(n):
  1. adjusted B) fiscal year.
  2. C) accounting D) accrual year.

 

 

• Accumulated Depreciation, Equipment, is shown as:
  1. an addition to expenses on the Income
  2. a deduction of Capital on the Statement of Owner’s
  3. an addition to assets on the Balance
  4. a deduction from assets on the Balance

 

 

• The adjustments made on the worksheet:
  1. need not be entered in the journal or the
  2. are posted to the ledger but are not recorded in the
  3. are recorded in the journal but are not posted to the
  4. are recorded in the journal and then posted to the general ledger

 

 

• The unadjusted net income on the income statement was $46,850. After journalizing and posting the adjusting entry for the $2,300 of supplies used during the year, the adjusted net income is:

A) $46,850.                       B) $44,550.                      C) $49,150.                      D) $45,700.

 

 

• The unadjusted net income on the income statement was $23,760. After journalizing and posting the adjusting entries for the $1,620 of supplies used and $3,700 of depreciation on the company’s equipment for the year, the adjusted net income is:

A) $25,840.                       B) $18,440.                      C) $21,680.                      D) $29,080.

 

 

• The unadjusted net income on the income statement was $41,800. After journalizing and posting the adjusting entry for the $600 of prepaid advertising that expired and $1,600 in supplies used during the year, the adjusted net income is:

A) $41,800.                       B) $39,600.                      C) $40,200.                      D) $41,200.

 

• The unadjusted net income on the income statement was $64,916. After journalizing and posting the adjusting entries for expired insurance during the year of $3,400 and for supplies used during the year of $1,480, the adjusted net income is:

A) $69,796.                       B) $61,516.                      C) $64,916.                      D) $60,036.

 

 

• The total assets on the balance sheet was $128,800 before journalizing and posting the adjusting entries for $800 of expired insurance, $2,400 of expired rent and $900 of What are the total assets after journalizing and posting the adjusting?

A) $128,800.                     B) $124,700.                    C) $126,500.                    D) $132,900.

 

 

SHORT ANSWER QUESTIONS

• The process of allocating the cost of a long-term asset as an expense of operations during the asset’s expected useful life is known as

 

• The difference between the debit balance of the Equipment account and the credit balance of the Accumulated Depreciation–Equipment account is called the ________ of an

 

• The Supplies account had a balance of $1,200 when a physical count indicated that supplies on hand totaled $250. This means that supplies in the amount of ________ were used during the accounting

 

• The process of updating accounts at the end of an accounting period for previously unrecorded items that belong to the period is referred to as making

 

• The account credited in the adjusting entry made to record the expiration of a portion of prepaid rent is the ________

 

71)   Accumulated depreciation is classified as a(n) ________ account.

 

 

• When the ________ method of depreciation is used, an equal amount of depreciation is charged to each accounting period during the asset’s useful

 

73)   The account accumulated depreciation has a normal                  balance.

 

 

• A(n) ________ is prepared at the end of each accounting period to organize and summarize the data needed for the preparation of the financial

 

• On a worksheet, the adjusted balance of Supplies is extended from the Adjusted Trial Balance Debit column to the ________ Debit

 

• On a worksheet, the adjusted balance of Depreciation Expense is extended from the Adjusted Trial Balance Debit column to the ________ Debit

 

• For each of the accounts listed below, enter the words, Increase or Decrease, in the Debit and Credit columns to indicate the effects of each on the account

 

 

Account		Debit	Credit
A.	Accumulated  Deprecation
B.	Depreciation  Expense
C.	Equipment
D.	Prepaid Rent
E.	Rent Expense
F.	Supplies
G.	Supplies Expense

 

 

 

• For each of the accounts listed below, enter the words, Increase or Decrease, in the Debit and Credit columns to indicate the effects of each on the account

 

 

Account		Debit	Credit
A.	Accumulated  Deprecation
B.	Advertising  Expense
C.	Depreciation  Expense
D.	Insurance Expense
E.	Land
F.	Prepaid Advertising
G.	Prepaid Insurance

 

 

 

• Read each of the following transactions for Patel’s Repair Determine the accounts and amounts to be debited and credited in the necessary end-of-May adjustments.

 

1. On May 1, 2019, Patel’s Repair Services, a new firm, paid $6,600 rent in advance for a six-month The $6,600 was debited to the Prepaid Rent account.
2. On May 1, 2019, the firm bought supplies for $2,000. The $2,000 was debited to the Supplies An inventory of supplies at the end of May showed that supplies costing $800 were on hand.
3. On May 1, 2019, the firm bought equipment costing $12,000. The equipment has an expected useful life of 10 years and no salvage The firm will use the straight-line method of depreciation.

 

• Read each of the following transactions for Pickerton Printer Repair Determine the accounts and amounts to be debited and credited in the necessary end-of-April adjustments.

 

500. On April 1, 2019, Pickerton Printer Repair Services, a new firm, bought supplies for $2,500. The

$2,500 was debited to the Supplies account. An inventory of supplies at the end of April showed that supplies costing $1,500 were on hand.

1. On April 1, 2019, the firm bought equipment costing $25,000. The equipment has an expected useful life of 10 years and a salvage value of $1,000. The firm will use the straight-line method of
2. On April 1, 2019, the firm paid $7,200 rent in advance for a six-month The $7,200 was debited to the Prepaid Rent account.

 

• Read each of the following transactions for Gallagher Determine the accounts and amounts to be debited and credited in the necessary end-of-January adjustments.

 

1. On January 1, 2019, Gallagher Enterprises, a new firm, paid $4,800 rent in advance for a three-month The $4,800 was debited to the Prepaid Rent account.
2. On January 1, 2019, the firm bought supplies for $3,000. The $3,000 was debited to the Supplies An inventory of supplies at the end of January showed that supplies costing $1,300 were on hand.
3. On January 1, 2019, the firm bought equipment costing $15,000. The equipment has an expected useful life of 8 years and a salvage value of $1,560. The firm will use the straight-line method of

 

• Read each of the following transactions for Enterprises Security Determine the accounts and amounts to be debited and credited in the necessary end-of-July adjustments.

 

300. On July 1, 2019, Enterprises Security Systems, a new firm, bought supplies for $2,300. The

$2,300 was debited to the Supplies account. An inventory of supplies at the end of July showed that supplies costing $900 were on hand.

1. On July 1, 2019, the firm bought equipment costing $24,000. The equipment has an expected useful life of 10 years and no salvage The firm will use the straight-line method of depreciation.
2. On July 1, 2019, the firm paid $4,500 rent in advance for a nine-month The $4,500 was debited to the Prepaid Rent account.

 

• Read the description of the following adjustments that are required at the end of the accounting period for Riley Furniture Determine the account and amount to be debited and the account and amount to be credited.

 

2019. Purchased supplies for $1,000 on June 1, Inventory of supplies was $300 on June 30, 2019. Record the adjustment for the amount of the supplies used during the month of June 2019.
2020. Signed a 4-month contract for $1,200 of prepaid advertising on June 1, Record the adjustment for the amount of the advertising contract that expired during the month of June 2019.
2021. Prepaid rent for one year on June 1, 2019, in the amount of $12,600.
2022. Depreciation is computed using the straight-line Equipment purchased on June 1, 2019, for $16,800 has an estimated useful life of 5 years with no salvage value. Record the adjustment on June 30, 2019.

 

• Read the description of following adjustments that are required at the end of the accounting period for Hubbard Repair Determine the account and amount to be debited and the account and amount to be credited.

 

2019. Purchased supplies for $2,000 on November 1, Inventory of supplies was $600 on November 30, 2019. Record the adjustment for the amount of the supplies that were used during the month of November 2019.
2020. Signed a 4-month contract for $2,400 of prepaid advertising on November 1, Record the adjustment for the amount of the advertising contract that expired during the month of November 2019.
2021. Prepaid rent for the year on November 1, Rent expired during the month of November 2019, $1,500. Record the adjustment on November 30, 2019.
2022. Depreciation is computed using the straight-line Equipment purchased on November 1, 2019, for $6,000 has an estimated useful life of 5 years with no salvage value. Record the adjustment on November 30, 2019.

 

• Read the description of following adjustments that are required at the end of the accounting period for Hubbard Repair Determine the account and amount to be debited and the account and amount to be credited.

 

2019. Prepaid rent for the year on April 1, Rent expired during the month of April 2019, $3,500. Record the adjustment on April 30, 2019.
2020. Purchased supplies for $2,000 on April 1, Inventory of supplies was $1,600 on April 30, 2019. Record the adjustment for the amount of the supplies that were used during the month of April 2019.
2021. Depreciation is computed using the straight-line Equipment purchased on April 1, 2019, for $18,000 has an estimated useful life of 5 years with no salvage value. Record the adjustment on April 30, 2019.
2022. Signed a 6-month contract for $2,400 of prepaid advertising on April 1, Record the adjustment for the amount of the contract that expired during the month of April 2019.

 

• Read the description of following adjustments that are required at the end of the accounting period for Drake Consulting Determine the account and amount to be debited and the account and amount to be credited.

 

400. Prepaid rent for one year on January 1, 2019, in the amount of $26,400. Record the adjustment on January 31,
401. Purchased supplies for $1,600 on January 1, The inventory of supplies was $400 on January 31, 2019. Record the adjustment for the amount of the supplies that were used during the month of January 2019.
402. Depreciation is computed using the straight-line Equipment purchased on January 1, 2019, for $36,000 has an estimated useful life of 6 years with no salvage value. Record the adjustment on January 31, 2019.
403. Signed a 12-month contract for $3,000 of prepaid advertising on January 1, Record the adjustment for the amount of the advertising contract that expired during the month of January 2019.

 

• Read the description of following adjustments that are required at the end of the accounting period for AAA Appliance Repair Record the necessary adjusting entries required at the end of January on page 2 of a general journal. Omit the descriptions.

 

2019. Prepaid rent for the year on January 1, Rent expired during the month of January 2019,

$2,000.

2019. Purchased supplies for $7,600 on January 1, Inventory of supplies was $1,600 on January 31, 2019.
2020. Depreciation is computed using the straight-line Equipment purchased on January 1, 2019, for $15,000 has an estimated useful life of 5 years with no salvage value.
2021. Signed a 3-month contract for $600 of prepaid advertising on January 1,

 

• Read the description of following adjustments that are required at the end of the accounting period for Anise’s Repair Record the necessary adjusting entries required at the end of January on page 2 of a general journal. Omit the descriptions.

 

2019. Prepaid rent for the year on January 1, Rent expired during the month of January 2019,

$1,600.

2019. Purchased supplies for $4,000 on January 1, Inventory of supplies was $1,200 on January 31, 2019.
2020. Depreciation is computed using the straight-line Equipment purchased on January 1, 2019, for $3,000 has an estimated useful life of 5 years with no salvage value.
2021. Signed a 3-month contract for $450 of prepaid advertising on January 1,

 

 

• Read the description of following adjustments that are required at the end of the accounting period for Paulo Consulting Record the necessary adjusting entries required at the end of January on page 2 of a general journal. Omit the descriptions.

 

720. Equipment was purchased on January 1, 2019, for $60,000 and has an estimated useful life of 7 years with a salvage value of $3,720. Depreciation is computed using the straight-line
721. Signed a 5-month contract for $4,500 of prepaid advertising on January 1,
722. Prepaid rent for the year on January 1, 2019, in the amount of $22,200.
723. Purchased supplies for $3,200 on January 1, Inventory of supplies was $2,800 on January 31, 2019.

 

• Read the description of following adjustments that are required at the end of the accounting period for River Front Record the necessary adjusting entries required at the end of January on page 2 of a general journal. Omit the descriptions.

 

2019. Prepaid rent for the year on January 1, Rent expired during the month of January, $7,200.
2020. Equipment purchased on January 1, 2019, for $8,100 has an estimated useful life of 5 years with no salvage Depreciation is computed using the straight-line method.
2021. Purchased supplies for $650 on January 1, Inventory of supplies was $100 on January 31, 2019.
2022. Signed a 12-month contract for $4,800 of prepaid advertising on January 1,

 

 

• The balances of the ledger accounts for Oleman Services on January 31, 2019, and the information needed for adjustments are shown Prepare the Trial Balance section, record the adjustments, and complete the worksheet.

 

 

 

 

 

 

 

 

 

Account Name Balance Cash $6,500 Accounts  Receivable 3,500 Supplies 1,200 Prepaid Insurance 3,000

17

 

 

Prepaid Insurance	3,000
Equipment	7,500
Accumulated Depreciation -Equipment		—
Accounts Payable	3,400
Jeff Oleman, Capital	17,500
Jeff Oleman, Drawing	1,500
Fees Income	9,500
Advertising  Expense	600
Rent Expense	1,200
Salaries Expense	5,000
Supplies Expense	—
Insurance Expense	—
Utilities Expense	400
Depreciation Expense – Equipment	—

 

Adjustment  information:

• The supplies were purchased on January 1, An inventory of supplies showed $600 on hand on January 31, 2019.
• The amount of Prepaid Insurance represents a payment made January 1, 2019, for a six-month insurance
• The equipment, purchased January 1, 2019, has an estimated useful life of 5 years with no salvage The firm uses the straight-line method of depreciation.

 

 

OLEMAN  SERVICES
Worksheet
Month Ended January 31, 2019
		TRIAL BALANCE		ADJUSTMENTS
	ACCOUNT NAME	DEBIT	CREDIT	DEBIT	CREDIT
1
2
3
4
5
6
7
8
9
10
11
12
13		18

 

 

13
14
15
16
17
18
19
20

 

OLEMAN  SERVICES
Worksheet  (Continued)
Month Ended January 31, 2019
		ADJ. TRIAL BAL.		INCOME  STATEMENT		BALANCE SHEET
	DEBIT		CREDIT	DEBIT	CREDIT	DEBIT	CREDIT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20

 

• The balances of the ledger accounts for Buffet Services on September 30, 2019, and the information needed for adjustments are shown Prepare the Trial Balance section, record the adjustments, and complete the worksheet.

 

 

Account Name	Balance
Cash	$13,000
Accounts  Receivable	7,000
Supplies	2,400
Prepaid Insurance	6,000
Equipment	15,000
Accumulated Depreciation – Equipment	—
Accounts Payable	6,800
Jane Buffet, Capital	35,000
Jane Buffet, Drawing	3,000
Fees Income	19,000
Advertising  Expense	1,200
Rent Expense	2,400
Salaries Expense	10,000
Supplies Expense	—
Insurance Expense	—
Utilities Expense	800
Depreciation Expense – Equipment	—

 

Adjustment  information:

• The supplies were purchased on September 1, An inventory of supplies showed $1,200 on hand on September 30, 2019.
• The amount of Prepaid Insurance represents a payment made September 1, 2019, for a six-month insurance
• The equipment, purchased September 1, 2019, has an estimated useful life of 5 years with no salvage The firm uses the straight-line method of depreciation.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BUFFET  SERVICES Worksheet Month Ended September 30, 2019             TRIAL BALANCE ADJUSTMENTS   ACCOUNT NAME DEBIT CREDIT DEBIT CREDIT 1           2           3           4           5

20

 

 

5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20

 

 

 

BUFFET  SERVICES
Worksheet  (Continued)
Month Ended September 30, 2019
		ADJ. TRIAL BAL.		INCOME  STATEMENT		BALANCE SHEET
	DEBIT		CREDIT	DEBIT	CREDIT	DEBIT	CREDIT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16

21

 

 

16
17
18
19
20

 

 

 

 

• The balances of the ledger accounts for Lance’s Landscaping Design on March 31, 2019, and the information needed for adjustments are shown Prepare the Trial Balance section, record the adjustments, and complete the worksheet.

 

 

Account Name	Balance
Cash	$3,250
Accounts  Receivable	1,750
Supplies	600
Prepaid Insurance	1,500
Equipment	3,000
Accumulated Depreciation – Equipment	—
Accounts Payable	950
Lance, Capital	8,750
Lance, Drawing	750
Fees Income	4,750
Advertising  Expense	300
Rent Expense	600
Salaries Expense	2,500
Supplies Expense	—
Insurance Expense	—
Utilities Expense	200
Depreciation Expense – Equipment	—

 

Adjustment  information:

• The supplies were purchased on March 1, 2019 An inventory of supplies showed $300 on hand on March 31,
• The amount of Prepaid Insurance represents a payment made March 1, 2019, for a six-month insurance
• The equipment, purchased March 1, 2019, has an estimated useful life of 5 years with no salvage The firm uses the straight-line method of depreciation.

 

 

 

 

 

 

LANCE’S LANDSCAPING DESIGN Worksheet Month Ended March 31, 2019

22

 

 

Month Ended March 31, 2019
		TRIAL BALANCE		ADJUSTMENTS
	ACCOUNT NAME	DEBIT	CREDIT	DEBIT	CREDIT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20

 

 

 

LANCE’S LANDSCAPING DESIGN
Worksheet  (Continued)
Month Ended March 31, 2019
		ADJ. TRIAL BAL.		INCOME  STATEMENT		BALANCE SHEET
	DEBIT		CREDIT	DEBIT	CREDIT	DEBIT	CREDIT
1
2
3
4
5
6
7
8

23

 

 

8
9
10
11
12
13
14
15
16
17
18
19
20

 

 

 

 

• The partial worksheet for the Lorado Insurance Agency for the month ended October 31, 2019, is shown Using this data, prepare an income statement, a statement of owner’s equity, and a balance sheet. The owner made no additional investments during the month.

 

INCOME  STATEMENT       BALANCE SHEET ACCOUNT NAME           DEBIT            CREDIT           DEBIT                                          CREDIT

Cash                                                                                       9,000

Accounts Receivable                                                              11,000

Supplies                                                                                  5,500

Equipment                                                                              30,000

Accum. Depr.–Equip.                                                                                   8,000

Accounts Payable                                                                                          9,000

Ashleigh Lorado, Capital                                                                               32,000

Ashleigh Lorado, Drawing                                                      2,000

Fees Income                                                   23,300

Salaries Expense                      12,200

Rent Expense                           1,000

Supplies Expense                     600

Depr. Exp.–Equip.                   1,000

Totals                                       14,800            23,300             57,500            49,000

Net Income                                     8,500                                                     8,500 23,300 23,300            57,500             57,500

 

• The partial worksheet for the Marion Consulting Services for the month ended January 31, 2019, is shown Using this data, prepare an income statement, a statement of owner’s equity, and a balance sheet. The owner made no additional investments during the month.

 

INCOME  STATEMENT       BALANCE SHEET ACCOUNT NAME           DEBIT            CREDIT           DEBIT                                          CREDIT

Cash                                                                                       18,000

Accounts Receivable                                                              22,000

Supplies                                                                                  11,000

Equipment                                                                              60,000

Accum. Depr.–Equip.                                                                                   16,000

Accounts Payable                                                                                          18,000

Mary Marion, Capital                                                                                    64,000

Mary Marion, Drawing                                                           4,000

Fees Income                                                   46,600

Salaries Expense                      24,400

Rent Expense                           2,000

Supplies Expense                     1,200

Depr. Exp.–Equip.                   2,000

Totals                                       29,600            46,600             115,000          98,000

Net Income                                     17,000                                        17,000 46,600 46,600 115,000           115,000

 

• Match the accounting terms with the description by entering the proper letter in the space

1. Account form balance sheet
2. Adjusting entries or adjustments
3. Book value
4. Contra account
5. Contra asset account
6. Depreciation
7. Prepaid expenses
8. Report form balance sheet
9. Salvage value
10. Straight-line depreciation
11. Worksheet

 

1. Allocation of an asset’s cost in equal amounts to each accounting period of the asset’s useful life
2. Journal entries made to update accounts for items that were used or expired during the accounting period

________ 3. An estimate of the amount that could be received by selling or disposing of an asset at the end of its useful life

________ 4. A balance sheet that lists assets on the left and liabilities and owner’s equity on the right

5. An account with a normal balance that is opposite that of a related account

________ 6. A form used to gather all data needed at the end of an accounting period to prepare financial statements

________ 7. That portion of an asset’s original cost that has not yet been depreciated

________ 8. Expense items acquired, recorded, and paid for in advance of their use

________ 9. An asset account with a credit balance, which is contrary to the normal balance of an asset account

10. A balance sheet that lists the asset accounts first, followed by liabilities and owner’s equity

________ 11. Allocation of the cost of a long-term asset to operations during its expected useful life